C51 - Model Construction and EstimationReturn

The paper focuses on identifying the main factors affecting the motivation of labour market participation in connection to the system of assistance in material need and the subsistence minimum. The results of the analysis show that (i) assistance in material need itself lowers the motivation to work, but in Slovakia, the difference between net household income from work after finding a job and the net social income during unemployment is increasing in time; (ii) house-holds with incomes below the subsistence minimum react to these changes most sensitively; and (iii) increases in the assistance in material need negatively affect the motivation to work, especially in those individuals for whom the additional benefit from work is relatively low, i.e., people with a low level of education and mothers with dependent children.

In accord with international transfer pricing regulations, the borrower's creditworthiness is the main factor to be reflected in valuation of cross-border loan transactions between associated enterprises. However, trouble invariably arises for small and medium-sized enterprises that do not have an assigned credit rating. The aim of this paper is to determine the most reliable predictors of a company's credit rating for European entities facing missing rating coverage for the purpose of transfer pricing. Based on 2015-2019 data sourced from the Orbis database, the study examines key financial ratios and non-financial information that could be instrumental in reconstructing a long-term rating category of a company assigned by Moody's Investors Service. The results identify interest coverage as the most useful predictor. Therefore, a law-approved and tax-acceptable approach to pricing of financial transactions between unrated parties (i.e., without credit rating) should preferably exploit interest coverage as a link to the otherwise missing ratings.

The objective of this paper is to analyse the distribution of salaries in the public sector with a focus on employees receiving a salary at the level of minimum wages in the initial period of the COVID-19 pandemic. Among the methods used is the construction of salary distribution models by gender and educational attainment and the creation of predictions using exponential smoothing. The results of the analysis show the highest increase in real salaries among women with the lowest education. The results further show that the highest benefit in terms of the average real monthly salary of both men and women comes from changing the employee's educational attainment from secondary education without A-level examination to secondary education with A-level examination. On the other hand, for women originally with primary education, obtaining an apprenticeship certificate does not have a significant effect on their real salary on average.

The article investigates potential output and output gap modelling and estimation in the Czech Republic in the period 1996-2021, including the global recession from 2008 and the recent crisis caused by government measures against the COVID-19 pandemic. The unobserved components (UC) methodology is applied, coefficients are estimated by the maximum likelihood method, unobserved variables are estimated using the Kalman filter. The standard UC model is modified in an original way to nonlinearly describe the hysteresis effect by allowing the output gap to have an asymmetrical influence on potential output. The econometric model verification proved significance of the hysteresis effect and showed a substantial inertia of negative consequences of both crises. Predictions of an impact of the War in Ukraine on the gap were also calculated and the uncertainty associated with these predictions was quantified.

Environmental Improvement Possibilities for Local Governments: Example of Reducing PM10 Concentration in Air The municipality can significantly improve the air in its territory by regular cleaning of its street network. The aim of this study is therefore to demonstrate the positive effect of machine cleaning of roads on the reduction of PM10 dust particles in the air. These particles are the result of emissions from transport and more than 83% of them come from the so-called resuspension (the secondary whirling of particles that lie on the road). Cleanliness and care of public spaces, in which road cleaning may be included, belongs to the so-called compulsory tasks of self-governments in some legal regulations, e.g., Bavarian, Polish, Slovak and Serbian, and as this study shows, its positive effect is measurable, which is not common among activities of local municipalities. Therefore, it may be stated that the funds invested by local governments in mechanical road cleaning have a significant positive effect on reduction of PM10 particles in the air and thus on the health of their citizens. The study is based on measurements performed in the capital city Prague from 2013 to 2019 and uses monthly data from 4 measuring stations, for which it was also possible to obtain adequate meteorological data of variables that affect the occurrence of PM10 particles in the air. The results of the study can be used to properly set up the machine cleaning system so that its effect is as high as possible. Stata econometric software was used for the data analysis. The study builds on similar analyses carried out in recent years in Europe, the Arabian peninsula and Asia.

The issue of minimum wage is highly topical in the context of the so-called minimum wage controversy, which contradicts the attitude of the neoclassical school. The aim of this paper is to analyse the effect of minimum wage increase together with effects of changes in other exogenous variables such as GDP growth rate, inflation rate, unemployment compensation and other social benefits on the real unemployment rate in the Czech Republic in 2006-2018. Linear regression models are tested using the Cochrane-Orcutt method. The effect of minimum wage increase on the rate of unemployment proved to be insignificant in the period 2006-2018. A negative effect of GDP growth rate was confirmed in 2006-2018, while unemployment benefits seemed to have a positive effect on the unemployment rate. The results show a negative effect of increasing minimum wage on the unemployment rate of women in 2011-2018, in line with the neoclassical theory. The conclusions of this paper have significant economic implications for minimum wage policy.

