J64 - Unemployment: Models, Duration, Incidence, and Job SearchReturn

Minimum wage remained unchanged for many years. Politicians and even a large part of the business sector could not agree with previously spoken rule that raising the minimum wage has a negative impact on the overall unemployment rate of the country. The article therefore initially concentrated on the development of the minimum wage in the Czech Republic, its comparison with other European Union member states and tries to find the answer by empirical methods whether the raising of the minimum wage in the Czech Republic has a really economic impact on the unemployment in this country.

Unemployment belongs to the most serious economic and social problems of developed countries. Usually, the rate of unemployment is analysed. Another problem is the duration of unemployment and especially long-term unemployment. The unemployment duration in the Czech Republic in 2010 is analysed in the paper. The model uses data from the Labour Force Sample Survey, which is performed quarterly by the Czech Statistical Office. The probability distribution of unemployment duration is modelled with the use of finite mixtures of lognormal distributions with the observable components of membership, gender and education. The observations are right and interval-censored, exact values of the unemployment duration are not included in the data. Both parametric and non-parametric Kaplan-Meier methods are used to estimate the survival function. The estimated survival functions are compared graphically and medians are evaluated for each component. A positive effect of education on the duration of unemployment is found. Also, a greater median unemployment duration is found for women than for men. All the computations are made in the R software.