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Launch Connecting people with jobs: Slovenia

  1. 1. Connecting People with Jobs Slovenia Mark Pearson Deputy Director of Employment, Labour and Social Affairs OECD
  2. 2. The OECD’s review of activation and labour market policies in Slovenia Presented at the conference QUALITY JOBS FOR ALL by the Ministry of Labour, Family, Social Affairs and Equal Opportunities Brdo, 28 October 2016 Contents  Key labour market outcomes in Slovenia: tackling some long-standing issues  The OECD’s assessment and recommendations  Summary: Most important areas for change in Slovenia Connecting People with Jobs: Slovenia 2
  4. 4. Employment rates fell sharply after 2008, recovered from 2014, but are still low for some groups 4 Note: OECD and EU22 are weighted averages. EU22 includes all EU countries which are also OECD members. Source: OECD Labour Force Statistics database. Employment rates significantly declined for young adults (<30 years); losses for prime-age workers (30-54 years) were less pronounced For older workers (55-64 years) the employment rate in 2015 was higher than in 2008, but it is still the third lowest in the OECD Poor labour market outcomes also for low-skilled people: Low employment rates, high unemployment rates and many have withdrawn from the labour market 56 58 60 62 64 66 68 70 56 58 60 62 64 66 68 70 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Slovenia OECD EU22 Employment rates, persons aged 15-64 % %
  5. 5. 0 2 4 6 8 10 12 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Slovenia OECD EU22 Unemployment declines, but high levels of long- term unemployment reveal structural problems 5 Note: OECD and EU22 are weighted averages. EU22 includes all EU countries which are also OECD members. Source: OECD Labour Force Statistics database. Following rising unemployment, long-term unemployment (12 months and more) increased from 2010 In 2015, slightly more than one in two jobseekers have been unemployed for more than a year The global financial crisis resulted in jobs being wiped out by firms closing or down-sizing (i.e. displacements) Dismissal rates in Slovenia in 2013 were still three times higher than prior to the recession Unemployment rates, persons aged 15-64 %
  6. 6. 0% 10% 20% 30% 40% 50% 60% Expiryoffixed-term contract Displacement Otherandunknown Youth(15-29) Primeage(30-49) Olderunemployed(50+) Lessthan12months Morethan12months Lessthanupper secondaryeducation Uppersecondary education Tertiaryeducation Recorded inflow reason By age groups By duration By educational attainment Registered jobseekers have typically been unemployed for more than a year and many of them are older and low-skilled 6 All unemployed people in Slovenia can register with the Employment Service of Slovenia Large proportions of registered jobseekers are part of the population of special interest in the context of the OECD’s policy review With the caseload recently declining, the remaining jobseekers are more and more disadvantaged on average Employment Service of Slovenia caseload by different characteristics, 2015 Source: Employment Service of Slovenia.
  8. 8. Without stricter administration of benefits, welfare dependency may become pervasive 8 Number of registered jobseekers aged 30+ years (in thousands) Source: Employment Service of Slovenia. Despite recent decline in unemployment, number of social assistance and disability benefit recipients continues to increase Steady increase in disability benefit recipients driven by least disabled Client stock becomes more disadvantaged: growing share of clients classified as “employable with intensive support” Although “parking” the disadvantaged may have been a sensible strategy, more attention should now be focused on their activation 0 5 10 15 20 25 30 35 40 2006200720082009201020112012201320142015 Unemployment insurance recipients Social assistance recipients Partial disability benefit recipients
  9. 9. Social Assistance recipients Occupational protection: ambiguous legal situation Benefit sanctions are too strict Reluctance by employment service staff to apply sanctions Employment service has no control over implementation of sanctions Partial Disability Benefit recipients 1 in 10 registered jobseekers now fall into this group, up from 1 in 20 in 2005 Establish mutual obligations, which are enforceable 9 Introduce lower-level sanctions and facilitate their administration Recipientsshould be required to undergo occupational rehabilitation Reconsider and tighten benefit eligibility criteria
