publication March 19, 2018

Western Balkans Labor Market Trends: 2018

World Bank Group

Labor markets in the Western Balkan countries—comprising Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro and Serbia—are characterized by low employment rates and high unemployment by European standards.

As elsewhere in Europe, almost the entire region is facing an ageing and shrinking population due to low birth rates and high emigration.

This report uses data from national labor force surveys to examine key labor market indicators for the six Western Balkan countries – Albania, Bosnia and Herzegovina, FRY Macedonia, Montenegro, Kosovo and Serbia – between the second quarter of 2016 and the second quarter of 2017.

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As comparators, the report uses four countries that joined the EU at different times over the last 25 years, namely Austria (1995), Hungary (2004), Bulgaria (2007), and Croatia (2013). The analysis uses labor force survey data provided by the Statistical Offices of the individual Western Balkan countries and by Eurostat for the EU comparator countries.

Report highlights:

  • During this period, Western Balkan countries created 231,000 new jobs and employment rose 3.9 percent, with increases ranging from 1.9 percent in Serbia to 9.2 percent in Kosovo. The largest share of this increase, about 60 percent, was due to rising self-employment.
  • Unemployment fell during this period by an estimated 169,000 people, from 18.6 to 16.2 percent, reaching historical lows in some countries. Despite the overall rise in employment and drop in unemployment, low activity rates (particularly among women and young people), a large share of long-term unemployment (close to 80 percent in some countries) and high informality (i.e., those self-employed in unregistered businesses, wage workers without written contract and unpaid family workers) remain key challenges.
  • Youth unemployment fell faster than the overall unemployment rate, but remained high compared to EU countries. Almost one quarter of the youth population was not in employment, education or training (NEET), which was less than a year earlier, but still high by international standards.
  • Improvements in the labor market were not sufficient to discourage young, educated people from continuing to emigrate. For decades, the region has been a net sender of migrants, with close to one third of the resident population of the Western Balkans living outside the region.
  • In the long run, high levels of emigration may have negative consequences for human capital formation, competitiveness, growth and economic convergence

The full report and the accompanying database are available on the website of the Jobs Gateway in South Eastern Europe - SEE Jobs Gateway.

The SEE Jobs Gateway is a community of practice for labor market policies in the Western Balkan which brings together policy makers, academics, and experts from international organizations who regularly exchange ideas and learn from the experience of other countries with regard to labor market policies. Most members are from or have an interest in the Western Balkan region, comprising Albania, Bosnia and Hercegovina, FYR Macedonia, Kosovo, Montenegro and Serbia.