Introduction

In this chapter, we shall assess the dynamics of labour market policies and regulations during 2008–14 in Czechia. A primary focus will be developments in the unemployment benefit scheme (income replacement for insiders), active labour market policies (ALMPs) (including labour market training) and employment protection legislation. Second, we shall analyse needs-based income support (minimum income protection) and activation policies related to the minimum income scheme (MIS). Three issues will be paramount. The first concerns substantive and governance-related policy changes: whether these changes have brought expansion or retrenchment in expenditure and coverage (of benefit recipients or participants of the programmes). The second concerns whether there has been a shift in the character of the policy instruments that promote activation: whether these instruments have been rather enabling/restitutive or punitive/repressive in nature. The third concerns whether and how divisions are emerging concerning the policies between groups facing the risk of unemployment. Besides an assessment of labour market policy trends during the crisis and afterwards, the politics underlying the reforms will be discussed.

The key methodological approach is institutional policy analysis, combined with the secondary analysis of data from international and national sources. Historical institutionalism accentuates the role of institutional legacies in policies: policies and institutions are considered to be path-dependent on the institutional set-up. Institutional path dependency explains to a great extent the varieties of policy dynamics in different countries or the persistence of given features of welfare and labour market regimes over time, despite the common challenges that countries face. Studies also show that institutional path dependency is shaped by institutional traditions. Saxonberg et al (2013) explain, for example, how policy path dependency has been strong in Czechia in the area of childcare policies, even during the transition to a market democracy during the 1990s and 2000s, due to the cultural and institutional legacies of the past, in contrast to a new area, such as labour market policy, which has been subject to experimentation.

Path dependency, however, is not an obstacle to policy change. Incremental forms of institutional change can take place through ‘bricolage’ or ‘layering’. Accumulation of the incremental changes may, at times, lead to path-breaking change when the policy path comes to a critical juncture (Palier, 2005; Streeck and Thelen, 2005).