The Retirement Behaviour of Older Workers in Transitional Economies

Research has shown that public pay-as-you-go, defined-benefit pension plans penalise those who stay at work beyond a certain age by reducing the present discounted value of future retirement benefits. In discussions on the effectiveness of policies aimed at eliminating the age-dependency factor in workers' decisions to retire, it is often assumed either that the benefits in all future periods have the same weight in the present discounted value or that the discount rate is close to unity due to low real interest rates used in this case. Galuscak first considered the U.S. pension scheme, showing that discounting plays a crucial role since the formula for the present discounted value of future retirement benefits is sensitive to the discount rate used. He then analysed the role of social security incentives and retirement provisions on older workers' behaviour in the labour markets of the Czech and Slovak Republics and the effect of the macroeconomic environment on workers' decisions to retire. He calculated the optimal parameters of the Czech and Slovak pension rules and assessed the potential effectiveness of changes to the Czech scheme introduced in January 1996.

Immigrants in the Czech Republic (With Special Reference to Ukrainian Workers and "Western" Firms Operating in Prague)

International migration has increased rapidly in the Czech Republic, with more than 150,000 legally registered foreign residents at the end of 1996. A large proportion of these are in Prague - 35% of the total in December 1996. The aim of this project was to enrich the fund of information concerning the "environment", reasons and "mechanisms" behind immigration to the Czech Republic. Mr. Drbohlav looked first at the empirical situation and on this basis set out to test certain well-known migration theories. He focused on four main areas: 1) a detailed description and explanation of the stock of foreign citizens legally settled in Czech territory, concentrating particularly on "economic" migrants; 2) a questionnaire survey targeting a total of 192 Ukrainian workers (98 in the fall 1995 and 94 in the fall 1996) working in Prague or its vicinity; 3) a second questionnaire survey of 40 "western" firms (20 in 1996 and 20 in 1997) operating out of Prague; 4) an opinion poll on how the Czech population reacts to foreign workers in the CR. Over 80% of economic immigrants at the end of 1996 were from European countries, 16% from Asia and under 2% from North America. The largest single nationalities were Ukrainians, Slovaks, Vietnamese and Poles. There has been a huge increase in the Ukrainian immigrant community over both space (by region) and time (a ten-fold increase since 1993), and at 40,000 persons this represents one third of all legal immigrants. Indications are that many more live and work there illegally. Young males with low educational/skills levels predominate, in contrast with the more heterogeneous immigration from the "West". The primary reason for this migration is the higher wages in the Czech Republic. In 1994 the relative figures of GDP adjusted for parity of purchasing power were US$ 8,095 for the Czech Republic versus US$ 3,330 for the Ukraine as a whole and US$ 1,600 for the Zakarpatye region from which 49% of the respondents in the survey came. On an individual level, the average Czech wage is about US$ 330 per month, while 50% of the Ukrainian respondents put their last monthly wage before leaving for the Czech Republic at under US$ 27. The very low level of unemployment in the latter country (fluctuating around 4%) was also mentioned as an important factor. Migration was seen as a way of diversifying the family's source of income and 49% of the respondents had made their plans together with partners or close relatives, while 45% regularly send remittances to Ukraine (94% do so through friends or relatives). Looking at Ukrainian migration from the point of view of the dual market theory, these migrants' type and conditions of work, work load and earnings were all significantly worse than in the primary sector, which employs well educated people and offers them good earnings, job security and benefits. 53% of respondents were working and/or staying in the Czech Republic illegally at the time of the research, 73% worked as unqualified, unskilled workers or auxiliary workers, 62% worked more than 12 hours a day, and 40% evaluated their working conditions as hard. 51% had no days off, earnings were low in relation to the number of hours worked. and 85% said that their earnings did not increase over time. Nearly half the workers were recruited in Ukraine and only 4% expressed a desire to stay in the Czech Republic. Network theories were also borne out to some extent as 33% of immigrants came together with friends from the same village, town or region in Ukraine. The number who have relatives working in the Czech Republic is rising, and many wish to invite relatives or children to visit them. The presence of organisations which organised cross-border migration, including some which resort to organising illegal documents, also gives some support for the institutional theory. Mr. Drbohlav found that all the migration theories considered offered some insights on the situation, but that none was sufficient to explain it all. He also points out parallels with many other regions of the world, including Central America, South and North America, Melanesia, Indonesia, East Africa, India, the Middle East and Russia. For the survey of foreign and international firms, those chosen were largely from countries represented by more than one company and were mainly active in market services such as financial and trade services, marketing and consulting. While 48% of the firms had more than 10,000 employees spread through many countries, more than two thirds had fewer than 50 employees in the Czech Republic. Czechs formed 80% plus of general staff in these firms although not more than 50% of senior management, and very few other "easterners" were employed. All companies absolutely denied employing people illegally. The average monthly wage of Czech staff was US$ 850, with that of top managers from the firm's "mother country" being US$ 6,350 and that of other western managers US$ 3,410. The foreign staff were generally highly mobile and were rarely accompanied by their families. Most saw their time in the Czech Republic as positive for their careers but very few had any intention of remaining there. Factors in the local situation which were evaluated positively included market opportunities, the economic and political environment, the quality of technical and managerial staff, and cheap labour and low production costs. In contrast, the level of appropriate business ethics and conduct, the attitude of local and regional authorities, environmental production conditions, the legal environment and financial markets and fiscal policy were rated very low. In the final section of his work Mr. Drbohlav looked at the opinions expressed by the local Czech population in a poll carried out at the beginning of 1997. This confirmed that international labour migration has become visible in this country, with 43% of respondents knowing at least one foreigner employed by a Czech firm in this country. Perception differ according to the region from which the workers come and those from "the West" are preferred to those coming from further east. 49% saw their attitude towards the former as friendly but only 20% felt thus towards the latter. Overall, attitudes towards migrant workers is neutral, although 38% said that such workers should not have the same rights as Czech citizens. Sympathy towards foreign workers tends to increase with education and the standard of living, and the relatively positive attitudes towards foreigners in the South Bohemia region contradicted the frequent belief that a lack of experience of international migration lowers positive perceptions of it.

