Why does Czech Republic have the lowest unemployment in EU?

By | November 23, 2016

I was reading through a Wikipedia article on the Czech Republic while researching countries that were able to dissolve peacefully. During this research, I ran into an interesting bit of trivia that the Czech Republic has the lowest unemployment rate in the European union. Surely, there has to be some reason why this is the case, especially with certain countries having a catastrophic unemployment rate, like Greece’s 23.2% unemployment rate. (Greece is a particularly bad case because before the Syrian migration they were on the verge of declaring bankruptcy.)

My assumption was that the Czech republic was somehow insulated from the Syrian migration because of their geography. Actually, it appears they have some legislation that prevents foreigners from collecting unemployment:

Q: “They say that something like 10 percent of Prague’s population is made up of foreigners. Is that a factor here? Are foreigners less likely to look for unemployment benefits, or are they likely to leave if they can’t find work?”

A: “Definitely. The Czech Republic somehow manages to discourage or prevent foreigners from touching unemployment benefits, if you look at international comparisons.
“Foreigners either move out of the country or out of Prague and try to find some job in rural areas. Or they establish self-employment businesses so that they are no longer required to fulfil employment conditions.”

Now this may not be the entire reason why the Czech Republic’s unemployment is so low but I’d definitely say it’s a major factor.

2 thoughts on “Why does Czech Republic have the lowest unemployment in EU?

  1. thekladivo

    I am from Prague, here is my opinion:

    Major factor for the low uneployment rate is the well performing German economy. Czech economy is from 80 % connected to Germany and Germans have a history of happily outsouring a decent portion of work for their industries from Czechs. If German economy starts struggling, I guarantee you the Czech unemployment would skyrocket.

    Another reason for the unemployment might be the geographic and cultural position of CZE. Prague is a beautiful, civilized and safe city (one of the safest in the world), yet still affordable and liberal and people there are highly skilled (languages, business education). At the same time, salaries are much lower than in Western Europe and for historical reasons we have a good connection Eastern European countries, which are somewhat bamboozeling for westerners – you can think of it as a gate between the west and the east. Therefore, CZE is a favourite place for CEE headquarters of big international companies.


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