Chapter 1. Policy context for employment and skills in Slovenia

This chapter provides an overview of the general economic situation in Slovenia and the most recent macroeconomic developments as well as their impact on labour market trends. Slovenia was one of the most profoundly hit economies in the 2008 downturn primarily because of its high reliance on export demand as well an unsustainable model of debt-financed investment and consumption demand. In 2015, unemployment was roughly twice as high compared to 2008. As the crisis continued, labour market outcomes, including long-term and youth unemployment, deteriorated. The government implemented a number of measures to directly support “keeping jobs” as well as tackle unemployment-related problems via active and passive labour market measures.

  

Economic and labour market trends

Slovenia experienced a period of solid and stable growth between 2000 and 2008 facilitated by a skilled workforce and solid industrial base. However, the 2008 crisis had a profound impact on the country, as exemplified by a 7.8% decline in Gross Domestic Product (GDP) in 2009. The severity of the crisis was the result of vulnerable trade linkages as well as declining external demand, which led exports to fall to 57% of GDP in 2009. The crisis also had a pronounced impact on gross capital formation, which declined by 32.2% in 2009.

Recovery has been slow and difficult, as the government initially reacted hesitantly in dealing with the causes of the crisis (OECD, 2015a). From 2010-11, growth slowly regained traction, but the economy dampened again between 2012 and 2014 (SORS, 2015). The decline in 2012 coincided with a cut in wages in the public sector (Republic of Slovenia, 2012). While household consumption and investment saw positive growth in 2014, state consumption has steadily declined since 2011 (SORS, 2015). In 2015, exports of goods and services gained momentum, reaching 77.9% of GDP (Eurostat, 2016).

Previous OECD analysis of Slovenia highlighted the need to strengthen the banking and corporate sectors, address rising debt levels in view of the pressures that will be created from population ageing, and introduce structural reforms to improve the overall labour market situation and create better quality jobs (OECD, 2015a).

Figure 1.1. Growth rates of key economic indicators (%), 2000-15
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Source: OECD (2017a).

The global financial crisis impacted overall employment and affected the labour market position of many vulnerable groups, especially youth. This impact varied across sectors and regions in Slovenia (OECD, 2016e). The employment rate slightly declined from 68.6% to 65.2% between 2008 and 2015, and was higher for men (69.2% in 2015) than women (61%) (OECD, 2017b). The unemployment rate went from 4.5% in 2008 to over 10% in 2013, which was above the OECD average. Two in three unemployed in Slovenia do not receive income support, which puts them at serious risk of poverty (OECD, 2016a). In all OECD counties, the level of qualification of individuals has an effect on the probability of being unemployed, but this effect is even greater effect in Slovenia (OECD, 2016a). In 2015, the unemployment rate for tertiary educated individuals was 5.8%, very close the EU average of 5.7%, but it reached 10% among upper secondary and post-secondary (non-tertiary) educated individuals and 17.8% among individuals with less than upper secondary education (Eurostat, 2016).

Figure 1.2. Unemployment rate across OECD countries, aged 15-64, 2015
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Source: OECD (2017b).

The long-term unemployment rate also increased significantly following the crisis, reaching 5.3% in 2014 from a low of 1.9% in 2008 (Eurostat, 2016). While the long-term unemployed represented 42.2% of all unemployed in 2008, this proportion was 54.5% in 2014. The number of long-term unemployed that were unable to find work for 18-23 months is almost five times the number it was in 2008. Long-term unemployment has disproportionately impacted men. Between 2009 and 2012, the male share of total long-term unemployment reached 55% (Eurostat, 2016).

In the wake of the global financial crisis, the labour market outcomes for some particular groups have worsened considerably. For example, the employment rate of those workers with less than upper secondary education went from 56.2% in 2007 to 49% in 2015 (OECD, 2016a). This has led to a widening employment gap between individuals according to their level of educational attainment. Similarly, in 2014, unemployment was more than twice as high for low-skilled workers (15.4% compared to 6.1% for the high-skilled). While the active labour market policy system was effective in facilitating job-to-job transitions following the crisis, this system was not well adapted to helping unemployed persons with weak labour market attachment back into employment. Thus, the number of low-skilled unemployed and older workers has increased to constitute roughly half of total unemployed in 2015 (OECD, 2016a).

