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JOURNAL OF INTERDISCIPLINARY RESEARCH

Table 2: Results of shift-share analysis

Czech republic

Slovakia

Primary sector

-0,0099

-0,0233

Secondary sector

0,0042

0,0099

Tertiary sector

0,0325

0,0758

Quaternary sector

0,0009

0,0021

Source: own calculation of authors based on Statistical office of
the Slovak republic and Czech statistical office

In the Czech Republic, the average change in employment in the
primary sector was lower than the average change in
employment of the sector in both the Czech Republic and the
Slovak Republic. Similar changes occurred in the Slovak
Republic, where the average change in employment in the
primary sector was lower than the average change in
employment in both countries in aggregate. This phenomenon
arises by a persistent drop in the number of workers in the
primary sector. In the end, employment decline in individual
sectors of the national economy can only be seen as a decline in
jobs in the primary sector only.

Concerning employment in other sectors of the national
economy, there have been less significant changes, but have
been reflected in employment growth. In the tertiary sector, the
average employment rate has risen to the highest. This
phenomenon can be explained by the fact that the sectors of the
tertiary sector are the leading industries in the Czech and Slovak
Republics providing the largest number of jobs. We also
designate them as competitive industries. If we were to return to
the primary sector, there was a significant reduction in
employment, which naturally also indicates the loss of
competitiveness of sectors such as agriculture and forestry that
belong to this sector.

The shift-share analysis results suggest that countries such as the
Czech Republic and the Slovak Republic with their potential for
the primary sector change their orientation towards the tertiary
and quaternary sectors where the so-called soft sectors - trade
and services. In this sense, it will be very interesting to look at
the changes that occur in the field of income generation as it is
obvious that the lower-wage sector's primary sector produces
lower wages. The decline in the labor force in the primary sector
can be explained differently, whether in view of the shortage of
workers in the labor market in general, in terms of their
qualifications or in terms of the demanding and wage valuation
of their work. Of course, this phenomenon may have several
reasons that are not directly related to the labor market, but to
the EU's common agricultural policy or to the protection of the
environment.

Wage or income is one of the key factors in the labor market,
which affects many others, not only economic and demographic
indicators. The existence of income inequality is a common
occurrence in every society.

The need to measure income inequality in comparison of labor
market disparities results from the assessment of the level of
income achieved by employees in individual sectors of the
national economy in the Czech and Slovak Republics. Due to
current demographic trends such as population aging, gradual
increase in employment, educational attainment, or economic
burden, there are changes affecting the overall quality of life of
individuals. One of the basic indicators of quality of life is
income. Previous surveys show that the pensions of the
population of the Czech Republic and the Slovak Republic are
gradually rising, reaching the maximum by 2020. Another very
important factor in the changes in the labor market is the change
in sectoral employment and the shift of employees from lower
salaries to higher. Sectoral employment changes arise from
gradual job liberalization due to demographic trends, such as
migration, retirement age, but also economic trends such as
increasing demands for living standards or innovations.

To measure income differentiation, we chose the Gini coefficient
method.

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The coefficient ranges from 0 to 1, with the value 0 representing
absolute equality in the breakdown of pensions, and vice versa,
the value of the coefficient approximating to 1 represents an
increase in inequality in the distribution of income. The purpose
of applying this method is to point out the income gaps achieved
in individual sectors of the national economy.

Based on the above results, Table 3 shows that income
inequality is relatively low, but has been growing steadily since
2000, reaching almost 0.29 in both countries by 2020. This
means that, by 2020, the disparities in earnings should be
gradually worsened.

Table 3 Gini coefficient in Czech Republic and Slovakia

2000

2020

Czech republic

0,239

0,289

Slovakia

0,248

0,284

Source: own calculation of authors based on Statistical office of
the Slovak republic and Czech statistical office

The Lorenz curve points to the fact that the 70% of population of
Czech Republic and Slovakia own together 50% of the total state
wealth. (Figure 13).

Graf 13 Lorenz curve of Czech Republic and Slovakia

Source: own calculation of authors based on Statistical office of
the Slovak republic and Czech statistical office

3 Conclusion

One of the biggest problems that can be encountered on the labor
market in the Czech Republic and the Slovak Republic is the
lack of workforce. The number of employers facing this shortage
is unstoppable. We can now argue with certainty that this
negative trend will cause cracks in all branches of the national
economy by constantly deepening it. Fewer and fewer job
seekers will respond to job offers, which will put pressure on
wage increases. Potential rescue for this unfavorable situation
may be, for example, "labor migration", but it still does not have
to eliminate the damage caused by unfavorable demographic
developments. It is also necessary to consider voluntary
unemployment, changes in sectoral employment, the
development of wages in individual sectors of the national
economy, permanent emigration, or a rapid increase in university
graduates. Given the potential of these countries, we pose the
greatest threat to the primary and secondary sectors.

An increase in the number of post-productive populations from
the total population will cause a significant drop in the labor
force accompanied by an increase in average age, resulting in a
sharp increase in the economic burden on the population. Thus,
an economically active resident will be increasingly
economically inactive. A major problem will also be the increase
in the number and share of older people in the economically
active population. These will need to be considered, especially in

100

income

population

Lorenz curve

Equality line

Lorenz curve

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