Slovenia, once the richest republic in the former Yugoslavia, has maintained its lead and now enjoys the highest living standards of all transition countries in Central and Eastern Europe. Real wages are relatively high and the unemployment rate is close to the OECD average, about 7.5%. Nevertheless, its economy is stil burdened by difficult structural problems inherited from the past. This report offers a critical analysis of the role of the labor market and social policies in Slovenia's transition. It suggests that a change in policy emphasis towards a more bold pace of industrial restructuring is now justified. Labor market and social policies should not delay change, but facilitate and promote it.
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