Back to Unemployment – How the emergence of Covid-19 set back the prospects of young workers in the Western Balkans

Written by Melissa Montasser

The Western Balkan nations have a long history of emigration that has continued up to this very day as it is demonstrated by the vast migration flows of mainly young people that leave South-Eastern Europe each year, to a large extent towards countries of the European Union. These migration waves from the Western Balkan countries (WB6) regularly place the region “among the largest exporters of migrants in Europe” (OECD, 2020a), and are, together with declining birth rates, the major cause of the region’s depopulation. In 2016, a total of 3.4 million Balkan citizens lived in OECD countries, or in other words, around a fifth of the region’s entire population (de Feo, 2021). Although there are several factors that drive young people from their home countries in the Western Balkans, the main one is undoubtedly widespread youth unemployment (Naseva, 2021). Various reports indicate that the outbreak of the Covid-19 pandemic has exacerbated the already precarious situation of young workers. Given this, the present policy brief aims at providing an overview of the general development of youth employment in the WB6 (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, Serbia) from the start of the pandemic. Finally, this policy brief will be concluded with the proposal of solution-based approaches in order to minimize the pandemic’s negative effects on youth unemployment in the examined countries.

The pandemic’s impact on youth employment in the Western Balkans

The rate of youth unemployment was particularly high in WB6 countries in comparison to countries within the European Union even prior to the pandemic outbreak. Nevertheless, from 2017 onwards, a positive trend was recorded leading to a slight, but steady decrease in youth unemployment rates, which in return led to an average decline of about 7 percent within three years (Regional Cooperation Council, 2021). However, this process came to an abrupt end with the advent of the coronavirus and the following containment measures that led to the shut down of several industries. By the end of the year 2020, a rise in youth unemployment was registered in all of the WB6 countries, with Montenegro – a country in which the tourism sector generates around a third of the national GDP – being the worst affected one with an increase in the rate of unemployed young people from 24.3% in 2019 to 36% in 2020 (de Feo, 2021). All in all, the youth unemployment rate ended up being above 26% in all the countries examined, compared to only 16.8% in the EU countries (Regional Cooperation Council, 2021). Furthermore, the number of young people who were considered to be NEET (i.e. young people neither in employment nor in education or training aged 15-24) increased significantly within the first year of the pandemic. In fact, their share grew in the Western Balkans from 19% in 2019 (Council of Europe Development Bank, 2021) to 23.7% in 2020 (Regional Cooperation Council, 2021), compared to a change of only one percent from 10% in 2019 (Council of Europe Development Bank, 2021) to 11.1% in 2020 in the EU (Regional Cooperation Council, 2021).

In 2021, however, in line with general global developments, the Western Balkan economies were seeing a faster than expected recovery, with an expected growth rate of 5.9% in 2021, following a contraction of 3.1% in 2020. Nevertheless, the situation in the labor market still remains fragile, especially for women and youth who have been disproportionately hit by job losses caused by the recession and its consequences (OECD, 2021). The explanation for their vulnerability lies, among other things, in the fact that they are more likely to get hired for temporary jobs protected by weak if any, contracts making it, therefore, easier for them to lose their job in times of crisis (de Feo, 2021). In Kosovo and Montenegro, for example, more than three-quarters of young workers hold this type of contract. Furthermore, the pandemic has blocked new job creation which, in turn, negatively affected the job perspectives of the youth (Regional Cooperation Council, 2021).

Possible solutions to avoid further negative consequences for the youth

Given these circumstances, it is obvious that the ongoing situation has to be addressed in some way in order to avoid the emergence of a “lockdown generation” (ILO, 2020a), that would likely be exposed to scarring effects that, in turn, could affect young people negatively throughout their whole working life. For example, they could result in the reduction of future earnings as well as an increased risk of future unemployment and poverty (Regional Cooperation Council, 2021).

• First of all, more legal security has to be provided for young workers on the labor market by impeding fixed-term work.
• In addition, it is advisable to invest more in education, as various reports (e.g. ILO, 2020b; UNDP, 2021) have attested large skill mismatches in all WB6 economies caused by shortcomings in the teaching of skills actually demanded by the labor market. One possible and crucial measure in this regard would be the introduction of apprenticeships on a contractual basis between the employer and the apprentice which have not yet been established in any of the Western Balkan countries examined (Regional Cooperation Council, 2021).
• Finally yet importantly, tougher action against the rampant corruption in the WB6 is needed as young people often feel that the few jobs available on the small job market are distributed on the basis of personal connections rather than individual qualities of applicants, which in turn, might further undermine their trust in institutions (UNDP, 2021).

Only through the adoption of such measures can young people be given the prospect that they can believe in a future in their home countries.

Final thoughts

In conclusion, it can be stated that despite the observed short-term decrease of youth unemployment rates in the region from 2017 onwards (Regional Cooperation Council, 2021), the rate of youth unemployment started growing rapidly with the emergence of the coronavirus and the following introduction of containment measures (OECD, 2020b). Additionally, it is important to notice that the NEETs have been affected equally hard by the crisis (Region Cooperation Council, 2021). This particular vulnerability of young people to the pandemic’s effects can be explained by the fact that in the Western Balkans young workers usually are extremely likely to be employed under precarious conditions and thus can be easily dismissed in troubled times (de Feo, 2021). Furthermore, job creation has been obstructed by the pandemic, diminishing further the already difficult job prospects for the youth (ANSA, 2021). Measures need to be taken in order to stop the process of mass emigration and brain drain that for many decades has been posing a serious problem in the Western Balkan countries. It is recommended in this regard that more legal security is ensured for young workers, in particular by restricting the share of temporary contracts. Furthermore, more investment in the education and training of young people is needed as well as a reinforcement of the fight against corruption.

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