Analysis of the purchasing power of wages in the Czech Republic between 2004-2017

The aim of the thesis is to analyze the purchasing power of wages in the Czech Republic, which achieves very poor results. I discuss the market, historical and institutional factors that can cause wage differences on the basis of comparison with the states of Europe. I analyze the popular problem with the economic apparatus and propose solutions that can prevent the outflow of a qualified workforce and raise the living standards of the population. On a theoretical basis, I discuss the labour productivity and its possible causes, which are mainly human capital and technological equipment. Further, I explain the historical context of the socialist era and the institutional factors in the labour markets. In the practical part, using the causal analysis and comparison, I find, with the help of the Human Development Index, the states with high standards of living, that I compare with the Czech Republic. I detect, that investing in education or research and development has no clear impact on labour productivity, which is low in Czech Republic. Historical data confirm, that in the monitored period 2004-2017, Czech wages grew more than wages in Western Europe, but the wage approach is far away. I also analyze the impact of high labour costs, civil servants, governmental and currency interventions, and lastly, I show forecasts of purchasing power evolution, that seems positive