Youth were also severely impacted by the economic crisis in Slovenia, almost doubling the 15‐24 year old unemployment rate to about 16.5% in 2015 (see Figure 1.3). Older workers are also facing severe difficulties in the labour market in view of the high levels of inactivity among this population (OECD, 2016a).The employment rate among the 55-64 year-olds stands at 35%, compared to 55% on average for this group in OECD countries. Slovenia also has the lowest retention rate among all OECD countries, which explains why one in three jobseekers is older than 50 years. This may partly be due to a benefit system that provides disincentives for older workers to remain longer in employment as well as weaknesses in the Slovenian life-long learning system (OECD, 2017f forthcoming).

Figure 1.3. Youth unemployment rate (15-24) across OECD countries, 2015
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Source: OECD (2017b).

During the crisis, wages also suffered but the impact started later. According to Institute for Macroeconomic Research and Development (IMAD, 2013), the initial adjustments started in the private sector, primarily by cutting overtime, lowering working hours, and terminating temporary contracts. Wage growth was already slowing in 2009, but started to decline in late 2011 and stayed negative until 2014. Public sector wages also adjusted significantly, with nominal growth being halted following the 2012 “Law on balancing public finances”, which nominally lowered wages by 8%. Another notable development was the public sector wage increase in 2008, which was a consequence of the changes in the public sector wage system (for further information on the reforms, see OECD, 2011).

Another one of the more discussed measures during the crisis was the minimum wage increase in 2010. The minimum gross wage in Slovenia is around EUR 790, while the average wage in May 2015 was EUR 1 528 (SORS, 2015). According to the latest Eurostat data (Eurostat, 2017), Slovenia has the highest ratio between the minimum and average wage in Europe; the minimum wage represents 51.3% of the average monthly wage in Slovenia. In comparison, the minimum wage represented 41% of the average monthly wage in 2008.

In recent years the wage distribution has been characterised by a “disappearing middle” effect (OECD, 2016a), which is a sign indicating that the job market in Slovenia is becoming increasingly polarised. Major job losses in medium-skilled occupations have been observed while the number of jobs requiring high levels of skills has grown steadily. This pattern of “job polarisation”, which can be observed in other OECD countries such as Denmark and Estonia, is often the result of routine jobs being automated following the adoption of new technologies (Berger and Frey, 2016).

Education and skills

Educational attainment levels in Slovenia have improved significantly over the last decade (OECD, forthcoming, 2017e). The share of low educated people among the working age population (i.e. those who possess below upper secondary education) went from 20% in 2005 to only 13% in 2015, which is much lower than the OECD average of 23% (Figure 1.4). Although tertiary attainment was ten percentage points higher in 2015 (30%) compared to 2005 (20%), this remains below the OECD average of 35%. This is essential, as the level of qualification and skills have a large impact on individuals’ labour market outcomes.

Figure 1.4. Share of the population by educational attainment, aged 25-64, 2015
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Source: OECD (2017c).

Low educational attainment of specific student-population groups (particularly Roma students) has been highlighted has a pressing challenge in Slovenia (OECD, 2016c). Individuals in the Roma community are less likely to be enrolled in pre-school education and they tend to leave education earlier, often after basic education.

According to the Survey of Adult Skills (PIAAC),1 adults in Slovenia show below-average proficiency in both literacy and numeracy compared to adults in the other OECD countries (Figure 1.5), and around one in four adults performs poorly in these skills. In terms of problem-solving in technology-rich environments, only 3.7% of adults in Slovenia attain the highest proficiency level (level 3) while only 21.6% are proficient at level 2, compared to 5.8% and 25.7% respectively on average in OECD countries (OECD, 2016d). This lack of problem-solving skills is even apparent among the tertiary educated population, which is a major issue to attract potential investors (OECD, 2017f forthcoming).

