I38 - Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare ProgramsReturn

This paper deals with the situation on the European labour market and especially on the Czech labour market. It shows the impact of long-term unemployment - a crucial problem in contemporary European countries - on the economy and on the society and its integrity. Great attention is paid to the social parasitism of the long-term unemployed and to the conversion of social protection systems that started in the late 1990s, when the new principle of social protection systems - the coercive principle - was set up. The principal findings concern the decline in long-term unemployment both on the European labour market and on the Czech labour market after the conversion of the social protection systems. Last but not least, the paper deals with labour market flexibility.

The article deals with the German obligatory unemployment insurance (so-called AVAVG, enacted in 1927) in the interwar period. This scheme replaced an older system, introduced in 1918, based on monetary provisions distributed under means-tests and financed from taxes. The prospective unemployment rate was underestimated. Because of this fact the insurance scheme had the serious trouble of showing a deficit. Financing became an important issue in the political struggle among political parties, and governments were not able to enforce any fundamental curative reform of this scheme before 1933.