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Key Challenges of Human Capital in Former Yugoslavia Region

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Key Challenges of Human Capital in Former Yugoslavia Region 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... .
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