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This report focuses on movements of individuals between employment, unemployment and inactivity in selected EU countries during the period 2008-2012. The report also examines the extent to which the job-finding chances of young unemployed decline due to the length of their unemployment episodes.

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[The authors] analyse labour market flows and unemployment rate dynamics in the Czech Republic (CR), Slovakia and Poland. Relative involvement of working-age individuals in movements between various labour market states appears to be approximately five times lower in Central Europe than in the US/UK. Compared to neighbouring countries, the CR suffers from a relatively weaker net flow of individuals from unemployment to employment. This net flow alone would cut the unemployment rate in Poland more than twice as fast as in the CR. In particular, currently unemployed Czech men, individuals with primary education, and the 55-65 age group are adversely affected by this national-specific feature of labour market flows.

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Using Spain and the Czech Republic as examples of two [European Union] EU countries with remarkably different youth labour market performance, [the authors] apply a gross flow analysis based on [European Union-Statistics on Income and Living Conditions] EU-SILC longitudinal data. While in Spain increases in youth unemployment rate are driven mostly by young people losing their jobs, in the Czech Republic, this is mainly due to new labour market entrants who failed to find a job. Furthermore, the analysis of flow transition rates suggests that the job-loss rates of young workers are persistently higher than those established for prime-age workers. But the analogous result applies, though less uniformly, also to the job-finding rates. Survival functions estimates point to prolonged unemployment duration and increasing long term unemployment, while both these tendencies apply relatively more to the young unemployed. Proportional hazard models generally indicate that shorter unemployment spells are more likely to be terminated by finding a job in comparison with those spells lasting for more than one year, while the hazard ratios for duration intervals under one year are typically higher for prime-age unemployed. Finally, [the authors] examine education, gender, household size, etc. as determinants of exits from unemployment, with uniform evidence found for tertiary education only.

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