Does the Slovenian public work program increase participants’ chances to Find a job? Milan Vodopivec Presented by:-- Aklilu Mebrahtu

Topic to be discussed 1.Introduction 2. Description of the public works program 3. Evaluation 4. Conclusion

1. INTRODUCTION The transition to a Market economy removed one of the key characteristics of the socialist system i.e, Job security. So the gov’t gave up its role as guardian and provider of jobs and allowed enterprises to lay-off workers. As a result many workers lost their jobs when enterprises were forced to declare bankruptcy. In addition to these workers, the ranks of unemployment were filled by school leavers who couldn't find a job under the harsh labor market conditions.

Cont… Some considerations about public works:--  How helpful are they in increasing the chances of unemployed persons obtaining a regular job?  There is also a danger that public works participation stigmatizes the participants as the very fact they participate in public work may worsen their chances to find a job.

2. DESCRIPTION OF THE PUBLIC WORK PROGRAM Slovenia introduced various kind of labor market programs aimed at assisting the unemployed to find jobs and preserving the existing jobs, the so called ALMP In addition to traditional training programs, several new programs were introduced. Ex; job preservation subsides, public works and several programs to provide guidance and assistance for individuals considering self- employment.

Table 1

A.Duration and objective of the program The jobs are strictly limited duration; they should not exceed one year but with the exception of for the unemployed over 50 years of age and those with disabilities. Apart from assisting the unemployed to maintain their workforce attachment, the program has been designed both to assist the unemployment to retain and develop their work habits, i.e, to prevent the dissipation of human capital, and to cope with the crisis of social exclusion associated with unemployment

B. Supply of public works  It is generated through a tender organized by the National Employment office (NEO) the bidders to the tender are contractors, propose the plan of implementation of public works for a given period.  The contractors are either public agencies, notably  In the field of social protection  Education and  Culture  or private non profit organizations (NGOs)

The 4 broad categories of Slovenian public works Year 1993Year 1997 Social protection35%38% Educational and culture20%30% Environmental and rural17%11% Municipal services28% Source, (national employment office of Slovenia,1998) 28%

3. Evaluation This shows on the evaluation of the impact of the SPWP, on the prospects of participants to leave unemployment and either find a job or become inactive. To analyze the effects of the participation in PW on the probability of leaving unemployment, it was constructed a variable a variable that shows an individual’s labor market statues after spending “n” months searching for a job.

The model for the individual’s labor force status after ‘n’ months of job search as:-- The principal obstacle in obtaining unbiased estimates of the impact of public works on chances to a job is the problem of selection. The coefficient of the participation in public works in the estimation, which does not account for selectively, is bias downward i.e, PW are underestimated.

However, PWs may attract motivated and agile individuals, which produces an upward bias in the coefficient of estimation if it is not correct for selectivity. To correct this selection of bias, a Heckman two- stage procedure employed:-- 1. the equation of participation in PWs is estimated, with repressors derived from the process and circumstances. 2.In the estimation of the equation governing the exit process from unemployment.

The Results For participants included in the study, the average time – lapse between the registration and the enrollment in the program was 16.6 months. While, the average duration of participation was 7.6 months. Fewer participants were; married or non-Slovenian Since the program had financial reward; those who quit their previous job, and ended a fixed-term are more likely to participate. Those with vocational education are least likely to participate.

Conclusion  Slovenian PWs help their participants find a job and in a long run, however, the impact of the program on exit to employment becomes negative.  the study also shows that public works reduce the exit rate to inactivity  Comparing with public works in other transition economies, Slovenian program seems to be more innovative.