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Spatial effects of open borders on the Czech labour market

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  • Michael Moritz
Abstract
Hardly noticed in Western Europe the fall of the Iron Curtain had also ef-fects on the regional structures of the labour markets in the Central and Eastern Euro-pean Countries (CEEC). I analyse whether during the undoubtedly increasing integration of markets the Czech border region close to the Western European high-wage countries benefited from its geographical position. Even without transnational free labour mobility, free trade and outsourcing of production activities can lead to shifts in the labour demand and wage structure with respect to different skill groups. These integration effects should be stronger in border regions. Using data from the Czech Microcensus and quarterly dis-trict level data, I investigate the impact of the fall of the Iron Curtain on the regional differ-ences in unemployment, the skill structure of employment and wages in the Czech Re-public. According to my results there are no indications of disproportionate shifts in the economic structure as well as in the skill structure in the Czech districts neighbouring Bavaria and Austria compared to non-border districts. However, regarding wage differ-entials between workers employed in the border region and workers in the rest of the country, I find evidence that between 1996 and 2002 the border region workers of the lowest skill category exhibit a positive wage differential of around 12% compared to their counterparts in non-border districts. For all other skill groups in the border region the spatial wage gap is negative and, in absolute value, increases with the skill level.
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Suggested Citation

  • Michael Moritz, 2011. "Spatial effects of open borders on the Czech labour market," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(2), pages 305-331, April.
    • Handle: RePEc:bla:etrans:v:19:y:2011:i:2:p:305-331
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    2. Bartłomiej Rokicki, 2013. "Ewolucja regionalnego zróżnicowania płac realnych w Polsce," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 9, pages 53-67.
    3. Kirchner, Stefan & Oppen, Maria & Bellmann, Lutz, 2008. "Zur gesellschaftlichen Einbettung von Organisationswandel : Einführungsdynamik dezentraler Organisationsstrukturen," IAB-Discussion Paper 200837, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Büttner, Thomas & Rässler, Susanne, 2008. "Multiple imputation of right-censored wages in the German IAB Employment Sample considering heteroscedasticity," IAB-Discussion Paper 200844, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Hirsch, Boris & Mueller, Steffen, 2010. "Temporary agency work and the user firm's productivity: First evidence from German Panel Data," Discussion Papers 68, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    6. Chilla, Tobias & Sielker, Franziska, 2018. "Grenzüberschreitende Raumentwicklung Bayerns: Ausgangssituation, aktuelle Herausforderungen und konzeptionelle Debatten," Arbeitsberichte der ARL: Aufsätze, in: Chilla, Tobias & Sielker, Franziska (ed.), Grenzüberschreitende Raumentwicklung Bayerns: Dynamik in der Kooperation - Potenziale der Verflechtung, volume 23, pages 5-22, ARL – Akademie für Raumentwicklung in der Leibniz-Gemeinschaft.
    7. Chilla, Tobias & Sielker, Franziska, 2022. "Cross-border spatial development in Bavaria: Starting point, current challenges and conceptual debates," Arbeitsberichte der ARL: Aufsätze, in: Chilla, Tobias & Sielker, Franziska (ed.), Cross-border spatial development in Bavaria: Dynamics in cooperation - Potentials of integration, volume 34, pages 5-22, ARL – Akademie für Raumentwicklung in der Leibniz-Gemeinschaft.
    8. Bruckmeier, Kerstin & Graf, Tobias & Rudolph, Helmut, 2008. "Working poor: Arm oder bedürftig? : eine Analyse zur Erwerbstätigkeit in der SGB-II-Grundsicherung mit Verwaltungsdaten," IAB-Discussion Paper 200834, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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