Regional Labour Market Differences in Serbia: Assessment and Policy Recommendations

Creating effective employment policy to combat rising unemployment and widening regional labour market differences is a major task facing Serbian economic policy makers. In this paper we argue that the best results would be achieved if a differentiated approach to regional labour markets is adopted, resulting in regionally specific employment policies. Our paper presents an original methodology which uses relevant statistical data from various sources (altogether 21 indicators) in order to create compound indices which serve as means of a comprehensive regional labour market classification. The main composite indices contain indicators standardised and grouped so that they reveal multifaceted features of the regions. The first classification distinguishes between indicators depicting regional economic situation and development prospects, and the second between those of general economic conditions, labour market situation and restructuring dynamics. Finally, we suggest a simple two-dimensional taxonomy of regions with regard to their labour market situation and prospects. While regions with positive composite indices of both situation and prospects in general do not require additional intervention, regions in other three quadrants are recommended specific policy mix of employment policy measures and active labour market programmes tailored according to their characteristics revealed by the analysis.Unemployment; Employment Policy; Regional Development; Transition; Assessment Methodology

Na šta mislimo kada kažemo... Reforma redistributivne politike u Srbiji posle 2000. godine

Ova publikacija analizira post-komunističku redistributivnu politiku u Srbiji posle 2000. godine. Autori tvrde da tržišni fundamentalizam (princip po kome je tržište najefikasnije rešenje za post-komunističke probleme) nije uspeo da ispuni ono što je obećano 1989. godine. Istraživanje sadrži dve novine. Prvo, rad pokazuje da je novousvojena neoliberalna redistributivna politika kombinovana sa klasnom i etničkom diskriminacijom nasleđenom iz komunističkog doba kako bi se stvorila idiosinkratična i stroga država blagostanja u Srbiji. Drugo, teorijski pristup kombinuje analizu javne politike sa političkom filozofijom, što su dve discipline društvenih nauka koje retko komuniciraju. Na taj način izvode se preporuke za politiku redistribucije iz specifičnog razumevanja principa jednakih mogućnosti, koje su razvile savremene egalitarne teorije pravde.Ova publikacija je nastala u okviru projekta “Program stipendija Fondacije za otvoreno društvo” koji realizuje Institut za filozofiju i društvenu teoriju Univerziteta u Beogradu, uz podršku Fondacije za otvoreno društvo. Stavovi izrečeni u tekstu predstavljaju stavove autora

Egalitarianism and Redistributive Reform in Serbia After 2000

We investigate post-commu- nist redistributive policies in Serbia, focus- ing particularly on the period after 2000. Our main argument is that market funda- mentalism, which posits that the market is the most efficient solution for the post- communist transition, has failed to deliver on its promises. The expectation was that, after a temporary transitional sacrifice, the worse-off would benefit equally with the better-off by reaping the rewards of market economic reforms. The anticipated faster growth was supposed to generate more quality jobs as the most effective means to alleviate poverty. Unfortunately, growth has been sluggish, while inequalities in Ser- bia have experienced rapid and persistent growth since 2000. We look into redistribu- tive reform measures to understand the reasons behind this outcome. Our approach combines applied political philosophy with economic policy analysis – a unique in- tersection of two social science disciplines. Firstly, our research explores the implicit and explicit normative foundations of post- communist economic reforms. Secondly, we identify and analyse a pivotal juncture of policy reform in the early 2000s. During this period, the newly-adopted neoliberal taxation and social policies were combined with class- and ethnic-based discriminato- ry approaches inherited from the pre-1990s socialist era and the post-socialist 1990s, respectively. This combination resulted in distinct, notably pro-rich redistributive patterns in Serbia

Regional labour market differences in Serbia: assessment and policy recommendations

Creating effective employment policy to combat rising unemployment and widening regional labour market differences is a major task facing Serbian economic policy makers. In this paper we argue that the best results would be achieved if a differentiated approach to regional labour markets is adopted, resulting in regionally specific employment policies. Our paper presents an original methodology which uses relevant statistical data from various sources (altogether 21 indicators) in order to create compound indices which serve as means of a comprehensive regional labour market classification. The main composite indices contain indicators standardised and grouped so that they reveal multifaceted features of the regions. The first classification distinguishes between indicators depicting regional economic situation and development prospects, and the second between those of general economic conditions, labour market situation and restructuring dynamics. Finally, we suggest a simple two-dimensional taxonomy of regions with regard to their labour market situation and prospects. While regions with positive composite indices of both situation and prospects in general do not require additional intervention, regions in other three quadrants are recommended specific policy mix of employment policy measures and active labour market programmes tailored according to their characteristics revealed by the analysis

From inactivity to work: unleashing the untapped potential of the labour force in Serbia

High participation rate of population is important for growth, especially for an aging population. This is also the reason why the European Union’s (EU) the Europe 2020 Strategy — sets a target of 75 percent labour force participation of the population aged 20 to 64. For Serbia, an aspiring EU country with an aging population, it is important to consider policies to increase the activity rate and unleash the untapped potential of the inactive labour force. The main aim of this paper is to identify subgroups of population with especially high inactivity rates, reveal main causes of inactivity and analyze policies that could increase employment probabilities of inactive population. Using latest Labor Force Surveys (LFS) the paper provides a structure of inactive persons disaggregated by sex, region, type of settlement, age, reason for failing to search for jobs and education level. Furthermore, using econometric binary choice models, the paper analyses reasons behind high inactivity rates, accounting for different individual characteristics. Finally, labor market dynamics is examined by constructing transition matrices based on LFS panel data. In order to increase participation rate and converge towards corresponding European Union activity indicators, this paper further discuses key policy interventions needed to decrease inactivity rates in the Serbian labour market. We argue that labour taxation and benefit design are some of the key factors behind high levels of inactivity among the working age population. We also analyze those labour market institutions which increase outflows into inactivity and cause prolonged periods of joblessness for important part of the labour force in Serbia

Simulating policy reform : distributional and poverty outcomes of the new social welfare law in Serbia

This chapter presents micro-simulation results of the impact of a new social welfare law adopted in Serbia in 2010 on income distribution and poverty outcomes across households. Micro-simulations were conducted using a tax-benefit micro-simulation model for Serbia (SRMOD). The new law introduced a number of the changes to the eligibility criteria for the last-resort social assistance programme discussed in this chapter. These are expected to improve significantly the targeting of social assistance, both in terms of its expanded coverage and increases in the amounts of social assistance received by the already eligible households. Simulation results suggest that the changes in legislation would increase social assistance eligibility of households in the poorest income decile by 18.4 %. The average amount of the benefit would increase by about 10.6 % per adult equivalent. Finally, total fiscal expenditures on MOP would increase by 34.6 %