Get all Chapter’s Instant download by email at etutorsource@gmail.com
Robin Maialeh
Editor
Navigating Europe’s
Socio-Economic Crisis
The Impact of Inflation, the Energy Crisis,
and the Conflict in Ukraine on the Czech Republic
and Beyond
Get all Chapter’s Instant download by email at etutorsource@gmail.com
We Don’t reply in this website, you need to contact by email for all chapters
Instant download. Just send email and get all chapters download.
Get all Chapters For E-books Instant Download by email at
etutorsource@gmail.com
You can also order by WhatsApp
https://api.whatsapp.com/send/?phone=%2B447507735190&text&type=ph
one_number&app_absent=0
Send email or WhatsApp with complete Book title, Edition Number and
Author Name.
Get all Chapter’s Instant download by email at etutorsource@gmail.com
CHAPTER 1
Introduction to the Current Challenges
Robin Maialeh
Abstract In the dynamic landscape of the global economy, rigorous
research that addresses key socioeconomic issues plays a pivotal role in
terms of shaping equitable societies. This book explores several critical
aspects of the economy of the Czech Republic, shedding light on topics
such as the relationship between wages and productivity, the integration of
immigrant workers and the distributional effects of inflation. These chapters, characterised by their thorough analysis and methodological precision, both contribute to the academic discourse and provide valuable
insight for policymakers. The Czech Republic’s unique economic challenges, regional disparities and labour market dynamics provide fertile
ground for exploration. The chapters reveal the intricate connections
between wage dynamics, productivity and regional disparities, while
addressing immigrant labour market integration and the impacts of inflation on different socioeconomic groups. By offering nuanced insights and
employing advanced methodologies, this book advances the overall level
of economic understanding, informs policy decisions and paves the way
R. Maialeh (*)
RILSA, Prague, Czech Republic
e-mail: robin.maialeh@rilsa.cz
1
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
2
R. MAIALEH
towards a more sustainable, inclusive and prosperous future for the Czech
Republic and beyond.
Keywords Socioeconomic research • Labour market • Inflation •
Public policy • Distributional effects
In the ever-evolving landscape of the global economy, where complexities
and disparities abound, rigorous research into pivotal topics plays a commanding role in terms of shaping more equitable and just societies. This
book considers a range of critical issues that lie at the heart of socioeconomic research. The chapters featured herein, each of which embodies
meticulous analysis and methodological rigour, shed light on fundamental
aspects of the economy of the Czech Republic. By exploring the intricacies
of the relationship between wages and productivity, the distributional
effects of inflation and the labour market integration of immigrants, this
collection both advances the academic discourse and provides indispensable insight for policymakers and stakeholders alike.
In recent years, the Czech Republic has provided fertile ground for
economic transformation and has been faced with formidable challenges,
which has prompted both scholars and policymakers to consider the intricacies of the country’s economic dynamics. The Czech Republic comprises distinct regions, each with its own socioeconomic characteristics and
potential for growth. This heterogeneity provides an ideal “laboratory”
for the investigation of the factors that contribute to regional disparities
and the dynamics that underpin the convergence or divergence of economic performance across regions. Secondly, the prevalence of relatively
low wages in the Czech Republic serves as a crucial point of interest for
scholars and policymakers alike. The country’s labour market landscape is
characterised by a competitive environment in which low wages have the
potential, as the archetypal textbook conclusion suggests, to attract foreign investment and stimulate employment. However, it should be noted
that such conclusions are conditioned to numerous aspects and generate
mixed effects. Low wages may also push the unemployment rate below
sustainable levels. A low unemployment rate may, in turn, then serve as a
balancing factor that acts to support already weaken consumer demand
caused by low wage levels.
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
1
INTRODUCTION TO THE CURRENT CHALLENGES
3
In addition, the low-wage scenario also raises questions concerning the
adequacy of remuneration for workers and the negative impact on standards of living and, potentially, income inequality since the income composition of the top earners is usually dominated by capital rather than
labour incomes. Moreover, the examination of the role of policies and
labour market institutions in terms of determining wage levels becomes
paramount in the quest to shape a sustainable and inclusive economy.
Furthermore, the juxtaposition of regional economic disparities and low
wages leads to the uncovering of several intriguing connections between
these factors. How do regional disparities influence wage levels, and vice
versa? Does the prevalence of low wages in certain regions exacerbate disparities, or does it present an opportunity for economic convergence?
