1. 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

2. 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 )

3. 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

4. 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

5. 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 ( ), 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

6. 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

7. 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

8. 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 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

9. 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

10. 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

11. 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

12. 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 ( )
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.

13. Thank you for your attention!