MILADA HORÁKOVÁ Červen / June 2009

LABOUR MIGRATION DEVELOPMENT IN THE CZECH REPUBLIC

IN THE CONTEXT OF THE ECONOMIC CRISIS

VII. mezinárodní vědecké konference pořádané Katedrou národohospodářskou EkF VŠB-TUO

ve spolupráci s Katedrou ekonomie OPF SUO

„Hospodářská politika v zemích EU: Ekonomická krize – výzvy budoucnosti“ve dnech 16. – 18. září 2009

MILADA HORÁKOVÁČerven / June 2009

Economic and Labour Market DevelopmentAfter the accession of the CR to the EU the Czech economy experienced significant growth (6.5%

per annum); in 2008 GDP increased by 3.2%. GDP per capita in 2008 reached 82% of the EU27 value;

GDP declined by 4.9% year-on-year (2Q 2009 compared to 2Q 2008); it was the largest fall in GDP in the history of the CR (since 1993); the reason for the fall was the generally unfavourable situation prevailing especially in the manufacturing sector which experienced a sales crisis for several months principally with respect to external markets;

The Czech economy is predominantly reliant upon exports;The Czech economy has the highest proportion of secondary sector employment when compared to

total employment of the entire EU27; manufacturing 29.7%, construction 7.1% in 1Q 2009;The atypical structure of Czech employment: self-employed made up 17% of total employment in

1Q 2009; Long-term and repeated unemployment form the most significant problems (35% of all the

unemployed in 1Q 2009;The activity rate of the Czech population aged 15-64 years dropped from 66.8% in IVQ 2008 to

65.5% in IIQ 2009;Registered unemployment increased from 352 250 in December 2008 to 463 555 in June 2009 and

overall unemployment increased from 6.0% to 8.0%;

Population Development of the Czech Republic

Mid-year population

10 000 000

10 100 000

10 200 000

10 300 000

10 400 000

10 500 000

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

Employed in the National Economy of the Czech Republic

Employed in NE of population 15+

4 958 400

5 033 400

5 003 3005 014 800

4 946 800 4 941 300

4 880 0004 900 0004 920 0004 940 0004 960 0004 980 0005 000 0005 020 0005 040 0005 060 000

1. Q. 2008 2. Q. 2008 3. Q. 2008 4. Q. 2008 1. Q. 2009 2.Q.2009

Source: Czech Statistical Office, Labour Force Sample Survey

Registered Unemployment and Vacancy Development 2007-2009

Source: Ministry of Labour and Social Affairs ( MoLSA) graph Milada Horáková

050 000

100 000150 000200 000250 000300 000350 000400 000450 000500 000

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

2007 2008 2009

Unemployment Vacancies

Shares of Vacancies by Chosen Sector December 2008 versus March 2009

Source: MoLSA, graph Milada Horáková

0,0

5,0

10,0

15,0

20,0

25,0

30,0

Agr

icul

ture

, gam

eke

epin

g, f

ores

try

Pro

cess

ing

indu

stry

Bui

ldin

g in

ndus

try

Tra

de; r

epai

rs o

fm

otor

veh

icle

s an

dpr

oduc

ts f

orpe

rson

al n

eeds

Acc

omod

atio

n an

dB

oard

Tra

nspo

rt, s

tora

gean

dte

leco

mun

icat

iona

s

Age

ncy

in r

eal

esta

te a

nd le

ase;

corp

orat

e ac

tivi

ties

othe

rs

%

31 December 2008 31 March 2009 30 June 2009

Vacancies by Employee Group

Source: MoLSA, graph Milada Horáková

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

KZ

AM

1 L

egis

lato

rs, s

uper

viso

rs a

ndm

anag

ers

KZ

AM

2 S

cien

tifi

c an

d pr

ofes

sion

alkn

owle

dge

KZ

AM

3 T

echn

ical

hea

lth

care

and

peda

gogi

cal

wor

kers

KZ

AM

4 L

ower

adm

inis

trat

ive

wor

kers

KZ

AM

5 O

pera

ting

per

sonn

el i

nse

rvic

e an

d tr

ade

KZ

AM

6 Q

uali

fied

wor

kers

in

agru

icul

ture

and

for

estr

y

KZ

AM

7 C

raft

smen

and

qua

lifi

edm

anuf

actu

res

KZ

AM

8 O

pera

tors

of

mac

hine

ry a

ndeq

uipm

ent

KZ

AM

9 L

abor

ers

and

unqu

alif

ied

wor

kers

KZ

AM

0 P

erso

ns w

itho

ut w

ork

clas

ific

aati

on

31 December 2008 31 January 2009 28 February 2009 31 March 2009 30 June 2009

Labour Market Development and Foreigner Employment Development

0,02,04,06,08,0

10,012,014,016,0

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

30.

