EFFICENCY OF REGIONAL LABOUR-MARKETS IN CROATIA

Tibor Kovac ()
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Tibor Kovac: The Institute of Economics, Zagreb

Economic Thought and Practice, 2023, vol. 32, issue 1, 133-157

Abstract: This paper explores the equilibrium levels of unemployment in Croatia and its counties. Using the methodology on the efficient level of unemployment, the purpose of the paper is to examine how far the observed labour markets are from their efficient level, where the waste of resources for seeking and offering employment is minimized. Results indicate that from 2004 to 2021 the effective level of unemployment in Croatia was 13.78% and the actual level of unemployment was, on average, 4 percentage points higher than the effective level. After the recession, the labour market in Croatia becomes tense. The counties of eastern Croatia are the closest to efficient levels of unemployment, but they are also extremely high. Such results point to deeper structural problems in the area. On the other hand, the counties of central and northern Croatia have, on average, the lowest effective levels of unemployment, but also the largest negative Beveridge gap, which highlights the need to create a migration policy in order to respond to the labour market needs.

Keywords: efficient unemployment rate; Beveridge curve; labour market (search for similar items in EconPapers)
JEL-codes: E24 J21 J40 J61 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.17818/EMIP/2023/1.7

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