Jan Fidrmuc, Kristína Gardoňová , Martin Hulényi (p), Zuzana Zavarská

Kamila Borsekova

In this paper, we explore the effect of transport infrastructure on regional labor markets by examining the impact of a new highway in central Slovakia, put into use in two stages: in 2000 and 2011. Our results show that although the unemployment of the whole region declined after the construction of the highway, we observe opposing effects at the municipal level: a decrease of unemployment in the municipalities near the first highway segment but a surge in unemployment rate of the municipalities in the vicinity of the second section. A possible explanation for these divergent patterns could be the different characteristics of the two regions, such as the quality of human capital or the ex-ante degree of industrialization.

Shin-kun Peng (p), Juin-Jen Chang, Li-Wen Hung

Martin Hulényi

This research examines the interaction of (de)unionization and trade liberalization in shaping firm productivity, market structure, trade flows, unemployment, and functional distribution (changes in the wage difference and labour income share). It introduces unemployment to the Melitz-Ottaviano model (2008) by considering unionism in the differentiated manufacturing sector and searching frictions in the homogeneous service sector. In the closed economy, we show that unionization has a selection-softening effect, leading to a non-monotonic relationship between unionization and the number of firms and un-employment. In the two-country equilibrium, unilateral unionization in one country gives rise to a selection-softening effect for domestic-only firms and a selection-toughening effect for exporting firms in this country. With international trade, unionization is more likely to increase unemployment relative to autarky. In response to the unilateral unionization, the average wage difference for this country compared to its trading partner country rises if openness to trade is low, but it declines if openness to trade is high. Under unionized labour markets, trade liberalization does not necessarily reduce unemployment, depending on the relative degree of unionization between the two trading countries. In sharp contradiction to the conventional notion, deunionization can increase, rather than decrease, the labour income share of unionized workers, provided that openness to trade is sufficiently high.

María del Cisne Tituaña Castillo (p), Alberto Diaz Dapena, Fernando Rubiera Morollón

Shin-kun Peng

"see extended abstract"

Kamila Borsekova (p), Samuel Korony

María del Cisne Tituaña Castillo

The present study proposes and tests an operational framework to examine the significance of resilience and the related concept of vulnerability, for labour market efficiency, in the context of regional competitiveness.
Three data analysis methods were used: principal component analysis, regression analysis, and multivariate classification using CART decision trees. The individual methods complemented each other for the purposes of comprehensive research on resilience and vulnerability of labour markets in the EU. Principal component analyses and regression modelling were used to test the significance of resilience and the related concept of vulnerability for labour market efficiency indicators in regions of the EU. For the interpretation of the principal component analyses results and regression analyses results, we deployed the CART decision tree algorithm to identify unknown data patterns of labour markets in regions of the EU based on resilience and vulnerability principal components and original LME indicators.
The proposed operational framework for understanding the resilience and vulnerability of regional labour markets, based on a principal components analysis, will be helpful in developing policy measures to improve both regional competitiveness and the resilience of regional labour markets. The proposed operational framework offers solid and new theoretical, methodological and empirical insights for understanding the real contribution of resilience and vulnerability to regional labour markets. A substantial advantage of the operational framework proposed in the present paper is its ability to become immediately applicable to policy and decision making. Our analysis employed readily accessible official Eurostat data, and standard indicators were involved in the Regional Competitiveness Index for 2019. Due to a consistency and time continuity in the Regional Competitiveness Index classification, policy-makers are able to compare the performance of their regions and regional labour markets and to appropriately design suitable measures and policies. From this point of view, the present paper has produced numerous relevant analytical elements and results for politicians and decision-making bodies appropriate for direct use and application at various levels.