Entrepreneurship Policies through a Gender Lens

Czech Republic

By Alena Křížková, Institute of Sociology, Czech Academy of Sciences

Marie Pospíšilová, Institute of Sociology, Czech Academy of Sciences

Background

The Czech Republic transitioned to a market economy in the 1990s. Business ownership was prohibited during state socialism from 1948 until 1989,1 persisting only through the black market as a strategy for increasing insufficient income for households. This included various types of services such as repairs and retail sale of one’s own products and cultivated crops, and bartering between households. This practice was tolerated by the regime in specific sectors (such as art). The transition led to both job losses and an increase in business opportunities, as state-owned enterprises were restructured and privatised. Research demonstrates the importance of small and medium-sized enterprises (SMEs) in the shift from socialism to capitalism in Central and Eastern Europe (Duh, Tominc and Rebernik, 2009). SMEs were particularly important for creating jobs, development of the market economy and for revival and development of an entrepreneurial tradition. Nevertheless, research on women-owned businesses and gender issues in entrepreneurship remains under-developed in transitional economies such as the Czech Republic.

While there was high employment of women under state socialism, the transition to capitalism led to calls for women’s return to the home and reliance on male breadwinners, even though economic conditions did not produce wages sufficient for a solo breadwinner. These types of discourse were reinforced by prolonging parental leave and reducing state-funded childcare for children under the age of three. This policy framework encouraged work trajectories for women that were interrupted by extended leaves (Jurik et al., 2019) as well as discrimination against women as members of a secondary labour force (Křížková , Penner and Petersen, 2010), trends that, in turn, had a negative impact on the opportunities for women in the Czech labour market and on their choices, including entrepreneurship.

Despite mandatory employment and the proclaimed equality of men and women during state socialism, women experienced job segregation and inferior wages because policies failed to address the unequal division of housework, thus perpetuating the double burden on women and gender stereotypes (Hašková and Uhde, 2009). After 1990, demands for gender equality by Czech feminists arose, but were discredited2 by the legacy of communism (Hašková , 2005). The transition from state socialism to a market economy also triggered a trend towards more traditional gender roles. This trend included a call for women’s return to the home, a reliance on male “breadwinners”, and traditional attitudes towards the division of housework and caring responsibilities between partners that has persisted over the years.3 These attitudes have been supported by policies such as the prolongation of parental leave4 of up to three years per child and a sharp decrease in state-funding for childcare facilities. There is limited availability of flexible and part-time working arrangements,5 and discrimination against women with young children by employers is widespread (Formánková and Křížková, 2015). Within the context of restructuring the Czech economy, the call for women’s return to the domestic sphere was also one of the strategies used to keep unemployment low (Hašková and Uhde, 2009). Despite this trend, which causes long interruptions in women’s careers and their wage disadvantage and segregation at work, women’s employment rates have stayed relatively high,6 and most women work full time.

In the Czech Republic, 31% of entrepreneurs are women (CZSO, 2019a), and women’s self-employment is increasing, particularly among women who have small children and those of pre-retirement age.7 However, self-employment is not always the first choice. Between 2013 and 2017, 27% of Czech women who started businesses did so out of necessity (OECD, 2018). Qualitative research shows that one of the main needs claimed by women entrepreneurs is for flexible working conditions and work-life balance (Volejníčková et al., 2019), but flexible or part-time options and family-friendly working conditions are still rare within employment contracts (Formánková and Křížková, 2015). Due to the restricted access of mothers of small children to secure employment contracts with family-friendly working conditions,8 women are often locked into unstable options in the labour market, such as short-term temporary contracts within the “gig economy” or self-employment. Research into legislation and taxation policy shows that the reality of women’s self-employment is often precarious, marked with financial and social insecurity (Homfray, 2018; Kaiserová, 2018). Women are pushed into self-employment by a labour market that is biased against women and mothers and does not provide conditions for work-life balance (McCracken et al., 2015).

