Outstanding economic growth—will labour shortage stop it?
After independence in 1991 Slovenia decided to go for a gradual transition of the economic system, unlike in other countries of the region. The main reasons for following such a strategy were the early introduction of some economic reforms in the end of the 1980s when Slovenia was still part of Yugoslavia, the country’s relatively high level of development, and the rather painless separation from Yugoslavia when compared to other successor states. This relatively smooth transition enabled Slovenia to avoid major shocks and to benefit from a steady growth.
Slovenia became the first former Yugoslav republic to obtain the EU membership in 2004 and was the first of all the EU’s new member states to join the euro currency in 2007. While in the early 1990s the per capita income was 50% of the EU average it now reaches almost 90%.
The robust economic growth also boosted the labour market. The unemployment rate fell to 4.6 % in 2019. The long-term unemployment rate continued to decline, falling to 2.2%, well below the EU average. However, the long-term unemployment of the older workers remains a concern. Employment rates are at 76.5% being higher than the EU average. Strong demand for labour and a quickly ageing society are already creating major shortages of labour. With regard to social development the country presents low poverty and inequality rates and the gender pay gap is relatively small.
Slovenia and the ILO
Slovenia is a member state of the ILO since 1992.
The ILO has assisted Slovenia in its economic and labour market transformation and in its accession to the EU in 2004. Main areas of work included establishing and strengthening independent workers’ and employers’ organizations, social dialogue and tripartism, supporting the development of new active labour market policies, labour law reform and launching of regular labour force surveys, supporting pension reform and sustainable social security system as well as combating poverty and social exclusion.
After 2004, main areas of work included technical assistance in reducing youth unemployment and an analysis of the impact of the Great Recession on social dialogue, industrial relations and the pension system.