LAB meeting, Czech Republic

Prague, 20 November 2014. Metropolitan University Prague organised a Local Advisory Board Meeting. The main aim was to discuss the first research results collected by the MUP team with the stakeholders involved (Research Institute for Labour and Social Affairs, Labour Office of the Czech Republic, Czech National Disability Council, and Educa International. The meeting also benefited from the presence of invited experts from Institute of Sociology of the Czech Academy of Sciences and European Commission. It was organised as a publicly open research seminar where the MUP team presented basic information on the STYLE project as a whole, along with the information about specific tasks to be fulfilled by MUP. The major part of the MUP presentation and subsequent lively discussion was devoted to the results of analysis of labour market flows, unemployment rate dynamics and long-term unemployment of young workers in Spain and the Czech Republic.

Main issues of debate

Youth Labour Market Flows as a Measure of Labour Market Fluidity

Both in Spain and the Czech Republic, the relative share of young people involved in gross labour market flows is persistently higher than of prime-age individuals. Perhaps more interestingly, the relative involvement of young people in gross labour market flows appears to bear rather pro-cyclical features, i.e., it is declining in line with the progress of the Great Recession. The opposite tendency is likely to hold true for prime-age individuals, the relative involvement of whom in gross labour market flows is rather counter-cyclical. As a result of such disproportionate evolution, the gap between labour market dynamics of both age groups has narrowed: The youth labour markets have responded to the deepening Great Recession by losing part of their fluidity, while the prime-age labour markets have become slightly less tight. The reasons of different cyclical sensitivity of labour market dynamics of both age groups still require further research.

 

Youth Labour Market Flows as a Measure of Unemployment Rate Dynamics

Presented gross flow analysis indicates that the recent increases in youth unemployment rates have different origins. While in Spain increases in youth unemployment are driven mostly by young people losing their jobs, in the Czech Republic, this is mainly due to new labour market entrants who failed to find a job. The participants discussed these empirical findings in a light of potential policy relevance within the different settings of labour market institutions in both countries.

 

Flow Transition Rates

The analysis of flow transition rates suggests that the job-loss rates of young workers are persistently higher than those established for prime-age workers. However, the analogous result applies, though less uniformly, also to the job-finding rates. These results appear to be in line with other research. But some results are more surprising – a young labour market entrant in Spain can still hope in a higher average month-to-month probability of finding job than becoming unemployed. In the Czech Republic, the reverse is the case, with unemployment being the more likely destiny of young labour market entrants. The discussion led to the conclusion that badly performing youth labour markets with enormously high unemployment rates have not failed in all relevant respects. Currently, their development seems to be hindered predominantly by high risk of job losses and diminishing employment prospects of the unemployed, rather than by impeded transitions from inactivity to employment. In countries with lower youth unemployment rates, unemployment policy agenda appears to be challenged by quite the opposite tendency.

Duration Dependence and Marginalisation

Survival functions estimates presented point to prolonged average unemployment duration and increasing long term unemployment of young people in both countries. Proportional hazard models generally indicate that shorter unemployment spells are more likely to be terminated by finding a job in comparison with those spells lasting for more than one year: The highest probability to find job was established for unemployment spells lasting between 3-4 months. The discussion pointed to the potential policy relevance of these results for the timing of various activation measures aimed at young unemployed.

Location: Metropolitan University Prague (MUP)

Date: 20 November 2014

 

Participants:

  • Czech LAB Members:
  • Research Institute for Labour and Social Affairs

Jaromíra Kotíková, Head of Research Team “Labour Market and Employment Policy”

  • Educa International

Josef Vochozka, Director

–     Labour Office of the Czech Republic

Jan Karmazín, Director of Labour Market Division

–   Czech National Disability Council

Michal Dvořák, Head of Organisation Department

  • Invited External Experts
  • Institute of Sociology, Czech Academy of Sciences

Jiří Večerník, Head of Economic Sociology Department

  • European Commission, Representation in the Czech Republic

Pavlína Žáková, Economic Advisor

  • MUP Representatives

–     Ondřej Daniel, Head of Scientific Support Centre

–     Jan Hřích, Secretary, Dep. of International Relations and European Studies

  • MUP STYLE Research Team
  • Vladislav Flek, WP 5.2 leader
  • Martina Mysíková, Researcher
  • Other Participants

The meeting was organised as a research seminar and was open to the MUP Faculty, students and general public