Czech Republic

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    About the ILO in the Czech Republic


    From middle to high income country


    The Czech Republic was among the first countries in Central and Eastern Europe to fundamentally transform its political and economic system after the fall of the iron curtain. The country is considered as one of the most successful states in making the transition from a centrally planned economy to a social market economy. Since the early 1990s growth has been strong, though volatile, driven by opening markets, inflows of foreign investment supported by a competitive industrial base, a favourable geographical location and a skilled work force.

    The rapid transformation lead to EU membership in 2004 and the classification as high income country in 2006. Income convergence with EU has made significant progress and national income per person is at 83% of EU average.

    Labour markets benefited from these developments and currently Czech Republic has the lowest unemployment rate in EU and OECD (2.5%). With employment rates approaching 80% the country is facing increased labour shortages that could become a major growth hurdle. The country also performs well on other social indicators with low income inequality and a very low share of people at risk of poverty or social exclusion.

    Remaining challenges are the low participation in employment of women with small children and of vulnerable groups as well as gender inequalities in terms of pay. Continue reading