OECD Reviews of School Resources: Czech Republic 2016 © OECD 2016 Chapter 1 School education in the Czech Republic This chapter presents an overview of the economic and demographic context in the Czech Republic, including the impact of the international financial crisis and demographic changes on the funding and organisation of schooling. It also provides a brief description of the Czech school system for international readers. Finally, it presents evidence on the quality, equity and efficiency of the Czech school system. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. 33 1. SCHOOL EDUCATION IN THE CZECH REPUBLIC Economic, governance and demographic context Economic growth has returned, but the recession impacted the young Prior to the international financial crisis, the annual growth rate in the Czech economy was above OECD average levels. However, the Czech Republic is one of the OECD countries where the international financial crisis had the greatest impact on economic growth. Between 2007 and 2009 growth in real Growth Domestic Product (GDP) declined by ten percentage points (Figure 1.1). The main factor behind economic contractions was weak domestic demand, but slowing export market growth also played a role (OECD, 2014a). At the start of the economic recovery in mid-2013 GDP had fallen by nearly 4% below its pre-crisis peak (OECD, 2014a). Economic growth picked up strongly in 2015 (OECD, 2016) and is predicted to continue in 2016 (Figure 1.1). Figure 1.1. Recent and projected growth in real GDP (%) Czech Republic OECD 8 6 4 2 0 -2 -4 -6 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Note: Figure shows projected growth in real GDP in 2015 and 2016. Source: OECD (2015a), OECD Employment Outlook 2015, http://dx.doi.org/10.1787/empl_outlook-2015-en. The unemployment rate is lower than on average in the OECD (Table 1.1). But unemployment rates vary significantly among Czech regions, from 3.3% in Prague to over 11.4% in the Ústi region (Figure 1.A1.3). The international financial crisis impacted the Czech labour market. Relative to the OECD area, employment growth has slowed more in the Czech Republic and was negative in 2009, 2010 and 2011 (OECD, 2015a, Table 1.A1.1). Notably, the youth unemployment rate has increased significantly and is now above the OECD average (Table 1.1). In general, youth were hit hardest by the recession in OECD countries. The Czech youth unemployment rate remains lower than on average in OECD members within the European Union (EU) (22.2% in 2014) (Eurostat, 2015). 34 OECD REVIEWS OF SCHOOL RESOURCES: CZECH REPUBLIC 2016 © OECD 2016 1. SCHOOL EDUCATION IN THE CZECH REPUBLIC Poverty rates are much lower in the Czech Republic compared to in the OECD on average (Table 1.1). While they increased following the crisis (OECD, 2015b, Figure 3.6), they are now just below pre-crisis levels (Table 1.1). Poverty rates for Czech children are relatively high and this is a growing concern in OECD countries generally (Table 1.1). Table 1.1. Indicators of social inclusion Czech Republic OECD average 20001 2007 2013 2014 20001 2007 2013 2014 Unemployment rate (age 15-64) (%) 8.8 5.4 7.0 6.2 6.2 5.8 8.1 7.5 Youth unemployment rate (age 15-24) (%) 17.0 10.7 19.0 15.9 11.9 12.0 16.2 15.0 Poverty rate (relative threshold) (%) 5.8 5.5 5.3 - - 11.0 11.2 - Poverty rate for children (age 0-17) (%) 10.2 8.8 10.3 - - - 13.3 - Note: The poverty threshold is 50% of median disposable income in each country. 1. Unemployment rate data are for 2000 and poverty rate data are for 2004. Source: OECD (2015a), OECD Employment Outlook 2015, http://dx.doi.org/10.1787/empl_outlook-2015-en, Table D; OECD (2015b), In It Together: Why Less Inequality Benefits All, http://dx.doi.org/10.1787/9789264235120-en; and OECD.Stat (n.d.), Income Distribution and Poverty Database, http://stats.oecd.org/Index.aspx?DataSetCode=IDD#. As in other OECD countries, wage restraint helped to limit employment losses during the recession (Table 1.1), however, in the Czech Republic there was a real decline in wages which has contributed to economic hardship, especially for those on lower incomes (OECD, 2015a). Notably, following the crisis the minimum wage relative to the median national wage has decreased by five percentage points. Compared to both median and average national wages, the minimum wage in the Czech Republic