Daniel Markovič

Madrid 12/11/2016

Labour market in Slovakia

in the aftermath of the economic crisis

Madrid 12/11/2016

Today´s presentation

Situation in Slovakia after crisis

Changes in empolymentpolicy

Selectedmeasures

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Facts about Slovakia

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Meet Slovakia

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State of Slovakia

• country bordering with Ukraine• 1% of EU population• 0.5% of EU GDP• automotive industry 1/6 of industry• 240 000 in Roma settlements– plus 160 000 other Roma

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Labor market situation

• relatively high employment:– 66% SK vs. 69% EU vs. 72% target• moderately low unemployment– 10% SK vs. 10% EU • extremely high long-term unemployment– 9.3% SK vs. 5% EU– only in Greece, Spain, Croatia is higher• The unemployment rate for women is higher in

comparison to men in Slovakia (11.9% vs. 8.9% in 2015).

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Development of employment and unemployment in Slovakia

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Problems of Slovak LabourMarket

• Structural unemployment (industrial structureinherited from the pre-1989 command economy)

• inflexible educational system• exclusion of the low-skilled, poorly educated

Roma population• the combination of high social contributions,

which weaken labour demand, with tax-benefit system

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Long term unemployment

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Long term unemploymentstructure

• low education• social trap• regional concentration – 3 regions– 3.5% of SK population– 10% of SK long-term unemployed• low long-term unemployment →employment transition (less than 1%)• long term unemployed are not labour market

supply

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Young people neither in employment, nor in education or training

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Development of employment and poverty

• Slovakia has experienced a remarkable increase in the employment rate (from 54% in 2009 to 62.7% in 2015), accompanied by a moderate decrease in the unemploymentrate (from 14.5% in 2010 to 10 % in 2016).

• Long-term unemployment is a key challenge for the Slovak labour market, with most of the unemployed being long-term(65.8%).

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Percentage of people at risk of poverty in Slovakia

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Changes in Slovakia 1

• Slovakia has implemented several reforms and changes to its social and employment policies in the period 2014-2016.

• The statutory minimum wage has continuously beenincreased every year to a gross of 405 EUR per month in 2016.

• In 2015, in an effort to facilitate employment of the low-skilled, health insurance contributions were reduced for employees with low wages, which increased their net wages and decreased labour costs for their employers.

• Since July 2015 Slovakia has guaranteed minimum pension for retirees with low lifetime earnings, but who have reached a certain minimum employment history threshold.

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Changes in Slovakia 2

• Since 2014, assistance to materially deprived people has been conditioned by their active participation in public “activation works”.

• work performed outside a regularemployment relationship

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Roma community

• Educational inequality and widespread discrimination are the key factors behind the severe labour market segregation of the Roma population in Slovakia, whichcontributes to their social exclusion.Roma population.

• The Roma population in Slovakia is one of the most disadvantaged groups

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Employment and unemployment gaps between Roma and Non-Roma

population in Slovakia

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Wages in Slovakia, EUR

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Living Wage in Slovakia (2016)

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Graduate practise

since November 2015 covers the social contribution costs of all individuals staying in their job after completing the Graduate practice

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Youth Guarantee umbrella:Right for the first job

• Supporting the creation of part-time jobs for unemployed young people under 29.

• Up to 95% of the labour costs of a part-time worker can be reimbursed together with a part of the labour costs of a mentor and further mentoring costs.

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Dual education makes a comeback

• Slovakia is gradually returning to a so-called dual education scheme.

• While several companies across the country have launched programmes to train workers lacking in the market, the Education Ministry took steps to launch the nation-wide project at vocational schools as soon as September 2015.

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RE-PAS

• jobseeker chooses accredited training course and the provider

• Labour Office pays her/him 100% ofcourse fee

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Activation works

daniel.markovic@ku.sk