KEY CHALLENGES OF HUMAN CAPITAL IN FORMER YUGOSLAVIA REGION
VALERIJA BOTRIĆ THE INSTITUTE OF ECONOMICS, ZAGREB KEY CHALLANGES
Demographic changes – aging population
In case of some countries/periods even population decline (supported by net migration flows)
Educational system – over-education, skills mismatch, low participation in adult education
Low productivity: underutilization of labour, low capital intensity
Some similarities to the rest of the Europe
Some similarities to European South PRE-PANDEMIC HOT TOPICS: MIGRATION AND RESTRUCTURING
Strong net emigration (?) Lingering economic structures
Finding better work and life opporunities (labour High unemployment market mechanisms work!) High (official) inactivity rates Labour market skills mismatch (slow reforming High informal sector educational system) Skills shortages in certain sectors Labour market institutions Inability to attract talent Voting with their feet Opposition to active immigration policies Lack of precise (structural!) data
The difference in characteristics between those who leave and those who stay HUMAN CAPITAL – STILL A COMPARATIVE ADANTAGE?
Average annual change, 2006-2019 Work population (15-64) share
71 70 69 68 15 67 10 66 5 65 64 0 63 -5 62 -10 61 -15 -20 -25
total population natural change net migration 2006 2020
Source: Eurostat. EMPLOYMENT TO POPULATIN RATIO
60%
50%
40%
30%
20%
10%
0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bosnia and Herzegovina Croatia North Macedonia Montenegro Serbia Slovenia
Source: PennWorldTables10.0 THE CONSEQUENCES OF MIGRATIONS
Migration stock dynamics Human flight and brain drain
1 800 000 8 1 600 000 7 1 400 000 6 1 200 000 1 000 000 5 800 000 4
600 000 3
400 000 2 200 000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 .. 1990 1995 2000 2005 2010 2015 2020 Bosnia and Herzegovina Serbia B&H Croatia Montenegro Macedonia Montenegro N. Macedonia Serbia Slovenia Croatia Slovenia
Source: UNDESA 2020. Source: Fragile States Index 2020. PERCENTAGE OF POPULATION BY EDUCATIONAL ATTAINMENT LEVEL, 2019
Less than primary, primary and lower Tertiary education secondary education
35 35
30 30
25 25
20 20
15 15
10 10
5 5
0 0 Croatia Slovenia Montenegro North Macedonia Serbia Croatia Slovenia Montenegro North Macedonia Serbia
Source: Eurostat. (INVESTING IN) HUMAN CAPITAL
Participation in education and training (18- Human capital index (2020) 64), 2019
0.9 18
0.8 16 0.7 14 0.6 12 0.5 0.4 10 0.3 8 0.2 6 0.1 4 0 2
0 Croatia Montenegro North Serbia Slovenia Macedonia
Source: The World Bank. Source: Eurostat. ACTIVITY RATES AND EDUCATIONAL ATTAINMENT (15-64)
Less than primary, primary and lower Tertiary education secondary education
60 93
92 50 91
90 40 89
30 88
87 20 86
85 10 84
0 83 Croatia Slovenia Montenegro North Macedonia Serbia Croatia Slovenia Montenegro North Macedonia Serbia
Source: Eurostat. UNEMPLOYMENT – PRE-PANDEMIC SLIGHT IMPROVEMENT
50
45
40
35
30
25
20
15
10
5
0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Bosnia and Herzegovina Croatia Montenegro North Macedonia Serbia Serbia and Montenegro
Source: WIIW Annual Database YOUTH EMPLOYMENT PROSPECTS LOW
Tertiary educated youth, percentage of total employment, 2019 Up to lower secondary educated youth, percentage of total employment, 2019
16 30
14 25 12 20 10
8 15
6 10 4 5 2
0 0 Croatia Slovenia Montenegro North Macedonia Serbia Croatia Slovenia Montenegro North Macedonia Serbia
Source: Eurostat. TRANSITION FROM SCHOOL TO WORK
Employment of youth (15-34), 1-3 years Underachieving 15y-olds, 2018 after existing education, 2019 90 70
80 60
70 50 60 40 50 30 40 20 30 10 20
10 0 EU-27 Croatia Montenegro N. Macedonia Serbia Slovenia 0 Croatia Slovenia Montenegro North Macedonia Serbia mathematics reading science
Source: Eurostat. ECONOMIC STRUCTURE – EMPLOYMENT 2019
30
25
20
15
10
5
0 A B C D E F G H I J K L M N O P Q R S
EU27 Croatia Slovenia Montenegro North Macedonia Serbia
Source: Eurostat. POST-PANDEMIC PROSPECTS?
Clearly, not the reliable pool for further emigration (to EU)
Active imigration strategies (although politically still unpopular) should be developed
Education must be a priority, life-long learning key for adressing (not only!) the issue of aging population
Integration in global value chains – shorter global value chains related to pandemics an opportunity (however, skills depletion, competition, education system ...)
Limits of the existing policy creating structures…
Dependence on the decision making process outside the region... AFTER 30 YEARS…
Key problems of the countries are fairly similar: related to ‘megatrends’ globalisation, digitalisation and ageing
Policies adopted strongly guided by outside countries factors, less by domestic evidence-based policy making
Path dependency aliby still holds?
Where are the solutions?
“Reforms”, “structural reforms”, “institutional reforms”, ...
Or...