Introduction

This chapter provides an overview of labour market policies in Slovakia from the beginning of the post-socialist transition to the recent period, characterised by growing pressure for fiscal stringency from the European Union (EU). It provides a historical overview and investigates the differences between the prevalent trends in labour market policies before and after 2010. The European Commission initiated an excessive deficit procedure (EDP) against Slovakia between 2010 and 2014. However, for a variety of reasons, the emphasis on fiscal discipline has been nothing new in the Slovak case. Consistent with this, the analysis finds little difference between labour market policies before and after 2010. Although the 2011 Reform Programme of the Slovak government (MFSR, 2011), drawn up by a centre-right coalition, includes plans for labour market flexibilisation, these have not been implemented by subsequent governments. In the meantime, needs-based support was reformed, mainly by the political Left, with the intention of motivating labour market participation, also using punitive measures. While EU-led ‘austerity’ may have played a role by reinforcing existing tendencies to contain spending on labour market policies, the role of domestic politics appears much more important.

The chapter focuses on four pivotal areas: unemployment protection, employment protection, active labour market policies (ALMPs) and needs-based income support. The first three of these are commonly recognised as key parts of a modern labour market policy mix. Needs-based income support includes predominantly unconditional social transfers and measures provided on the basis of material deprivation. Although the primary objective of needs-based support is the alleviation of poverty, in the Slovakian context, these policies are also employed as a pillar of labour market activation.

The study proceeds as follows. In the second section, the Slovak macroeconomic and macro-institutional context is presented. The third section traces the development of labour market policies from the early 1990s to recent times. The fourth section discusses the most important differences between pre- and post-2010 labour market reforms and evaluates the impact of the growing EU-wide pressure for budgetary stringency. In order to aid the reader, each section is divided into three periodic subsections: post-1989 transition; EU accession and early post-accession; and crisis and recovery.