Asymmetry of information between employers and high school graduates in Czech Republic's labour market

Abstract

The labour market is an inevitable part of every market economy. Manifestations of imbalanced relations between the demand for work and its offers are a problem in each market-oriented society. Thus, the serious macroeconomic problem of unemployment arises, which is, to many governments and in several countries, a subject of solution. However, the solution to this problem has to start as early as the stage of the potential job applicant's education. The education structure of job applicants must be based on the needs of the specific economy because the economic structure fundamentally influences the demand for the labour force. In 2011, extended research was done on a segment of high school students throughout the Czech Republic. The results of the research show that, within the specified education level, students can show different approaches to work effort. From this point of view, the whole examined set, with the same level of education, can be divided into sample groups of employees with different approaches to work effort. This paper presents research on these sample groups and analyses characteristics of these sample groups. The results indicate that the education level can be misleading as a signal for employers. The asymmetry of information-when a potential employer is not provided with sufficient information about the school graduate's (job applicant's) access to work-can be a source of considerable failures in the labour market. In addition to the lack of graduates' practical experience, missing references in the graduate's access to work is the second most common reason companies dislike employing school graduates. These recent graduates then move from school directly into job centres' records of the unemployed. © Common Ground, Zuzana Dohnalová, All Rights Reserved.