In 2001 the positive employment trend continued; this was despite the fact that new employment slowed down in the second half of the year and that the number of employed people fell towards the end of the year. Nevertheless, in December 2001 the number of economically active people was 1.4% higher than in December 2000, and the number of people in paid employment was higher by 1.7%.

According to the estimates of the Office for Macroeconomic Analysis and Development, GDP grew by approximately 3% in 2001, which was less than in 2000, when it grew, in real terms, by 4.6%. The year-on-year increase in industrial output volume was 2.9%.

At the end of 2001 Slovenia's total active population numbered 886,378 people, of whom 782,062 were economically active. On average the active population numbered 880,897, of whom 779,041 were economically active. In comparison with December 2000 the active population grew by 1.5%; at 1.8% the increase in the number of economically active people was higher than the increase in the overall active population. In comparison with 2000 the average number of economically active people grew by 0.7% in 2001, while the increase in the number of economically active people was double that number, i.e. 1.4%. During the year the number of economically active people either grew or remained the same for the first ten months of the year, and then fell in November and December.

Of the total of 782,062 economically active people in December 2001, 696,950 were employees and 85,112 were self-employed. Of the total number of employees, 629,180 worked for companies and organisations and 67,770 worked for self-employed people. The majority of self-employed people were sole traders (44,577), followed by farmers (34,440) and people performing professional activities (6,095).

Table II: Total employment (economically active people) in Slovenia - annual averages, 1987-2001

The number of employed people grew in the first half of 2001; during the summer months it fell slightly due to a lull in employment; it continued to grow in the first half of autumn and then fell in the last two months of the year. Despite the negative trends at the end of the year, there were still 1.7% more people in paid employment in December 2001 than in December 2000. The average number of employees also grew by 1.7%.

The categories of people employed in companies and organisations, and people employed by self-employed people, followed similar trends. At the end of December 2001 companies employed 1.9% more people than in December 2000; in the same period there were 0.3% fewer people employed by the self-employed. In comparison with 2000 the numbers in both categories increased: there were 1.8% more people employed by companies and organisations, and 1.2% more people working for the self-employed.

The number of self-employed people fell in 2001; on average there were 1.1% fewer self-employed people. During 2001 the number of self-employed people remained unchanged at the beginning of the year; from April to November it mainly grew. In December there was a fall in the number of self employed people, yet there were still 2.2% more self-employed people at the end of December 2001 than there had been at the end of December 2000.

The number of sole traders was either the same or fell for most months in 2001; it only increased in April, August and September. As a result there were 0.4% fewer sole traders at the end of the year than in December 2000, and on average there were 0.5% fewer sole traders in 2001 than in 2000.

Most months the number of farmers remained the same; the only exceptions were April, July and September, when it increased. At the end of the year there were 5.6% more farmers in comparison with the year before, while their average number fell by 2.4% in comparison with 2000. The most positive trend in 2001 was shown by the number of people performing professional services, which grew most months in 2001. At the end of the year there were 3.6% more of them and their average number increased by 2.2% in 2001.

In 2001 the number of economically active people increased in the services and agricultural sectors, and fell in the non-agricultural sector. The services sector recorded an increase in economically active people (comparing December 2001 to December 2000) of 3.2%. The agricultural sector recorded an increase of 2.8%. The non-agricultural sector employed 0.3% fewer people.

Table III: Economically active people, by branch, as at 31 December 2001

Figure 7: Structure of the active population (2001 average percentages)

Registered demand for workers and trainees

General trends of demand for labour followed the economic trends in Slovenia in 2001. Since 1997 there has been an increase in the registered demand for labour. The first fall in demand occurred in 2001; this was, in all probability, caused by the cautious approach by employers to new employment. The slowdown of Slovenia's economy has been reflected in lower demand for labour. In the first quarter of 2001 (in comparison with the same period in 2000) there were 11.4% fewer reported job vacancies; in the second and third quarters, 9% fewer vacancies were reported. In 2001 employers registered a total of 143,149 vacancies for workers and trainees, which was 7.6% less than at the end of 2000. The fact that the fall in the annual demand for labour was not as high could be attributed to the fact that the demand registered by employers in the last quarter of 2001 was only 2.9% lower than the demand reported in the last three months of 2000.

