The state loses about CZK 10 billion in taxes every year because women with small children cannot work as much as they want, according to researcher Klára Kališková from the SYRI National Institute, who has been studying the issue for a long time. The labour market is not yet as flexible as required by women on maternity leave. Greater involvement of mothers in the labour market is also hindered by the lack of available childcare, as well as social norms.
Only 7% of women who are at home with children under the age of 4 are not interested in working. 22% want part-time or project-based work, 20% would welcome one day a week of work, 38% half-time, and 13% want to work full time.
“In summary, the majority of Czech mothers with children under 4 would like to work more hours than they actually do,” said Kalíšková. According to her research, several factors prevent this. “Substitute childcare is not very available, and there are also not enough flexible work engagement options on the market,” said the researcher.
At the same time, Kalíšková, who also works at CERGE-EI and at FIS VŠE, calculated the potential increase in tax income for the state in the event that mothers started working according to their preferences. There are currently about 210,000 unemployed mothers in the Czech Republic, whose average preferred working time is 12 hours a week. At an average hourly wage of CZK 215, this means CZK 11,000 per month. “Involvement of non-working women in the labour market, according to their preferences, would bring about CZK 9.108 billion per year in income tax and social and health insurance contributions for employees and employers,” Kalíšková pointed out.
Another 150,000 mothers with young children work an average of 17 hours a week. However, their preferred working hours are about four hours a week more. In this case, the increase in hours worked according to their preferences would bring in about CZK 1.231 billion per year in income tax and social and health insurance payments for employees and employers.
“In total, the transition to a situation where mothers of children up to 4 years of age work on their preferred part-time basis would bring about CZK 10 billion a year to public budgets,” added Kalíšková.
This is also one of the reasons why Czech mothers experience one of the biggest drops in the employment rate during maternity. At the same time, higher employment, especially among mothers of pre-school children, would help to correct deficits in the pension system and reduce high gender differences in the labour market. The lack of vacancies in kindergartens also leads to shortfalls in the state budget, amounting to over CZK 1 billion annually.
