Socially Excluded Communities and the Inclusive Labour Market in the Slovak Republic

In this paper, we construct a computable general equilibrium model of the Slovak economy to evaluate an impact of different types of inclusive programmes on an economic performance. Furthermore, we apply individual microeconomic data to identify socially excluded communities and place them in the inclusive labour market in a form of inclusive employers or social enterprises. While the first ones operate as standard producers with additional subventions from government, the latter ones are explicitly designed for the employment of socially excluded communities. Our results show that both types of inclusive programmes help to reduce structural unemployment and improve potential production in the Slovak economy. While the application of the inclusive employers leads to a better improvement of potential production, in line with a higher productivity of production factors, the application of the social enterprises leads to a more significant reduction in structural unemployment, due to an absence of social dumping on the domestic labour market.