About the ILO in Slovakia
After the dissolution of Czechoslovakia into its two constituent parts in 1993, the Slovak Republic witnessed considerable catch-up growth relative to EU average. GDP per capita more than doubled and was at 70% of the EU average in 2020. Growth has been driven by a strong inflow of foreign direct investment facilitated by relatively low wages, skilled labour, and the proximity to Western Europe. This development resulted in marked regional disparities, with Western Slovakia benefitting more from the presence of foreign investors. The rapid transformation led to EU membership in 2004 and the classification as a high-income country in 2007. After a 4.4% decline in economic output in the pandemic year of 2020, forecasts predict a quick recovery. GDP Growth was at 3% in 2021. Using funds from the European Recovery and Resilience Facility, Slovakia is supporting the country’s green and digital transitions.
The significant progress made on income convergence with the EU has translated into substantial improvement of employment outcomes. The country reduced its long-standing unemployment problem from a peak unemployment rate of 20% in 2000 to 5.8% in 2019, rising close to the EU average (7%) with 6.8% in 2021. With one of the strictest lockdowns in Europe, Slovakia experienced a high loss of working hours in 2020 (10.9% vs. the EU27 average of 7.4%) and 2021 (8.7% vs. the EU average of 2.7%). This was equal to almost 274,000 full-time jobs in 2020 and 217,800 full-time jobs in 2021 (based on a 40-hour week). Most of these jobs were preserved as firms resorted to reduced working hours and did not dismiss workers. Public job retention schemes played an important role. Fiscal stimulus measures in 2020 amounted to 5.1% of GDP, with additional spending in 2021.
The pre-pandemic employment rate in 2019 was at 73.4%. In 2020, the employment rate fell to 72.5%. If the labour markets recover quickly from the pandemic, Slovakia can reach the new EU employment target of an employment rate of 78% in 2030 as outlined in the new European Pillar of Social Rights Action Plan. Improved labour market outcomes have led to substantial reductions of at-risk-of-poverty and social exclusion rates (14.8% in 2020), where Slovakia performs better than the EU average (22%).
Remaining challenges are the relatively high youth unemployment (20.4% in 2020), one of the highest shares of long-term unemployed in EU (55.6% of all unemployed in 2020), low labour market participation of disadvantaged groups (especially Roma), persisting gender disparities in the labour market with a gender pay gap of 15.8% in 2020 (EU27 average: 14%) and a low female participation rate, and labour shortages in some sectors, especially in the booming regions of Western Slovakia.
The ILO in the Slovak Republic
Czechoslovakia was one of the founding members of the ILO in 1919. After the break-up of the country, the Slovak Republic became an ILO member state in the same year (1993).
The ILO has assisted the Slovak Republic in its economic and labour market transformation and in its accession to the EU in 2004. Since then, the ILO has not maintained a permanent presence in the country.
Text last edited on 03/22