Figure 1.5. Mean literacy and numeracy scores, OECD Survey of Adult Skills (PIAAC), selected OECD countries and OECD average
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Source: Survey of Adult Skills (PIAAC) (2012, 2015).

Over the past two decades, literacy scores have improved significantly in Slovenia. However, this general improvement has not benefited the whole population equally, and considerable differences can be observed depending on socio-demographic characteristics such as age, socio-economic status, level of education and immigrant background (OECD, 2016d). In particular, native-born Slovenians and native-language immigrants tend to have much higher levels of literacy and numeracy than foreign-language immigrants. On average, younger generations are more proficient than older age groups in all three domains, which indicates that the level of skills within the Slovenian population should continue to improve in the future. But it should be noted that the generational gap is greater in Slovenia than in most other OECD countries. No significant differences between male and female outcomes can be observed in terms of skills proficiency levels in Slovenia.

Those individuals with low levels of skills may become trapped in a situation where they are not able to obtain the skills needed to access quality employment opportunities (OECD, forthcoming, 2017f). According to data from the OECD PIAAC survey, only around 30% of low‐skilled individuals benefit from education and training opportunities, compared to 78% of adults with high levels of skills (OECD, 2016d). This large gap can be a serious obstacle to making the labour market more inclusive as labour force participation and employment prospects in Slovenia are much better for individuals with higher proficiency in literacy and numeracy, and information-processing skills have a strong positive impact on wages (OECD, 2016d). Similarly, the difficulties faced by older workers in remaining in the labour market may partly be explained by the low share of such workers seeking to participate in education or training programmes (OECD, 2016a). More generally, the relatively low share of individuals of all ages that engage in upskilling activities shows that more could be done to encourage life-long learning in Slovenia.

While most workers in Slovenia are well-matched with their jobs (OECD, 2016d), there is some indication that the education and training system is not fully able to provide skills that are demanded on the labour market. In particular, labour market mismatches for highly educated workers have tended to increase in recent years (OECD, 2016a). There are also signs of labour shortages in a number of vocational occupations, including mechanical engineering, computer science, construction, chemical technologies, and services such as catering and hotel management (ESS, 2017).

In recent years, the policy response to address such skills shortages has clearly prioritised offering better training opportunities to young people. But at the same time, life‐long learning for those in employment has tended to be neglected (OECD, 2017f forthcoming). These gaps in the education and training system can have serious undesirable consequences for individuals, firms and society as a whole. Individuals may acquire skills that they will not be able to put to use in their job and firms may not be incentivised to move up the value chain if they are not able to secure the skilled workforce they need to operate their investment.

National policy context: Increasing competitiveness and growth

Several national strategies form the basis for the national government’s labour market policy goals. These include the Strategy for Economic Development of Slovenia 2006-13, which sets a number of goals around increasing competitiveness and growth; boosting investments in research and development; improving institutional competitiveness and the overall functioning of the state; creating a modern welfare system and labour market; and promoting sustainable development. A new development strategy for Slovenia is also in preparation. It will include a strategic vision for 2050 as well as strategic planning priorities and measurable targets within the UN 2030 Agenda for Sustainable Development.

The European EU2020 Strategy includes targets such as boosting the employment rate to 75%; increasing R&D expenditure to 3% of GDP; reducing greenhouse gas emissions; boosting educational attainment such that 40% of 30-34 year-olds complete tertiary education; and ensuring a reduction of 40 000 in the number of people at risk of poverty or exclusion.

Additionally, the Partnership Agreement between Slovenia and the European Commission for the period between 2014-20 provides policy and programme guidelines around a number of policy goals that have been set through the Strategy for Economic Development of Slovenia 2006-13 and the European EU2020 Strategy. Finally, the Operational Programme for the Implementation of the EU Cohesion Policy in the Period 2014-20 operationalises the partnership agreement and provides further details about the measures to support the achievement of the goals from the agreement.

