1. Boris MAJCEN Joint programming initiative More Years, Better Lives and Federal Ministry of Science, Research and Economy Conference „Demographic Change in Central and Eastern Europe (CEE)“, Vienna, 24 March 2015, Museumsquartier (Arena 21) ACTIVE AGEING – CHALLENGES FOR THE SLOVENIAN LABOUR MARKET

2. OUTLINE o Introduction o Economic crisis and labour market adjustment o Labour market reform o Population ageing – ageing of workforce o Challenges

3. INTRODUCTION  Late entrance and early exit from the labour market  Low employment rates of young and elderly (current and future adequacy of pensions)  Population ageing - unsustainable pension, health and long term systems  Need for a Comprehensive active ageing strategy – Active and healthy ageing in Slovenia – AHA.SI project

4. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Source: EUROSTAT (2015)

5. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Source: EUROSTAT (2015)

6. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Source: EUROSTAT (2015)

7. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Survey unemployment rate by educational attainment in Slovenia (in %) Source: IMAD (2014)

8. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Share of long-term unemployment in total unemplyoment (%) Source: IMAD (2014)

9. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Share of temporary employed young persons (15-24, 2. quarter 2013) Source: IMAD (2014)

10. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Monthly minimum wage as a proportion of the mean value of average monthly earnings Source: IMAD (2013)

11. ECONOMIC CRISIS AND LABOUR MARKET ADJUSTMENT Source: IMAD (2013

12. Labour market adjustment mainly through decreasing employment Source: Kajzer, 2013

13. Labour market reform  Main goals:  Reduction of labour market segmentation  Increasing flexibility  Increasing labour law protection and preventing abuse  Strengthening the role of collective bargaining  First effects:  Reform reduced employment protection (changed indicators of employment protection according to OECD methodology)  Decreased share of fixed-term employment contracts in total new employment contracts (77,1%  71,8%)  Higher rate of unemployment realocation

14. Labour market reform Table : The employment protection legislation index in Slovenia prior to and following the change in the year 2013 the protection of an employee with a permanent employment contract against an individual and collective dismissal (EPRC) the protection of employees with permanent employment contracts against an individual dismissal (EPR), the additional provisions for collective dismissal (EPC), the regulation on temporary contracts (EPT), Slovenia – 2013 (prior to the change)2.672.393.382.50 Slovenia – May 2013 (following the change)2.391.993.382.13 Non-weighted OECD average2.292.042.912.08 Source: IMAD,2013

15. EMPLOYMENT RATES IN 2013 Source: Eurostat (2014)

16. ACTIVITY RATES IN 2013 Source: Eurostat (2014)

17. PENSION REFORM – MAIN CHARACTERISTICS  Efficiently decreases pressure on pension budget in the mid-term period  Freezing of the accrual rates  Basis for the usual indexation of pensions  Move into the right direction – equalization of the conditions for both genders and relative short transition periods  But, the problem with long term sustainability remains open

18. Long-term sustainability of pension reform (ZPIZ-2) and indexation of pensions Figure 1: Estimated effect of no-indexation measure on the share of pensions in GDP(%) Source: own calculations

19. Sustainable pension system  Share of pensions in GDP – 11%  Parametric reform of the 1.pillar  Increased number of the best consecutive years from 24 to 34  Indexation of pensions with inflation  Gradual increase of activity rates as assumed by EC  Gradual increase of the effective pensionable age by 2 years (2031-2040)  Gradual increase of the effective pensionable age by 3 years (2041-2055)

20. ZPIZ-2 and sustainable pension system Source: own calculations

21. Sustainable pension system – changes in employment rates Source: EUROSTAT and own calculations

22. Employment rates (%) – sustainable pension system Men 2015202020252030203520402045205020552060 50-5478,477,881,380,782,283,484,285,186,1 55-5963,372,072,374,074,976,277,478,880,480,5 60-6425,945,051,450,756,360,263,166,269,469,5 65-6910,811,019,121,527,633,838,944,049,3 70-746,07,17,211,914,716,420,023,326,7 Women 2015202020252030203520402045205020552060 50-5477,278,181,679,780,381,181,882,382,983,0 55-5945,363,471,673,673,474,575,777,178,578,6 60-6411,327,244,649,255,058,261,164,467,867,9 65-697,05,110,617,225,331,536,441,647,047,1 70-742,73,52,24,910,012,716,419,823,5 Source: EUROSTAT and own calculations

23. Number of employees - sustainable pension system Men 2015202020252030203520402045205020552060 50-54 61057586656086464102613685597648045464624693154252 55-59 47944540045269553732578615545850733439894298443035 60-64 18673323003672635349393254487344444420843767236225 65-69 573373901279114456181522242927651296903010425787 70-74 23753348431972549081995012361155211692515428 TOTAL 135783155707167395174893185786188687183234177747174617174727 Women 2015202020252030203520402045205020552060 50-54 58672574045780459457569405250245550429804323849960 55-59 33564474425196951518541465229848592426484071140696 60-64 8139196813270135004378374231542284408213707634839 65-69 40323536743412238175472119725906282532931025356 70-74 13031929144832916833846910678136921550614291 TOTAL 105710129992151356161508173303176781173010168395165840165142 Source: EUROSTAT and own calculations

24. Number of employed persons (age 50-74) no change, ZPIZ-2 (EC) and sustainable variants Source: EUROSTAT and own calculations

25. Active ageing - Challenges  Lifelong learning  Working conditions  Incentives for employers and employees  Long-ter sustainability of pension system (parametric reform or changed system, 1.pillar and/or 2.and 3.pillars, solidarity, adequacy)  Structural reforms – labour market, health care and longterm care, education,…  Comprehensive strategy on active and healthy ageing – activation of all relevant stakeholders within the country, minimum consensus regarding the actions and measures needed  …..

26. THANK YOU FOR YOUR ATTENTION !