Employer of last resort for the Czech republic
Employer of last resort for the Czech republic

Summary/Abstract: This article simulates a programme called Employer of Last Resort, and analyses itspotential impact in the Czech Republic.The design of the programme guarantees perfectly inelastic demand for labourat a given wage level. In practice, the state would offer a job to anyone willing to workin order to eliminate involuntary unemployment, reduce poverty and income inequalityand secure stable growth. My aim is to estimate hypothetical effects on the main objectivesand calculate fiscal demands if the programme was launched on the Czech labour market.The results suggest that the programme could significantly reduce unemployment anddecrease income inequality. On the other hand, it would have limited impact on income poverty.The gross wage costs of implementing the Employer of Last Resort programmein the Czech Republic are in all constructed scenarios below 1% of the gross domesticproduct and further calculations suggest that the total net costs could even be negative.

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