Aggressive Behaviour of Different Social and Demographic Groups in Post-Totalitarian Society

The project looked at aggressiveness in different age and social groups of modern post-totalitarian society, beginning with the hypotheses that the greatest risk groups are teenagers and the unemployed, and that there is a link between aggression and the level of meaningfulness of life. The groups studied comprised about 200 persons from urban areas of eastern Ukraine, including schoolchildren, students, white collar workers, self-employed persons, the unemployed and pensioners. Workers in industry were not included as this group has virtually disappeared in Ukraine at present since most enterprises have ceased to work and most workers have moved into the groups of the unemployed or self-employed. Participants were divided into age groups of 13-14, 16-17, 18-22, 24-45, 46-60 and over 60, with each group including approximately equal number of men and women. Research methods included Buss-Darky techniques, the "hand test" (E. Wagner), the "non-existent animal" technique, a Rozenzweig picture frustration study, purpose-in-life tests and an interview. The Buss-Darky test showed that schoolchildren have the highest level of aggression, followed by students. These groups have high indexes in virtually all types of aggression, including its open form. The self-employed have relatively lower indexes, although they are more likely to manifest it openly, while such open manifestations are less likely among white-collar workers, pensioners and the unemployed. The least aggressive were the unemployed and pensioners, although the latter had a relatively high level of hostility. In terms of age, aggression was shown to decrease with age, which Ms. Ivanova attributes to the still imperfect control mechanisms of teenagers and their less mature personalities. Among the younger groups girls showed a slightly higher level of aggression, although this situation was reversed among older people. The risk groups inclined to manifest open forms of aggressiveness can therefore be seen to be teenagers and students. Other tests used show aggressiveness as a feature of the current state, rather than as an inherent feature and the results obtained were somewhat different. In the interviews, all adults referred to the increased aggressiveness in society and most stated that they themselves had become more aggressive and bad-tempered. The ability of individuals to adapt to their social environment was also investigated and schoolchildren turned out to have the lowest adaptation index and the unemployed the highest. MS. Ivanova attributes that latter, rather surprising, result to the fact that the constant frustrations facing the unemployed force them to actively seek ways and means of adapting in order to survive. The final aspect considered was the possible connection between human aggressiveness and the meaningfulness of life. Here the groups with the most meaningful lives were the self-employed and pensioners. The latter result, again rather surprising, was attributed to the desire of people who have already lived the greater part of their lives to place more weight on what they have already done, in order to prove to themselves that they have not lived in vain. The hypothesis that aggressiveness is conversely related to the meaningfulness of life was only partially confirmed. In the two extreme cases (schoolchildren and pensioners) this was indeed the case, but the remaining groups did not show any such connection. From the data obtained, Ms. Ivanova concluded that life in modern post-totalitarian society does indeed foster a rise in people's aggressiveness, and this was supported by the fact that indexes of aggressiveness proved to be higher than the norm. Her original hypothesis as to the groups in society most at risk from open aggression confirmed in the case of teenagers but not of the unemployed, who had relatively low aggressiveness indexes and the highest degree of adaptation.

