Understanding Czech Long-Term Unemployment

One potential impact of the looming EU accession of Central European economies is unem-ployment hysteresis working through long-term unemployment (LTU). In this paper, we explore the mechanisms of LTU by providing a detailed description of the recent rise in Czech LTU following the recession of 1997. We place the Czech evidence in international perspective using, e.g., VAR-based simulations, and focus on the role of welfare beneÞts in driving LTU. Acknowledgements Jurajda is also affiliated with IZA, Bonn. This research was supported by a grant No. P98