30. Unemployment in Slovakia (november 2014)

The average rate of Slovak unemployment in the last 20 years reaches 14.5%, well above the majority of European countries. This policy paper examines causes of such persistent unemployment and offers policy responses. Main findings suggest that there are three predominant causes of the unemployment presented in the order of their importance. First, very low skills and discrimination exclude Roma population from the labour market. Second, inadequate initial structure of the economy continues to hamper employment growth from the onset of the transition process. Third, high contributions and inappropriate tax-benefit system reduces job creation among low-income households. Policies should aim at (i) raising skills of unemployed Roma, educating youth and developing affirmative action policies towards integration of the entire Roma population; (ii) improving the infrastructure by directing more EU funds into the least developed regions; (iii) reducing labour cost for low-income earners and (iv) introducing in-work benefits for deprived households.