CERGE-EI Media Highlights for June

1 July, 2021

Teachers' and politicians' salaries, the government's plan to increase old-age pensions by CZK 300, health insurance, and supply chain problems faced by Czech manufacturing companies were among the topics on which experts from CERGE-EI and the IDEA think-tank commented in June. 

On, Klára Kalíšková welcomes the opposition's proposal of two months of parental leave for fathers and an allowance for grandmothers. "This will somewhat deconstruct the labour market myth that only women go on parental leave, and it will also promote the relationship between fathers and their children," she says.

In the article "Will Everyone Have Their Own Chair?", the daily Hospodářské noviny reports on a study by the think-tank IDEA at CERGE-EI which focuses on the issue of working from home. It points out that remote working is not suitable for all professions. "Most university-educated workers can work from home, but the same is true for only one in ten workers without a high-school diploma," says Petr Janský, one of the study's co-authors.

Vilém Semerák comments for Mladá fronta Dnes on the current situation in logistics. The article highlights the supply chain issues Czech manufacturing companies are currently facing. "Unless there is a significant increase in transport costs or an increased perception of risk in the form of exposure to China and other problematic countries, I am not entirely sure that individual companies on their own will be able to do anything other than continue some form of existing cooperation with others," says Vilém Semerák.

In Respekt, Filip Matějka explains the importance of the contribution of Daniel Kahneman and Amos Tversky, whose work the magazine discusses in the article "How Institutions Murmur." Both psychologists focused on human decision-making in uncertain situations. "The prevailing theory in economics used to be that people behaved rationally and tried to maximize their utility. Kahneman and Tversky showed that this was not quite so. They introduced humans with their imperfections to economics. (...) Their findings had a far-reaching impact and in essence laid the foundations of behavioral economics."

"The better politicians are paid, the more educated people with higher qualifications go into politics," Filip Pertold told Hospodářské noviny, summing up his opinion on the salaries of politicians. "From my point of view, politics is a job like any other; it should be done by the most qualified people with experience in managing people and so on. And such qualifications need to be properly remunerated. It is beneficial to society when politicians are well paid."

"Health insurance companies are operating at a loss because of vaccinations and testing. The government wants to increase payments for state-insured persons," says a Hospodářské noviny article reporting the findings of the IDEA at CERGE-EI study titled "Intervention Necessary: The Impact of Future Economic Developments and Pandemic Measures on the Revenues and Expenditures of the Public Health Insurance System".

"The health sector needs to realize that the expenditure growth trends of the past years cannot be sustained in the coming years. We need to follow the path of more moderate spending growth, and even then, the state will have to increase the payments for state-insured people," claims one of the authors of the study, economist Lucie Bryndová. The same study was also covered by the television channel Regionální televize Jih in a report titled "The pandemic has exhausted the public health insurance, the ball is in the state's court."

Daniel Münich evaluated the development of teachers' salaries in a Český rozhlas Plus (Czech Radio Plus) special. "People who go into teaching, or who we would like to see go into teaching, should be competent college graduates who are capable of doing other jobs. We have to compare their salaries with those of other university-educated people. Today their salaries actually reach the European Union average, which is great because we were dead last just four years ago. This is a positive development, but we are still in danger of gradually returning to where we were."

"The rich have become even richer," says Jan Švejnar in an interview with "The market economy is not fully competitive in all aspects. We must realize that the market is 'mute'; it cannot ensure a fair distribution of income and wealth." He goes on to point out the problems this can lead to: "Statistics show that the wealthy, and the richest in particular, have become even wealthier. On the other hand, more people are living in poverty, whichever way we define it. These poorer groups can no longer afford housing, for example. This is very much so with young people and young households, for whom it is difficult to get on the property ladder."

"Bibliometric Backing of Charles University: Behind-The-Scene Stories" is the title of Daniel Münich's article for "Charles University (CU) has published bibliometric information in support of its internal international evaluation of science exercise, the description and results of which were recently published. IDEA prepared this extensive report together with CU's internal evaluation team. It was an honour to be part of the very first international science assessment on a scale that is unprecedented for the university and possibly also nationally," writes Daniel Münich.

Filip Pertold comments for on old-age pension amounts in the Czech Republic. He points out that it is advisable to monitor the first pension to final salary ratio as an indicator that "fairly accurately describes how people's standard of living decreases as they enter retirement. How pensions evolve and how the amounts are adjusted as pensioners age is another matter. This should be informed by the inflation rate specific to the pensioners' consumer basket, and partly also by the average wage. It is so in the Czech Republic, roughly speaking," Filip Pertold said.

Daniel Münich commented on the government's planned CZK 300 increase in old-age pensions for Český rozhlas Plus (Czech Radio Plus). "Elections are just a few months away. These gifts, extraordinary and non-standard, are handed out more or less regularly before every election. The government has not addressed the revenue side of the budget at all in order to be able to afford the increase. It has abolished the super gross salary, losing a 100 billion crowns in the process, and the budget is now short of this money. That is why the opposition is quite rightly telling the government that there is not sufficient funds for this," Daniel Münich told Český rozhlas Plus.