Of the total number of registered vacancies, 135,896 (94.9%) were for workers and 7,253 (5.1%) for trainees. In 2001 the trend of falling demand for trainees, which began in 1993 and was caused by the abolition of joint funding of training, continued. Their share in overall demand in 2001 shrank by 0.4 percentage points.

For several years, demand has been highest for new workers hired on a temporary basis. In 2001 employers registered 72.4% vacancies for temporary workers, which was 1.7 percentage points more than in 2000. The demand for temporary workers shows that employment conditions became tougher in 2001.

In terms of sectors the greatest demand (83,954 vacancies) was reported by the service industry (58.6% of the total), followed by the non-agricultural sector (57,484 - 40.1%) and the agricultural sector (1,688 - 1.2%). In comparison with 2000 the decline in demand was the most pronounced in the non-agricultural sector (down by 13%), followed by the services sector (down by 3.7%). In the agricultural sector it actually increased by 5.1%.

Figure 8: Registered demand for labour and trainees, by activity, 2001

Figure 9 shows the gap between labour demand and the number of unemployed people registered with the ESS by education level. There are more unemployed people at the 1st, 2nd and 5th levels than there are employment opportunities for them.

The occupational and professional profiles most frequently requested in 2001 by employers looking for workers or trainees did not change significantly in comparison with previous years. They were as follows:

• 1st and 2nd levels: unskilled workers, auxiliary workers, construction workers, cleaners, journeyman bricklayers and plasterers, carpenters, lorry drivers, security guards, assistant cooks;
  
• 3rd and 4th levels: timber workers, stackers, hospital attendants, bakers, slaughterers, locksmiths, metalworkers, car mechanics, seamstresses, joiners, bricklayers, drivers/car mechanics, shop assistants, waiters, cooks;
  
• 5th level: book-keeping and accounting staff, mechanical technicians, grammar school graduates, electricians, shop managers, daycare assistant teachers, medical technicians;
  
• 6th level: economists, mechanical engineers, construction engineers, classroom teachers, daycare teachers;
  
• 7th level: graduate economists, graduate lawyers, graduate classroom teachers, graduate mechanical engineers, graduate electrotechnical engineers, medical doctors.
  

Figure 9: Registered job vacancies and registered unemployed, by education level, 2001

Occupational structure of the demand for workers and trainees

When reporting a job vacancy the employer describes the key elements and tasks of the vacancy. Employers look for workers from various profiles and, based on the employer's description, the ESS identifies the occupation with the help of the Standard Occupational Classification (SOC).

Satisfying the demand for workers and trainees

According registration data for pension, disability and health insurance in 2001, 110,013 people applied for announced vacancies; of these, 104,544 were workers and 5,469 trainees. This means that, in 2001, 8.5% fewer people found employment than in 2000. Temporary employment is still the predominant form of employment: 74.7% of people newly employed in 2001 were placed on temporary contracts (0.9 percentage points more than in 2000).

3.3.1. Employment of foreign workers in Slovenia

The basis characteristic of the area of the employment and work of foreign workers in 2001 was the implementation of the new Employment and Work of Aliens Act (Ur. l. RS, no. 66/2000), which entered into force on 1 January 2001. While the act is designed for conditions on the Slovenian labour market, it also takes into account the basic principles of the international regulation of migration and the basic principles of EU legislation. The new act regulates employment and work in a completely different manner to the old one; this had a direct impact on the number of foreign workers in Slovenia in 2001.

