Arsena Gjipali, PhD Faculty of Business and Economics

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Presentation transcript:

LABOUR MARKET ADJUSTMENTS IN A TRANSITION ECONOMY OF THE CENTRAL AND EAST EUROPE - ALBANIA Arsena Gjipali, PhD Faculty of Business and Economics Tirana University

General trends of LM in the region - Falling employment

Demographic structure in Albania Percentage share of various age groups in the population of selected CEE countries Source: Own calculations from Laborsta (2006). The data for each country are for: 2000 (Bulgaria), 2001 (Albania, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovakia), and 2002 (Macedonia, Moldova, Russia). Note: 0-14 year-old age group as a share of total population; Other age groups are calculated as a share of population over 15 years old.

General trends of LM in Albania General trends of LM in Albania - Double digit rate of unemployment - High rate of long-term unemployed (90%) Unemployment rate by gender Source: INSTAT (2000-2007)

Adjustment of the LM Adjustment of LM into non-participation of the labour force; Emigration ; Informal labour market; Hindered unemployment (more than 50 % of labour force in agricultural sector). Poor labour reallocation Between sectors Across regions Mismatch of human capital supply and demand.

Recommendations for government decisions Improve macroeconomic performance Improve the matching processes Provision of incentives to measure and raise educational and professional attainment. Design a complementary package of policy measures Increase positive externalities of labour demand and supply from investing into human capital. Improve social infrastructure Support productive activities; Encourage capital accumulation, skill acquisition, invention, technology transfer.

Challenges for labour market policy Redress the problem of low employment Creation of high productivity jobs in the private non-agricultural sector. Domestic firms Attract FDI (improve domestic climate) Reduce the area of informality Build a coherent LM policy Establish proper legal and institutional LM framework Monitor and enforce procedures Aim Active labour market policies Build a system of comprehensive statistical information.