In the 2000S: a Report on Socio-Economic Policies and Structures
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Czech society in the 2000s: a report on socio-economic policies and structures JIŘÍ VEČERNÍK ACADEMIA 001_4_Czech_society 3.5.2009 20:13 Stránka 3 Czech society in the 2000s: a report on socio-economic policies and structures JI¤Í VEâERNÍK Academia, Prague 2009 001_4_Czech_society 3.5.2009 20:13 Stránka 2 To my wife A‰a 001_4_Czech_society 3.5.2009 20:13 Stránka 4 © Jifií Veãerník The research and the publication of the book were supported by the Grant Agency of the Czech Republic. Scientific reviewers: Prof. Stein Ringen, University Oxford Prof. Igor Tome‰, Prague ISBN 978-80-200-1750-5 Contents Acknowledgements 9 Preface 11 Introduction: policies, structures, inequalities and values 13 Part One: Policies 1 The labour market: developments and policies 27 1.1 The composition and mobility of the labour force 27 1.2 The flexibility of workers: formal and informal 30 1.3 The unemployed and vulnerable categories 34 1.4 Labour market policies 36 1.5 Conclusion 39 2 The welfare system: past reforms and enduring problems 41 2.1 Moving away from authoritarian paternalism 41 2.2 Initial reforms and subsequent stagnation 43 2.3 Reforms and their actors 45 2.4 Short-term performance and long-term problems 50 2.5 Conclusion 52 3 Social inclusion: implementing EU policies 55 3.1 Steering the policy process 56 3.2 Target population categories 59 3.3 Interactions between economic and social spheres 62 3.4 Monitoring the process 65 3.5 Conclusion 68 Appendix: Laeken indicators on social inclusion 69 5 CZECH SOCIETY IN 2000s Part Two: Inequalities 4 Disparities in earnings: education to the fore 73 4.1 Changes to the system after 1989 74 4.2 The range of disparities and demographic factors 77 4.3 The effects of education, industry and occupation 79 4.4 Political factors and the ownership sector 85 4.5 Conclusion 87 Appendix: Data sources and definitions 88 5 Household income: rising inequality, changing structure 90 5.1 The difficulties of determining well-being 91 5.2 Shifts in the range and system of inequality 93 5.3 The changing structure of inequality 96 5.4 The characteristics of couples 101 5.5 Conclusion 104 Appendix: Data sources, definitions and adjustment of income 105 6 Taxes and transfers: less redistribution, more progressivity 107 6.1 Changes in taxes and family social benefits 108 6.2 Reforms of personal income tax 111 6.3 Indirect taxes and overall redistribution 116 6.4 Taxes and benefits in public opinion 119 6.5 Conclusion 121 Appendix: Survey samples and simulation methods 123 Part Three: Structures 7 The middle class: less advancement than expected 127 7.1 Status of and barriers to the formation of the middle class 128 7.2 A shift in hegemony: from the working class to the middle class 131 7.3 Economic reforms: profiting from and neglecting opportunities 134 7.4 After the reforms: middle-class mechanisms and identity 138 7.5 Conclusion 142 8 Pensioners: changing socio-political status 144 8.1 The communist regime: pensioners as the poor 145 8.2 Establishing democracy: pensioners as a constituency 146 8.3 Reforming the system: future pensioners at stake 151 8.4 New challenges to expectations 155 8.5 Conclusion 158 6 CONTENTS 9 The poor: non-working and working 160 9.1 New situation, new policies 161 9.2 Income-related and subjective poverty 164 9.3 Deprivation in consumption and living conditions 168 9.4 Preventing poverty by redistribution or by employment 171 9.5 Conclusion 174 Appendix: The minimum living income 176 Part Four: Values 10 Work values and job attitudes 181 10.1 Methodological difficulties and previous research 182 10.2 The explanatory framework 185 10.3 Work expectations and conditions 188 10.4 Work commitment and job satisfaction 192 10.5 Conclusion 195 11 The pervasive consumer society 198 11.1 The communist regime: meeting basic needs 199 11.2 Emerging capitalism: how much the better? 202 11.3 Family budgets: less spending on food and more on housing 207 11.4 Consumer society: clients and agencies 210 11.5 Conclusion 213 12 Economic culture in transition 216 12.1 Beyond economistic assumptions 217 12.2 Legacies of the past 219 12.3 Key concepts and their varieties 222 12.4 The EU dimension 225 12.5 Conclusion 231 Conclusion: The challenges of the future 233 Annex: Comparative tables 239 Data sources 251 Abbreviations 254 References 257 Summaries of chapters 274 List of tables, figures and schemes 279 Name index 283 7 Acknowledgements This study was supported by grant no. 403/08/1369 from the Grant Agency of the Czech Republic within financing the project “Individuals and Households in the Czech Republic: Transformation Changes and a Cross-national Comparison”. The study also drew on the results of previous projects