BELGRADE (Serbia), March 20 (SeeNews) – Low activity rates along with high long-term unemployment rates and a prevalence of informal work continue to pose challenges for sustained economic growth in the Western Balkans, the Vienna Institute for International Economic Studies (WIIW) and the World Bank said on Tuesday.
A 3.9% increase in employment between the second quarter of 2016 and the second quarter of 2017 has led to the creation of 231,000 new jobs throughout the Western Balkans, while unemployment also fell from 18.6% to 16.2%, reaching historic lows in some of the six countries in the region, the WIIW and the World Bank said in their Western Balkans Labour Market Trends 2018 report.
Leading the way for employment in the region was Kosovo, which saw an increase of 9.2%, followed by Serbia (4.3%), Montenegro (3.5%), Albania (3.4%), Macedonia (2.7%), and Bosnia and Herzegovina (1.9%).
"The region has made great strides in improving labour market outcomes over the last year – meaning more people are finding jobs," Linda Van Gelder, World Bank Country Director for the Western Balkans, said. "However, we continue to see high rates of people who are not in employment, education or in training programmes and we need to find ways to link them to future opportunities."
Youth unemployment of 37.6% is a key challenge for the region. However, this rate is down from last year and all countries except Albania are experiencing the lowest levels of youth unemployment since 2010. Country rates range from 29% in Montenegro and Serbia, to more than 50% in Kosovo. According to the report, it may be difficult for young people who become detached from jobs or education for long periods to reintegrate into the labour market. They also face a wage gap, earning up to 20% less than those who find employment sooner.
The report also notes that female employment rates are on the rise but they still remain low by European standards. The employment rate for women across the region stands at 43.2%, varying from a low of 13.1% in Kosovo to a high of 52.3% in Serbia. The gender gap in employment has also narrowed since 2010, ranging from 28.9% points in Kosovo to 9.8% points in Montenegro.
"Economic trends in the region look to be headed in the right direction," Robert Stehrer, Scientific Director of the Vienna Institute for International Economic Studies, said. "Getting more people, particularly young and women into employment remains one of the key challenges in the region to sustain economic and social convergence."
A number of obstacles to employment need to be addressed to reduce ongoing emigration from the region, especially common among young, educated people. In order to address this, further knowledge is needed. Countries in the region should synchronize their data on emigration and improve the registration and publication of migration statistics, the report reads
By utilizing high-quality data that is in line with international standards on workforce composition – both domestically and internationally – will produce an accurate analysis of labour market dynamics in the region and allow for the design of policies that can simultaneously address the challenges of emigration and reap the benefits of migration.
Better linkages between secondary graduates and the labour market, as well as earlier interventions to retain students, can improve opportunities for employment. Policies, such as child care, care facilities for the elderly, flexible work arrangements and more part-time jobs would also promote labour market integration among women.