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OECD Reviews of Labour Market and Social Policies: Slovenia 2009

image of OECD Reviews of Labour Market and Social Policies: Slovenia 2009

This report analyses the main challenges for labour market and social policies in Slovenia and considers the available policy options from the perspective of OECD countries' experience. It finds that Slovenia has one of the most equal income distributions in the world and a tradition of social dialogue. However, its unemployment insurance and employment service system are not sufficient to deal effectively with the present economic crisis and the country is also faced with rapid population ageing and a low employment rate among 55-to-64 year olds. This report makes recommendations to deal with these issues.

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Social Policy and Family Assistance

Slovenia’s social protection system is well developed and social spending has a large impact on redistribution of resources, reducing the risk of poverty by half. Overall spending on social policy amounts to about a quarter of GDP which is around the OECD average. With economic growth and favourable employment trends, the number of social assistance beneficiaries went down. Although recent reforms aimed at activating unemployed people were implemented, they did not fully succeed. The participation of social assistance recipients in active labour market programmes remained low, at least initially. Hence increasing the activation of welfare recipients remains a policy challenge, all the more in time of economic slowdown.

Family policy is well developed, and includes a wide array of child benefits, parental leave and maternity leave allowances, and financial support towards childcare and kindergartens. On the whole childcare provisions are comparable with the OECD average and in terms of work and family outcomes, Slovenia generally scores well in international comparison. However, fertility rates are currently well below the replacement level. The reasons behind this low fertility rate can be found in difficulties young people encounter in getting established in stable employment as well as in difficulties they face in moving out of the parental home because of housing costs.

Social transfers have relatively broad coverage in Slovenia and social spending appears to have a high effectiveness with regard to poverty and inequality reduction. Nevertheless, the tax burden on low-wage work is high in Slovenia compared with other OECD countries with well developed outof- work support systems.

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