Unemployment, Labor Marginalization, and Deprivation

The increase in long-term unemployment and the prolongation of periods of unemployment signals the establishment of a marginalized labor force in the Czech Republic. This paper considers the emerging marginalized groups in the Czech labor market, and their social, mental, and material deprivation. A major determinant of the incidence of unemployment in a person?s work career is human capital, indicated by completed education. Material deprivation is most severe in unemployed-affected households with dependents in which the breadwinner?s income has been lost. It is also severe in single-parent households. Overall, it is particularly those in the non-qualified labor force who find themselves in a state of permanent material deprivation with respect to a high risk of unemployment. The effects of labor market marginalization on labor market performance are mostly negative due to a diminished employability, and, as a result, declining effective labor supply. A policy response should involve employment tax and benefit reform and the extension of activating measures, mainly of those supporting employability and human capital.