supported by the Grant Agency of the Czech Republic. The research was carried out at the Institute of So- ciology, Academy of Sciences of the Czech Republic (AS CR) in Prague. The research on earnings and income distribution presented in Chapters 4 and 5 was also supported by a grant from the CERGE-EI Foundation’s Global Development Network (GDN) under project no. RRC V-37 “How Labour Market and Earnings Affect Family Income? Disparities in Market Income and Household Disposable Income in the Czech Republic between 1988 and 2002”. Chapter 2 is a reworked version of my article “Social Policy in the Czech Republic: the Past and Future of Reforms” originally published in East European Politics & Societies 3/2008. Previous versions of chapters 1 and 8 were published in Prague Economic Papers 3/2007 and 3/2006. In the Annex, there are some comparative tables that were computed on the basis of 2005 cross-sectional data from the “EU Statistics on Income and Living Conditions” (EU-SILC), revised version 1, released by Eurostat in February 2008. The EU-SILC datasets were made available for the project on the basis of contract no. EU- SILC/2007/16 signed on 3 August 2007 between the European Commission, Eurostat, and the Institute of Sociology AS CR. As the notes to the tables in which the data were used emphasise, the author, not Eurostat, is solely responsible for the presented results. For encouraging me to summarize parts of my previous research and write a syn- thesizing report and for his important suggestions, I am especially grateful to Professor Stein Ringen (Oxford University). I am also very grateful to Professor Igor Tomeš (Prague), former Deputy Labour Minister and current expert of the World Bank, for his useful comments. Individual parties were discussed also with my colleagues at the Institute of Sociology AS CR and other researchers. In the study, I profited from the experience gathered during my participation in the EC/TERC project “Towards a European system of social reporting and welfare measurement” (coordinated by ZUMA in Mannheim) in 1998–2001 and in the project SERD/EU “Households, work and flexibility” in 2000–2002 (coordinated by the Institute for Advanced Studies, Vienna). Further, I profited from writing the “Labour Market Flexibility and Employment Security” country study for the ILO in 9 2001, and from participating in the project “Ageing and Employment Policies” of the OECD in 2003–2004, and reporting on social inclusion as a member of the “Network of Non-governmental Experts on Social Inclusion” of the European Commission in 2004–2007. Regarding the production of this book, special thanks are due to Robin Cassling for carefully and tirelessly editing my English. Renata Nováková kindly formatted the study for printing. Martina Mysíková made some computations and cooperated with me on the comparative tables in the Annex. In particular, I am immensely grateful to my wife Aša for her technical assistance and, even much more, for her infinite patience with me while I was working on this book. To her I dedicate it with gratitude. 10 Preface This book is neither a comprehensive analysis of the state of Czech society nor a monograph on one in-depth problem. It is intended to be a report that mines data- sets from various statistical and sociological surveys and important Czech sources on particular areas to address several main issues. The way the study is divided into individual parts and chapters is only a vehicle for reporting on the various devel- opments of Czech society in the past two decades and on the current state of affairs. The study is a continuation of my research on Czech society, and some aspects I have dealt with before. The first study was Markets and People. The Czech Reform Experience in a Comparative Perspective (see Veþerník, 1996a in References), which was later revised and translated into Czech (Veþerník, 1998). The second was pre- pared as part of the project Social Trends supported by the Grant Agency of the Czech Republic and headed by Petr MatČjĤ and myself. The “social report” was published by Academia, first in Czech (Veþerník and MatČjĤ, 1998) and then in English (Ve- þerník and MatČjĤ, 1999). Most chapters in this study were originally conceived as articles, and despite revisions and synthesising efforts they still bear some traces of their original form. The conceptual background of any comprehensive study will be immense. There is a wealth of literature by Western scholars describing developments in Czech so- ciety, often in comparison with other CEE countries. Examples from outside include work by Jan Adam (1999), Steven Saxonberg (2003), Martin Myant (2003) and Pieter Vanhuysse (2006a), all of whom have examined the Czech transformation from a socio-economic, political-scientific, or sociological perspective.