Page 128 - ePaper
P. 128
Employment and Social Developments in Europe 2014
to Slovakia ( 135 ). Therefore, the effec- Chart 24: Impacts of subsidising companies’ training in Slovakia
tiveness of firm-sponsored training to Simulation with DG EMPL’s Labour Market Model: subsidise firm-sponsored
support young people is the focus of training in Slovakia (0.1 % of GDP) — all age groups targeted
this section. 0.30
We first simulate the effects of a Slovak 0.25
government subsidy to firms that induces 0.20
them to offer firm-sponsored training to
workers. The magnitude of the subsidy 0.15
is 0.1 % of GDP, and is assumed to be % 0.10
financed by lump-sum taxes levied on
all households. In order to show the 0.05
impact on different age groups, we first 0
assume that the subsidy focusses on all
workers. In a subsequent simulation, we -0.05
drop that assumption and focus the sub - GDP Investment Labour productivity Employment Gross wages
sidy on young workers only. Finally, in an
attempt to find the ‘optimal policy mix’, Source: Own calculations based on DG EMPL’s Labour Market Model.
we combine the training subsidy with a
scholarship programme to encourage a Chart 25: Employment impacts of subsidising
higher take up of higher education. companies’ training in Slovakia
Simulation with DG EMPL’s Labour Market Model:
Chart 24 shows the long-term results subsidise firm-sponsored training in Slovakia (0.1 % of GDP)
on the Slovak economy. In effect, the — all age groups targeted — employment effect
subsidy induces more firms to spend 0.12
on training, as a result of which more
workers take up training and become 0.10
more productive which, in turn, increases
demand for workers across all educa- 0.08
tional levels ( 136 ).
% 0.06
Chart 25 shows that employment 0.04
increases are strongest for highly edu-
cated workers, since higher educated 0.02
people in Slovakia have a higher pro -
pensity to undergo training. As capital is 0
more complementary to higher educated All Young Low-skilled Medium-skilled High-skilled
workers, the changing educational mix
would encourage further physical invest - Source: Own calculations based on DG EMPL’s Labour Market Model.
ment. As a result, GDP is 0.15 % higher
than in the baseline scenario. The educa - Chart 26: Impacts of subsidising companies’
tional structure of the workforce plays a training only for young people in Slovakia
major role in explaining this result. Simulation with DG EMPL’s Labour Market Model:
subsidise firm-sponsored training in Slovakia (0.1 % of GDP)
Since young people in Slovakia are dis- — young age groups targeted (aged 15–24 years)
proportionally affected by unemploy- 0.30
ment, which is at a level of around
34 %,we consider the impact of the 0.25
government devoting the same amount 0.20
of money (0.1 % of GDP) to subsidise
firm-sponsored training only for young 0.15
workers below 25 years of age. %
0.10
Chart 26 shows the resulting long-term 0.05
simulation results. The employment 0
effect is a little stronger than in the pre-
vious scenario because a given amount -0.05
of subsidy constitutes a relatively big GDP Investment Labour productivity Employment Gross wages
incentive to hire young workers since
Source: Own calculations based on DG EMPL’s Labour Market Model.
( ) European Commission (2014b), p. 5.
135
( ) Similar long-term outcomes were obtained
136
in a previous simulation for France (Peschner
and Fotakis 2013).
126
to Slovakia ( 135 ). Therefore, the effec- Chart 24: Impacts of subsidising companies’ training in Slovakia
tiveness of firm-sponsored training to Simulation with DG EMPL’s Labour Market Model: subsidise firm-sponsored
support young people is the focus of training in Slovakia (0.1 % of GDP) — all age groups targeted
this section. 0.30
We first simulate the effects of a Slovak 0.25
government subsidy to firms that induces 0.20
them to offer firm-sponsored training to
workers. The magnitude of the subsidy 0.15
is 0.1 % of GDP, and is assumed to be % 0.10
financed by lump-sum taxes levied on
all households. In order to show the 0.05
impact on different age groups, we first 0
assume that the subsidy focusses on all
workers. In a subsequent simulation, we -0.05
drop that assumption and focus the sub - GDP Investment Labour productivity Employment Gross wages
sidy on young workers only. Finally, in an
attempt to find the ‘optimal policy mix’, Source: Own calculations based on DG EMPL’s Labour Market Model.
we combine the training subsidy with a
scholarship programme to encourage a Chart 25: Employment impacts of subsidising
higher take up of higher education. companies’ training in Slovakia
Simulation with DG EMPL’s Labour Market Model:
Chart 24 shows the long-term results subsidise firm-sponsored training in Slovakia (0.1 % of GDP)
on the Slovak economy. In effect, the — all age groups targeted — employment effect
subsidy induces more firms to spend 0.12
on training, as a result of which more
workers take up training and become 0.10
more productive which, in turn, increases
demand for workers across all educa- 0.08
tional levels ( 136 ).
% 0.06
Chart 25 shows that employment 0.04
increases are strongest for highly edu-
cated workers, since higher educated 0.02
people in Slovakia have a higher pro -
pensity to undergo training. As capital is 0
more complementary to higher educated All Young Low-skilled Medium-skilled High-skilled
workers, the changing educational mix
would encourage further physical invest - Source: Own calculations based on DG EMPL’s Labour Market Model.
ment. As a result, GDP is 0.15 % higher
than in the baseline scenario. The educa - Chart 26: Impacts of subsidising companies’
tional structure of the workforce plays a training only for young people in Slovakia
major role in explaining this result. Simulation with DG EMPL’s Labour Market Model:
subsidise firm-sponsored training in Slovakia (0.1 % of GDP)
Since young people in Slovakia are dis- — young age groups targeted (aged 15–24 years)
proportionally affected by unemploy- 0.30
ment, which is at a level of around
34 %,we consider the impact of the 0.25
government devoting the same amount 0.20
of money (0.1 % of GDP) to subsidise
firm-sponsored training only for young 0.15
workers below 25 years of age. %
0.10
Chart 26 shows the resulting long-term 0.05
simulation results. The employment 0
effect is a little stronger than in the pre-
vious scenario because a given amount -0.05
of subsidy constitutes a relatively big GDP Investment Labour productivity Employment Gross wages
incentive to hire young workers since
Source: Own calculations based on DG EMPL’s Labour Market Model.
( ) European Commission (2014b), p. 5.
135
( ) Similar long-term outcomes were obtained
136
in a previous simulation for France (Peschner
and Fotakis 2013).
126