Unravelling these interrelationships allows for a nuanced understanding of
the broader economic landscape and the discovery of potential pathways
for fostering equitable and robust economic growth.
In addition to the structural differences in regional economic development, the Czech Republic’s recent experience with a substantial influx of
war refugees from Ukraine and the challenges posed by rampant inflation
have further solidified its position as an exemplary case for investigation.
The significant influx of refugees has introduced complex dynamics into
the Czech Republic’s social and economic fabric. The integration of these
refugees into the labour market and society at large presents unique challenges and opportunities. The investigation of how the arrival of war refugees impacts the labour market, wage dynamics and overall economic
performance has the potential to yield valuable insight for policymakers
facing similar situations globally. Forming an understanding of the potential impacts on the labour supply, skills transferability and human capital
development is vital in terms of designing targeted policies that promote
inclusive growth and social cohesion.
Moreover, the issue of rampant inflation has emerged as a pressing concern for the Czech Republic, and the detailed study of its impacts on
society is crucial. High inflation rates potentially erode purchasing power,
exacerbate income disparities and impact wage bargaining dynamics. The
analysis of inflationary pressures in the context of incomes and regional
disparities assists policymakers in terms of devising measures aimed at protecting vulnerable groups and maintaining economic stability. Moreover,
the exploration of the link between inflation and labour market outcomes
sheds light on the efficiency of monetary policies and their implications for
employment and wage levels.
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
4
R. MAIALEH
The combination of the shocks that have severely affected the Czech
Republic over recent years provides a unique opportunity to set the background for examining the interconnectedness of these phenomena. The
integration of war refugees into the labour market and society, coupled
with the impact of inflation on different social groups, and regional labour
market disparities, presents a multifaceted economic landscape. Via the
exploration of these intricate dynamics, researchers are able to provide
evidence-based recommendations for policymakers in terms of fostering
social cohesion and sustainable economic growth in the face of complex
and interconnected challenges. As we embark on this scholarly journey,
the various chapters in this book offer a testament to the enduring pursuit
of knowledge in the field of economics and policy research. Each contribution represents a step forward with concern to enriching the understanding of the key economic phenomena that shape the Czech Republic’s
economic landscape. The rigorous methodologies employed in these
chapters underscore the commitment to empirical precision and intellectual rigour and converge at the vanguard of contemporary economic
research by illuminating critical themes that resonate with the host of
complexities of the global economy. Through diligent inquiry and methodological precision, the book provides a major contribution to the understanding of the economic dynamics of the Czech Republic. As we navigate
through the chapters that lie ahead, the insight gleaned from this collection will serve to foster a deeper appreciation of the interplay of economic
forces that will pave the way towards a more sustainable, inclusive and
prosperous future for the Czech Republic and beyond.
The second chapter proposes that the intricate relationship between
real wages and labour productivity lies at the heart of economic performance, and includes a thorough analysis of the causal dynamics that
underpin this pivotal relationship in the regional context of the Czech
Republic. Leveraging an extensive panel dataset spanning the period 2000
to 2021, the study comprises a comprehensive investigation into the intertwined trajectories of real wages and labour productivity. Aimed at unravelling this complex interplay, the chapter applies the panel vector
autoregression (VAR) Granger causality test, which is widely recognised as
offering an effective methodology for such investigations. In addition, the
research employs the generalised method of moments (GMM) methodology, which is known for its capacity to address diverse econometric challenges, including endogeneity issues. The results provided by the rigorous
analysis shed light on the reciprocal relationship between real wages and
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
1
INTRODUCTION TO THE CURRENT CHALLENGES
5
labour productivity across the various regions of the Czech Republic. The
identification of this interdependence, which suggests that changes in real
wages have the potential to influence labour productivity, while shifts in
labour productivity concurrently impact real wages, is of profound significance. These findings reveal the intrinsic nexus that binds these two key
economic indicators, which has ramifications for both policymakers and
stakeholders.
As we progress through this scholarly endeavour, the significance of
understanding the causal relationship between real wages and labour productivity becomes evident. The chapter provides important insight into
the determinants that shape economic performance within the regional
landscape of the Czech Republic, and the findings pave the way for the
implementation of informed policy interventions that optimise the interplay between real wages and labour productivity and foster sustainable
economic growth and social well-being. Policymakers should leverage
these research findings so as to design targeted strategies that enhance
labour productivity, thereby elevating real wages and promoting the economic prosperity of the nation as a whole. Moreover, the application of
advanced econometric methodologies such as the panel VAR Granger
causality test and GMM makes a significant contribution to the application
of this methodological repertoire and bolsters the credibility and robustness of the economic research. By employing these sophisticated techniques, this chapter addresses potential endogeneity challenges and serves
to enhance the level of accuracy concerning the causal relationship between
real wages and labour productivity.