In this context, the most important and recent strategy adopted by the government and approved by the European Commission in autumn 2015 is the Smart Specialisation Strategy of Slovenia. This strategy aims to 1) boost Slovenian competitiveness by increasing its innovation potential, 2) diversify the existing industrial structure (both in the manufacturing and services sector) and 3) promote the development and growth of SMEs. The strategy plays a key role in integrating development priorities outlined through the Slovenia’s Development Strategy 2006-13, the Slovenian industrial policy and the Digital Agenda.

Slovenia is currently implementing a new phase of its Smart Specialisation Strategy, also called “S4”. In order to achieve the strategic objective of S4 – developing sustainable technologies and services for a healthy life – and reach the targets set in terms of raising the value added per employee, a number of key principles are being pursued during the implementation of the strategy. These include integrating strategies in various policy domains, ensuring the consistency of the policy mix, and clearly defining strategic objectives and priorities. Tailored governance structures, including the newly created Strategic Research and Innovation Partnerships (SRIPs), have also being established with the aim of encouraging collaboration and co-operation of stakeholders. Specific measures are being rolled out as part of the S4 policy mix in the following areas:

  • Increasing R&D and innovation by promoting basic and applied research, promoting co‐operation and research in value chains, supporting investment, internationalisation, foreign direct investment (FDI), and better use of research infrastructure;

  • Developing human resources by increasing research, promoting international mobility, strengthening development and innovation competencies, strengthening the knowledge and competences of employees and focusing on youth;

  • Promoting entrepreneurship and innovation by focusing on start-ups, SMEs, and promoting knowledge transfer;

  • Creating a supportive and development-oriented state.

These documents and strategies outline the basic goal of Slovenia’s future development, which clearly show that Slovenia aims to move further into the most developed group of OECD countries and climb the value-added ladder.

Regional development strategies have also been promoted through a Law on the promotion of Balanced Regional Development that was passed in 2011 and subsequently amended in 2012. The objectives of this law were to curb interregional disparities, revive areas distressed by industrial shocks, achieve balanced growth and implement a new industrial policy building on innovation and smart specialisation (OECD, 2016f).

Employment policies and programmes

The main body for labour market policies in Slovenia is the Ministry of Labour, Family, Social Affairs and Equal Opportunities. It oversees and manages policies related to labour relations, activation, equal opportunities, and cohesion policies. Employers also play an active role through a number of business organisations, including the Association of Employers of Slovenia, the Chamber of Craft and Small Business of Slovenia and the Slovenian Chamber of Commerce. Among the associations of unions, the largest is the Association of Free Trade Unions of Slovenia and the Confederation of Unions of the Public Sector of Slovenia.

As clearly highlighted, the labour market has changed significantly since the beginning of the crisis. This has led the government to introduce a number of reforms and measures that aim to improve the overall efficiency and functioning of the labour market. One of these areas has been pension reform. The focus has been primarily on the pension/wage ratio and the extension of work for older workers, which was necessary because of an ageing workforce and increasing dependency ratios. Amongst EU countries, Slovenia is projected to have the third-highest rate in the costs of managing ageing (pensions, long-term care, health care, education, unemployment benefits) as a percentage of GDP, following only Greece and Luxemburg. The costs of managing ageing are expected to rise from around 23% to 36% of GDP between 2007 and 2060 (European Commission, 2009).

In response, the government introduced the Law on Pension and Disability Insurance (1999), which included gradual increases in the retirement age. The Law also strengthened the link between pensions and income (actual contributions) by extending the reference period for calculating pensions from 10 to 18 years. The Law has been supplemented and changed several times, including reforms to pension levels and retirement conditions in 2012. These changes were less rigorous than a previous proposed reform, which was introduced in 2011 but was never implemented or passed in Parliament because of strong union opposition.

