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Empirical Essays on Unemployment, Inflation and Access to Human Capital
Franta, Michal ; Münich, Daniel (advisor) ; Blien, Uwe (referee) ; Galuščák, Kamil (referee)
This dissertation consists of three distinct topics within labor macroeconomics, applied microeconomics, and applied time-series econometrics. The first essay extends the standard methodology used in analyzing unemployment duration. The extension is applied on empirical data for the Czech Republic and France. Furthermore, unemployment dynamics are examined in terms of unemployment incidence and duration for the Czech Republic, 1992-2007. The second essay belongs to the field of the economics of education. It contributes to the discussion on the equal access to higher education. The theoretical (structural) model of an individual schooling decision is set up and the implied reduced form is estimated on a unique data set of all secondary school graduates in the Czech Republic in 1998. Finally, the third essay deals with the inflation dynamics. It draws on extensive research in the modeling of the inflation process in developed countries. Nevertheless, the focus is on developing countries where specific economic and consequently econometric issues have to be considered.
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Margins of Trade: Czech Firms Before, During and After the Crisis
Galuščák, Kamil ; Sutóris, Ivan
We investigate the extensive and intensive margins of trade of Czech firms in periods before, during and after the crisis of 2008–2009. The intensive margin explains most of the aggregate export growth in 2006–2014, which corroborates previous findings for other countries. The contribution of the extensive margin is smaller, explaining on average 39% of the aggregate export growth in 2006–2007 and around 25% to 30% of that in the post-crisis period. The lower contribution of the extensive margin may signal a lower rate of convergence of the Czech economy. The results indicate that the crisis had a more severe impact on small exporting firms and that exports to countries outside the EU gained more prominence in the post-crisis years. Our results are similar to findings from previous studies on the impact of participation in global value chains on firms’ trade. Specifically, a more negative impact of the crisis was observed for exports with higher import intensity. Overall, our results point to the importance of using disaggregated data in the analysis of countries’ export performance.
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Labour Market Adjustment since the Global Financial Crisis: Evidence from a Survey of Czech Firms
Babecký, Jan ; Galuščák, Kamil ; Žigraiová, Diana
The paper reports how Czech firms reacted to changes in economic conditions in the aftermath of the global financial crisis of 2008–2009 until 2013 and identifies specific patterns of employment, wage and price adjustment by firms. The results are drawn from a survey of firms conducted within the third wave of the ESCB Wage Dynamics Network (WDN3). Overall, while changes in demand were both positive and negative over the period, aggregate wage growth remained low, although more firms experienced an increase in average productivity over labour costs than a decline. Labour cost reduction was achieved mainly by reduction of new hires and by individual layoffs. The main obstacles to hiring workers were uncertainty about economic conditions, high payroll taxes and a shortage of labour with the required skills. The frequency of wage changes was lower in 2010–2013 than before and was attributed by firms inter alia to stronger competition. Wage freezes and wage cuts were still in use, while wage growth was more likely to be observed in very small and large firms and firms with a foreign owner. The frequency of price changes in 2010–2013 compared to 2008–2009 remained unchanged for more than 80% of firms. More frequent price changes were due to stronger competition and volatility in demand, while exchange rate changes contributed to higher frequency of price changes on foreign markets.
