Big differences in labour market in one small country

The situation of the labour market in the Slovakia is really serious. According to the research of TASR (2012) the unemployment rate in Slovakia has increased by 1,1% in comparison with the last year.  Slovakia belongs to group of countries with the highest unemployment rate in the European Union. The current rate is 14,8 %.

The labour market in Slovakia is characterized by big regional differences. There is “rich west” and “poor east”. Western Slovakia with the capital Bratislava has lower unemployment rate amounting to 10,82%.  On the other hand Eastern Slovakia faces higher unemployment 18,85%. Big differences are visible even among Slovakian administrative districts. The district of the capital Bratislava is typical by the lowest unemployment rate in country 5,4% as opposed to district of Rimavská Sobota with  the highest unemployment rate of 34,59% (REGIODAT, 2011, http://px-web.statistics.sk/PXWebSlovak/ ). You can also see variety of unemployment in districts of Slovakia on the first picture.   The main reason for these differences is insufficient infrastructure in regions of Eastern and Middle Slovakia.

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Figure 1: Unemplyment rate in Slovakia in 2011

Source: http://sk.csuszi.sk/2012/01/medzi-poslednymi/

The capital Bratislava has very good location, because it is situated near Austrian and Czech borders, so most of the foreign investors are focusing on this region.  Giant and successful companies like IBM, PWC, Ernest&Young, Dell, Eset, Procter&Gamble are the biggest employers in Slovakia, but unfortunately their scope of interest is situated only in the western part of the country. Even though most of these companies have branches also in Eastern Slovakia, they do not hire so many people there as in Western region.

Other serious problem comes with the problem of insufficient infrastructure. It is problem influencing most of the students in the Eastern Slovakia. After they receive their professional degree, it is almost impossible for them to find a job in the field they previously studied. Mostly, they have two options how to find a job. When they decide to stay in eastern region, they can generally find job, which is not in field of their specialization. In most cases, absolvent of university works in restaurants as waiter, barman… The second possibility is to move to Bratislava or even abroad (the most frequent countries are UK, Czech Republic, Austria…). Unfortunately, it is not sure, that if the absolvent moves abroad, he will find a job in the field which he studied.

The problem of regional differences could be solved by the government by building the highway to Kosice. The better traffic connection with Kosice and region of Eastern Slovakia ensures bigger attractiveness for investors and big employers. After the successful elimination of unemployment in regions of Eastern Slovakia the situation in the labour market should improve. Slovakia disposes of qualified labour force so it could use this competitive advantage to become competitor to advanced countries.

written by Lenka Filova, Lucija Kacin, Cansu Bayar, Eyyüp Dönderalp

4 thoughts on “Big differences in labour market in one small country

  1. I agree that the missing infrastructure is one of the biggest problems in inequality of employment my home country – Slovakia. As I wrote in my post – the finishing of the highway connecting capital Bratislava in the east with Kosice city in the west will draw more and more foreign investments to middle and western parts of Slovakia.
    However, this is sadly years away because of the speed (slowness) of building it and financing problems and frauds caused by Slovak governments (1 km of Slovak highway is the most expensive in the world).
    D1 Motorway is the most important and longest Slovak motorway, is under construction since 1972 and currently only 320 km of it are done, which is less than 62 percent of the total planned length of 515.621 kilometers. Despite the variety of schedule completion dates in its history – 1990, 2000, 2005, 2010 or 2013 (:D), it will be finished in its entire length not before 2019.

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  2. Likee in the Czech Republic, the regional differences in the labour market in Slovakia are very clear. In Bratislava, the labor market is characterized by almost full employment. The situation is very different in parts of the Central and Eastern Slovakia, where the unemployment rate exceeds the 20-percent mark.
    One reason could be the chainging structure of the labour market in Slovakia.
    While at the beginning of the 90s the Slovak majority of workers were working in the industry, 60 percent are now working in the service sector.
    Also the agriculture has lost a considerable weight. 350,000 people worked in the late 80s in this sector. The number has fallen to about 50,000 workers. Many people in the country now have to find a new job in another sector – if they have the qualification and opportunities for these jobs.

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  3. The same problem is in my country – Latvia, where exist big difference of labour market between regions. For example in the capital city – Riga region unemployment rate is the lowest (8.4%), but in the east of country – territory of Latgale is the highest unemployment rate (20,3%). Unfortunately this situation exist long time, but governments still can’t find the solution for this problem.
    The idea to build the highway to Kosice in Slovakia can be the one of way how involve the investors in this region, maybe, Latvia’s government’s also have to think about this solution. But in general government have to think how to develop one or more sphere in this region to provide the new working places and to stimulate employment.

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  4. I think this problem is very common all over the world – that in one country can be regional differences on unemployment rate. Actually it depends of development in current region. For example, usually low unemployment rate is observed in capital of country and the nearest cities. Of course, the main cause of so high difference is infrastructure, which “brake” and do not allow to grow employment in poor regions. Other problem is using qualification. I think it is sad that people with good qualification, education cannot find the job by their qualification in their own city – they have to move to another place- that’s why this flow of skilled people to another region do not allow to increase employment in the “high employment” city.
    I think building the highway could be solution for employment – if current place for investors look attractive, it can affect employment rate positively and somehow smooth big differences of unemployment in one country.

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