Policy issue: Developing a women’s entrepreneurship policy

The main strategic documents addressing entrepreneurial support in the Czech Republic are produced by the Ministry of Industry and Trade (MIT) and The Office of the Government of the Czech Republic (OGCR). MIT strategies aim to foster competitiveness and economic performance, and to develop the innovative potential of SMEs (MIT, 2013). In its Action Plan for Support of Economic Growth and Employment (OGCR, 2017), the OGCR sets out the goal of increasing the attractiveness of the entrepreneurial sector. Neither gender nor the specific situation of women entrepreneurs are mentioned in these strategic economic documents. However, the Government Strategy for Equality of Women and Men in the Czech Republic for 2021-30 (OGCR, 2021) (hereafter the Strategy) discusses gendered aspects of entrepreneurship. The most notable issues identified include the risk of increasing the number of women working as entrepreneurs by default rather than by choice. One of the objectives of this Strategy is to provide systematic support to women entrepreneurs and to encourage greater monitoring of women’s precarious entrepreneurship.

Research shows that self-employment is a “second choice” for under-represented groups of women such as mothers with small children, because women entrepreneurs with children are at a disadvantage compared to women employees with children. Women entrepreneurs’ medical insurance benefits are significantly lower than those of women employees, and women entrepreneurs are not entitled to an allowance to care for a family member. Furthermore, access to maternity allowance is restricted, as women entrepreneurs are required to terminate their business in order to receive it9 (Homfray, 2018; Kaiserová, 2018). These conditions put many Czech women entrepreneurs, especially those with parental or other care responsibilities, into more vulnerable positions (Hašková and Dudová, 2017). The tax discount for a non-earning wife (the Czech version of joint taxation) is also a disincentive to women’s entrepreneurship or employment. In the Czech Republic the breadwinner gains a spousal deduction if his/her spouse earns less than CZK 68 000 per year. When combined with gender pay gaps and norms advocating women’s responsibility for the home, this system encourages women to defer earning opportunities during and after paid parental leave or in other periods of intensive care. It also has a negative effect on women’s income later in life (e.g. post-divorce, pensions). Further, the Czech Republic’s joint taxation system permits the placement of married women in unofficial positions within family businesses, thereby posing a threat to their long-term wellbeing (e.g. entitlement of maternity benefit or lower pensions). These examples illustrate how gender stereotypes in the division of work within a household are embedded in the wider institutional context. Due to the gendered nature of this context and the expectations it creates, women are not only considered as an unreliable “secondary labour force” and discriminated against by employers (Křížková et al., 2009), but are also viewed as untrustworthy by financial institutions when applying for loans (McCracken et al., 2015).

In its Statement of the working group for women and economy (CWL, 2018) (hereafter the Statement), the Czech Women’s Lobby (CWL)10 stresses missing or inadequate support for women-owned firms to become viable and sustainable as a major problem. Both the Strategy and the Statement highlight the need for systematic and effective support for women entrepreneurs in the Czech Republic. In the last Programme term within the European Social Fund (ESF), support for women entrepreneurs was limited to training activities designed to encourage women to start ventures. However, the framework for the training programmes was not sufficient to ensure practical creation of new businesses or their long-term sustainability due to the lack of coordination between various support programmes managed by various ministries (some focused on training, some on consulting services), the short-term duration of such programmes, and the absence of special investment stimulus for micro financing.

Entrepreneurship has the potential to provide a solution to Czech women’s restricted access to paid work, especially for women with caring responsibilities. However, the institutional context tends to reinforce gender inequalities, and neither the current nor prior levels of support for women entrepreneurs within ESF have been sufficient. Systematic, sustainability-focused and gender-sensitive policy support for women entrepreneurs is needed to address women’s disadvantage in the labour market and the additional challenges women face when attempting to launch and develop businesses.

Conclusions and recommendations

The support provided to women entrepreneurs in the previous European Union programming period focused on pre-start-up training activities and offered limited support beyond the very initial stages of entrepreneurship. There is currently no specific policy support for women-led businesses in the Czech Republic in spite of the growing number of self-employed women. In the Czech cultural context, women entrepreneurs face the additional burden of an unequal division of work and homecare, combined with traditional gender expectations that are reflected in family and tax policies, and the lack of flexible, part-time and family-friendly jobs. The following recommendations are offered to increase effective support for Czech women entrepreneurs.

Recommendations for the Czech Republic

• Further develop gender-specific entrepreneurship policies that address the specific barriers faced by women entrepreneurs. Undertake systematic monitoring of the status of women entrepreneurs to ensure progress.

• Extend the focus of entrepreneurship support schemes for women entrepreneurs beyond business creation to also cover business sustainability and development, including greater efforts to improve access to finance and business counselling.

• Assess family, health, tax and entrepreneurship policies to ensure that measures do not disadvantage women entrepreneurs relative to male entrepreneurs or employees.

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