The paper analyses how the municipality-level unemployment rates of 1993 and their changes in 1993-2001 were affected by the availability of urban labour markets in Hungary. The year 1941 share of the Jewish population is used as an instrument for availability, in order to mitigate endogeneity,...

We extend the benchmark model of Aghion and Blanchard (1994) assuming two segments of the emerging private sector that differ in workers’ productivity. We look at the paths of employment, wages, taxes, labor costs and profits during and after the transition, up until the shock is fully...