Review article
https://doi.org/10.3935/rsp.v26i3.1582
Making Work Pay in Slovenia
Suzana Laporšek
orcid.org/0000-0002-7787-8749
; University of Primorska, Faculty of Management Koper
Milan Vodopivec
; University of Primorska, Faculty of Management Koper
Matija Vodopivec
; University of Primorska, Faculty of Management Koper
Abstract
The paper analyzes incentives for making transition from non-employment to work as expressed by various financial indicators in Slovenia and compares them to the EU countries. It also provides an overview of the main features of making-work-pay policies and discusses reasoning for their implementation in Slovenia. The paper shows that in Slovenia, families and individuals who are not working have poor incentives to find a job – because for many, “it does not pay to work.” Unemployment benefits and cash transfers, coupled with high tax wedge, create high work disincentives. To address this issue, Slovenia should consider introducing into-work benefits, in-work benefits, or both. Presently such policies are virtually non-existent. In the light of international successful experiences with such policies and given the strong work disincentive created by unemployment, inactivity and low-pay traps, in Slovenia such policies have a great potential to stimulate transitions from non-employment to employment and stay in employment.
Keywords
making work pay; in-work benefits; into work benefits; unemployment trap; inactivity trap; low wage trap; Slovenia
Hrčak ID:
231729
URI
Publication date:
20.12.2019.
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