(Un)certain future: How to overcome youth employment challenges in the Western Balkans?

Kosovo continues to struggle with the highest unemployment rates in the Western Balkan region. Although the figures have improved, the labor market does little to encourage young people in Albania, with a similar situation persisting in North Macedonia and Serbia. Experts interviewed by Kosovo Online point to a critical mismatch between the education system and labor market needs, as well as a lack of quality jobs. As a result, they agree that youth migration is inevitable.

Written by: Petar Rosic

A World Bank report indicates that Kosovo has the highest unemployment rate in the region, with only 37.1% of its working-age population employed.

However, Kosovo’s Minister of Finance, Hekuran Murati, claims that the World Bank report was misquoted in Kosovo, asserting that unemployment fell to a record low of 10.9% by the end of 2023.

His statement sparked reactions from opposition experts, who argued that only the Kosovo government would misinterpret and manipulate such reports.

"There is no misinterpretation of the World Bank report from the opposition or 'opposition-aligned media.' We are worse off than the worst in the region," wrote Democratic League of Kosovo MP Hikmete Bajrami on Facebook.

The president of the Kosovo Business Alliance, Agim Shahini, also has no doubts about the World Bank report. Research published by the Alliance in June highlights that Kosovo is experiencing its worst economic crisis, with daily life becoming increasingly difficult for its citizens.

"We are the poorest country in Europe, right after Ukraine, which is at war. Our GDP per capita is the lowest, indicating we are indeed a poor nation. Unemployment is also very high. According to the World Bank, only 37% of our citizens are active in the labor force, meaning that 63% who want to work cannot find employment," Shahini told Kosovo Online.

When it comes to employment opportunities, Shahini emphasizes that young people find jobs most quickly in the IT sector, while the situation in other professions remains nearly unchanged.

"In construction, there’s a daily demand for workers, but there are none available either because wages are low or because workers lack the necessary skills. It's a similar story in medicine. We have many people who finish school and then leave the country. Kosovo lacks a strategy to combat poverty and to develop its economy and industry," he notes.

He adds that the core issue of unemployment is that the Kosovo government doesn’t know what the development priorities for Kosovo should be.

"A vision is created in a strategy, followed by a plan on how to achieve that vision for economic development. As the Business Alliance, we believe the government has lost valuable time focusing on dialogue with Serbia while neglecting the economy, which is in poor condition. Even though we have positive growth—the highest in the Balkans—our development rate is quite low. There is significant poverty, underdevelopment, and widespread dissatisfaction among people in Kosovo, whether they are Albanian, Serbian, or other citizens," says Shahini.

He notes that his Alliance would like for the government to be right.

"But, just the other day, the Minister of Finance said unemployment was at 4 percent; five days later, he reported it was 10.6 percent. Now, the data indicates over 30 percent. We have many people who fall outside the statistics, many unemployed individuals who have lost hope of finding a job and are not recorded anywhere," he says.

Economic analyst and professor at the University of Tirana, Eduart Gjokutaj, points out that, unlike Kosovo, Albania has one of the lowest unemployment rates in the region, though youth employment remains a major issue leading to emigration.

"According to 2023 data, the average unemployment rate in Albania is among the lowest in the region, around 10.7 percent. However, the 15-29 age group has an unemployment rate over 22 percent, which is above the Albanian average. Naturally, it's also above the regional average and is linked to what the labor market offers, which drives young people to leave. It’s evident this will continue unless measures are taken beyond the concerns expressed in the media by experts or government officials," says the professor from Tirana for Kosovo Online.

He assesses that the labor market does little to encourage young people, neither in Albania nor in other regional countries. He suggests Albania should develop a new model that leverages the "common Balkan market."

"I would say Serbia somewhat stands out by diversifying its economic portfolio and exponentially increasing agricultural production and exports. Regarding future market adaptation, Kosovo has the potential to emerge as an exporter of information technology services. Albania should consider adopting a similar model—something between Kosovo, Serbia, and North Macedonia, so they can rotate and complement each other economically. Especially now, with the Berlin Process and all the initiatives and projects aimed at connecting people," Gjokutaj concludes.