As a result of the legal changes, there was a reduction in the number of valid permits (down from 40,320 at the end of 2000 to 33,982 in 2001, or a drop of over 15.7%). Since personal work permits (15,090) are not included in the legally prescribed quota, this means that at the end of the year there were 18,842 valid employment and work permits.

Despite the tougher regulation of employment of foreign workers in certain activities of a seasonal nature and when labour supply is higher than demand, the new act provides for the issuing of temporary permits for seasonal work. On this basis 2,708 permits were granted in 2001; of these, 1,293 were in the construction industry and 1,382 in agriculture. In total 25,753 employment permits and 2,708 permits for seasonal work were issued in 2001, which is 22.7% (8,327) fewer permits than in 2000. Most permits were issued to workers already working in Slovenia.

Table IV: Number of work permits issued, 1992-2001

Most foreign workers are working for the construction industry. This industry suffers from a shortage of domestic labour throughout Slovenia. Foreign workers also work on various seasonal jobs in agriculture, particularly in the border regions with Croatia, and to a much lesser extent in the metal industry, retail, public utilities, the hospitality industry and the textile industry. Their educational structure remains low and is dominated by workers who have attained the 1st to 4th education levels. This structure of foreign workers is understandable in view of the basic reasons for their employment, which are: structural discrepancy between supply and demand in some branches (construction industry); cheap foreign labour; and the willingness of foreign workers to work under more demanding working conditions.

With regard to nationality, the bulk of foreign workers was made up of people from former Yugoslav countries (92.8% of all foreign workers): 16,447 from Bosnia-Herzegovina, 6,852 from Croatia, 4,926 from the Federal Republic of Yugoslavia and 3,529 from Macedonian. There were considerably fewer foreign workers from other countries, and only 633 from EU countries.

In addition to classic forms of employment and seasonal work, the new act regulates other forms of lucrative activity undertaken by foreign citizens (foreign managerial staff, foreign workers sent by their companies to work or undertake on-the-job training in Slovenia) where the situation on the labour market is not the basic criterion for issuing the permit and other, legally prescribed criteria are applied instead. In 2001, 2,115 work permits were issued to workers who were sent by their employer to work in Slovenia but were still employed by their company abroad. In 2001, 1,601 permits were issued to foreign managerial staff.

Table V: Number of valid work permits, 1992-2001

3.3.2. Employment of Slovenian workers abroad

The organised employment of Slovenian workers abroad took place only to a limited extent on the basis of an employment agreement with Germany, which allows Slovenian workers to work on seasonal jobs and as hospital attendants, and to be employed for up to 18 months for the purposes of training. On this basis 237 people were sent to Germany to work as seasonal workers, 22 to undertake training and three to work as nurses. Most seasonal workers worked in agriculture, the wine industry, hop production, forestry and the hospitality industry. Since there is a ban on new employment of foreigners in place in most EU countries, no increase is expected in this type of employment in the future, at least not until Slovenia joins the EU.

Approval of contracts for work abroad

Pursuant to the Decree on the Ratification of the Agreement on the Employment of Workers on Contracts of Work from the Republic of Slovenia in the Federal Republic of Germany (Ur. l. RS, no. 3/92 - Mednarodne pogodbe), the ESS has, since 1 June 2001, been performing tasks in connection with quotas on contracts of work for Slovenian companies in Germany, which before that date lay within the jurisdiction of the Ministry of Labour, Family and Social Affairs. Between 1 June and 31 December 2001 the ESS granted 244 permits for 2,920 staff of Slovenian companies for work in Germany: in 190 cases it approved new contracts and in 54 cases it extended the duration of or increased the number of people working on already approved contracts.

The large structural changes in the economy in the early 1990s shook up the Slovenian labour market. Unemployment peaked in October 1993, with 137,257 people out of work. After 1993, when Slovenia recorded economic growth for the first time, unemployment still remained at 120,000. Only towards the end of the decade did the positive effects of several years of economic growth, company restructuring and of the new Employment and Insurance Against Unemployment Act lead to a reduction in unemployment.

