The impact of education on unemployment in the Czech Republic

This diploma thesis analyzes the impact of education on unemployment of citizens of the Czech Republic. It utilizes data from the ISSP international survey between years 1994-2012. The main assumption of this work is that education reduces the likelihood of individual's unemployment. This hypothesis is confirmed by using the Probit method, in several models accompanied also by the instrumental variable approach. The instrumental variable method helps to identify the causal effect of education on unemployment. Results show that education has greater impact on women. Each additional year of schooling reduces the likelihood of a woman's unemployment by 1 percentage point and likelihood of a man's unemployment by 0.75 percentage points. In additional models, education is measured by highest reached level rather than years of schooling. Results confirm that the probability of unemployment is lower for people with higher level of education than for others