The Head of the Labor Market Research and Analysis Department at the Employment Agency of North Macedonia, Biljana Delovska, states that official statistics show that unemployment has decreased in recent years, though it remains high compared to EU countries.

In the second quarter of 2024, unemployment stands at 12.5 percent, with 18 percent of the unemployed being under 29 years old.

In terms of educational background, she explains, nearly 61 percent of the unemployed have no formal education or only elementary school education, while 7.6 percent hold higher education degrees. Among them are 530 master's degree holders and 18 with doctoral degrees.

Delovska told Kosovo Online that every young person expects a diploma from formal education (secondary or higher) to lead to quicker employment. However, she warns that the dynamic development of the labor market and new technological changes create jobs requiring skills that may not always be acquired through formal education.

"Employers often seek workers who, in addition to an educational diploma, also hold a range of certifications reflecting skills gained outside formal education. Thus, successful integration of young people into the labor market requires bridging formal and informal education," she explains.

She describes the unemployment issue in North Macedonia as quite complex and influenced by multiple factors. Despite the fact that 99,142 active job seekers were registered with the Employment Agency in August 2024, employers increasingly voice concerns about difficulties in finding qualified workers.

"One reason is the lack of workers with appropriate education and qualifications. Namely, 61 percent of registered job seekers have no education or have completed only primary education. Most of them lack specific knowledge and skills needed for particular tasks—they are essentially unskilled. On the other hand, a large number of them receive social welfare, and the Law on Social Protection requires them to register as active job seekers with the Employment Agency," she explains.

Dragan Todorovic, President of the Union of Autonomous Trade Unions of Belgrade, states that Serbia is the first in the region in employment compared to other EU candidate countries. He confirms for Kosovo Online that jobs are indeed available in Serbia but warns of a lack of quality jobs.

According to him, if looked at from the outside, it sounds very nice that there are only 257,000 unemployed in Serbia.

"However, if we look at the inactivity rate and exclude retirees and other groups, such as dependents receiving social assistance and similar, we definitely arrive at around 500,000 people who are missing from that statistic," Todorovic says.

If we also take into account the 600,000 with informal jobs, he adds, more than a million people are in some gray zone.

"They are certainly doing something. What I want to emphasize is that there is work in Serbia, but there are no quality jobs and what people would like to have, decent salaries they can live on. That is why we have a large number of people in informal jobs, wandering around, or working multiple jobs to survive. Everyone is finding their own way, and then that statistic is not really representative to say 'yes, that's how it is,'" he states.

When it comes to trends, according to Todorovic, if we compare Serbia with the EU candidate countries, Bosnia and Herzegovina, North Macedonia, Montenegro, and Albania, the employment rate in Serbia is the highest. If we look at EU countries in the region, Bulgarians might even be one percentage point below, but all others are above.

"The Croats are at 68%, Romania at 66%, and these are among the lowest-ranked countries in Europe. Only the Italians have an employment rate of 65%, while countries further north go over 70%, some even over 80%. When we add what is missing from the official statistics, we come to around seventy percent, which should be the goal we aim for," he says.

One of the main issues, according to Todorovic, is finding jobs for young people.

"Younger people in Serbia can relatively quickly find a job. Certainly within the first year after graduation, but the question is the quality of the job. They can find some lower-quality jobs with lower incomes in a few months. For jobs that require expertise and are of higher quality, it takes about a year. There are also many positions where someone is expected to have knowledge and experience from the very beginning, and they do not have that, leading to a mismatch between employer requirements and what a young person can realistically offer," he notes.

The consequences of all this are primarily the emigration of young people, Todorovic says, adding that we are no longer talking only about the youth.

"That is a trend in Europe, but I believe that is not an excuse for us not to take the actions we can," he concludes.