Boosting Job Growth in the Western Balkans

Abstract

Labor markets in the Western Balkan countries (Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia) are characterized by some of the highest unemployment and low employment rates in Europe. We analyze the poor labor market outcomes in these countries by comparison with the New Member States of the European Union and advanced European economies. Our findings suggest that long-lasting labor market weaknesses in the Western Balkans have structural roots: the institutional setup of the labor markets, labor cost factors, and especially the unfinished transition process. Finally, we offer policy recommendations for boosting job creation.

Keywords: Labor markets, Albania, Bosnia and Herzegovina, Kosovo, Macedonia, former Yugoslav Republic of, Montenegro, Serbia, Eastern Europe, Workers remittances, Emerging markets, Cross country analysis, The Balkans, unemployment, labor market, employment, long-term unemployment, labor force, employment protection, high unemployment, unemployment benefits, unemployment rates, unemployed, high unemployment rates, job creation, labor productivity, rates of unemployment, low employment, unemployment insurance, unemployment spells, unemployment rate, rate of unemployment, employment protection legislation, employment rates, labor migration, registered unemployment, supply of labor, natural rate of unempl

JEL Classification: E20, J20, J30, J60