Czechia Among EU’s Worst for Labor Market Flexibility and Gender Pay Gap

Despite having the lowest unemployment rate in the European Union, the Czech Republic struggles to create favorable conditions for its workers.

According to the latest Prosperity and Financial Health Index, the country ranks 18th out of 27 EU members, reflecting a range of issues such as low labor market flexibility and a significant gender pay gap.

One key factor contributing to this poor ranking is the limited availability of part-time work in the Czech Republic. Many employees lack the option to work flexible hours, a stark contrast to countries like the Netherlands, where 24% of employees can choose when and where they work through options such as flexitime or teleworking.

In the Czech Republic, only 14% of employees enjoy such flexibility. The nation also performs poorly regarding gender pay equality, placing among the worst in the EU for the gender pay gap.

Three Years of Decline in Labor Market Conditions

The Czech labor market has been deteriorating for three consecutive years. In 2022, the country held the 15th position among EU members for labor market conditions. However, the latest analysis shows it has slipped to 18th place.

Countries like the Netherlands, Austria, and the Nordic nations, including Denmark, lead in providing the best conditions for employees. These countries are characterized by high levels of work flexibility; for example, 42.8% of jobs in the Netherlands are part-time, compared to just 6.9% in the Czech Republic, the 9th lowest rate in the EU.

Meanwhile, countries in Eastern and Southern Europe face even worse labor market challenges. Spain, for instance, has the EU’s highest unemployment rate at 12.2% and suffers from a lack of part-time job opportunities and overall labor market flexibility.

The Hidden Costs of Low Unemployment in the Czech Republic

While the Czech Republic enjoys the lowest unemployment rate in the EU at 2.6% in 2023, this achievement comes with its own set of challenges. The nation’s low unemployment rate results from a robust industrial sector that demands a large workforce. As of 2021, 35.8% of all domestic workers were employed in the industry, the highest share in the EU, according to the Czech Statistical Office.

Despite a recent decline in job vacancies, many people continue to find employment. “In the first half of this year, the Labor Office helped 140,000 people secure new jobs—65,000 more than last year. In July alone, 18,405 people were placed in new roles, a 105% increase from the previous year,” comments Daniel Krištof, Director General of the Labor Office.

Gender Pay Gap: A Persistent Problem

“The Czech labor market lacks flexibility for employees. For instance, only 6.9% of all jobs are part-time, compared to 42.8% in the Netherlands,” says Milan Mařík, an analyst from the Europe in Data project. This lack of flexibility exacerbates gender inequality, with the gender pay gap in the Czech Republic rising by over one percentage point to 17.9%, the third highest in the EU.

“During the COVID-19 period, many low-income women lost their jobs, which led to a temporary reduction in the gender pay gap in the statistics. The rise in 2022 could partly be seen as a normalization back to pre-COVID levels,” explains economist Martina Myslíková from the Institute of Sociology at the Czech Academy of Sciences.

The Role of Flexible Employment for Parents

More flexible forms of employment also benefit parents who wish to stay economically active while caring for their children. “Few companies offer long maternity or parental leave without also facing a high gender pay gap. In the Czech Republic, parents can typically stay at home with their children until they are two or three years old, which, while beneficial for families, often disrupts mothers’ careers and leads to lower earnings,” concludes the analysis.

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