Effects of the Covid-19 pandemic on labour markets in the western Balkans

Abstract

Covid-19 has had a significant effect on labour market metrics across the globe. This article aims to contribute to the understanding of the pandemic’s adverse impact on labour markets in the western Balkans and the need to take appropriate measures to mitigate this effectively in the forthcoming period. Using a spread of data, we analyse and compare the distributional impacts of the pandemic recession in western Balkans labour markets in terms of the unemployment rate and the average annual growth in real minimum wages. Our analysis shows a significant deterioration of labour market trends - not least in comparison with the picture of 2019 which was broadly much more positive - which has led to increased government spending on social protection measures. This needs to be continued, not least as regards vulnerable individuals, including young people, as the pandemic continues its track. On the basis of our results, and to deal with the structural challenges presented by Balkans labour markets, there is a need for further reform and updating of regulation, social protection and policies in the labour market.