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The aim of this thesis is to examine the direct effects of labour market institu- tions on unemployment rates in the selected EU Members. For this purpose, we use macroeconomic cross-country, time series analysis for 21 OECD European members over the 2001-2011 period. The results gained from our empirical ana- lysis are rather inconclusive over the possibility to explain the development of European unemployment solely by analysing the effects of labour market insti- tutions. This finding might as well be caused by the volatile evolution of both output and unemployment over the observed period. The importance of busi- ness cycle is confirmed by our results as the measure for the output gap appears highly significant in every model specification. Unlike the majority of previous literature, in our estimates the proxies for macroeconomic shocks do not turn out to be significant. Hence, we decided not to examine mutual interactions between macroeconomic shocks and institutions. JEL Classifications: J08, J30, J51, J64 Keywords: unemployment, labour market institutions, EU, active labour mar- ket policies Author s e-mail: janhnevkovsky@gmail.com Supervisor s e-mail: strielkowski@fsv.cuni.cz 1

This thesis consists of three theoretical chapters, all related to the response of unemployment to shocks and the role of active and passive labour market policies. Throughout the thesis, unemployment is assumed to evolve as a result of the uncoordinated nature of the labour market along the lines outlined in the Diamond-Mortensen-Pissarides equilibrium search and matching model. Chapter 2 examines the effects of employment policies on vacancy creation and allocation decisions of firms and unemployment across workers with different skills. We develop a partial equilibrium model with heterogeneous high- and low-tech jobs and with skilled and unskilled workers, which we motivate by the stark evidence on the incidence of cross-skill employment (which crowds out unskilled workers, e.g. evidence for the US, the UK and the EU put these at 58%, 32%, and 35%, respectively). We show that certain employment protection policies could, in fact, lead to a reduction in job creation and might alter the allocation of vacancies across low- and high-tech job type. We find that: (i) skilled workers benefit while unskilled workers experience high jobless rate; (ii) policy effects differ when they are skill-specific; (ii) stricter policies can have more severe consequences; and (iv) vacancy creation subsidy can play a key role in reducing unemployment across worker type as well as alleviating the cross-skill crowding out of jobs. Against conventional wisdom, we demonstrate that severance compensation can have a ‘real’ effect on job creation decision, provided there is some degree of strictness in its enforcement. Motivated by the extensive use of fiscal stimulus policies and labour market reforms during the last economic crisis, in Chapter 3 we study the implications of labour market regulations in driving the sensitivity of an economy to fiscal spending shocks, in a Dynamic Stochastic General Equilibrium (DSGE) model with job search frictions. We demonstrate that less rigidity in the labour market reduces the impact of fiscal demand shock on job creation and employment, both at extensive and intensive margins, whereas higher rigidity amplifies it. We also establish that the extent to which government spending promotes economic activity, job creation and employment depends on the degree of substitutability between private and public consumption. Higher substitutability dampens economic activity and reduces the sizes of output and employment multipliers. Labour market-oriented fiscal spending is found to be the most potent policy instruments for promoting employment – especially in the presence of high labour market rigidities. Finally, in Chapter 4, we study how openness to international trade and capital mobility and their interactions with labour market policies affect the behaviour of an economy, in particular with respect to its unemployment level. We show that the degree of openness to international capital flow is crucial for understanding the response of unemployment to different shocks. In isolation, by raising the incentive to invest, a reduction in capital mobility barriers leads to lower unemployment, both in the long-run and the dynamic short-run. With limited restrictions to capital movement, unemployment responds faster and with greater magnitude to a domestic productivity shock, and this is further enhanced the more the economy is open to international trade. A striking finding of this study is that while a higher degree of capital mobility enhances the adjustment of unemployment in response to a domestic productivity shock, it dampens its adjustment to a foreign demand shock. By contrast, higher openness to international trade enhances the adjustment effects of both shocks on unemployment. Finally, we find that heterogeneity in the welfare state systems in the EU can generate substantial differentials in the adjustment of unemployment to various shocks.

There is a growing literature studying unemployment dynamics by means of worker flow data between labor market states. This paper contributes to this literature stream by analyzing the dynamics of the Austrian unemployment rate applying novel worker flow data for 2005-2016. Our main results can be summarized along two dimensions: First, we show that worker flows between unemployment and inactivity are major determinants of unemployment fluctuations in Austria. Second, we show for the working-age population that the contribution of male worker flows to the overall variation of the unemployment rate is higher, but that this relation turns when it comes to the youth cohort. The gender differences are probably related to the early occupational and educational segregation of young men and women in Austria. The paper concludes by stressing a strong need for further empirical and theoretical research which aims to link structural differences in an economy with different responses to the business cycle. / Series: Department of Economics Working Paper Series

Following diploma thesis is focused on retraining as a form of vocational adult education and on its possibilities in the struggle against unemployment. This thesis aims to describe retraing in terms of being an effective measure of active labour-market policy as well as to examine thorougly the actual contribution of retraining scheme for increasing both employment rate and employability. This effort subsequently entails the disclosure of some weaknesses in the implementation of this measure. Diploma thesis therefore contains also some recommendation for improving the existing practice. The theoretical part of the thesis starts by providing general overview of fundamentals of a theme such as labour market, unemployment or labour policy. Then it moves on theoretical description of retraining scheme itself. Empirical part of the thesis is founded on analysis of the local labour market (the territory of the capital city Prague) and on the particular means of action in the implementation of retraing scheme here.

