RCC’s ESAP 2 Project presents Study on Labour Markets in the Western Balkans at“Data Matters” webinar

Sarajevo/Online – “In 2019, the average employment rate in the Western Balkans (WB) grew to a historically high level, with new jobs being created throughout the region. New job creation by in large came to a halt in 2020 due to the effects of the coronavirus.  Despite overall economic growth prior to the pandemic, relatively low activity and employment rates compared to the EU, especially for women, and high unemployment, especially long-term and for youth, are structural challenges in the region which Covid-19 pandemic has accentuated. ” said Amira Ramhorst, Team Leader of the Regional Cooperation Council’s (RCC) Employment and Social Affairs Platform 2 (ESAP 2) project announcing the new ESAP 2 2019 & 2020 Study on Labour Markets in the Western Balkans presented at the Webinar “Data Matters!” held online today.

“WB economies experienced an acceleration of economic growth from 2015 to 2019 after recovering from the worst effects of the 2008 global economic crisis; the average growth rate over this period was 3.5% per year, compared to 2.2% in the EU27. In 2019 the average growth rate of the region reached 3.6%, leading to an increase in the number of jobs in the region and rapidly falling unemployment rates. However, all of this came to a sudden stop in 2020 with the onset of the COVID-19 pandemic.”

In the region as a whole the working age population totals about eleven million, of whom about seven million are active in the labour market, while four million (about one third) are inactive, ranging from 32% in Albania to 60% in Kosovo*. The average labour force participation rate in the Western Balkans was 59.9% in 2020, far below the EU27 average of 72.9%, the Study shows.

Professor William Bartlett, lead editor and author, presented the RCC ESAP Labour Markets in the Western Balkans 2019 and 2020 study.  Labour markets were badly hit by COVID-19 pandemic due to reductions in both aggregate demand and supply sides of the economy, and the worst effects were avoided only due to supportive policy measures. The most affected segments of the labour markets were young people on temporary contracts and workers in service industries.”

The RCC ESAP Study also finds that there is a large gender gap in labour force participation rates, and the WB average of 20.9 p.p. is almost twice that in the EU27 (10.7 p.p.). The average male participation rate was 70.3% (almost the same as the EU27 total) but female labour force participation rates were just 49.4%. Also, education levels influence labour force participation rates, as it increases with the level of education resulting in an education gap in terms of labour participation of 47.6 percentage points (p.p.) between those with a low level of education and those with a high level of education (compared to a gap of 36.2 p.p. in the EU27).

As an introduction to the second part of the webinar, focusing on the importance of data collection, sharing and analyzing for effective tackling of t undeclared work, the participants heard the Study’s finding that the Western Balkans economies belong to the group of European economies with the highest share of informal employment, in the range of 20-30%, with the exception of Albania, where the informal employment rate is above 40%. The structure of informally employed by status is different from the structure in the EU. Informal employment contracts are held by the most vulnerable groups, such as young people, women and the older age groups.

Professor Colin Williams, ESAP 2 Lead Expert for undeclared work presented the importance of data for improving enforcement authority performance in detecting, preventing and predicting undeclared work.

“For data analysis to effectively tackle undeclared work, there is a need for up-to-date data to be available, databases to be inter-operable, specialised staff to produce intelligence using data mining and matching, a well-functioning data analysis tool, resources to fund analysis, which requires “proof of concept” in terms of the “returns on investment; and analyses to be easily available to inspectors to help them in the field”, said Williams, adding that political support is necessary for effective data collection and sharing across the system.  

Representatives of labour and tax inspectorates from Albania, Bosnia and Herzegovina, Kosovo* and North Macedonia shared examples from their economies and institutions, including challenges and best practices in data collection and analysis,  contributing to WB peer learning, one of the core RCC ESAP 2 project goals. 

In conclusion, prof. Williams singled out some good practices on data collection, sharing or analysis in the region, efficient data collection; real time up-to-date data, innovative data sources (e.g., big data, social media); and data sharing with other bodies.   

The Webinar gathered around 30 representatives from the Ministries of Labour, Labour Inspectorates and Tax authorities from six Western Balkan economies, members of the Western Balkan Network for tackling undeclared work.