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Western Balkans Labor Market Trends 2020

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Western Balkans Labor Market Trends 2020 Western Balkans Labor Market Trends 2020 Western Balkans Labor Market Trends 2020 Highlights: • This report used data from national labor force surveys to examine key labor market indicators for the six Western Balkan countries – Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia – between the second quarter of 2018 and the second quarter of 2019. • Despite a slowdown in economic growth in 2019, the Western Balkan countries’ labor markets developed more favorably than a year earlier. During this period, 105,500 new jobs were created and employment increased by 1.7 percent, ranging from a decline of 2.4 percent in Bosnia and Herzegovina to an increase of 5.2 percent in North Macedonia. • Recent job creation benefited women, younger and older age groups, and those with higher levels of education most. Amid an overall increase in employment in the region, the number of people employed informally dropped in Serbia and North Macedonia (by 43,000 and 14,600), respectively, and rose in Albania (by 30,000). • Unemployment reached an all-time low in all Western Balkan countries, ranging from 10.3 percent in Serbia and 11.5 percent in Albania to 25.2 percent in Kosovo. Emigration from the region played an important role in the reduction of unemployment. • Youth unemployment fell in all Western Balkan countries, to an average of 30.4 percent, but it was more than twice as high as the EU average. More than one fifth of the youth population was not in employment, education or training (NEET), almost unchanged compared to a year earlier. • Wages increased in all Western Balkan countries, and this was partly the result of hikes in the minimum wage, rises in public sector wages as well as labor shortages in some sectors. In 2019, average monthly gross wage growth was positive in all Western Balkan countries and was higher than in 2018, except in Kosovo. This report and the accompanying database are available on the website of the Vienna Institute for International Economic Studies (wiiw) at https://data.wiiw.ac.at/seejobsgateway.html. This report and the SEE Jobs Gateway are financially supported by Page | I Western Balkans Labor Market Trends 2020 This report was written prior to the outbreak of the COVID-19 pandemic in Europe. At the time of publication, the severity and duration of the pandemic and the resulting impact on the Wester Balkan labor markets were uncertain. March 2020 Page | II Page | III Acknowledgements This report is the result of collaboration between the World Bank and the Vienna Institute for International Economic Studies (wiiw). The team comprised Stefanie Brodmann and Gonzalo Reyes (co-task team leaders, World Bank), Hermine Vidovic (lead author main report, wiiw), Sara Johansson de Silva, Alicia Marguerie, Jamele Rigolini (lead authors of special topic, World Bank), Calogero Brancatelli (World Bank), Olga Kupets (World Bank), and Sandra Leitner (wiiw). Monika Schwarzhappel (wiiw) together with Galina Vasaros (wiiw) compiled the regionally comparable database on labor market outcomes and the statistical annex. Goran Paunovic (wiiw) has created and completely redesigned the online graphical user interface. Beate Muck (wiiw) was responsible for the production of graphs. Michaela Bönisch (wiiw) formatted the publication, Clive Liddiard provided editorial support and Carey Jett was responsible for final editing. The team is grateful for the collaboration of the individual Statistical Offices of the Western Balkan countries. The team would also like to thank the peer reviewers Victoria Levin and Sanja Madzarevic- Sujster as well as Neil Butcher, Elwyn Davies, Mirey Ovadiya, and Goran Tinjic (all World Bank) for their valuable comments and Linda Van Gelder (Country Director, South Eastern Europe, World Bank), Cem Mete (Practice Manager, Social Protection and Jobs, World Bank), and Robert Stehrer (Scientific Director, wiiw) for overall guidance. The team is grateful to the Austrian Federal Ministry of Finance for its financial support of this report and of the SEE Jobs Gateway. Page | IV Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data presented in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. Copying or disseminating portions or all of this work without permission may be a violation of the law. The International Bank for Reconstruction and Development/The World Bank encourages dissemination of its work and will normally grant permission promptly to reproduce portions of the work. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, http://www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. Page | V Content Executive Summary ................................................................................................................................ XI 1. Introduction .................................................................................................................................... 1 2. Economic environment ................................................................................................................... 1 3. Population ....................................................................................................................................... 3 Working-age population ..................................................................................................................... 3 Activity Rates ...................................................................................................................................... 4 Inactivity .............................................................................................................................................. 6 4. Employment .................................................................................................................................... 7 Employment rates ............................................................................................................................. 10 Informal employment ....................................................................................................................... 11 5. Unemployment ............................................................................................................................. 13 Long-term unemployment ................................................................................................................ 14 Youth unemployment ....................................................................................................................... 15 Sub-national unemployment ............................................................................................................ 16 6. Wages............................................................................................................................................ 17 Labor market developments by country .............................................................................................. 19 Albania .................................................................................................................................................. 20 Bosnia and Herzegovina ........................................................................................................................ 21 Kosovo ................................................................................................................................................... 22 Montenegro .......................................................................................................................................... 23 North Macedonia .................................................................................................................................. 24 Serbia .................................................................................................................................................... 25 References ............................................................................................................................................ 26 Special topic: A Call for Action: Changing Technologies and Skills Development in the Western Balkans ................................................................................................................................... 27 Executive Summary ............................................................................................................................... 28 1. The transformation of jobs ........................................................................................................... 31 More productive firms are needed for
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