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Poverty in the Czech Republic: Unemployment, Pensions, and Regional Differences

Author

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  • Danile Kolar

    (Institute of Economic Studies, Charles University, Prague, Czech Republic)

Abstract

The Czech Republic has experienced a remarkable decline in the unemployment rate but not in relative poverty. I address this and other facts by analysing the evolution of absolute and relative poverty over the 2004-2021 period. I first document a remarkable decline in absolute poverty in poorer Czech regions, indicating that the growth experience of the Czech Republic was shared. Nonetheless, the low absolute poverty levels of Western Europe are yet to be reached. I then explain the paradox of stagnating relative poverty, i.e., the at-risk-of-poverty rate, and find that the drop in unemployment was offset by increased old-age poverty. Oaxaca-Blinder decomposition reveals that older retirees living alone are particularly vulnerable. However, the overwhelming majority of the retired poor live in their own housing, and treating imputed rent as part of income would decrease retirees´ poverty.

Suggested Citation

  • Danile Kolar, 2024. "Poverty in the Czech Republic: Unemployment, Pensions, and Regional Differences," Working Papers IES 2024/33, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2024.
    • Handle: RePEc:fau:wpaper:wp2024_35
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    File URL: https://ies.fsv.cuni.cz/en/poverty-czech-republic-unemployment-pensions-and-regional-differences
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    More about this item

    Keywords

    poverty; welfare; decomposition;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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