Weak Labour Markets, Weak Policy Responses - Active Labour Market Policies in Albania, Bosnia and Herzegovina and Macedonia
Weak Labour Markets, Weak Policy Responses - Active Labour Market Policies in Albania, Bosnia and Herzegovina and Macedonia

Author(s): Amar Numanović, Blagica Petreski, Elena Polo, Despina Tumanoska
Contributor(s): Mirna Jusić (Editor)
Subject(s): Regional Geography, Labor relations, Economic policy
Published by: Analitika – Centar za društvena istraživanja
Keywords: Albania; BiH; North Macedonia; labour markets; policy responses;
Summary/Abstract: The Western Balkan (hereafter: WB) countries are facing a difficult economic situation and inadequate economic governance, which, among other things, results in poor labour market performance and outcomes. The region is characterised by persistently high levels of unemployment, low job creation rates, the presence of structural unemployment2 and a generally underdeveloped institutional framework of the labour market. Three countries – Albania, Bosnia and Herzegovina (hereafter: BiH) and Macedonia – which are the focus of this study, share the same labour market problems and are characterised by similar socio-economic trends as other countries in the WB region. Despite poor labour market outcomes and socio-economic issues that arise as a result, labour market policies are still insufficiently developed in these three countries and have limited effects on employment and labour market improvement. This is especially relevant for active labour market policies (hereafter: ALMPs), which are recognized in both developed and developing countries as one of the most important policy instruments in fighting unemployment, in mitigating labour market imbalances and contributing to long-term improvements in its efficiency. In that sense, effective activation policies are promoted by the Organisation for Economic Co-operation and Development (hereafter: OECD) and the European Commission with the conviction that they will help reduce unemployment and boost employment.3 The main aim of the research conducted for this study was to provide evidence on key aspects of ALMPs and their implementation in these three countries, considering that research and systematised data in this field are lacking. Insufficient evidence on ALMPs in Albania, BiH and Macedonia limits policy debates and the formulation of effective policy proposals in the field of employment. Based on such research, the aim was also to provide evidence-based recommendations to further the discussion on ALMPs in these three countries. Research was conducted through a combination of secondary and primary research methods, relying on both qualitative and quantitative data. This included an analysis of legal and policy frameworks, descriptive analysis of the available aggregate labour market data, and targeted, semi-structured interviews with relevant stakeholders in these three countries. Research has shown that ALMPs in the observed countries are developed only in a rudimentary form and suffer from many shortcomings, as explained further in the study. The level of public spending on these policies is generally low, the coverage of labour force by ALMP measures is quite limited, while targeting and design of ALMP programmes need further improvements in all three countries. In addition, a lack of evaluation of implemented ALMP measures hinders evidence-based policy making and the implementation of necessary improvements in this field. However, it is necessary to emphasise several important limitations of this study. A lack of reliable data on some important dimensions of ALMPs, as well as the low comparability of available data between countries, has inevitably affected the analysis and understanding of some important issues with respect to the implementation of ALMPs in these countries. Such limitations are explained in more detail in further text. The study is structured as follows: a brief conceptual overview of ALMPs, their development and key elements are presented in the second chapter of the study. An overview of the main labour market trends by key indicators of labour market performance in the three countries is provided in the third chapter. The fourth chapter presents key research findings on ALMPs, covering four main aspects of these policies in Albania, BiH and Macedonia: (a) the institutional and policy frameworks of ALMPs, (b) coverage, target groups and targeting by ALMPs, (c) the types of active measures / programmes deployed, and (d) the evaluation and effectiveness of these measures. Finally, general recommendations for improving active labour market policies are formulated based on the research findings.

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