Economic activity of the population - 1 quarter

The population of the Czech Republic, similarly as populations of other European countries, is getting old. Since the end of 2001, when the last population census took place and the demographic data were updated accordingly, the total population of the republic has grown by 300 thousand during eight years. According to the definitive demographic data, the population exceeded 10.5 million at the end of the last year. However, this increment was very unbalanced from the viewpoint of age. The part of the population in the pre-productive age up to twenty years decreased at the same time by 186 thousand persons. The long-term negative trend in the birth rate development is documented by the fact that the number of children and young people up to 20 years of age decreased from the end of 1991 by more than 903 thousand, i.e. by 30%.

The age group of 20-64, which has a decisive influence on the level of economic activity of the population, recorded the eight-years' increment by 2 thousand (higher than the total increment in the CR population). However, within such a defined group of productive age (young people up to 20 years are mostly involved in the educational process and, on the other hand, retirement age is postponed for later), development was very diverse. In eight years, similarly as in case of pre-productive age group, the number of young people (20-29) decreased by more than 237 thousand. A large decline was recorded also in the age group of 45-54 (by 203 thousand). The losses resulting from changes in life-tree were offset by extraordinarily strong increase in the number of thirty-year old people by more than 380 thousand and in the number of persons in the oldest ten-year group of 55-64 (by nearly 314 thousand).

At the same time, the population in post-productive age (65+) increased by 184 thousand persons in the monitored period. This increment practically equalled to the loss in the number of all children and young people up to twenty. That was the group which recorded absolutely the biggest year-on-year increment by 43 thousand persons, as compared with the end of 2008, while the total population increased by less than 40 thousand persons, y-o-y.

The Europe 2020 ten-year draft plan, published this March by the European Commission, is to replace the Lisbon economic agenda of 2000. This draft outlines five main goals whose realization should ensure modernization of the European economy and its sustainable growth. Two goals relate directly to enhancement of employment. The first of them is just improvement of employment within the age group of 20-64 years to 75% in 2020 on average in the whole EU 27. At present, individual member countries prepare national goals to support employment in this age group.

According to preliminary results for Q1 2010, employment rate for the whole population decreased by 1.4 p.p. to 53.6%, year-on-year. In the age group of 15-64 the decrease was also 1.4 p.p. (to 64.1%). In the age group of 20-64, i.e. the newly proposed productive age group, employment rate dropped even by 1.7 p.p. down to 69.5% in Q1 2010. Decreasing employment rate was marked especially for men (down by 2.2 p.p.), for women it was -1.2 p.p.

Decreasing rate was recorded, except for the age group of 35-39, in all five-year groups from twenty to sixty five years. Losses were noticeable in groups from forty to fifty five years, i.e. age groups with absolutely the highest employment rate. Relatively the largest drop of employment was recorded, besides the age group of 40-44, in two marginal groups, namely in the youngest productive age of 20-24 years and in the oldest productive age of 60-64 years. Decreasing employment rate applied to all levels of education.

As results from the latest data available for Q4 2009 enabling comparison of situations in member countries, our republic has considerably higher employment rate in the defined productive age group of 20-64 than the EU 27 average. In Q4 2009 it was 70.7% in the CR and 68.8% in the EU 27. Relatively favourable position of our republic (the tenth highest rate) clearly results from high employment rate of men (79.8% in the CR compared to 75.3% in the EU 27 on average). By contrast, employment rate of women is still below the European average for various reasons (61.4% in the CR compared to 62.4% in the EU 27). Nordic countries create a separate chapter together with the United Kingdom, the Netherlands, Cyprus and our neighbours Germany and Austria, where the required rate of employment has already been reached or come very close. By contrast, employment rate in this large group of productive age is very low in some East European and South European countries.

The following table indicates that the employment rate is fundamentally influenced by economic and social development in individual countries. Economic crisis was a key factor, why the employment rate in all countries, except for Germany, Luxembourg and Malta, decreased during the last year. Quite extraordinary drop of employment rate was recorded in three Baltic states (down by 6-9 p.p. year-on-year), although a year ago they belonged to countries with high employment rates. The slump in employment affected mainly men whose employment rate dropped even below employment rate of women in these three countries. Despite all global problems, it is quite atypical situation all over Europe.

So far, men's employment throughout Europe reacts to the current crisis more sensitively. This is clearly connected with a different sectoral and professional structure of men and women.

The growing share of young people preparing for their future career especially by studying at the tertiary level is reflected in the below-average employment rate in the age group of 20-24 in the Czech Republic as compared to other member countries. Within the European Union, this rate reached more than a half of persons in this age group (50.7%). However, in our republic the share of employed persons in this age group was only 44.6%. (According to the preliminary data, this rate further decreased to 41.8% during Q1 2010.) This group showed a diametrically different high employment rate in Nordic countries, the United Kingdom, Cyprus, the Netherlands, Germany and Austria on the one hand and a very low employment among these young people in many South European, East European and especially Baltic countries. The range of figures is wide; the highest employment rate was recorded in the Netherlands (76.6%) while in Hungary it was only one-third (33.6%). For information we state that a comparable lower employment rate than the CR was recorded in Slovakia (39.8%).

Paradoxically, employment rate of young people in this age group seems to be high in countries with traditionally a big share of population with university education. This applies, in particular, to Northern Europe. A high employment rate in this age group is also in the neighbouring countries of Germany and Austria. One of reasons may be the fact that in these countries educational programme at schools takes place in parallel with practical training of young people, which is often linked with their field of study. These university graduates with a certain kind of practical training have more opportunities to prove successful in their first important job after graduation.

