Czech republic and youth unemployment

Youth unemployment is one of the most serious issues confronting the European Union and, indeed, the Czech Republic, and it has a huge impact on the unemployed as well as the whole population. It has been determined that higher levels of unemployment in young people have far greater negative effects than other age groups. The most recent global recession led to one of the country's highest unemployment rates, with rates hitting an all-time peak of 9.69 percent in 2004. (Loster, & Langhamrova, 2011). In the Czech Republic, the average unemployment rate of the youth is considerably higher than the average for other age groups. A fundamental statistic that can be observed is the relationship between the unemployment rates and the levels of education and gender disparities.

The unemployment rate among young persons in the country stood at 9.3% in March 2017, an increase from 9.1% in February of the same year. Between the years 1993 and 2017, the average rate of youth unemployment was 14.29% and reached an all time high in October 2004 when it stood at 21.6%. The lowest rate of 6.7% was in October 1996 (The Czech Statistical Office, 2017).

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The economic recession of 2008/2009 had an impact on the globe and the European Union noted that the most affected group was the young people aged between 15-25 years. The European Commission recommended the adoption of the Youth Guarantee, which was marketed as part of the Youth Employment Package (European Commission, 2012). The program was to enable all people under the age of 25 years who lose their jobs or are unable to find a job after graduation, to be offered a quality offer for employment, internships, and further education for four months. In response to this recommendation, the Czech Ministry of Labour and Social Affairs introduce the Internship Program for Young People that offers students in their final year of study work experience (MPSV, 2012).

Unemployment among the youth has significant costs to the community including the loss of the work habits, or lack of the opportunity to obtain the habits in the first place. The frustrations of searching for a job unsuccessfully may lead to social unrest. It is not uncommon to hear the youth being branded the “lost generation” because of the increasing crime rates and dubious means of earning a living among the youth (Mroz, and Savage 2006).

The Czech Republic has experienced an economic cycle where there was accelerated growth after an economic slowdown observed in 2002. This was accelerated by the acceptance of the country to the European Union and with it the markets opened up. Between 2005 and 2007, the growth exceeded its potential and there was inadequate labour force resulting to increase in labour immigration and growth of wages (The Czech Statistical Office, 2017). In 2011, after the economic slowdown, the country again faced another recession. These developments in the GDP had impacts on the labour markets. The lowest unemployment was seen in 2008 and rose sharply in 2009 after the recession. Between 2004 and 2008the unemployment rate fell from 19.9% to 9.9% but rose again to 19.0% in 2013 after the recession.

It has been traditionally accepted that young people with no or low levels of education are the most affected by unemployment. Statistics have indicated that the rates of unemployment among the youths with secondary education and university education do not have significant deviations, although those with higher education seem to have slightly lower rates (Gregg, & Tominey, 2005). However, the proportion of people with higher levels of education among the youth is significantly low. In 2004, the rate of unemployment among the young people with basic education was 54% which was almost 3 times more than those with medium levels and almost 6 times more of those with university education.

The longer unemployment lasts, the deeper the negative effects become for the unemployed people and the society. The government needs to check the incidence of long term unemployment among the young people because it represents a significant risk. The creation of the idea of ‘no work is normal’ is a dangerous as it presents an opportunity for radicalization (Mroz, and Savage 2006). It has been observed that the young people return to the education process or into some form of retraining. Some of the unemployed people cannot find a job and enter into long-term unemployment (Pavelka, 2011). While the there have been challenges, in dealing with unemployment, the government has tried to shield the labour market by stabilizing the economy and investing in education to reduce the incidence of unemployment among the youth.

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References

European Commission. (2012, December 05). Youth employment: Commission proposes

package of measures – frequently asked questions. Retrieved from

http://europa.eu/rapid/press-release_MEMO-12-938_en.htm?locale=en

Loster, T., & Langhamrova, J. (2011). Analysis of long-term unemployment in the Czech

Republic. In Loster Tomas, Pavelka Tomas (Eds.), International Days of Statistics and

Economics (pp. 307-316), ISBN 978-80-86175-77-5

The Czech Statistical Office. (2017). Empolyment and Unemployment Statistics. Retrieved

from http://www.czso.cz/csu/2017edicniplan.nsf/p/3115-13

Pavelka, T. (2011). Long-term unemployment in the Czech republic in comparison with the

other countries of the European Union. In Loster Tomas, Pavelka Tomas (Eds.), International Days of Statistics and Economics (pp. 481-489). ISBN 978-80-86175-77-5

MPSV. (2012). Stáže pro mladé zájemce o zaměstnání. Retrieved from http://www.mpsv.cz/cs/14161

Mroz, T. A. and T. H. Savage (2006), The Long-Term Effects of Youth Unemployment.

Journal of Human Resources¸ 41(2), Spring, pp. 259-293.

European Commission.(2014a). Youth employment. Retirieved from

http://ec.europa.eu/social/main.jsp?catId=1036&langId=en

European Commission. (2014b). Youth employment: Commission proposes package of

measures – frequently asked questions. Retrieved from http://europa.eu/rapid/pressrelease_MEMO-12-938_en.htm?locale=en

Gregg, P., & Tominey, E. (2005). The wage scar from male youth unemployment. Labour Economics, 12(4), 487-509