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FREN, Serbia and UACS, Macedonia

Final Project Conference : Making work pay in Western Balkan countries: the case of Serbia and Macedonia. FREN, Serbia and UACS, Macedonia. Making work pay in Western Balkan countries: the case of Serbia and Macedonia.

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FREN, Serbia and UACS, Macedonia

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  1. Final Project Conference:Making work pay in Western Balkan countries: the case of Serbia and Macedonia FREN, Serbia and UACS, Macedonia

  2. Making work pay in Western Balkan countries: the case of Serbia and Macedonia • Lead organization Foundation for the Advancement of Economics (FREN) , Belgrade, Serbia implemented the project in partnership withUniversity American College - Skopje (UACS), Macedonia • Period: July 2012 to October 2013 • Research team:MihailArandarenko, JelenaŽarkovićRakić, MarjanPetreski , SunčicaVujić, NikicaMojsoskaBlazevski, Sasa Ranđelović,Marko Vladisavljević, DespinaPetreska • Support form Francesco Figari (University of Insubria - Varese (Italy) and a Research Associate in Institute for Social and Economic Research – ISER at the University of Essex) and Horacio Levy (OECD)

  3. Overall objective of the project • This research examines employment, poverty and income inequality effects of introducing making work pay (MWP) policies • MWP policies (or in-work benefits) are means-tested transfers given to individuals conditional on their employment status • They intend to enhance the incentives to accept work and to redistribute resources to low income groups

  4. Motivation • High inactivity rates of 39% in Serbia • High informal employment rates of 18.2% in Serbia • Inactivity and informal employment rates higher among: • low-educated individuals • those with low skills • women • These groups have low earnings capacity → financial payoffs from staying in or seeking employment are often limited

  5. Motivation • Incentive problems are aggravated by high tax burdens on labour income and by social benefits design (sudden withdrawal of benefit once a person has formal income on his/her record)

  6. Motivation • Those taking up low-paid employment see that large part of their gross earnings is consumed by income taxes, social contributions or reduced social benefits • => Need incentives to make (formal) work pay • On the labour demand side, MWP reasonable choice given that the minimum wage in Serbia is high (50% of the average wage ) and suspected to discourage hires

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