engleski

Croatia: Time to re-evaluate employment policy

The current situation on the Croatian labour market does not look very promising. The global financial and economic crisis has only emphasised the already existing problems. Croatia has the lowest employment rate in the EU which, together with a two-digit unemployment rate, clearly indicates internal structural explanations. The main culprit for the lack of the necessary dynamics in labour market flows is labour demand. Faced with an absence of domestic and foreign investment, rigid employment protection laws and high tax burdens, it is almost impossible for firms to create new jobs and expand overall labour demand. Employment policies should help in this kind of situation, but an assessment of employment policies in Croatia reveals that there are more weaknesses than strengths among the internal factors. Relying only on accession to the EU in a situation of reasonably unfavourable economic conditions does not seem like the best strategy. In order to improve employment potential, Croatia should rely more on internal strengths and institutional conditions.

economic crisis; employment rate; unemployment; youth unemployment; tax wedge; education and training system; active labour market measures; demographic change; aging labour force; migration trends

The article originates from the Friedrich Ebert Foundation publication "Employment Policies in South-East Europe: Common Challenges and Different Scenarios".