is the lowest in the OECD (OECD, 2015a, Figure 1.11). The working hours required to escape poverty on a minimum wage are unrealistic for a lone parent; for two-parent households on a minimum wage both parents would need to work to ensure that children do not grow up in poverty (OECD, 2015a). Also, there are indicators that work has become more precarious with one in ten Czech workers now in temporary work (this represents a 25% increase between 2007 and 2014 (OECD, 2015a, Figure 1.7). Fourteen self-governing regions with a large number of self-governing municipalities In 2002, there was a significant reform of public administration in the Czech Republic when fourteen self-governing regions were established, including Prague the capital city. This move away from a centralised governance structure notably gave the 14 regions autonomy to govern their own education system. Four of the Czech regions are home to nearly half (47%) of the Czech population: Prague, Central Bohemia, Moravia-Silesia and South Moravia (Table 1.2). The Czech regions mainly operate schools providing upper secondary education. There are over 6 000 self-governing municipalities in the Czech Republic, of which only 453 are urban municipalities (Table 1.2). Among these, there are five “cities”, that is, municipalities with over 1 million inhabitants: Prague, Brno, Ostrava, Plzen and Liberec. The vast majority of Czech municipalities, therefore, are “rural”, having less than 3 000 inhabitants. Half of the total municipalities in the Czech Republic are concentrated in four regions: the Central Bohemian region (18%), the Vysocina region (11%), the South Moravian region (11%) and South Bohemian region (10%). Municipalities operate pre-school and basic schools (primary and lower secondary education), although not all Czech municipalities have a school (see Chapter 2). OECD REVIEWS OF SCHOOL RESOURCES: CZECH REPUBLIC 2016 © OECD 2016 35 1. SCHOOL EDUCATION IN THE CZECH REPUBLIC An ageing population with low levels of migration The Czech Republic has a population of 10.5 million (Table 1.2). As in a number of OECD countries, the Czech population is ageing. Between 1990 and 2015, the Czech population aged 15 to 64 grew by 2.6%, but the Czech population aged 65 or older grew by 47%, while at the same time the population aged 15 years or younger shrank by 28%.1 The decline in the school age population has been steep (see Figure 1.3). Ageing populations are a common challenge in the European Union. By 2030, the old-age dependency ratio (65 years or older / population aged 15 to 64) in the Czech Republic is predicted to be 35, that is ten percentage points higher than the 2013 ratio (European Commission, 2015a, Table 1.1.14). While this would remain just below the EU average, these population projections indicate significant pressures on securing funding for education in the future, given increased needs for pension funding. In 2011, the Czech Republic spent 8.9% of GDP on public pensions, which is above the OECD average of 7.9% (OECD, 2015c). The Czech Republic is gradually raising the age of retirement (as are other OECD countries) to 66 years, with steeper increases for women so as to level out the retirement ages for men and women. Currently, men retire at age 62 years and 8 months and women at age 61 years and 4 months (OECD, 2015c). Table 1.2. Czech regions: area, population and number of municipalities Population Number of municipalities 2 Territorial unit Area (km ) Total Percentage of the Average Percentage of the Rural Urban Of which: City Total (thousands) national total age (years) national total (< 3 000) (> 3 000) (> 1 million) Czech Republic 78 868 10 538 100 41.7 6 253 5 800 453 5 Prague 496 1 259 12 42.0 1 0.0 - 1 1 Central Bohemia 11 016 1 315 12 40.7 1 145 18.3 1 073 72 - South Bohemia 10 057 637 6 41.9 623 10.0 590 33 - Pilsen 7 561 575 5 42.1 501 8.0 472 29 1 Karlovy Vary 3 314 299 3 41.8 132 2.1 114 18 - Usti 5 335 824 8 41.2 354 5.7 318 36 - Liberec 3 163 439 4 41.4 215 3.4 193 22 1 Hradec Kralove 4 759 552 5 42.3 448 7.2 419 29 - Pardubice 4 519 516 5 41.7 451 7.2 424 27 - Vysocina 6 796 510 5 41.9 704 11.3 679 25 - South Moravia 7 195 1 173 11 41.9 673 10.8 625 48 1 Olomouc 5 267 636 6 42.0 399 6.4 373 26 - Zlín 3 963 585 6 42.2 307 4.9 276 31 - Moravia-Silesia 5 427 1 218 12 41.8 300 4.8 244 56 1 - : Absolute zero.