  10. 10. Activate jobseekers earlier on, especially displaced workers 10 Unemployment Insurance can be claimed with long delays; long period of retrospective pay (30 days) Abolish retrospective pay to incentivise early registration Voluntary Employment Service registration for employees following dismissal MandatoryEmployment Serviceregistrationforall employeeslosingtheirjob Dismissed workers: within 3 days of notice 4 weeks before expiry of fixed-term contract Job-search during notice period possible, but employee “pays” (lowerpay,shortenedbenefits) Give jobseekers better incentives to seek a new job during notice period (i.e.notshorteningbenefits) Target high-risk individuals
  11. 11. Enable Employment Service of Slovenia to “dig deeper” into the caseload 11 Standardised customer journeys for all client groups More frequent counselling for harder-to-place jobseekers More active labour market programme/workshop referrals for older and low-skilled jobseekers Stronger push towards e-services Invest to save: Hire more caseworkers Piloting and evaluating measures and programmes
  12. 12. Given benefit generosity, making work pay is important for benefit recipients 12 Incentives to move off benefit and into work can be weak, particularly for low-wage earners Example: for a one-earner couple with two children, with assistance benefits and one spouse in a low-paid full-time job, net income increases only by 12% if the other spouse takes up a similar job. Existing employment subsidies are mainly targeted at labour demand, but could be expanded to increase labour supply Given Slovenia’s compressed wage distribution, such measures would need to be highly targeted
  13. 13. Unemployment benefits Long benefit payment duration for older unemployed 1 in 3 pensioners retire through unemployment Seniority allowances Typically 0.5% per year: increase older-worker wages and labour costs by about 15% May lock some workers into jobs that no longer suit them Pension system Employment rate of elderly (55-64 years) increased from 23% in 2000 to 37% in 2015 Full labour market effects of 2012 pension reform unclear due to long transitional period Keep older workers longer in employment 13 Abolishspecialrules forelderlyin unemployment system Continuewith pensionreformthat promoteslonger workinglives Reduceand eventuallyabolish thesenioritybonus
  14. 14. Centres for Social Work (CSW) •Managed on the local level, with each of the 62 Centres reporting directly to the Ministry of Labour; •Pay social assistance and improve the social integration of their clients; •Little focus on labour market activation. Employment Service of Slovenia (ESS) •Public agency, headquarter reports to Ministry of Labour, 12 regional offices, 59 local offices; •Responsible for all registered jobseekers, including social assistance recipients: job-brokerage, employment counselling, referrals to active measures; •Furthermore: administration of unemployment insurance benefits, life-long career guidance, issuing work permits to foreign workers. Social assistance recipients are clients of two institutions 14
  15. 15. Better connect Employment Service of Slovenia and Centres for Social Work 15 Formalising co-operation Integrating IT systems Merger of ESS and CSW Introduce performance management system for CSW Co-operation between the Employment Service (ESS) and the Centres for Social Work (CSW) is not formalised Inconsistent activation of social assistance recipients Contact on ad-hoc basis Exception: Commission to establish provisional non-employability No central CSW management No clear enforcement procedures
  16. 16. Strengthen the connection between the Employment Service of Slovenia and the Centres for Social Work Tackle long-term unemployment by enforcing job-search requirements, benefit conditionality and benefit sanctions Enable the Employment Service of Slovenia to help harder-to-place jobseekers Make work pay for benefit recipients through lower taper rates and time- limited into-work benefits Promote longer working lives through coherent changes to unemployment, pension and disability benefit system, as well as the labour law Summary of OECD’s assessment: Most important areas for change in Slovenia 16
  17. 17. For further information 17 Please contact Mr Christopher Prinz Project leader for Activation Policies OECD Directorate for Employment, Labour and Social Affairs Phone: +33 1 45 24 94 83 Email: Ms Kristine Langenbucher Labour Market Economist OECD Directorate for Employment, Labour and Social Affairs Phone: +33 1 45 24 18 37 Email: For further information on the OECD’s work on activation policies: Follow us on Twitter: @OECD_Social Cover image : © Sergio77/