Continuing with the issue of wages and productivity and with concern
specifically to the realm of regional economic dynamics, forming an understanding of labour productivity and real wages convergence patterns is of
paramount importance. The third chapter undertakes a rigorous analysis
aimed at investigating and dissecting the diverse convergence patterns
across the fourteen distinct regions of the Czech Republic over the period
2000 to 2021. Employing the clustering algorithm, this chapter ventures
into uncharted territory by offering novel insight via the modelling of the
variables in a non-linear manner, thus accommodating both heterogeneity
and transitional dynamics at the regional level. The exploration of the
outcomes provides valuable information on the nuanced dynamics that
underlie labour productivity and real wages and, further, serves to shape
our comprehension of the diverse economic performance and wage levels
that are evident across the regions. In the absence of conclusive evidence
Get all Chapter’s Instant download by email at etutorsource@gmail.com
We Don’t reply in this website, you need to contact by email for all chapters
Instant download. Just send email and get all chapters download.
Get all Chapters For E-books Instant Download by email at
etutorsource@gmail.com
You can also order by WhatsApp
https://api.whatsapp.com/send/?phone=%2B447507735190&text&type=ph
one_number&app_absent=0
Send email or WhatsApp with complete Book title, Edition Number and
Author Name.
Get all Chapter’s Instant download by email at etutorsource@gmail.com
6
R. MAIALEH
in support of overall convergence, the identification of two (three) sub-­
convergence and one non-convergence group for labour productivity (real
wages) revealed the varied trajectories and distinct factors that influence
regional economic growth and wage distribution in the Czech Republic.
The findings should serve as a call to action for policymakers and
researchers to meticulously analyse and comprehend the intricate convergence patterns that underpin regional economic dynamics. By gaining a
comprehensive understanding of the unique factors and influences that
shape labour productivity and real wages in each region, targeted strategies can be devised aimed at addressing regional disparities, fostering
inclusive economic growth and ensuring an equitable wage distribution
across the Czech Republic. The analysis of labour productivity and real
wages convergence patterns stands as a cornerstone in the quest for equitable regional economic development. The understanding of the presence
of sub-convergence and non-convergence groups helps to unravel the
complexity of regional disparities and dynamics, thus presenting new
opportunities for policymakers to tailor intervention measures that address
the specific needs and challenges faced by different regions. The insight
offered by this chapter enriches our understanding of the heterogeneous
nature of regional dynamics and serves as a crucial reference point for
guiding policymakers and researchers towards the design of informed
strategies that promote economic growth, mitigate regional disparities
and bolster an equitable wage distribution system.
Continuing with the theme of the Czech labour market, the immigrant
labour market integration process comprises a complex and critical area of
inquiry in an increasingly interconnected global economy. The fourth
chapter provides an incisive overview of the labour market integration of
immigrants in the Czech Republic employing comprehensive data
obtained from the European Union—Statistics on Income and Living
Conditions (EU-SILC) survey over the period 2006 to 2021. As the
nexus between immigrant-native wage differences and the effectiveness of
immigration and integration policies becomes ever more pertinent, this
chapter presents a nuanced exploration of this relationship and offers valuable insight for policymakers. Moreover, it explores the various factors
that shape the location choices of Ukrainian war refugees in the Czech
Republic, including the influence of ethnic networks and employment
prospects, that contribute towards the unequal distribution of refugees.
Employing the Blinder-Oaxaca decomposition for unconditional quantile
regressions method, the chapter rigorously quantifies wage differences
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
1
INTRODUCTION TO THE CURRENT CHALLENGES
7
across the entire wage distribution spectrum and provides crucial insight
into the economic realities faced by immigrants.
The analysis reveals that immigrants from Eastern and Southern
Europe, on average, earn lower wages than native Czechs. Notably, low-­
earner immigrants face a more considerable wage disadvantage than their
high-earning counterparts. These disparities underscore the urgency of
investigating the determinants responsible for the immigrant-native wage
gap across the entire wage distribution spectrum. The chapter reveals the
myriad unobservable factors that comprise the key determinants in terms
of shaping wage disparities, thus enriching our understanding of the multifaceted interplay of diverse variables. Education and experience play pivotal roles in determining wage disparities between immigrants and natives.
