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LABOUR MARKET ADJUSTMENTS IN A TRANSITION ECONOMY OF THE CENTRAL AND EAST EUROPE - ALBANIA. Arsena Gjipali, PhD Faculty of Business and Economics Tirana University. General trends of LM in the region - Falling employment. Demographic structure in Albania.
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LABOUR MARKET ADJUSTMENTS IN A TRANSITION ECONOMY OF THE CENTRAL AND EAST EUROPE - ALBANIA Arsena Gjipali, PhD Faculty of Business and Economics Tirana University
Demographic structure in Albania Percentage share of various age groups in the population of selected CEE countries Source: Own calculations from Laborsta (2006). The data for each country are for: 2000 (Bulgaria), 2001 (Albania, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovakia), and 2002 (Macedonia, Moldova, Russia). Note: 0-14 year-old age group as a share of total population; Other age groups are calculated as a share of population over 15 years old.
General trends of LM in Albania- Double digit rate of unemployment- High rate of long-term unemployed (90%) Unemployment rate by gender Source: INSTAT (2000-2007)
Adjustment of the LM • Adjustment of LM into non-participation of the labour force; • Emigration ; • Informal labour market; • Hindered unemployment (more than 50 % of labour force in agricultural sector). • Poor labour reallocation • Between sectors • Across regions • Mismatch of human capital supply and demand.
Recommendations for government decisions Improve macroeconomic performance Improve the matching processes Provision of incentives to measure and raise educational and professional attainment. Design a complementary package of policy measures Increase positive externalities of labour demand and supply from investing into human capital. Improve social infrastructure Support productive activities; Encourage capital accumulation, skill acquisition, invention, technology transfer.
Challenges for labour market policy • Redress the problem of low employment • Creation of high productivity jobs in the private non-agricultural sector. • Domestic firms • Attract FDI (improve domestic climate) • Reduce the area of informality • Build a coherent LM policy • Establish proper legal and institutional LM framework • Monitor and enforce procedures • Aim Active labour market policies • Build a system of comprehensive statistical information.