How to sustainably increase employment in Slovakia? Kristine Van Herck Director-General for Employment, Social Affairs and Inclusion 22 September 2016

Agenda 1.Economic situation and key labour market developments 2.Country Specific Recommendations 2

3 1. Economic Situation and Key labour market developments

Economic growth: Catching up Eurozone average in the last decade Recovery after the economic crisis: SK GDP growth was 2.4% in 2014 (vs. Eurozone 0.9%) and forecast SK GDP growth 3.0% in 2015 (vs. Eurozone 1.5%) Economic situation Labour markets are slowly improving SK unemployment down to 13.2% in 2014 (vs. Eurozone 11.6%) Forecast SK unemployment % in 2015 (vs. Eurozone 11.0%)

Employment rate for males converging to EU average, but not for females

High unemployment for LTU 6

7 2. Policy Challenges & labour market recommendations

Policy challenges Labour markets: High structural and long term unemployment Low labour market participation of fast-growing vulnerable groups (Roma) Education: Poor educational outcomes High inequality of opportunity 8

CSR2. Long term unemployment Issue: long-term unemployment among the highest in EU for many years Potential causes: Legacy from transition Vulnerable groups (Roma, low-skilled) Regional disparities and low internal mobility Taxation Low expenditure on PES and ALMP: extreme low share of ALMP expenditures devoted to training in the EU Policy action: PES reform is ongoing (end 2020) In-work benefits for LTU + lower social contributions for employees and employers 9

CSR2. Female particpation Issue: High employment gap for females high in particular for females with children under 6 years Potential causes: Lack of affordable child care facilities Lengthy parental leave Taxation Policy action: Capacity of kindergarten and child care facilities for children age under 3 years expanded "Family and Work project« : subsidies for newly-created jobs for females with children under age of 10 years 10 Employment gap, adults (2013)

CSR 3. Attractiveness of teaching Issue: Low level of educational outcomes Potential causes: Low level of expenditures and quality of teaching Policy action: Increases in wages of teachers, but wages still among the lowest in the EU Investment in textbooks and equipment 11 Government expenditures on education in 2012 (% of GDP)

CSR 3. High inequality in educational outcomes Issue: Low level of educational outcomes in particular for Roma which is problematic as 13% of the new labour market entrants are low-educated Roma Potential causes: Low level of children participating in pre-school education (77% compared to the EU average of 93%) in particular for vulnerable social groups including Roma Policy action: Free pre-primairy education for children aged over three years and from socially vulnerable groups Investment in texbook in Roma language 12

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