Before the global financial crisis, efforts were being made in Slovenia to increase labour market flexibility. In 2007, the Law on Labour Market Relations was amended to allow better internal flexibility by facilitating employment for a specific job, extending the legal grounds for flexible employment, improving legislation about job contract termination and severance pay, increasing the flexibility of work arrangements, cutting down notice periods for layoffs, allowing additional overtime, and introducing more stringent discrimination clauses. A subsequent reform of the law was made in 2013 to further simplify job termination procedures, adjust the costs of terminating a work contract for an indefinite period, while also increasing the cost of fixed-term contracts.

In 2010, the Law on Labour Market Regulation was adopted, with the goal of further increasing labour market flexibility, lowering the impact of the unemployment trap, and reducing administrative barriers for employers. In 2010 the government had also made an ambitious plan to tackle the problem of undeclared work as well as to make the labour market more flexible through two laws: the Mini Jobs Law or the Law on the Prevention and Detection of Undeclared Work and Employment, which covers “personal supplementary work”. However, due to strong opposition from students and unions the Mini Jobs Law was rejected on a referendum in 2011.

Box 1.1. Mini jobs and “personal supplementary work” for greater flexibility and security, 2010/14

The concept of “personal supplementary work” was introduced as part of the Law on the Prevention and Detection of Undeclared Work and Employment. The introduction of “personal supplementary work” was an attempt to reduce the incentives for participation in the informal economy and provide benefits to workers in these types of occupations. Jobs that would typically qualify as ”personal supplementary work” include domestic help, baby-sitting, producing and selling hand-made products and smaller and limited tasks for individuals or companies. Such jobs were typically done as part of the informal economy. Under the reforms, an individual must register as a provider and report income to the tax administration every half year in order to carry out supplementary jobs. In lieu of standard taxation, each provider would purchase a monthly coupon at the price of nine euros; Seven euros of which is used for pension insurance, and two contribute to health insurance. The total annual income of a provider of “personal supplementary work” should not exceed three average monthly net wages (roughly EUR 3 000 per year).

The Law on Mini Jobs (which was rejected at a referendum in 2011) was intended to introduce “small or mini jobs” as paid, temporary or more permanent jobs for students and retired people. These jobs were limited in time to 60 hours per month (720 a year, with some additional flexibility for students). Yearly income was not to exceed EUR 6 000, while a minimum gross hourly wage was set to EUR 4 (93% of students earned less and would benefit). The income would be taxed by 14%. The collected revenues would be used by the state to pay primarily for scholarships, student facilities, student organisations, projects for students and retired, and active labour market policies. The Law was intended to allow retired people to improve their social position. Students would also benefit from small jobs by allowing them to obtain formally acknowledged work experience (which would facilitate future employment) while contributing to their pension. Unions and student organisations strongly opposed the law, arguing that it would further deteriorate the position of the young, increase the share of precarious jobs, lower employment opportunities of the young and impact their ability to obtain financing for studying.

Nonetheless, as part of the 2013 Law on Labour Market Relations and within the 2014 Public Finances Stabilization Act, the government addressed the problems of work for students and the retired. Retired people are entitled to work up to 60 hours per month and are allowed to earn up to 6300 euros per year (and not less than 4.20 euros per hours) with temporary or occasional jobs. To avoid exploitation, employers are limited in the number of hours which can be dedicated to such types of jobs. Student work was still geared towards temporary tasks to allow for greater flexibility in both the demand and supply of labour. Nonetheless, by adding the social and health contributions to the cost of student work, the students gained rights (pension insurance and other rights) as well as work that was acknowledged as part of formal work experience. Moreover, since youth unemployment as well as the precariousness of jobs they are often forced to take have been recognized as a problem, the increased cost of student work also served to make “normal” employment of youth more attractive to employers. This also addresses the issues of young people studying several years longer than expected in order to retain student status to get work more easily.

Source: Republic of Slovenia Ministry of Labour, Family, Social affairs and equal opportunities (2017).