Immigrants often encounter lower returns on their education and experience, which can be attributed to the imperfect transferability of skills, challenges in terms of the recognition of foreign educational qualifications,
and lower returns on foreign education. This finding underscores the
necessity for the implementation of targeted policies that address the specific hurdles faced by immigrant workers concerning in particular ensuring
equitable access to opportunities and resources and facilitating the seamless integration of immigrants into the labour market.
The findings of the fourth chapter resonate as a clarion call for the
design and implementation of more effective integration and equal treatment policies aimed at narrowing the immigrant-native wage gap. By
acknowledging the complexities of labour market integration, policymakers will be better able to craft informed strategies that foster social cohesion and promote inclusive growth by leveraging the potential of immigrant
workers for the collective benefit of society and the economy. The knowledge provided by this chapter offers a valuable lens through which to
comprehend the immigrant labour market integration dynamics at work
in the Czech Republic. The contribution of this chapter extends beyond
mere data analysis; it serves as a beacon for guiding policymakers towards
designing evidence-based intervention measures that prioritise inclusive
economic growth and social cohesion. By placing immigrant labour market integration at the heart of policymaking, we can collectively create a
more harmonious and prosperous society that nurtures the diverse talents
and contributions of all individuals, thus fostering an environment of
equal opportunities and shared prosperity.
Currently high levels of inflation comprise a further important issue for
the labour market. As the global economy experiences bouts of
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
8
R. MAIALEH
inflationary pressures, the exploration of the distributional effects of this
phenomenon is imperative in terms of forming an understanding of the
implications for different socioeconomic groups. The fifth chapter presents a comprehensive analysis of the distributional effects of currently high
inflation rates, focusing specifically on the investigation of studies that
have addressed inflation in the European context. Drawing upon innovative methodologies that integrate microeconomic surveys with national
accounts and employ panel quantile regression with fixed effects, the
chapter unravels the intricate relationship between inflation and income
inequality. The findings highlight that higher inflation rates exacerbate
income inequality, particularly in regions characterised by lower initial
income inequality. Moreover, the chapter explores the complex interplay
between inflation and well-being by disentangling the contributions of
profits, wages and import prices to inflation dynamics within countries.
In the context of the Czech Republic, the chapter adopts a meticulous
approach employing data obtained from the Czech Household Budget
Survey and the Consumer Price Index to create consumer price indices for
various population subgroups. This thorough analysis allows for a nuanced
understanding of the distributional impact of inflation on different segments of society, particularly those whose budgets are most affected.
Notably, the chapter emphasises that subgroup-specific inflation rates
align closely with that of the inflation rate for the non-elderly population,
with the exception of single-parent households, which experienced a
higher inflation rate in 2022 than the other subgroups. Although this difference was reasonably modest, the findings are significant in view of the
potential negative implications for the well-being of single-parent households. Importantly, the fifth chapter sheds light on the disproportionate
burden borne by low-income and single-parent households in terms of
inflationary costs related to essential expenses such as housing, water, electricity, gas and other fuels. While all households are facing the impact of
rising living costs, the analysis indicates that single-parent and low-income
households are particularly vulnerable to the inflationary pressures that
arise from these essential items. The stark contrast in terms of the inflation
burden between single-parent and two-parent households, especially with
regard to housing, water, electricity, gas and other fuel costs, reveals the
heightened susceptibility of single-parent households to the adverse effects
of inflation
The disparities identified in the distributional effects of inflation signal
the pressing need for the introduction of targeted policy intervention
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
1
INTRODUCTION TO THE CURRENT CHALLENGES
9
measures that specifically address the challenges faced by vulnerable households. In particular, the recent increases in electricity and gas prices underscore the urgency of providing government support aimed at mitigating
the adverse impacts on single-parent households. By prioritising support
for single-parent and low-income households, policymakers will contribute towards fostering social equity and stability, alleviating the burden of
rising living costs, and promoting a more inclusive economic recovery.
The insight gained from this analysis serves as a critical reference point for
informed policymaking that aims to mitigate the adverse consequences of
inflation on the most susceptible segments of society and support the creation of a more equitable economic landscape. The results presented in
this chapter contribute to forming a more complete understanding of the
complex interplay between inflation and income inequality, thus paving
the way for a more resilient and just economic future for all.