6.

2008

2009

31.

3.

2009

30.

6.

Share of foreigners at labour force of the CR in %

Registered unemployment rate in %

Number of job aplicants per 1 vacancy

Source: MoLSA, MIT, graph Milada Horáková

Labour Migration and Residence Permit Development during the Economic Crisis

The share of foreigners of the total population increased from 2.5% to 4.2% in the period 2004-2008; the share of registered foreigners in the Czech labour market increased in the same period from 3.3% to 6.4% of the labour force;

The share of registered foreigners in the Czech labour force has declined by 5.9% while the share of foreigners in the Czech population overall remains the same during the first half 2009;

The employment of foreigners decreased from 361 709 in December 2008 to 335 176 in June 2009 (-26 533);

The number of residence permit holders increased from 438 301 in December 2008 to 442 506 in June 2009 (+4 205).

The number of foreigners registered at labour offices decreased in the same period from 284 551 to 251 662 (-32 889), conversely, the number of foreigners holding trade licences increased from 77 158 to 83 514 (+6 356);

The number of work permit holders decreased from 128 934 to 101 735 (-27 199); the number of non-EU nationals with non-mandatory work permits increased from 14 516 to 15 911 (+1 395); the number of Slovak citizens registered at labour offices decreased from 100 233 to 94 566 (-5 667); the number of other EU citizens decreased from 40 868 to 39 260 (-1 608).

From December 2008 to June 2009, foreigners left principally: the processing industry (-27 540), building industry (-8 872), science, research and technology (-2 106), and transport and storage (-1 325). A number of those released have been absorbed by: agriculture (+1 688) and administrative support activities (+1 020).

Registered employment declined mainly with regard to: Vietnamese (-7 177), Mongolians (-6 192), Ukrainians (-5 383) and Slovaks (-5 294).

Conversely, the number of resident permit holders increased with regard to: Ukrainians (+2 491), Russians (+1 866) and Slovaks (+1 398), i.e. amongst the most significant national groups in the labour market. This could indicate that the most numerous irregular workers in the nation’s economy are made up of nationals of these countries.

Share of residence permit holders within the Czech population in per cent

Source: Directorate of Alien Police of the MoI; graph Milada Horáková

0,00

1,00

2,00

3,00

4,00

5,00

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

%

Share of permanent residence permit holders in the CR population

Share of long-term residence permit/visa over 90 days holders in the CR population

Share of total residence permit holders in the CR population

Residence permit development

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

500 000

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

long-term/ visa over 90 days

permanent residence

Source: Directorate of Alien Police of MoI graph Milada Horáková

Most numerous resident permit holders; development by state citizenship

0

20000

40000

60000

80000

100000

120000

140000

160000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Ukrajine

Slovakia

Vietnam

Russia

Poland

Germany

Moldavia

Mongolia

Bulgaria

Source: Directorate of Alien Police of MoI graph Milada Horáková

Employment of Foreigners and Residence Permit Development 1996-2009 (December 31, *June 30)

