Effect of Labour Code Reform on Unemployment Duration in the Course of Crisis: Evidence from Slovakia

This paper investigates the pattern of exiting unemployment in Slovakia during the period 2005 - 2009 using an alternative concept of unemployment represented by the self-perceived labour market status as measured by the EU-SILC dataset. In particular, we examine the effects on unemployment duration of the changes in labour regulations as captured by a major Labour Code reform in 2007. Applying standard statistical techniques to several inflow samples we find that after the new Labour Code came into effect in September 2007 the unemployed have, ceteris paribus, lower probability of exiting unemployment by almost 40%.