<sup>* Performance of services in a foreign country on the basis of a contract of work signed between two legal entities (domestic and foreign). Such work may last three to 12 months.
* a contract for work is a fixed-term contract to perform a specific service.</sup>

Figure 11: Registered unemployment trends, 1987 - 2001

Registered unemployment, by RO

At the end of 1999, 114,348 unemployed people were registered with the ESS. A year later, at the end of December 2000, there were 104,583 registered unemployed people. By the end of December 2001 the number of unemployed people had fallen further, to 104,316. This fall in unemployment in the last three years was the result of the more active involvement of unemployed people in jobseeking, changes in the status of people in public works programmes, increased monitoring of unemployed people's involvement, and the effects of active employment policy measures.

Figure 12: Newly-registered unemployed by reason for registration in 2000 and 2001

A total of 87,940 people left registered unemployment in 2001, which was a fall of 4,154 (4.5%) in comparison with 2000. A total of 52,664 people found employment, which was 12.5% fewer than in 2000; of this total, 82.7% were temporary jobs. There were also slightly fewer first-time jobseekers finding employment (a 14.1% drop) and women finding employment (down by 11.6%). In comparison with 2000, the shares of unemployed people with the 5th and 7th levels of education who found work went up, while the employment of people with other levels was lower.

The official registered unemployment rate is calculated and published by the Statistical Office. In December 2001 it was 11.8% of the active population (10.6% of active men and 13.2% of active women). In comparison with December 2000, the registered unemployment rate fell by 0.3 percentage points (by 0.4 percentage points for both men and women). The annual registered unemployment rate was 11.6%, which was 0.6 percentage points lower than in 2000. For men, the average annual registered unemployment rate was 10.4%, and for women 12.9%.

Table VI: Typical groups of registered unemployed people, 1987-2001

Structural unemployment remains a problem, with the shares of older unemployed people, unskilled unemployed people, women and the longterm unemployed remaining high. These are mostly people who can be classified as older, as well as the longterm unemployed and those whose employability has been further eroded by their inadequate or inappropriate skills and by other characteristics undesirable to employers, such as medical problems, social limitations, lack of specific additional skills, inadequate motivation for work, inflexibility, etc. Because of the unfavourable structural characteristics of unemployment, the imbalance between labour supply and demand is not improving and can only be addressed with the help of suitable employment policy measures aimed at raising the education levels, training and motivation of unemployed people for work, especially of the longterm unemployed.

Structure of registered unemployment (sex)

On average 101,857 people were unemployed in 2001; of these, 51,693 were women (50.8%). In comparison with 2000 the average number of unemployed women fell by 4.4%, but during the year their share increased by 0.1 percentage points due to the unfavourable trends during the year.

Structure of registered unemployment (age)

Of the total number of unemployed people registered with the ESS at the end of 1993, 9.6% were over the age of 50; their share has been growing ever since and, at the end of December 2001, amounted to 25.6%.

It is difficult for older workers to find employment, for a variety of reasons. Employers prefer to give precedence to younger applicants, and their demands regarding qualifications are increasing. With the restructuring of the economy, the nature of the demand for workers has changed. The demand for highly qualified people is increasing and the demand for people with lower qualifications is falling. Since most older workers do not have the right types of qualification, it comes as no surprise that the majority of older people who find themselves unemployed fail to find a new job, and that the period during which they are without a job is growing longer. As of late, special attention has been dedicated to improving the employability of this group of unemployed people as part of active employment policy measures.

In comparison with December 2000 there were fewer unemployed people over 30 at the end of 2001, but particularly noteworthy was the drop in the number of people over 50 (a drop of 6.5%). There was an increase in the number of unemployed people under 30, particularly in the 25-30 category (up by 9.8%). Subsequently, the proportion of older unemployed people in unemployment fell slightly, and the proportion of younger people increased. A comparison with 1993, when unemployment was at its highest, shows that the numbers fell in all age categories of unemployed people, except for people over 50, where it doubled (up by 103.2%).