Source: MoI, MoLSA, MIT, graph Milada Horáková

1,9 2,0 2,1 2,2 2,0 2,1 2,3 2,4 2,5 2,73,1

3,84,2 4,2

3,6 3,83,0 2,9 3,2 3,2 3,1 3,2 3,3

4,04,6

5,66,4

5,9

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

%

share of residence permit holders in the CR population

share of foreigners employment in the CR labour force

Development of Residence Permits for and Employment of Foreigners

0

100 000

200 000

300 000

400 000

500 000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

residence permits of foreigners employment of foreigners

Source: MoI,MoLSA, MIT, graph Milada Horáková

Development of the Structure of foreigner employment

050 000

100 000150 000200 000250 000300 000350 000400 000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Mar

ch 2

009

June

200

9

foreigners registered at labour offices trade licence holders

total employment of foreigners

Source: MoLSA, MIT, graph Milada Horáková

Latest Labour Migration Development

Source: MoLSA, MIT, graph Milada Horáková

128

934

14 5

16

100

233

40 8

68 77 1

58114

809

14 8

18

93 3

46

38 2

98 79 4

98

101

735

15 9

11

94 5

66

39 4

50

83 5

14

361

709

340

769

335

176

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

valid work permits third countrynationals registered

at labour officewho need not work

permit

SR ciztizensregistered at labour

office

otherEU/EEA/Swiss

citizens (withoutSR)

trade licenceholders

total employmentof foreigners in the

CR

31.12.2008 31.3.2009 30.6.2009

Employment Development of EU/EEA/Swiss and Non-EU Citizens

Source: MoLSA, MIT, graph Milada Horáková

148 855

188 745 194 296

156 209 151 852164 987 167 652 161 711 168 031 173 203

218 982

250 797

309 027

361 709335 176

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

EU/EEA/Swiss total

others

total employment of foreigners

Source: Unpublished data created by Information “OK system” of MoLSA for the purpose of Peer Review at 18.5.2009

Unemployed Foreigners Registered at Labour Offices

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

VI.

08

VII

.08

VII

I.08

IX.0

8

X.0

8

XI.

08

XII

.08

I.09

II.0

9

III.

09

IV.0

9

EU/EEA/ Swiss citizens

third countries nationals

Most Numerous Groups of Nationals by Country Employed in the Czech Labour Market

Source: MoLSA, MIT, graph Milada Horáková

0

20 000

40 000

60 000

80 000

100 000

120 000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

*

Slovakia

Ukraine

Vietnam

Poland

Mongolia

Moldova

Bulgaria

Russia

Germany

Romania

Employed Foreigners Registered at Labour Offices by Employee Group; NACE-CZ, December 2008, March 2009, June 2009

0

20 000

40 000

60 000

80 000

100 000

120 000

Pro

cess

ing

indu

stry

Bui

ldin

g in

dust

ry

Tra

de; r

epai

rs o

fm

otor

veh

icle

s an

dpr

oduc

ts f

or

Sci

ence

, res

earc

h,te

chno

logy

Age

ncy

in r

eal

esta

te a

nd le

ase;

corp

orat

e ac

tiviti

es

Adm

inis

trat

ive

supo

rtin

g ac

tiviti

es

Info

rmat

ion

and

tele

com

mun

icat

ions

Tra

nspo

rt, s

tora

ge

Agr

icul

ture

, gam

eke

epin

g an

d re

late

dac

tiviti

es

Acc

omm

odat

ion

and

boar

d

Hea

lthca

re a

ndso

cial

wel

fare

serv

ices

; vet

erin

ary

Edu

catio

n

Oth

er a

ctiv

ities

31 December 2008 31 March 2009 30 June 2009

Source: MoLSA, graph Milada Horáková

Foreigners Registered at Labour Offices Employed in the Processing and Building Industries 2006-2009

0

20 000

40 000

60 000

80 000

100 000

120 000

31 2006 December 2006 31 2006 December 2007 31 December 2008 31 March 2009 30 June 2009

Processing industry Building industry

Source: MoLSA, graph Milada Horáková

Employed Foreigners Registered at Labour Offices by Employee Group KZAM, 31 December 2008, 30 March 2009, 30 June 2009

