Presentation for the launch of Connection People with Jobs - Slovenia (28 October 2016)

1. Connecting People
with Jobs
Slovenia
Mark Pearson
Deputy Director of Employment,
Labour and Social Affairs
OECD

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

3. KEY LABOUR MARKET
OUTCOMES IN SLOVENIA:
TACKLING SOME
LONG-STANDING ISSUES

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many have withdrawn from the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. 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. 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.

7. THE OECD’s ASSESSMENT
AND RECOMMENDATIONS

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. 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. 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. 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. 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. 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. 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. 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. 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. 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: Christopher.PRINZ@oecd.org
Ms Kristine Langenbucher
Labour Market Economist
OECD Directorate for Employment, Labour and Social Affairs
Phone: +33 1 45 24 18 37
Email: Kristine.LANGENBUCHER@oecd.org
For further information on the OECD’s work on activation policies:
http://www.oecd.org/employment/emp/activation.htm
Follow us on Twitter: @OECD_Social
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