Unemployed are supported by self-employment

The permanently high unemployment forces the employment services to apply more efficient active employment policy measures. One of the most efficient tools implemented in 2004 is provision of financial benefits for those unemployed who decided to act as self-employed entrepreneurs. In 2005 these financial benefits started to be provided to a wider range of unemployed. So far more than two thousand unemployed started their self-employment thanks to this tool.

Although unemployment in Slovakia has been constantly decreasing, its rate is still high and is the second highest from all new EU member states. According to the Eurostat data the unemployment rate in Slovakia was 16.2% in February 2005. The number of registered job seekers at the employment offices was more than 379,000. In order to significantly contribute to the unemployment decrease the employment services started to implement new active employment policy measures in 2004 (SK0411103F). According to the recent information from the Centre of Labour, Social Affairs and Family (Ústredie práce sociálnych vecí a rodiny, ÚPSVR) one of the most efficient measures is provision of the financial benefit to unemployed for their self-employment. In 2004 these financial benefits were provided in a selective way upon recommendation of a committee established for this purpose. However, in 2005 these financial benefits started to be provided in wider range to all unemployed who fulfilled the given criteria, eg they were registered as unemployed at least for four months, have completed a special training programme devoted to acquiring competences for entrepreneurship, submitted a business project. The amount of provided financial benefit varies from SKK 30,000 to SKK 75,000 depending on the unemployment in the region - higher benefits are provided to job seekers from regions with higher unemployment rate. In Bratislava region, where the unemployment rate is the lowest one, the benefits are provided only to those unemployed who belong to the group of disadvantaged job seekers.

According to the ÚPSVR data, in the first four months of 2005 it was possible to create 2,154 new jobs in Slovakia through self-employment of unemployed. The highest number of applicants for the financial benefit for self-employment was from the Prešov, Banská Bystrica and Žilina regions that belong to the regions with the highest unemployment rate.

From time to time ÚPSVR checks how are doing those job seekers who received the financial benefit for self-employment. ÚPSVR provided the financial benefit on the basis of a contract with the unemployed who committed to be self-employed person at least for two years. In a case that the unemployed from a certain reason is not keeping this obligation, he or she must pay back to ÚPSVR the aliquot part of the received financial benefit.

To act as a self-employed person is obviously demanding and not everybody has got abilities to work like this. The number of jobs currently created in this way is less than one percent of the registered unemployed. Due to the short time period it is not possible to evaluate how many of them will be able to perform their planned business activities for the required period or even longer. In any case, it would be useful to evaluate the impact of implementation of this active employment policy measure on decrease of unemployment in the long-term perspective.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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