Source: MoLSA, graph Milada Horáková

Foreigners registered at labour offices by employee groups KZAM

7 08

4 19 4

52

19 4

78

8 53

4

13 4

83

2 59

3

68 7

75

49 7

38

7 25

8 19 5

68

19 1

08

8 50

3

13 5

48

2 67

3

59 2

48

40 8

56

7 45

5 19 9

89

19 3

24

8 51

4

13 9

54

2 81

4

53 7

17

37 3

97

94 9

05

90 3

17

88 3

06

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

100 000

KZAM 1Legislators,

supervisors andmanagers

KZAM 2 Scientificand professional

knowledge

KZAM 3 Technicalhealth care and

pedagogicalworkers

KZAM 4 Loweradministrative

workers

KZAM 5 Operatingpersonnel in

service and trade

KZAM 6 Qualifiedworkers in

agruiculture andforestry

KZAM 7Craftsmen and

qualifiedmanufactures

KZAM 8 Operatorsof machinery and

equipment

KZAM 9 Laborersand unqualified

workers

December 31 2008 March 31 2009 June 30 2009

Employed Foreigners Registered at Labour Offices and registered Unemployed persons by Employee Group KZAM at 30 June 2009

0

20000

40000

60000

80000

100000

120000

140000

KZ

AM

1 L

egis

lato

rs, s

uper

viso

rsan

d m

anag

ers

KZ

AM

2 S

cien

tific

and

prof

essi

onal

kno

wle

dge

KZ

AM

3 T

echn

ical

hea

lth c

are

and

peda

gogi

cal w

orke

rs

KZ

AM

4 L

ower

adm

inis

trat

ive

wor

kers

KZ

AM

5 O

pera

ting

pers

onne

l in

serv

ice

and

trad

e

KZ

AM

6 Q

ualif

ied

wor

kers

inag

ruic

ultu

re a

nd f

ores

try

KZ

AM

7 C

raft

smen

and

qua

lifie

dm

anuf

actu

res

KZ

AM

8 O

pera

tors

of

mac

hine

ryan

d eq

uipm

ent

KZ

AM

9 L

abor

ers

and

unqu

alif

ied

wor

kers

foreigners registered at labour offices

registered unemployed persons

Source: MoLSA, graph Milada Horáková

Attained and Required Education of Foreigners Registered at Labour Offices30 June 2009

Source: MoLSA, graph Milada Horáková

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

no e

duca

tion

inco

mpl

ete

basi

c

basi

c lo

wer

voc

atio

nal

low

er m

iddl

e

low

er m

iddl

e vo

cati

onal

mid

dle

voca

tion

al w

ith

Lea

ving

Voc

atio

nal C

erti

fica

te

mid

dle

or m

iddl

e vo

cati

onal

wit

hout

Lea

ving

Cer

tifi

kate

gram

mer

sch

ool

com

plet

e m

iddl

e vo

cati

onal

wit

h L

VC

and

LA

C

com

plet

e m

iddl

e vo

cati

onal

wit

h L

AC

but

vit

hout

LV

C

uppe

r voc

atio

nal

univ

ersi

ty (b

ache

lor)

univ

ersi

ty (m

aste

rs)

doct

orat

e

unsp

ecif

ied

educational attainment required education

Required Education of Foreigners Registered at Labour Officesand Registered Unemployed Persons at 30 June 2009

Source: MoLSA, graph Milada Horáková

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

no e

duca

tion

inco

mpl

ete

basi

c

basi

c lo

wer

voc

atio

nal

low

er m

iddl

e

low

er m

iddl

e vo

cati

onal

mid

dle

voca

tion

al w

ith

Lea

ving

Voc

atio

nal C

erti

fica

te

mid

dle

or m

iddl

e vo

cati

onal

wit

hout

Lea

ving

Cer

tifi

kate

gram

mer

sch

ool

com

plet

e m

iddl

e vo

cati

onal

wit

h L

VC

and

LA

C

com

plet

e m

iddl

e vo

cati

onal

wit

h L

AC

bu

t vit

hout

LV

C

uppe

r voc

atio

nal

univ

ersi

ty (b

ache

lor)

univ

ersi

ty (m

aste

rs)

doct

orat

e

unsp

ecif

ied

Registered unemployed persons Required education of foreigners

Population of the CR by Highest Education Attainment (2008) and Foreigners Registered at Labour Offices by Highest Education Attainment (2.Q.2009)

Source: CZSO, MoLSA, graph Milada Horáková

16%

31% 29%

10%

42% 43%

16%13%

36% 37%

15%13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Basic, pre-primary and withouteducation

Secondary education withoutGCE

Secondary education with GCE Tertiary education

The CR population 15+ 2008 Foreigners registered at labour offices in December 2008

Foreigners registered at labour offices in June 2009