Structure of registered unemployment (education level)

In addition to other factors, the education level people have attained plays a large role in their employment opportunities. Unemployed people with higher or university levels of education find it easier to get work; for those who have only completed secondary school, the subjects they studied become important. When everything is taken into account, it becomes clear that it is only the people with few qualifications or qualifications that are not in demand on the labour market who remain unemployed.

In 2001 the largest group was formed by unemployed people who had attained the 1st or 2nd education levels (47%), followed by people with the 3rd and 4th levels (26.8%), the 5th level (21.5%) and, a long way behind, by people with the 7th (2.4%) and 6th levels (2.2%). In comparison with the educational structure of registered unemployment in 2000, the proportion of unemployed people with lower levels of education fell and the proportions of people with higher levels increased. The share of unemployed people who had attained the 5th level increased by 0.5 percentage points; the share of those with the 6th level increased by 0.3 percentage points.

Of unemployed people who found employment in 2001, most had attained the 3rd or 4th levels (31.6%), followed by people who had attained the 1st or 2nd levels (29.8%). People who had attained the 5th level (28%) were also above the 10% mark. Some 7.4% of unemployed people who found employment had attained the 7th level and 3.2% the 6th level. In comparison with 2000 there were more unemployed people with higher levels of education

Figure 13: Structure of registered unemployment, by duration of job search, 2000 and 2001

In recent years the structure of registered unemployed people in terms of duration of job search has changed. The increased placement of the longterm unemployed in active employment programmes and the intensified monitoring of unemployed people's own activity level have led to a rapid reduction in the number of longterm unemployed people, which was above average with regard to the total number of unemployed people. In comparison with 2000 the number of people out of work for more than a year fell in 2001 by 10.5%; in the same period the average number of all unemployed people fell by 4.5%. As a result, the proportion of longterm unemployed people in the total number of unemployed people also fell. In 2001, 58.9% of all unemployed people were those who had been registered with the ESS for over a year, which was a drop of four percentage points on 2000. Since there was a fall in the share of longterm unemployed people, the share of unemployed people who had been registered with the ESS for less than a year increased.

A comparison of unemployment figures for the end of December 2000 and December 2001 shows an increase only in the number of longterm unemployed people who had been registered with the ESS for over eight years. In this period their numbers grew by 18.7%, while all other categories of longterm unemployed people saw a drop, the largest of which was in the category of people who had been unemployed for between two and three years (down by 25.5%).

The average duration of unemployment in December 2001 for registered unemployed people was two years, seven months and six days, which in comparison with December 2000 was shorter by one month and 13 days.

Registered unemployment, by RO

At the end of 2001 there were 104,316 jobless people registered with the ESS. This was a drop of 0.3% in comparison with December 2000. At the regional level, unemployment fell in seven out of 12 regions; it increased in five. At the local level, unemployment fell in 31 Los; in the remaining 27 LOs there were more unemployed people at the end of 2001 than in 2000.

Table VII: Registered unemployment, by RO, 2001

Basic concepts and definitions of terms

• The Labour Force Survey (LFS) is the most comprehensive official survey of households in Slovenia. The aim of the LFS is to gather information on the situation and changes on the Slovenian labour market, and on the size and structural characteristics of the active and inactive populations.

• The LFS is carried out in line with ILO and EU Statistical Office instructions; this allows for comparability with other countries that conduct such surveys, as well as for comparisons with data from previous years. The LFS has been in use in Slovenia since 1993. Until the end of 1996 the survey was conducted once a year; since 1997 it has been conducted as a continuous sample survey. LFS results are estimates based on a representative sample and are published quarterly. In 2001 the LFS sample covered 5,329 households which, according to the principle of panel sampling, were canvassed five times, and 2,008 households which were surveyed for the first time. The first survey takes place inside the home; all subsequent surveys are conducted over the telephone (if the household has no telephone, a canvasser makes a visit each time).

