Compendium of Country-Specific Analyses on Solutions to High Unemployment Rate

Dátum: 04.03.2016

The document offers a brief overview of key facts and hypotheses about reasons of unemployment in Visegrad 4 countries and in Ukraine. It includes an overview of key applied or planned policies to solve this problem as well as some of key challenges discussed in respective countries. The document comprises five country-specific analyses presented in a webinar “Solutions to high unemployment rate” that took place on January 29th, 2016 under the project “Hidden Triggers of Economic Growth in V4 plus Ukraine” supported by the International Visegrad Fund; see also.

Introduction

For a long time, the Czech Republic has been a champion from among Visegrad 4 countries in having low unemployment rate (5.1% in 2015, Eurostat). In the past few years, also Hungary (7.7%), Poland (7.5%), and Slovakia (11.5%) decreased their unemployment rates rapidly. In Ukraine, the official unemployment rate increased after recent Revolution of Dignity and military conflict in the eastern part of the country (9.7% in 2014, International Labour Organisation – ILO).

Relatively low unemployment rates in Poland and Hungary are partially distorted by higher shares of inactive people (mainly taking social benefits) and in Hungary also by the expansion of public works. In Ukraine, the official statistics does not reflect much wider shadow economy.

Unemployment rate in V4 and Ukraine (in %, 2015)

Source: Eurostat, International Labour Organisation (ILO) for Ukraine

If we look at the employment rates, the Czech Republic remains at the best position (73.5% in 2014, Eurostat) followed by Hungary (66.7%), Poland (66.5%), Slovakia (65.9%) and Ukraine (64.5%, ILO).

Employment rate in V4 and Ukraine (in %, 20-64 years of age, 2014)

Source: Eurostat, International Labour Organisation (ILO) for Ukraine

Note: For Ukraine, so called “working age” is considered, meaning 15-57 years of age for females and 15-59 years for males.

The pattern changes if we look at the activity rates, which is calculated from the sum of unemployed and employed people. The Czech Republic is still on the top (78.2% in 2014, Eurostat), followed by Slovakia (75.7%), Poland (73.0%), Hungary (72.2%) and Ukraine (71.4%, ILO). It seems that in Poland and Hungary, compared to Slovakia, there are more people in the active age who do not work and, at the same time, do not belong to the unemployed. These may be inactive people taking social benefits such as old-age and disability pensions, sickness benefits, people on maternity leave, but also students or simply discouraged people who believe there are no jobs available. Many of them meet the OECD definition of “marginally attached workers” who “are persons aged 15 and over, neither employed, nor actively looking for work, but are willing/desire to work and are available for taking a job”. According to the OECD statistics for 2014, there were 1.7% marginally attached people as a share of the labor force in Slovakia, compared to 3.7% in Poland, 4.0% in Hungary and just 0.9% in the Czech Republic.

Activity rate in V4 and Ukraine (in %, 20-64 years of age, 2014)

Source: Eurostat, International Labour Organisation (ILO) for Ukraine
Note: For Ukraine, so called “working age” is considered, meaning 15-57 years of age for females and 15-59 years for males.