IFP: Motorways Not Panacea for Unemployment

(Stock photo by TASR/AP)

Bratislava, July 25 (TASR) – A highway can reduce the unemployment rate in a given district by 0.9-1.6 percentage points, the Finance Ministry’s Financial Policy Institute (IFP) stated on Tuesday.

Even though the construction of a motorway or an expressway in regions with rampant unemployment can indeed have a certain effect, it isn’t so pronounced, however, and it’s obvious that the problem of so-called ‘hunger valleys’ won’t be resolved without increasing the quality of human capital, stressed IFP.

The Finance Ministry’s think-tank noted that Slovakia is among the five EU countries with the most striking regional differences, with this issue being among the chief challenges for the Slovak economy. The institute conceded that a lack of highways can also play a certain role in the underdevelopment of regions, especially in terms of industry and tourism.

Nonetheless, IFP has found out that the benefits brought by highways in individual districts tend to be negated when Roma make up a high percentage of the population. “This might be related to low quality human capital and a lack of success in activating it despite the improved situation on the labour market. Highways also have the tendency to reduce unemployment more significantly in relatively less urbanised regions. Meanwhile, relatively dense agglomerations can produce jobs even without being linked to motorway infrastructure,” added IFP.