Employability and Sustainability of Young Graduates in the Slovak Labour Market: Counterfactual Approach

Abstract

A necessary condition for economic development and raising living standards in Slovakia is to address employment issues in a way that would inter alia contribute to employment sustainability. This important fact mirrors in the study that directly analyses the employability and sustainability of young unemployed jobseekers, participants of the intervention “Graduate Practice”, in the Slovak labour market in 2014–2017 by applying a counterfactual approach. The intervention is one of the active policy measures in the labour market, and its implementation is subject to the specifics of the excluded group of the unemployed. Its aim is to help the members of the group find a job and gain work experience and habits. The impacts of the intervention on the employability and sustainability of young graduates were evaluated based on real data using the caliper-matching technique, the technique of the propensity score-matching method. The intervention database was relatively robust and included 42,626 participants over a 24-month impact period. In the analysis, we considered both the effectiveness and efficiency of the Graduate Practice. The findings point to no or very weak effects of the intervention, especially to the long-term sustainability of jobs. However, its impact on the state budget we consider as positive due to the intervention’s ability to reduce total costs of unemployed graduates. From the methodology point of view, the use of the method is appropriate in finding possible imbalances in the active and passive policies of the labour market. The results of the study themselves have the explanatory power not only for Slovak policymakers but also for policymakers at the level of the European Union. The results are helpful in creating other interventions and setting their conditions for future periods to bring a desired effect on employability and sustainability of members of excluded groups in general.