ABSTRACT
The labor markets of socialist countries were characterized by high job security and stability. No open unemployment existed in the Czech Republic, labor shortages were chronic, and labor force participation rates of both men and women were high. Employment was concentrated in industry. For men, the statutory retirement age was low, at age 60. For women, it was even lower, since each child they raised meant retirement age sank: women with no children retired at 57, but women with five or more retired at 53. Until 1988, no general early retirement scheme existed. However, preferential treatment was given to specific groups of workers, including employees at higher risk for workplace injury or occupational illness, artists and pilots, and they could retire earlier, often with higher benefits. To some extent, disability pensions were used as an early retirement pathway (Biskup and Kortusová 2002). Nevertheless, until the early 1990s the employment rate in the immediate pre-retirement ages (55–59 for men and 50–54 for women) remained at 80 percent. To meet the demands of the command economy for labor, it was possible to accumulate pensions along with earnings. Many retirees thus participated in the labor market, with the result that working pensioners represented almost 13 percent of the labor force in 1987. Political, social and economic transformation led to market-oriented reforms, which opened the country to the impacts of globalization. The economy had to absorb both the effects of globalization and the transition to a market system at the same time (Fortuny, Nesporova and Popova 2003). These factors caused sharp losses in output that were followed by a decline in the size and a change in the structure of the demand for labor. For older workers, employment security was replaced by a high risk of dismissal, as they often cannot meet the new demands and are among the most disadvantaged groups in the labor market (KofroĖová et al. 2003). Employers are concerned with their low flexibility and unwillingness to adapt to new jobs or work conditions, their lack of knowledge of foreign languages, and their high wage expectations (Veěerník 2001a).
