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Job and wage changes during the transition: evidence from Czech retrospective data


Münich, Daniel; Svejnar, Jan; & Terell, Katherine (2000). Job and wage changes during the transition: evidence from Czech retrospective data. The National Council for Eurasian and East European Research, Washington DC: University of Michigan.


The transition from central planning to a market economy provides one of the most interesting laboratories to study the simultaneous emergence of labor markets and the private sector. In this paper, we analyze a key issue in transition economies that has so far received little attention, namely the link between job mobility, individual wage changes and the dynamics of firm characteristics over time. Specifically, we examine the effect of job mobility on individuals’ wage changes from 1989 to 1996, considering how workers left the old job and the characteristics of the new job, including whether it is a new private sector firm or not. The lack of attention to this issue appears surprising since the movement of labor from old and declining sectors of the economy to the new ones, coinciding with the exit, entry and restructuring of firms, is the very essence of the transition process. The scant literature stems largely from the lack of data for most of the transition economies that link individuals’ wage and job characteristics to their firms’ characteristics. In this paper we report results based on a retrospective survey for the 1989-1996 period that we carried out in the Czech Republic.


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Münich, Daniel
Svejnar, Jan
Terell, Katherine