Labour Market Participation: The Impact of Social Benefits in the Czech Republic and Selected European Countries

This paper aims to quantify the impact of social benefi ts on labour market participation in the Czech Republic and provides a comparison with selected European countries. It applies the logistic regression to estimate the probability of labour market participation depending on social benefits related to net wage of the individuals, controlling for individual and household characteristics. Our results indicate that the work disincentives via social benefi ts do exist in most of the included countries and they proved to be relatively strong in the Czech Republic. When trying to understand the reasons for recently decreasing participation rate in the Czech Republic, the often called “generous” Czech social benefi t system appears to be relevant.