What Drives Gender Differences in Unemployment?

Post-communist labour markets provide a remarkable laboratory for analysing gender differences in labour dynamics and unemployment in particular, since unemployment rates rose from zero to double digit levels in a very short time. While there is much evidence explaining the wage gap between men and women, we provide the first systematic analysis of the gender unemployment gap. Using primary data from the Czech Republic and secondary data from a few other transition economies, we apply a method that allows us to pinpoint which transition probabilities between labour market states are driving the difference. The remarkable finding is that the lion's share of the gender gap in the unemployment rates in the Czech Republic, East Germany, Poland and Russia during early transition is explained by one and the same flow: women's lower probability of finding a job from unemployment. This result holds for the Czech Republic even after controlling for demographic, regional and cyclical factors that may affect gender differences in unemployment.