Migration and the Labour Market of the Czech Republic

This chapter provides an overview of the labour market integration of immigrants in the Czech Republic employing European Union—Statistics on Income and Living Conditions (EU-SILC) survey data for 2006–2021. Analysis of immigrant-native wage differences may be helpful for policymakers since the performance of immigrants in the labour market indicates the overall effectiveness of immigration and integration policies. Furthermore, this chapter explores the main determinants of the location choices of Ukrainian war refugees, including ethnic networks and employment prospects, aimed at refining the explanation of the unequal distribution of refugees. We quantified the wage differences between immigrants and natives across the whole wage distribution spectrum employing the Blinder-Oaxaca decomposition for unconditional quantile regressions method. Our results indicate that immigrants from Eastern and Southern Europe earn on average less than natives in the Czech Republic. Furthermore, low-earners suffer from a more considerable wage disadvantage than do high-earners. A number of unobservable factors serve to explain a significant proportion of the immigrant-native wage gap across the whole of the wage distribution spectrum. In particular, immigrants reap lower returns on their experience and education, which is most likely due to the imperfect transferability of their skills, lower returns on foreign education and issues concerning the recognition of foreign educational qualifications. Our findings serve to highlight the urgency of designing and implementing more effective integration and equal treatment policies aimed at narrowing the immigrant-native wage gap.