Over the last decade, a large share of the population in the Europe and Central Asia region has benefited from economic advances generated by strong growth in their communities. New opportunities have opened up in labor markets and entrepreneurship, new infrastructure and services have been built, and people have accumulated new knowledge and assets.
On the other hand, the economic transition of the 1990s and more recent shocks have reduced the role of the state as a source of employment and have taken a toll on many households.
Using new qualitative data from nine countries – Bosnia and Herzegovina, FYR Macedonia, Georgia, Kazakhstan, Kosovo, Kyrgyz Republic, Serbia, Tajikistan and Turkey – including structured focus group discussions and semi-structured in-depth interviews in 43 communities, this report explores factors that have supported or hindered economic mobility and access to jobs among men and women in the region.
Listening to people from across Europe and Central Asia reveals that, despite an overall good performance in economic growth and shared prosperity, there is a lot of discontent and rising concerns about a disappearing middle class.
While economic growth in most countries in the region has created a ladder to better living standards, many people see no open path to climb above the first rungs. Men and women in the region aspire to be or remain in the middle class, and yet, many see it as elusive. Instead, men and women across the region describe societies that are greatly and increasingly polarized.
Advances in living standards at the lower end of the distribution are outpaced by more rapid gains at the top, resulting in widespread perceptions of increasing inequality. Across countries, people are voicing frustration about slow progress, inequality of opportunities and the limited sustainability of the gains that have been achieved.
These concerns may be partly related to the global economic crisis, but not exclusively. In fact, these perceptions are echoed in discussions referring to the pre-crisis period, and are also consistent with related findings for the mid-2000s when the region was growing rapidly.
The lack of good jobs, particularly among women and youth, is driving the discontent amidst rising prosperity. Access to jobs is the main factor that can propel households into higher living standards and the middle class, or precipitate a downward spiral.
Across the region, people aspire to a middle class that is largely defined by stable employment and earnings. The Ladder of Life – a community-specific description of the different socio-economic levels present in the community – is largely defined by individuals’ employment status and job prospects.
However, jobs – especially stable, well-paying jobs – are seen as out of reach for a large share of people. Poor labor market prospects are even more glaring when contrasted with people’s high, often unrealistic, expectations. The overwhelming majority of people in the region, even youth, associate the middle class and upward mobility with jobs that are full-time, formal and with open contracts. The vast majority still aspires to a public sector job.
This study has two important lessons for analytical and operational engagement on poverty, mobility and jobs in the region. First, the need to expand the “diagnostics toolkit” to harness the strong synergies in combining quantitative and qualitative work. This is particularly important in topics like labor markets where quantitative surveys can only provide a partial view of some of the barriers to work including networks, social norms, attitudes and aspirations, as well as economic mobility where people’s perceptions are arguably just as important as hard data.
The lens provided by qualitative evidence in this report on how societies perceive progress and the opportunities for and challenges to upward mobility is extremely valuable and complements traditional quantitative analyses.
Importantly, the report reveals a “disconnect” between performance measured by traditional economic indicators and people’s perceptions of their welfare and economic mobility. The negative perceptions on how people get ahead and find good jobs – widespread across the region – can influence how they view and evaluate situations, and how they make decisions.
Addressing the factors behind this disconnect is important. The second lesson, therefore, calls for expanding the “policy toolkit” to incorporate programs and interventions, like those discussed above, that aim at addressing non-traditional barriers to work.
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