While in the age group up to 25 years the employment rate is relatively lower due to a high share of students, the situation is different within a wide group of persons from twenty five to sixty years. This age group of 25-59 has a decisive impact on the total employment in all EU countries. Unlike the youngest age group, variability of this specific employment rate is substantially lower. While the EU 27 average was 75.7% in Q4 2009, the lowest value was recorded in Malta (65.6%) and in Spain (68.4%), and the highest employment rate was traditionally in the Netherlands (84.2%). The Czech Republic ranks among eight countries with the highest employment rate in this age group, which is only a little lower than in Austria and Germany.

Even bigger differences than in the youngest age group of 20-24 are observed in specific employment rate within the oldest five-year group of productive age (60-64). In all EU member countries 30% of persons in this age group were employed on average, in the Czech Republic it was every fourth respondent. Differences between countries are extraordinarily big; in Sweden more than 60% of persons in this age group were employed (as for non-EU countries, e.g. Iceland recorded even 75 %), but in Hungary it was only slightly over 13%. Differences between countries are not only in the female segment of the population but also among men. In addition, our republic shows one of biggest differences between employment rate of men and employment rate of women in this five-year group.

Comparable statistical data show that the oldest and youngest age groups substantially influence differences in overall national rates of employment. Our republic and the neighbouring Germany can serve as an example. While our employment rate in the age group of 25-59 is only a little lower than in the neighbouring country (Germany), respondents in the youngest and oldest productive age work much more frequently in Germany. Thus, the neighbouring country has a higher employment rate for the whole age group of 20-64 by nearly 5 p.p. Generally big differences result first of all from different practical application of employment policy in individual countries of the European Union.

Another key objective of the Europe 2020 plan is achievement of at least 40% of young people in the age group of 30-34 who should obtain formal education at the tertiary level of study (ISCED 5,6). In our conditions it means successful completion of bachelor, master and doctoral programmes of study, including higher professional schools.

If we compare the share of persons with completed tertiary education in the total population of young people in individual age groups we can get the picture of the situation in individual EU countries and of different shares of university graduates resulting from different systems of education. Although our republic has the highest share of persons with at least secondary education (ISCED 3,4 – with maturita examination or apprenticeship certificate) among all member countries, it belongs to countries with the lowest share of persons with university education.

Big international differences are observed within the wide group of respondents in productive age of 25-59 years. Within the EU 27 more than one fourth of all persons in this age group had completed university education (in Q4 2009 it was 26.4%). In our republic the share of university graduates in this period was only 16.5%, i.e. the fifth lowest share from among 27 countries.

Differences between countries can be demonstrated on the age group of the 25-29. The major part of the population in this age group has mostly finished their formal education. Although this group still shows considerable differences, the share of graduates from the tertiary level of study is rapidly growing in all countries. The position of the Czech Republic among countries is not better in the age group of 25-59. However, the difference against the EU average is substantially smaller (32.7% in the EU 27, 24.5% in the CR). In Q1 2010 this rate for the CR reached 24.6% and together with students it was 32.3%.

Note: Simple total of both categories of students and persons with completed tertiary education is partially influenced by potential failures to complete studies. However, we can suppose that such failures will have no significant influence on basic differences between age groups.

A fundamental turn is evident from the share of university students in the age group of 20-24. According to the preliminary data for Q1, 47.2 thousand persons, i.e. 6.2% of all in the age group of 20-24, completed their tertiary studies. Naturally, there are substantially more young people studying at the tertiary level. The number of these students was 252.9 thousand, mostly women (137.1 thousand). If we count up the graduates and students who have not completed their tertiary education yet, their share amounts to 42.8% of all persons in this age group. Even if we suppose that some students fail to complete their studies, it is possible to state that this age group will meet the goal set in the Europe 2020 programme. As it is typical for the group of young people, generally in the European Union and in our country alike, the number of female students prevails over the number of young men, which is reflected in a markedly higher share of female university graduates among young women.

In sharp contrast to a high number of university students or university graduates in the age group of 25-29, and especially 20-24, is the situation among respondents 30+ in our republic. In the five-year group of 30-34, the share of persons with university education in the Czech Republic was the second lowest after Romania and reached only 18.0% (in the EU 27 it was 32.6%) in Q4. According to results for Q1 2010 our republic recorded the share of 19.1% and together with all students at the tertiary level it was 20.4%. Similarly the second lowest share of persons with this level of formal education was recorded in our republic in the age group of 35-39. In Q1 2010, the share of all students and graduates of tertiary education in this age group was only 15.9%.

In both cases these age groups are the biggest of all five-year groups and, together with forty-year old people, their employment will have a substantial influence on the level of economic activity in the coming twenty years.

The quarterly publication “Employment and unemployment in the Czech Republic by results of labour force sample survey” regularly publishes the data on the number of persons by fields of education and selected branches of study. They provide at least a rough picture of how the branch structure is changing in the long term. In this connection it is necessary to point out that the data of sample survey relate to the achieved level of education or to the field of formal education and do not address the issue of quality and scope of studying or learning.
The Czech Republic is arriving at the point when weak one-year age groups of young people with a high share of tertiary education and very strong one-year age groups with secondary education but a low share of formal education at the university level will actively work side by side for a long period. Continuous improvement of the working people education, either by formal or informal study or training, is still insufficient in our republic. According to the latest data available for 2008, our republic still lagged behind in the share of 25-64 years old persons who enhanced their qualifications in some way. This indicator in the CR was 7.8%, while in the EU 27 it was 9.5% on average. Nordic countries stated that up to 30% of persons from this wide age group increased their qualifications. Thus, the issue of qualification improvement of persons who are now in their thirties and forties, either by formal or informal study, becomes a significant factor influencing the economic and social situation of citizens.

Published: 12.05.2010
The data are valid as of the release date of the publication.