PRECARIR meeting, September 17-18, 2015, Bratislava How to increase employment growth? The view from Slovakia Marta Kahancová CELSI Bratislava, Slovakia THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES International Conference, Zagreb, Croatia, July 9, 2018

Slovakia: basic LM indicators THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Slovakia: basic LM indicators Remarkable increase in employment rate: from 54% in 2009 to 66.4% in January 2018 (Eurostat) Decrease in unemployment rate: from 14.5% in 2010 to 5.4 % in Apr 2018 (Ministry of Labour, Family and Social Affairs) Youth unemployment 18,9% in 2017(Eurostat) highest in the Visegrad region Recently: alarming skill shortages, hinders further investments and job creation Since 2006, social-democratic government (with the exception of 2010-2012)

Main challenges of the Slovak LM THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Main challenges of the Slovak LM Long-term unemployment - almost two-thirds (65.8 %) of all unemployed are unemployed for 12+ months, compared to the EU-average of 48,2% (Eurostat) Youth unemployment –highest unemployment rate of young NEET in Visegrad countries Unemployment gaps between Roma and non-Roma population - particularly high for young women and those at an economically productive age, for whom the unemployment rates reach 78% and 79% (UNDP 2016) Structural gaps, skill mismatches, regional disparities (skill shortage in West, unemployment in East) Low labour market mobility (high house ownership rates) Vocational education and training lacks work-based learning and close cooperation with industrial partners

Main LM achievements in Slovakia THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Main LM achievements in Slovakia Employment of the low skilled and low paid: measures to increase net income (concurrent receipt of income from employment and unemployment benefits) minimum wage increase (480 EUR in 2018, compared to 338 EUR in 2013) payroll-tax deductibles and exemptions National employment strategy – incorporated the concept of Inclusive labour market (2014) to facilitate work experience for the long-term unemployed Activation works to support long-term unemployed (benefits conditioned by participation in public works, 32hrs/month) Support school-to-work transition (special internship scheme for school leavers and subsidies for employers) Legislative improvements in employment protection – decreasing precariousness

EU support for LM in Slovakia THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES EU support for LM in Slovakia European Social Fund, European Fund for Regional Development, Fund for European Aid to the Most Deprived Operational Program Human Resources (2014-2020), priorities: Education Youth employment initiative General employment growth Social inclusion Integration of marginalised Roma communities Technical facilities in communities with a presence of marginalised Roma communities Operational Program Employment and Social Inclusion (2007 – 2013), focus: National Employment Strategy until 2020, regional employment disparities, low wages, youth employment, elderly employment, Roma integration, work-life reconciliation

Structural/cohesion fund effects on unemployment in Slovakia THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Structural/cohesion fund effects on unemployment in Slovakia Allocation for 2007 – 2013: 11,5 mld. EUR, Unempl rate 2007 2008 2009 2010 2011 2012 2013 2014 2015 With SCF support 11,0 9,6 12,1 14,4 13,6 14,0 14,2 13,8 13,3 Without SCF support 12,9 16,6 16,4 17,5 18,4 18,8 19,4 Source: Ekonomický ústav SAV (2014): Trh práce na Slovensku

Youth employment initiative THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Youth employment initiative Changes in vocational training, subsidies for student’s/graduate’s first regularly paid jobs as part of the National Youth Guarantee Implementation Plan (2014) Means: amendment to Act on Employment (2014), Act on VET (2015) Employers can receive subsidies for creating jobs for 6-12 months for young people below 29 without previous regular job experience. Financed from a special EU budget chapter (allocation for the YEI 50% of the OP Human Resources) Expected total impact: support for almost 260,000 young people Evaluation: by end of 2015 reached 132,500 young persons, 80% remained in employment after project end

EU support for LM in Slovakia THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES EU support for LM in Slovakia Criticism of implementation: low uptake rates of EU Funds, reasons weak governance, poor project design, corruption, inadequately long/unclear rules for procurement procedures Absorption rate of the programming period 2007-2013 was around 60 % in 2014 Extension of the N+2 rule for Slovakia to N+3 improved the uptake of funds: at beginning of 2016, over 92 % of the allocation had been spent. quality of projects, corruption prevention, improvement of public procurement procedures to be solved continuously in the current programing period Unclear effects of the Youth Guarantee Program: possible adverse effects on human capital investment

Other LM policies in Slovakia THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Other LM policies in Slovakia Legislative changes to Employment Services provision – simplifying implementation of ALMPs, various subsidies 2015 Act on Vocational Education and Training (dual education) Reducing precariousness – increased employment protection of temporary agency workers (TAW only possible upon regular employment contract) Implementation of social security contributions onto works performed outside of a regular employment relationship

Registered work agreements, monthly data, 1/2011 – 2/2014 THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Registered work agreements, monthly data, 1/2011 – 2/2014 Source: Social insurance company data (Sociálna poisťovňa) Two trends: seasonal fluctuation in work agreements overall decline in the number of work agreements after legislative change

Lessons from the Slovak case THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES Lessons from the Slovak case Effects of structural and cohesion funds on employment visible in a long-term perspective despite criticized low uptake rates ALMPs essential to address particular long-term challenges, including Regional disparities in employment opportunities Long-term unemployment Youth employment Employment of particularly segregated groups, e.g. the Roma population Means of addressing LM challenges: systemic, not ad hoc, government policies (e.g. in work-related migration and regional spread of investment support, Roma integration in the LM) reforms in the education system to address the skill mismatch between education and labour market needs

European semester recommendations for Slovakia (2018 - 2019) THE CHALLENGES OF IMPLEMENTING EU POLICIES IN CROATIA AND OTHER NEW MEMBER STATES European semester recommendations for Slovakia (2018 - 2019) Reinforce activation and upskilling measures, e.g., quality targeted training and individualized services for disadvantaged groups Deliver on the action plan for the long-term unemployed Foster women's employment, especially by extending affordable, quality childcare Improve the quality and inclusiveness of education Increasing the participation of Roma children in mainstream education from early childhood onwards.

Thank you for your attention! marta.kahancova@celsi.sk