During the recent crisis, the government also introduced other measures to support quality and sustainable employment conditions. More recently, the state has supported mentorship opportunities for youth as well as the implementation of the Youth Guarantee programme. The Youth Guarantee plan was adopted in 2014 in order to reduce the average unemployment spell among youth. During the crisis, youth were significantly affected by low labour market demand and job creation. In 2012, the government has set a target to reduce average unemployment amongst youth (15 to 29 years) from 10.65 months to 9.5 months by 2016. The Plan foresees that all young people registered with the public employment service would receive an offer of employment, training or further education within 4 months of registration.

The government prepared an extensive set of measures to tackle youth unemployment that could be broadly categorised into two groups. The first are preventive measures, which target youth while they are still in school. These include incorporating career guidance in regional career centres and universities, providing a system for documentation of non-formal learning, facilitating and promoting more work-based training (apprenticeships, and internships), promoting creativity, entrepreneurship and innovativeness in schools and universities, strengthening the programme of project learning and providing an extensive and targeted system of scholarships. As part of the S4 strategy, measures are being taken to address gaps that have been identified in terms of promoting entrepreneurial skills and supporting innovative projects by young people.

The second group encompasses activities which have been introduced to promote labour market integration. These include reforms to student work, strengthening the support and counselling services to youth, focusing more on enabling international mobility (EURES), and promoting entrepreneurship and innovation. Specific measures include the “Entrepreneurially Into the World of Business” programme, a new initiative to stimulate entrepreneurship and self-employment and promote university incubators and start-up programmes. The initiative also establishes different training and mentorship schemes, strengthens the National Vocational Qualifications system, develops special training and mentorship programmes and promotes employment by providing tax exemptions for employers introducing special regional schemes, and promoting university incubators, as well as different training and job-opportunities (including self- employment). In 2014, the plan was estimated to cost EUR 43 million, which was increased to EUR 50 million in 2015.

Employment Services

The key institution for implementing labour market policies is the Employment Service of Slovenia (ESS). The ESS is divided into 12 regional offices with associated local labour offices. The ESS is run by the general manager and the ESS council. The ESS council consists of 13 members, including representatives from the Government of the Republic of Slovenia, (employers, unions and the ESS). The central office and the leadership are responsible for planning the implementation of employment services and providing support for IT, analytics, legal, HR, financial, and accounting (ESS, 2015b).

The 12 regional offices are responsible for the implementation of tasks related to monitoring labour market trends at the local level, and supporting local offices in their co‐operation with employers and ESS sub-contractors. The local offices are the direct link between the ESS and the clients and implement the policies of ESS (e.g. employment counselling, providing insurance for unemployment, and implementing employment policies) (ESS, 2015c). Figure 1.6 shows the distribution of ESS organisations and how they align with administrative NUTS 3 regions (Nomenclature of Territorial Units for Statistics), which are often used for statistical gathering and labour market information. As shown in the figure, the areas covered by regional ESS offices often cross multiple statistical regions in Slovenia.

Figure 1.6. Geographical organisations of the Employment Services of Slovenia (ESS) and NUTS3 statistical regions
ESS regional offices, left panel; NUTS3 regions, right panel
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Source: ESS (2015c); Eurostat (2011)

Labour market policy measures can be broadly divided into active and passive labour market policy and employment protection legislation. In the past decade, Slovenia has been moving towards increased utilisation of active labour market policies, but the use of passive measures has also increased due to the crisis. In 2013, active labour market measures accounted for 0.37% of GDP while passive measures accounted for 0.8% of GDP. The funding for both measures is below the OECD average, which is 0.56% and 0.91% of GDP respectively.

Figure 1.7. Public expenditure on active and passive labour market measures (LMP) as a percentage of GDP, 2014
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Source: OECD (2017b).

Slovenia spends less on labour market policy than other EU countries. In 2011, the EU28 spent 1.9% of GDP on average on labour market policy, while Slovenia only spent a total of 1.2% of GDP. In Slovenia, the amount spent on passive measures (supports) exceeds spending on active labour market policies by a factor of 3.5, while the average ratio for EU countries is 2.5. The total amount spent on labour market policies increased significantly since the beginning of the crisis, from 0.45% of GDP in 2008 to 1.2% in 2014.

