Time-Varying Rigidity of the Czech Regional Labor Markets
Time-Varying Rigidity of the Czech Regional Labor Markets

Summary/Abstract: While the empirical economic research has long focused on capturing the rigidities of the labor markets on the level of the whole economy, the structural policy might benefit much more from a regional perspective. This paper follows exactly this path, focusing on the regional differences in labor market rigidities. The concept of the labor market rigidity is captured by the sensitivity of probability of finding a job on the labor market tightness, a key relationship behind the search model of the labor market referred to as matching function. The relationship is estimated as time-varying using the Kalman filter procedure. Indeed the results go to prove that the situation among the regional labor markets in the Czech economy varies with respect to space as well as time.

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