Decomposing Structural Unemployment Persistence in Post-Transition Economies: A Beveridge Curve Misalignment Approach Under Asymmetric Labor Demand Shocks

Abstract

Structural unemployment persistence in post-transition economies remains a critical policy challenge, exacerbated by asymmetric sectoral demand shocks and deepening skill-vacancy mismatches. This study employs a dynamic Beveridge curve decomposition framework augmented with time-varying parameter vector autoregression (TVP-VAR) to isolate cyclical from structural unemployment components across fourteen Central and Eastern European economies over the period 2004–2023. Utilizing harmonized Eurostat labor force survey microdata and vacancy statistics from the European Job Mobility Portal, the analysis identifies statistically significant northward shifts in Beveridge curves post-2015, indicative of deteriorating matching efficiency. Quantile regression results further reveal heterogeneous firm-size effects on vacancy-filling durations. Policy simulations suggest that targeted active labor market programs, conditional on occupational retraining subsidies, reduce structural unemployment rates by 1.8–2.4 percentage points within a four-year horizon.