Active labour market policies plan for 2016-20

In November 2015, the government introduced guidelines for active labour market policies for the period of 2016-20. Under this plan, EUR 100 million (roughly 0.25% of GDP) will be spent to achieve clearly specified goals, including: decreasing the number of the long-term unemployed; increasing both the employability and employment of disadvantaged groups (primarily young, older and low-skilled workers); and strengthening education and training measures in order to deal with structural unemployment. The strategy specifically stresses the need for the measures to be able to quickly respond to the situation in the labour market as well as to be adjusted to the needs of regions.

Table 1.1. Indicators for Main Goals

Goal

Indicator

Value in 2014

Target value for 2020

Lowering the burden of long-term unemployment

Lowering the number of long-term unemployed

59 859

40 000

Increasing the share of long-term unemployed among those that get employment

24.9

33

Faster activation

Faster employment for those up to 29 years (average unemployment duration, months)

10.5

7

Faster employment for those aged 50 and more (average unemployment duration, months)

34.5

30

Lowering structural imbalances

Lowering structural unemployment by increasing the number of those included in education and training

30 059

30 100

Increasing the share of unemployed that have been employed within 6 months of completing education/training (%)

44.6

50

Source: Republic of Slovenia Ministry of Labour, Family, Social affairs and equal opportunities (2015).

Vocational education and training policies

Vocational education and training policies in Slovenia are managed by the Ministry of Education, which prepares legislation for upper secondary and vocational schools, maintains quality assurance and finances public schools. Formal VET programmes are delivered through the public system, although private schools and kindergarten (pre-school) facilities are also available and are co-funded by the state in some cases. In 2000, the Ministry of Labour introduced a national vocational qualification system.

After basic education, individuals are able to pursue any of the following upper secondary programmes: 1) technical upper secondary programmes, which last four years; 2) vocational upper secondary programmes, which last 3 years and are more labour market oriented; and 3) shorter upper secondary programmes, which are 2 years in duration. In 2007, the government introduced a Life-long Learning Strategy with the following goals:

  • Improve the quality and efficiency of educational systems by investing in both the education and training of teachers, changing the structure of education and improving the use of ICT, in order to develop foundations for a knowledge society;

  • Enable easier access to education and training to all and create an open educational environment, make education more appealing and link the educational goals to sustainable development goals (equal opportunities, social inclusion);

  • Opening and linking the educational system into the broader context of the domestic and global economy by facilitating better linkages to the labour market and promoting international co-operation and exchange.

Adult education programmes are overseen by the Slovenian Institute for Adult Education (SIAE), the main national institution for research and development, quality and education, guidance and validation, and promotional and informative activities in the field of adult education. SIAE drafts professional bases and evaluations, and monitors the development of the adult education system, develops various non-formal and formal forms of learning, develops programmes to improve adult literacy, and pays particular attention to improving access by vulnerable groups of adults to education and learning. In doing so, it develops the necessary infrastructure to support learning, develops models for the self-evaluation of quality and the validation of prior learning, and provides professional education and training for adult educators. It carries out a number of tasks related to adult education, including the development of the system, preparation of programmes and teaching materials/methods, quality assurance, providing guidance and information about adult education programmes, conducting adult literacy research and training, and supporting the development and validation of non-formal learning activities. Their activities are also co-financed by the EU.

Vocational education and training is carried out through the national curriculum both for young and adults, but curriculum implementation is different for adults. The Institute of the Republic of Slovenia for Vocational Education and Training is responsible for the vocational education and training. Its tasks include overseeing the curriculum implementation in schools with regard to national vocational qualifications and occupational qualifications.

