Adjustment capacity of labour markets of the Western Balkan countries

Dg Ecfin and Vienna Institute for International Economic Studies
Authors registered in the RePEc Author Service: Anna Iara

No 346, European Economy - Economic Papers from Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission

Abstract: Study on the adjustment capacity to shocks of EU candidate and potential candidate countries of the Western Balkans, with a focus on labour markets, and background studies on several countries of the region. The main question addressed in this study is the performance of the labour markets in the Western Balkans; to find out whether they can deliver growth of employment and decline of unemployment in the medium run and whether they can withstand short-term shocks due to changes in demand or supply. The study finds that there is an important case for improving the rule of law and the quality of public services in general in the fight against very low participation and employment rates in the region, as well as very high unemployment. Wages, with some exceptions in specific sectors, do not seem to be mis-aligned with respect to productivity developments. There is some indication of possible positive effects from adjusting employment protection legislation, especially for women. The study also identifies an important role for income policies in some of the countries as an important complement to labour market policies.

Keywords: Adjustment capacity; external shocks; Western Balkan countries; South-East Europe; labour markets; EU candidate countries; potential candidate countries; employment protection legislation; rule of law; wages; productivity; taxwedge; remittances; migration (search for similar items in EconPapers)
JEL-codes: J21 J24 J61 F24 (search for similar items in EconPapers)
Date: 2008-11
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Persistent link: http://EconPapers.repec.org/RePEc:euf:ecopap:0346

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