In recent decades, research from across the social sciences has demonstrated a strong, consistent and causal link between unemployment and a wide range of negative outcomes. These outcomes go beyond economic problems, incorporating issues such as low well-being, poor health and weak social capital. During the same time, successive UK governments have expanded the use of active labour market programmes (ALMPs): a wide range of interventions that aim to move unemployed people closer to the labour market. ALMPs have been widely evaluated since becoming a central part of UK social policy, yet the majority of studies focus almost exclusively on economic outcomes, such as re-employment and wage levels. This is despite the weight of evidence suggesting unemployment is as much a social problem as an economic one. This discrepancy has led to a small but growing body of research suggesting that ALMPs might play a role in modifying some of the health and social costs of unemployment: beyond simply moving people closer to the labour market. Using a mixed methods research design, this study examines whether ALMPs achieve this by considering four key questions. First, are ALMPs associated with higher well-being, health and social capital compared to the alternative of 'open unemployment'? Second, if there is an association, how robust is this and is there any evidence of a causal function? Third, does the context of an ALMP - such as the specific type of scheme and the kind of participant - matter for understanding outcomes? And fourthly, how and why do people's experiences of unemployment and ALMPs shape their health and well-being? The findings presented in this thesis offer five original contributions to the study of the health and social effects of ALMPs. First, there is a dichotomy in the effects of ALMPs: participants have higher well-being than the openly unemployed but similar health and social capital levels. Second, ALMPs are most effective in changing how participants feel about and evaluate their lives but are largely unsuccessful in mitigating negative emotions like anxiety. These two findings are evident in both cross-sectional and longitudinal data, suggesting the possibility of a causal function of ALMPs. Together, the findings suggest that the positive well-being effects of ALMPs are not necessarily linked to improved health or social capital but because participants begin to think about their lives in a different, more positive way. Third, well-being gains are experienced by both short-term and long-term unemployed people but disappear upon re-employment. This finding has an important implication for policy, with ALMPs seemingly effective as a short-term protective well-being measure. Fourth, this is the first UK study to explore whether ALMPs work more effectively for different types of unemployed people. The findings presented in Chapter Seven show that work-oriented ALMPs are more successful than employment-assistance programmes, whilst men, younger people, those with fewer qualifications, lower occupational status and lower pre-programme well-being experience the largest benefits of participation. Fifth, the qualitative analysis presented in Chapter Eight argues that ALMPs worked best when schemes reversed the perceived ‘losses’ associated with unemployment. Three processes of loss were identified - agency loss, functional loss and status loss – which, it is contended, help explain both the observed effects of ALMPs and the broader experience of unemployment. The thesis concludes with policy suggestions for improving the capacity of ALMPs to mediate the experience of unemployment.

The aim of the thesis is to identify the specific impacts of the global financial and economic crisis on the labour market of the Czech Republic and Slovakia. The theoretical part deals with the problems of unemployment and presents the basic theoretical approaches to the functioning of the labour market. The paper then presents the underlying causes, development and spread of the economic crisis and its impact on economic performance and labour markets with an emphasis on the development of the unemployment rate in the European Union and Central European countries. The output is the analysis of effects on the labour market of the Czech Republic and Slovakia during the crisis, their evaluation and comparison.

The goal of the thesis "The proposal of the Employment Support with Utilization of Active Labour Market Policy" is the summary of how to use Active labour market policy with a focus on welfare service, following the proposal of the efficient use of the welfare services using funding from the European social fund.

This thesis investigates how the experience of labour market insecurity affects individuals’ life courses and family lives in the UK. It focuses on unemployment and temporary work as the two sources of insecurity and examines their consequences on partnership formation, transition into parenthood, the well-being within family, and partnership dissolution. It follows a longitudinal approach and uses a sample from the BHPS. The results showed that unemployment has serious negative consequences for individuals’ family outcomes. Temporary work also has some negative outcomes, particularly for the vulnerable groups. Unemployment and temporary employment seem to discourage young adults to form marital unions, whereas especially for the young and non-married men unemployment increased the risk of fatherhood. Temporary work has a similar effect for those with no educational qualification, who are more likely to have their first child. Unemployed individuals and their spouses report a drop in their life-satisfaction, psychological well-being and are more likely to feel depressed, and they face a greater risk of marital separation. Male temporary work is associated with poorer well-being for the low-skilled employees and those who report subjective job insecurity. The wives of men working on temporary contracts also suffer from a decline in the well-being. The thesis also looked into the consequences of insecurity at the couple level. Contrary to our initial assumption, dual-insecurity - where both of the spouses are in insecure employment - does not have the strongest effect on the family. Rather, role-reversal between the spouses has the largest impact for family outcomes. When a male partner is unemployed and the female partner is employed, or when the male partner is working on temporary basis and the female partner is working on permanent basis, then the couple delays transition into parenthood, it suffers from a decline in the well-being, and it is more likely to separate.

The thesis deals with the active labour market policy in the Frýdek-Místek district, where is the problem of higher rates of unemployment and long-term unemployment. Active labour policy has an important role in solving the problem of unemployment in the region. The thesis describes the nature of the local labour market and assesses the active employment policy programs used in the years 2006 - 2010 in terms of their impact on employment and employability of participants. In particular, the thesis focuses on retraining, which is one of the most used tools of active employment policy, and monitors the creation of new jobs that directly affect the situation of individuals in the labour market. The thesis evaluates the targeting of retraining, which significantly affects their results. Using statistical data analysis methods are examined gross effects of retraining and monitored the effects of active employment policy to selected target groups of unemployed people.