1 / 28

Addressin g ageing and technological challenges in the Slovenian labour market

This conference presentation discusses the challenges posed by ageing and technological advancements in the Slovenian labour market. It explores the need for higher productivity growth, increased participation rates, and addressing age-related expenditure. It also emphasizes the importance of investing in education, qualifications, and skills to adapt to the changing world of work.

lpurvis
Download Presentation

Addressin g ageing and technological challenges in the Slovenian labour market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Addressing ageing and technological challenges in the Slovenian labour market Loukas STEMITSIOTIS Head of Unit Thematic Analysis, DG Employment, Social Affairs and Inclusion, European Commission ConferenceEuropean Semester 2019- Key structural challenges ahead of Slovenia, Ljubljana 11 June 2019

  2. Storyline Macroeconomic, labour market and social developmentsremainfavourable in the EU and Slovenia; Megatrends pose new challenges. Ageingwouldrequire: Higherproductivitygrowth in the EU and particularly in Slovenia; Further raising participation rates (of low skilled and older workers); Addressing the challenge of age related expenditure; theadequacy as well as the financing of social protection becomeincreasinglychallenging; Demographics, robotization and digitalisation are changing the world of work; theyrequire to: Address skills shortages and labour market mismatches; Invest in education, qualifications and skills, to raise GDP and physical investment, and increase employment.

  3. Real GDP growth Slovenia is experiencing robust growth

  4. SI Labor market keeps improving

  5. Raising the activity rate is a long term challenge

  6. The influence of megatrends grows stronger The changing world of work

  7. Employment will face its limits … in the EU Working-age population HIGH activity scenario LOW activity scenario scenario HIGH activity Activity rate Active population LOW activity scenario „Europe 2020“: 75% by 2020 Employment Employment rate +1.3% p.a. Own calculations based on Eurostat 2015 population projections, Eurostat LFS

  8. Employment will face its limits ... in Slovenia Working-age population scenario HIGH activity LOW activity scenario Activity rate Active population HIGH activity scenario „Europe 2020“: 75% by 2020 LOW activity scenario Employment Employment rate Own calculations based on Eurostat 2015 population projections, Eurostat LFS

  9. Labour productivity in Slovenia vs euro area

  10. Impact of population ageing on Pensions Imagine … • the EU was one country, one pension system with one single contribution rate. • everybody 20-65 was working, and • everybody 65+ received a pension (47% of avg. • wage). • Then, today's pension contribution rate would be 14% of that wage. • Can we keep those levels?

  11. EU-28 Hardly…. Population > 65 Index 2015 = 100 Population 20-65 Source: Eurostat 2015 population projections

  12. No reform scenario "Keep pension level at 47%!" Necessary pension insurance contribution rate EU-28 Own calculations based on Eurostat 2015 population projections

  13. "Full" reform scenario "Keep contribution rate at 14%!" Affordable level of pensions (% of wages) EU-28 Own calculations based on Eurostat 2015 population projections

  14. EU-28 Most probable scenario Higher contribution will be inevitable, but we limit the increase (say: 20%) Pension level in year …. Contribution rate in year …. Own calculations based on Eurostat 2015 population projections

  15. EU-28 Most probable scenario This implies: 'Double burden' for today's young workforce and those not yet born % of gross wage Today's contribution rate COHORT COHORT Own calculations based on Eurostat 2015 population projections

  16. Drivers of increasing age-related expenditures(Change in percentage points of GDP 2016-2070) Source: 2018 Aging Report

  17. The financing of socialprotectionbecomesmorechallengingSocialprotectionreliesincreasingly on governmentsubsidies.

  18. The number of robots is increasing rapidly Level of the operational stock of robots in the EU28 Most robots are installed in Germany. Source: International Federation of Robotics

  19. Jobs with highly automatable tasks may be lost If today’s cutting-edge science and technology were applied in production processes, a substantial part of jobs could be automated (Lordanand Josten, 2017).

  20. New jobs are created: increasing robot density and net job creation go hand-in-hand … Operational stock of robots in manufacturing and employment in Germany change since 1995 +214% (robots) +35% (services) -7% (manuf.)

  21. Smarter physical capital seeks smarter human capital • Capital and high-skill labour are complementary: • Employers buy robots because capital is more efficient than labour, so labour gets displaced, initially; • THEN, employers hire new labour, skilled enough to operate and fulfil the new capital's higher productivity potential • OR, • Employers buy robots to equip higher-skilled workers with better capital and thus achieve higher productivity

  22. Assumption: new technology makes labour substitution easier LT impact of new technology on employment: 2nd round effects create jobs in LT Model simulation of higher "elasticity of substitution" away from low-qualified workers in Slovenia- % change compared with 'do nothing' Qualification Model simulation based on the Labour Market Model

  23. Robotisation and digitalisation of work require better-qualified labour • Technological transformation upgrades capital faster, raising the "threshold of employability" of labour faster; needs to keep up with capital. • This calls for investment in education and skills. • EU education & training systems should provide the skills needed, become more effective and allow for broad and equitable access to them.

  24. Share of employers facing a lack of suitable labour in Slovenia Slovenia: employers increasingly struggle to find appropriately skilled workers All Large companies All Source: Employment service of Slovenia, Napovednikzaposlovanja Large companies

  25. Training helps: higher skills attract investment and foster productivity … Model simulation Government investment in training, 0.1% of GDP in Slovenia 1) 1) "Effective" employment takes into account that workers are more productive and work longer hours. DG EMPL calculations based on the Labour Market Model

  26. Priority investments defined for 2021-2027 • Promote VET as a quality and highly skilled career pathway; • Moderniseeducation/training sectors; including digital learning, transversal skills and other skills/knowledge for the future; • Inclusive and quality education, also focusing on enhancing digital skills; • Infrastructure and equipment aimed at up-re/skilling people; • Upgrade skills of the adult population and increase participation in LLL; • Improve targeting of ALMP for long term unemployed and inactive; • Anticipate LTU challenges and provide lifelong guidance and learning opportunities; • Promote prolonging working activity and elderly-friendly forms of work organisation and conditions

  27. ConclusionsRising Megatrends pose new challengesIn the light of ageing, there is need to:- Accelerate productivity growth;- Further raise participation rates (low skilled and older workers); - Address the challenge of age related expenditure; theadequacy as well as the financing of social protection becomeincreasinglychallenging;In the light of automation and digitalisation, there is need to:- Address skills shortages and labour market mismatches;- Invest in education and qualifications, which raise GDP and physical investment;- Invest in upskilling, which pays off and makes labour more complementary to capital. - Broaden access to training for upskilling. It helps both workers and the economy.Thank You!

  28. Thank you for your attention!

More Related