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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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Strong Growth but an Ageing Workforce

A successful transition followed by rapid catching-up with the EU average has permitted Slovenia to increase employment over the past decade. The overall employment rate is now close to the Lisbon target of 70%. Human resources have been largely reallocated towards more productive activities, not least within a manufacturing sector that is still large by OECD standards, and which has become increasingly export-oriented.

Nevertheless, young people continue to face high barriers to entering the labour market, largely reflecting the difficulty of combining education with work. For older workers, low employment and a high incidence of long-term unemployment remains a structural problem. A better integration of both young and older workers in the labour market will be especially important to help deal with a rapidly ageing population. However, the combination of a well-developed safety net and a moderately progressive tax system results in low overall income inequality, thus attenuating the rather wide wage inequality that is related to differences in human capital.

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