• The LFS classifies the population into categories according to the economically active population principle. Individuals are first classified as under 15, or 15 and over. The latter group is then divided by activity or contribution (or willingness to contribute) to the production of goods and services incorporated in the concept of the System of National Accounts (SNA) for calculating domestic product. Active employment is distinguished from other statuses according to the strict principle of "at least one hour of work against payment in a week", which provides for an unambiguous distinction between work and non-work.

The above LFS concept is the basis for division into the following categories:

• economically active - those aged 15 or over who, during the week surveyed, performed any work against payment (monetary or other) or for profit, and those who are employed or self-employed but who were temporarily absent from work during that week;
  
• unemployed according to the LFS - those aged 15 or over who, during the week surveyed:
  1. did not work (were not employed or self-employed, or did not perform any work against payment)
  2. were actively seeking employment (in the previous four weeks, or were registered with the ESS, applied for vacancies, etc.)
  3. were willing to accept work within two weeks
  4. had already found work and were going to start after the week surveyed;
  
• active population - those aged 15 or over who constitute people in employment and the unemployed;
  
• inactive population - those aged 15 or over who are not ranked among those in employment or the unemployed.
  

Active population trends in 2001

As a result of demographic trends, the total number of people able to work (aged 15 or over) increased in 2001* to 1,679,000 - or, in comparison with 2000, by 10,000. On the one hand the increase was caused by the younger generations, which are still sizeable, joining the ranks of those able to work and, on the other, by the continual increase in the number of older people in this group. In 2001 Slovenia's active population numbered 972,000 individuals, of whom 914,000 were employed and 57,000 were unemployed according to the LFS. In comparison with 2000 the number of economically active people grew by 20,000 in 2001, and the number of unemployed people fell by 12,000. The growth in the size of the active population is accompanied by a growth in the inactive, i.e. supported, population. In 2001 the number of inactive people rose to 708,000, which was up by 2,000 on the year before. The trend of a growing inactive population is therefore continuing.

In 2001 the total number of economically active people was 758,000 in employment, 100,008 in self-employment, and 48,000 assisting family members. In comparison with the year before the shares of self-employed people and those assisting family members in the total number of economically active people increased at the expense of employed people. At 86.9%, temporary employment remains the predominant form of employment. The share of women was 45.6%, which was a drop of 0.6 percentage points in comparison with 2000.

Figure 14: Unemployment according to the LFS, by sex, 1994-2001

In 2001 Slovenia continued to have one of the lowest unemployment rates when compared with EU countries or with eastern and central European countries. In the second quarter of 2001 the average ILO unemployment rate in the EU was 7.7%, in Germany 7.8%, in France 8.9% and in neighbouring Austria 3.9%. In comparison with eastern and central European countries Slovenia's ILO unemployment rate was lower than Poland's (18.2%) or the Czech Republic's (8.2%), while at 5.7% Hungary's was similar to Slovenia's.

Comparison between ILO unemployment and registered unemployment

In the second quarter of 2001 there were 100,000 unemployed people registered with the ESS; 57,000 people were classified as unemployed on the basis of the LFS.

A comparison between the two groups shows:

• 15.8% of people classified as unemployed on the basis of the LFS were not registered with the ESS.
  
• A total of 48,000 people classified as unemployed on the basis of the LFS were registered with the ESS. This represents 48% of registered unemployed people and 84.2% of people classified as unemployed according to the ILO.
  
• 52% of registered unemployed people did not meet one or more LFS criteria.
  

A comparison between ILO unemployment and registered unemployment rates shows a difference of 5.5 percentage points between the LFS-based rate, which for the second quarter of 2001 was 5.9%, and the registered rate, which in the second quarter (April, May, June average) was 11.4%. There had been a progressive reduction in the difference since 1998; it grew again slightly in 2001.

Figure 15: ILO unemployment rate in some OECD countries and Slovenia (2nd quarter of 2001)