Publication details

Nezaměstnanost a pracovní pobídky

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Title in English Unemployment and Work Incentives


Year of publication 2003
Type Article in Periodical
Magazine / Source Politická ekonomie
MU Faculty or unit

Faculty of Social Studies

Field Economy
Keywords replacement rate; reservation wage; work incentives
Description In this paper we explore how unemployment benefits and other social benefits affect work incentives in the Czech Republic. We test the link between replacement rates and reservation wages taking duration of unemployment into account and we specify validity of the outlined model using replacement rates and reservation wages recognised in the sample of the unemployed. We conclude that replacement rates are high only in case of specific family types (incomplete families and families with children where women have lost the job), low skilled categories of the unemployed. Reservation wages are linked mainly to the economic and social status of the unemployed and seem to be raised by replacement rates of benefits only with the category of the unskilled. Besides low efficiency of job search, insecurity of job tenure and of insecurity future benefits entitlements raise the price of the "status of the unemployed" and push reservation wages up.
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