Page 9 - IDEA Study 3 2018 Low skilled

1. Introduction Over the last two decades, EU labor markets have undergone substantial structural changes with increasing value placed on skills. The long-term decline in the demand for low-skilled workers is expected to continue. The situation of the low-skilled worsened after the economic and financial crisis of 2008; they were one of the most affected groups with long-lasting consequences. Their employment rate is typically very low, and the economic and social costs of the non-working low-skilled are substantial. Re-integration of the low- skilled into the labor market is therefore one of the key policy challenges for EU countries. The documented evidence and the existing economic and policy research are consistent in their recommendations: 1. Upskilling of the low-skilled is the way to bring them back to the labor market permanently; 2. Investing in providing skills to the low-skilled (through adult and lifelong learning) pays off when compared to the related costs. However, efficient reintegration policies tailored specifically to the needs of the low-skilled must be based on a full understanding of the characteristics of the low-skilled and of their current position in the labor market (for evidence regarding the EU and policy discussion, see Cedefop 2017). The purpose of this study is to contribute to the policy debate and provide policy makers with additional evidence on the situation of the low-skilled in the Czech Republic. The labor market in the Czech Republic has recently been very tight and is currently suffering from labor shortages rather than excess labor and high unemployment. The Czech Republic currently has one of the lowest unemployment rates in the EU (see Table 1 in the Joint Employment Report 2017). It is also among the countries with the lowest share of adults who are low performers in basic skills (see Figure 10, as above). Despite the positive overall performance of the Czech labor market, there are groups that remain underrepresented in the labor force (see for example Country Report Czech Republic 2017) and that perform much worse in the Czech Republic compared to the EU average. The low-skilled in the Czech Republic belong to one of these groups. Although they form less than 7% of working age individuals, they fare much worse than the rest of the population and worse than the low-skilled in other EU countries. The 43.7% employment rate of the low-skilled in the Czech Republic is among the lowest in the EU (see Figure 1). The participation rate among the low-skilled is only 54.8% compared to the EU average of 64% and the unemployment rate is 20.4% compared to the average of 16.1% in the EU (Eurostat, 20-64-year-olds, low-skilled defined as ISCED 2011 levels 0-2). 7