The Recent Structure of Wages in the Czech Republic

The project drew on an extensive firm-level sample of employees to describe in detail the recent evolution of the structure of wages in the Czech Republic between 1995 and 1998. The results of the analysis were then compared with information from EU countries. Regression analysis was used to study a number of specific questions, with particular emphasis being paid to proper weighting of the sample. Jurajda first quantified the effects on male and female hourly wages in the Czech Republic of worker age and education, firm size, region, industry and ownership type. He then examined whether these effects have been changing over time and how they differ by gender, and identified those industrial sectors that carry the largest wage premiums not accounted for by worker or firm characteristics, and measured the effect of unemployment on wages. He found a substantial increase in returns on human capital, with the earning differentials for education increasing substantially between 1995 and 1998, with these gains being largely comparable to those in western countries. Overall, the Czech structure of wages is now very responsive to market forces and is converging rapidly on EU-type flexibility in almost every dimension. It is likely, however, that due to the constrained supply of tertiary-educated workers in particular, the returns on education may keep on rising, surpassing levels typical of western economies and potentially reaching the high levels observed in developing countries.

The Man-Made Environment in Post-Stalinist Europe 1953-1968

This project looked at the various responses, both political and aesthetic, to the end of socialist realism and the return of pre-war modernism as a desirable ideal. It considered both the built environment and objects of daily use (furniture, radios, TV sets, etc.) in several countries of the region, including Estonia, Hungary, Poland, Russia and Romania, also comparing developments there with corresponding ones in the west. Among particular aspects considered were the effects of Kruschev's speech in December 1954 to workers in construction, machine-building and design industries, in which he argued against monumentalism and criticised both "classical architecture" and socialist realism. The team see the real issue in interpreting Eastern European architecture as its lack of a critical edge, since official discourses took the place of any form of criticism and architects sought to implement the "official line". Megastructures became increasingly popular from the 1960s onwards and in Romania, for instance, came to dominate the city in the late 1980s. Such structures proved an efficient way to control the environment in countries plagued by prefabrication and social housing, and the group see the exhibition of inflated concrete grids as perhaps the most important feature of Eastern European architecture in the 1960s and 1970s. They also point out the rarity of glass and steel architecture in the east, where the preferred material was concrete, a material seen as "revolutionary" as it was the product of heavy industry and was grey, i.e. the workers' colour. Tactile elements were more important here than the visual elements favoured in the west, and a solidity more in line with the dominant ideology than the ephemeral qualities of glass.