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System of Labour Market Information
Duspivová, Kateřina ; Hronová, Stanislava (advisor) ; Gottvald, Jaromír (referee) ; Galuščák, Kamil (referee)
The main aim of this dissertation thesis is to present a new system of statistical information concerning the labour market in the Czech Republic with respect to the theoretical background as well as to latest trends in the labour market statistics. The structure of the thesis is as follows. In the first chapter, there is a theoretical framework of the labour market introduced. This framework interlinks relations among employees and employers and is neutral with respect to all the economic schools of thought. Besides, I describe an actual state of the labour market statistics in the Czech Republic and evaluate its compliance with the theoretical research. The second chapter is focused on the state of the art concerning labour market statistics from the point of view of both data integration and comprehensive systems of labour market indicators. In the first part of the third chapter, there is a proposal of the new system of statistical information concerning the labour market that complies with both the economic theory and latest trends in the labour market statistics. The most likely advantage of the new system is the fact that all the key aspects of the labour market (i.e. employment as well as remuneration) are surveyed and evaluated together. In addition to the generally known indicators of both economic activity and remuneration, I propose new indicators of job creation, job destruction, hires, separations, job reallocation and worker reallocation. In the second part of the third chapter, there is a proposal of the integrated data source that will allow us to quantify all indicators provided that there are no legal restrictions concerning data integration in the Czech Republic. In last two parts of the third chapter, there are discussed both the main issues concerning the implementation of the system and the pros and cons of the system. There have never been quantified the indicators concerning job and employee flows using the linked employer-employee data in the Czech Republic, so the pilot results are introduced in the fourth chapter. It is obvious that using the new system, we could prove some hypotheses that were impossible to prove using standard set of indicators. In the last part of the fourth chapter, there are worker and job flows balanced with respect to the stock information concerning labour market in the Czech Republic. In the fifth chapter, I investigate the possibility of a wider use of the new system in order to be able to identify and analyse an array of labour market phenomena in more detail. The thesis brings a new insight to the dynamics of the labour market compared to the generally known basic set of labour market indicators. The systematic approach, based on a wider use of linked employer-employee microdata combined with new indicators, has the advantages of a higher information capability as well as of complying with the requirements of the academics.
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Labour Force Participation and Tax-Benefit Systems: A Cross-Country Comparative Perspective
Galuščák, Kamil ; Kátay, Gábor
This paper investigates the extent to which cross-country differences in aggregate participation rates can be explained by divergence in tax-benefit systems. We take the example of two countries, the Czech Republic and Hungary, which – despite a lot of similarities – differ markedly in labour force participation rates. We first replicate for Czech household-level data the labour supply estimation for Hungary presented in Benczúr et al. (2014) and use the two perfectly comparable estimates to simulate how the aggregate participation rate would change in one country if the other country’s tax and social welfare system were adopted. Our estimation results yield similar labour supply elasticities for both countries, suggesting that individual preferences are essentially identical. The simulation results show that about one-half of the total difference in the participation rates of the 15–74 years old population can be explained by differences in the tax-benefit systems. The highest response is obtained for married women or women of childbearing age. This is related to the more generous maternity benefit system in place in Hungary as compared to the Czech Republic.
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Stress Testing the Private Household Sector Using Microdata
Galuščák, Kamil ; Hlaváč, Petr ; Jakubík, Petr
We develop a methodology for identifying financially distressed households and use it for testing the responses to shocks to the unemployment rate, the interest rate and prices of essential expenditure in the Czech Republic. We extend the approach of Johansson and Persson (2006) for Sweden and Albacete and Fessler (2010) for Austria to allow for full labour market transitions between employment and unemployment, and, due to data availability, to account for heads and spouses within households. This improvement may lead to a higher response of household distress incidence due to the unemployment rate shock than in both Sweden and Austria, while the effects due to the interest rate shock are of similar size as in Austria. We illustrate the use of our approach for stress testing households’ ability to pay their debts using macroeconomic scenarios from the CNB’s official forecast and from the CNB’s Financial Stability Report. The results highlight the importance of using micro-level datasets in the analysis of household distress incidence, as the impact of shocks is more pronounced among lower-income households.
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Changes in the Czech wage structure: Does immigration matter?
Dybczak, Kamil ; Galuščák, Kamil
Using the Albrecht et al. (2003) version of the Machado and Mata (2005) decomposition technique along the wage distribution, writers find that immigrant workers do not affect changes in the Czech wage structure between 2002 and 2006 despite their substantial inflows. Instead, changes in the wage structure are explained solely by increasing returns of native workers, while changes in the observed characteristics of native workers, particularly a rising level of education, are responsible for increasing wage dispersion.
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