The qualification or certificate can be used either in the job search process or when enrolling in other educational programmes. Slovenia also offers a network of 14 “consulting centres”, which carry out activities on behalf of the Slovenian Institute for Adult Education (ISIO, 2015) to support individuals in finding and completing the appropriate educational programmes. In addition, there are 32 self-study centres, which offer counselling and mentoring services and feature spaces for informal education. The participants can learn IT, languages and the use of internet. Overall, Slovenia has a well‐developed VET system which provides various educational pathways for the development of skills.

Economic development and regional governance

Slovenia is divided into two cohesion regions (NUTS2) and 12 NUTS3 regions. The cohesion regions are Zahodna (Western) and Vzhodna (Eastern Slovenia). Western Slovenia comprises four NUTS3 regions (Central Slovenia, Upper Carniola, Gorizia, Coastal-Karst), while the rest are part of Eastern Slovenia. In general terms, Western Slovenia is more developed than the Eastern Slovenia.

Regional economic development strategies are prepared at several different institutional levels. The head organisation is the Ministry of Economic Development and Technology, which co-ordinates several bodies that work on different aspects of economic development and regional policy. The Ministry co-ordinates 12 regional development agencies as well as the public fund for regional and rural development. They support the preparation of legislation and regional development programmes (Ministry of Economic Development and Technology, Regional Development, 2015). In terms of cohesion policy, the Government Office for Development and European Cohesion Policy is the main institutional actor and acts as the Managing Authority for the European Structural and Cohesion Fund in Slovenia.

Figure 1.8. Slovenian regions
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Source: SORS (2015).

English name

Slovenian name

Mura

Pomurska

Drava

Podravska

Carinthia

Koroška

Savinja

Savinjska

Central Sava

Zasavska

Lower Sava

Posavska

Southeast Slovenia

Jugovzhodna Slovenija

Littoral-Inner Carniola

Primorskonotranjska

Central Slovenia

Osrednjeslovenska

Upper Carniola

Gorenjska

Gorizia

Goriška

Coastal-Karst

Obalnokraška

Slovenia had the fourth lowest regional disparities in GDP per capita in OECD countries in 2010 (OECD, 2015a). Among Slovenian regions, Central Slovenia contributes most to Slovenian GDP (37.3% in 2013). The Drava region is second (12.9%), followed by Savinja (11.4%). Southeast Slovenia contributes 6.6% to GDP (SORS, 2015). Central Slovenia is the most developed region; its GDP per capita is almost 42% above the Slovenian average. Costal-Karst region is the second most developed, followed by South-East Slovenia with 95% of Slovenian average GDP per capita in 2013. Generally, the Mura, Lower Sava and Drava regions have the highest unemployment rates. The crisis increased the unemployment rates across Slovenia, but the increase between 2008 and 2013 was most pronounced in the Central Sava region and Coastal Karst, where the difference was above 8.6 percentage points.

Figure 1.9. Unemployment rate by region, 2008 and 2015
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Source: SORS (2017).

The differences in economic development are also reflected in wages. Figure 1.10 presents an index of wages for May 2015, when gross average wage for Slovenia was EUR 1 528. Central Slovenia with the capital city of Ljubljana has wages that are 12% above the Slovenian average, while all other regions are below the Slovenian average. Other structural characteristics (gender differences, age differences) characteristics of the labour market also vary across regions. The specific industrial structure of some regions or proximity to the border (which results in more people working abroad) means these aspects become more or less pronounced.

Figure 1.10. Index of gross average monthly earnings by region (Slovenia = 100), 2015
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Source: SORS (2017).

References

Berger, T. and C. Frey (2016), “Structural Transformation in the OECD: Digitalisation, Deindustrialisation and the Future of Work”, OECD Social, Employment and Migration Working Papers, No. 193, OECD Publishing, Paris, http://dx.doi.org/10.1787/5jlr068802f7-en.

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Note

← 1. The Survey of Adult Skills is a product of the OECD Programme for the International Assessment of Adult Competencies (PIAAC). It assesses the proficiency of adults aged 16 or more in literacy, numeracy and problem solving in technology-rich environments. In Slovenia, 5 331 adults aged 16‐65 were surveyed between 1 April 2014 and 31 December 2014.