The aim of this paper is to assess the impact of the economic crisis which commenced in 2008 on fertility levels across the EU, i.e., whether the onset of the crisis influenced the fertility trends and whether the various countries differed in terms of their response to the crisis. The relationship between the two economic indicators GDP per capita and unemployment rate and the total fertility rate as the dependent variable was explored employing panel regression models. Simultaneously, an investigation was conducted into which indicator better fits the modelling of the influence of macro-economic conditions of individual countries on the fertility levels. Data on 28 EU member states from the period 2001 to 2013 were included in the analysis. The results revealed that the onset of the economic crisis exerted a fundamental effect on fertility. In addition, it was found that the two economic indicators were interchangeable in terms of the effects exerted. In conclusion, it was determined that the findings support the supposition that fertility tends to be pro-cyclical in character.

This article deals with multistate demography approach applied on the labour market. The multistate demography - methodology and history - are briefly described. The application of this method is presented using transitions between economically active and inactive states on the labour market and among economically inactive, employed and unemployed states. Estimation based on the Labour Force Sample Survey (LFSS) for the Czech Republic shows that during the life course (15-64 years of age) the expected length of stay for each state changes depending on the original state and age. Main differences were found for younger (25-40 years) and older (55+ years) persons.

For the purpose of monetary policy analyses dynamic multivariate models are usually applied. The reason is the presence of significant lags between an action and the appropriate effects in the economy. We use the concept of structural VAR models, widely used approach next to the DSGE and simultaneous equations models. We estimate four and five variable VAR containing the key macroeconomic indicators and identify monetary transmission mechanism using SVAR. Using different identification schemes and impulse response functions we compare the effect of a restrictive monetary policy shock on the set of analysed variables, especially price level. We also compare the results of defined models for the Czech and Polish economies, that both intend to enter EMU. To avoid the possibility of a price puzzle effect, as a result of mixing policy regimes in the sample period, we use data from single monetary policy regime starting 1998, when the Czech central bank switched to the inflation targeting regime. The results indicate high sensitivity to the identification schemes in SVAR and not significant differences between responses to monetary policy shock in CR and Poland.

In the text finite mixtures of lognormal distributions are used for the modelling of net annual income per capita and equivalized income of the Czech households (in CZK) in 2004-2010. The development of distribution of number of members of households is analysed and the characteristics of standardized units according to EU and OECD methodologies are given. Data from the survey EU-SILC organized by the Czech Statistical Office from 2005-2011 (dealing with incomes from 2004-2010) are used for the analysis. Models (with incomplete data) with two to four artificial components are used in order to fit the distribution of incomes; the development of their characteristics is shown. All estimates in the text are maximum likelihood estimates, EM algorithm in the program R is used for the optimalization. Models are compared with the use of Akaike criterion.

We analyze the extent of the integrated state control over the privatized companies in the Czech Republic during the decade of 1995-2005. During this period, the integrated potential of the state to control companies had a pyramid-like form. Even though the pyramid control was not fully utilized, the state owned the golden shares that significantly improved state ability to control companies. Our findings suggest that state control in the period under research is correlated with decreasing, or even negative performance of companies. The efficiency of the state-owned companies was much lower than that of the privately owned. The inability of state agencies to cooperate and inefficient state administration are the most probable explanations behind our findings.

A theoretical model describing a dependence of stock index on relevant macroeconomic variables is derived. Starting by two possible approaches, portfolio theory and heterogeneous agent hypothesis, the same model formulation resulted. An application was performed, using empirical data of the Prague Stock Exchange and of the Czech Republic economy. Working with the whole sample of observations, a significant relation of stock index and explanatory variables as for industrial production, exchange rate, interest rate, was hardly to be found. Studying an indication of three structural change points, this hypothesis was confirmed by a test and relating re-estimation was performed. A basic information about the problem of structural breaks is given.

A common export equation is used to describe the Czech export of machinery, tradable goods, agricultural and food products, and income from the tourist industry. Four important export regions are distinguished: Slovakia, Poland, Germany and USA. The problem of small data sample, which is a characteristic one for most time series of the Czech economy, is solved here by using the seemingly unrelated regression. The results confirm the theoretical expectation of more efficient estimates in comparison with the OLS variant. The basic characteristics of export are given with regard to the commodities and to the regions in question.