Introduction

The Slovenian welfare system is based on elements of a conservative-corporative welfare system, with compulsory social insurance systems and the state in a prominent role as provider of (universal) services, such as health, child care and education (Kolarič et al, 2009, 2011). In the 1990s, a fairly gradual approach to welfare system reform was adopted (Kolarič et al, 2009, 2011), which has continued until today. This gradualist approach is linked to the strong institutionalisation of social dialogue and relatively strong trade unions, the high coverage of collective agreements, and the prevalence of left-centrist parties in government over the past 25 years. Furthermore, as emphasised by Lavrač and Majcen (2006), Slovenia is one of the more developed countries in Central and Eastern Europe and thus could afford to take a gradual approach to structural reforms of the economy (eg privatisation). It thus opted for gradual reforms of the labour market, pension system, social welfare system and education system, keeping family policy intact, as well as social services such as childcare and elderly care (Kolarič et al, 2009, 2011; Filipovič Hrast and Rakar, 2017). However, the authors also warned that a potential negative side of this approach is the postponement of necessary structural reforms. Consequently, according to some authors (eg Guardiancich, 2011), although Slovenia has ensured social peace in this way, it may also be the reason that the crisis has hit Slovenia particularly hard.

The economic crisis, which led to high unemployment, stimulated several reforms of the labour market. In addition to the economic pressures, the Slovenian welfare state is also facing pressures from demographic ageing. These pressures are most evident in the poor sustainability of the pension system, but also in the labour market and its state of preparedness for an ageing workforce. One of the important reasons for the pension reform was the necessity to increase the activity rate among older age groups (55–64 years of age), which is among the lowest in the European Union (EU) (42.2% in the second quarter of 2016; see Eurostat, 2017).

In the next two sections, we present the major labour market policy changes, with emphasis on the period after 2010. These changes are also presented in relation to the retrenchment/expansion of policies, as well as the adoption of activation and flexicurity, as well as their consequences for the living standards of the most vulnerable groups.