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

2. General trends of LM in the region - Falling employment

3. 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.

4. 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 ( )

5. 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.

6. 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.

7. 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.