Finally, European countries have recently found themselves grappling
with a pervasive surge in inflation, exacerbated especially by the rapid escalation in energy prices. The Czech Republic has been hit particularly hard
by the ongoing energy crisis. The implications of such inflationary pressures warrant meticulous investigation. Thus, the sixth chapter explores
the phenomenon of general and energy inflation in the Czech Republic.
Employing data obtained from highly respected sources including the
Czech Statistical Office, Eurostat, ONS and OECD, the chapter endeavours to explore the profound economic ramifications of the crisis, identifies those socioeconomic groups that have been most severely affected and
suggests strategies for targeted governmental support aimed at mitigating
the losses incurred.
Of all the realms of economic dynamics, inflation represents one of the
pivotal indicators; it significantly influences the financial well-being of
households and shapes overall economic performance. The sixth chapter
attempts to explain the specific drivers of inflationary pressures focusing
particularly on energy prices, the rapid increase in which has exacerbated
the already precarious economic situation. Drawing upon a comprehensive dataset spanning the period February 2022 to 2023, the chapter
quantifies the toll inflicted by general inflation and the exclusive impact of
energy inflation on the average Czech household. The alarming findings
indicate that households have suffered a staggering loss of 12.2% of their
annual net income due to overall inflation and an additional 3.5% due to
energy inflation alone. These figures both underscore the gravity of the
crisis and underline the urgent need for the introduction of effective policy
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
10
R. MAIALEH
intervention measures aimed at alleviating the burdens borne by vulnerable segments of society.
Moreover, the chapter strives to identify the distinct socioeconomic
groups that have borne the brunt of energy-crisis-driven inflation. Through
rigorous analysis, pensioners, the poorest families in society, single parents
and households located in small municipalities were identified as the most
vulnerable group and those that experienced the most substantial financial
losses. The implications of these findings are profound and signal the need
for targeted government support that prioritises the addressing of the
unique challenges faced by these groups. By devising measures that align
with the specific needs of these socioeconomic segments, policymakers can
contribute towards fostering social cohesion, reducing inequalities and
safeguarding the well-being of the most vulnerable members of society.
Aimed at contextualising the Czech Republic’s position in the wider
European landscape, the chapter further compares the nation’s inflationary experience with that of other European countries. The identification
of the Czech Republic as the fourth most affected country in Europe
emphasises the gravity of the crisis and underscores the shared urgency for
cohesive, collaborative solutions at the regional level. The experience of
other European nations provides valuable information for the development of policy measures that effectively address inflationary pressures and
their consequences on the overall economic stability and social welfare of
the region.
In summary, in the context of today’s rapidly evolving socioeconomic
landscape, the three pivotal topics explored in this compendium—the relationship between wages and productivity, the influx of immigrants and the
distributional effects and decomposition of inflation—have emerged as
fundamental issues for economic research and policy decision-making.
These interconnected themes have the potential to reshape our understanding of economic dynamics, labour market efficiency and income distribution in the face of evolving global challenges. The nexus between
wages and productivity has a number of critical implications for policymakers who wish to encourage economic growth and increase productivity levels. A comprehensive understanding of the labour market integration
of immigrants is imperative in terms of effectively harnessing their economic potential. The examination of the distributional effects that arise
from inflationary pressures is essential in terms of devising equitable policies that act to reduce socioeconomic disparities and ensure macroeconomic stability. As we progress through the diverse chapters of the book,
Get all Chapter’s Instant download by email at etutorsource@gmail.com
Get all Chapter’s Instant download by email at etutorsource@gmail.com
1
INTRODUCTION TO THE CURRENT CHALLENGES
11
the intrinsic value of these topics for current socioeconomic research
becomes increasingly apparent. The findings and methodologies presented
in this compendium contribute to the shared knowledge base that guides
policymakers and researchers in terms of formulating evidence-based policies, fostering inclusive growth and mitigating economic imbalances. The
insight provided resonates with the complexities of the contemporary
global economy as we strive to build a sustainable, equitable and resilient
future for the Czech Republic and beyond.
Get all Chapter’s Instant download by email at etutorsource@gmail.com
We Don’t reply in this website, you need to contact by email for all chapters
Instant download. Just send email and get all chapters download.
Get all Chapters For E-books Instant Download by email at
etutorsource@gmail.com
You can also order by WhatsApp
https://api.whatsapp.com/send/?phone=%2B447507735190&text&type=ph
one_number&app_absent=0
Send email or WhatsApp with complete Book title, Edition Number and
Author Name.