Prague Economic Papers 2006, 15(2):99-112 | DOI: 10.18267/j.pep.279

Long-Term Unemployment in the Czech Republic: Motivation, Obstacles and the Social Assistance System

Magdalena Kotýnková

Economic transition in the Czech Republic has created a group of long-term unemployed people, many of whom do not actively seek out employment opportunities and instead rely on social assistance. A number of subjective and objective factors contribute to this problem, including the shifting demands of the labour market, regional variation, workers' attitudes and skill level, and the relationship between social assistance benefits and the minimum wage. This article assesses the issue of workers' motivation. Although there are combinations of factors that result in low motivation to search for jobs, the social assistance system is especially at fault and structural changes must be made to better foster workers' engagement and motivation. The problem with the social assistance system is finding the balance between protecting people from poverty and motivating them to work.

Keywords: unemployment, long-term unemployment, labour market, social assistance system, unemployment benefits, social assistance benefits, minimum wage, incentive gap

JEL classification: H55, J64, J68

Published: January 1, 2006  Show citation