Page 42 - IDEA Study 3 2018 Low skilled

higher unemployment, as over one third of the low-skilled unemployed state the end of their temporary contract as the reason for their unemployment. The inability of the low-skilled unemployed to find a job results in long term unemployment. Over 60% of the low-skilled unemployed in the Czech Republic are unemployed for more than one year. After such a long period, the unemployed typically not only lose much of the skills acquired at school or through work experience, but also work habits and social skills. Moreover, debts and other socio-economic problems are likely to accumulate during a prolonged period of unemployment. When the low-skilled unemployed are not able to find a job, active labor market policies should help them (re)enter employment. However, these policies often do not specifically target the low-skilled and may not always be effective. In the Czech Republic, if the low- skilled participate in some type of active labor market policies, it is mostly public works (Horáková, 2017). The low-skilled account for more than one third of all the participants in public works. The low-skilled are much less likely to participate in training programs because there is a lack of suitable tailor-made programs that respect their specific needs and help them overcome the skills barriers (Horáková, 2017). They are also not attractive for private employers; even the state subsidy for private employers does not increase their attractiveness. Thus, the low-skilled rarely enter a subsidized job in the private sector (Horáková, 2017). The public works require few skills and represent the only “job offer” (made by state rather than the private sector) that the low-skilled often have. These employment programs are effective in maintaining work habits and increasing the income of the low-skilled (and thus reducing other problems such as indebtedness or criminal behavior), but they are quite costly and were found to be the least effective type of active labor market policy in helping the unemployed to find a regular job (Hora and Sirovátka, 2012). The unemployed low-skilled would probably benefit most from well-tailored training programs, ideally long-term and/or modular training and work experience programs combining theory with practice provided by the employers themselves (Horáková, 2017). However, to be effective, these policies must also take into account other socio-economic aspects that may create further obstacles for the low-skilled to enter employment. Debt accumulation and insolvency can generate disincentives not only for the low-skilled to start a job (when the high share of wages goes towards repayment of debts) but also for employers to hire the low-skilled with debts (as wage garnishments impose a further administrative burden on employers). The specific active labor market policies targeted to 40