Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127550
Authors: 
Lehmann, Hartmut
Razzolini, Tiziano
Zaiceva, Anzelika
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9588
Abstract: 
This paper analyzes how the labor market adjusts to the Great Recession. To this aim, we use the data for Latvia, a country that has experienced one of the most severe recessions in Europe and a subsequent remarkable recovery. Employing longitudinal EU SILC data and a panel data set constructed by us from various waves of the Latvian Labour Force Survey (LLFS), we estimate worker transitions between labor market states. Labor market adjustment takes place predominantly at the extensive margin since it is driven by flows from permanent wage employment to unemployment. We also show that older, non-Latvian and above all less skilled workers are especially hard hit by the economic crisis. Estimated transitions between four mutually exclusive occupational groups demonstrate that downward mobility is very limited even during the Great Recession. Finally, wage regressions suggest that job mobility is not associated with increased labour productivity during and immediately after the crisis.
Subjects: 
labour market transitions
job and occupational mobility
Great Recession
Latvia
JEL: 
J6
J21
P20
P23
Document Type: 
Working Paper

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