Opening the “Black box” of the labor market in Macedonia: Youth unemployment

Abstract

The youth unemployment in Macedonia has been high and persistent for the last three decades, despite the many active labour policies for young persons. This paper examines the determinants of youth unemployment in the Macedonian labour market using quantitative and qualitative analysis. In order to empirically estimate the relevant determinants of youth unemployment in Macedonia we employ the two-step conditional mixed processes model (CMP) using the school to work transition survey (SWTS) by the International Labour Organization. The quantitative analysis is accompanied by qualitative analysis to further explore and explain the social-economic issues. The qualitative analysis includes semi-structured interviews and focus groups conducted in different regions of Macedonia. The empirical results indicate that gender, age, the wealth of the household, the education level and regional characteristics are the main determinants of youth unemployment in Macedonia. According to the findings of the qualitative analysis, the most of the young people pursue education and live with their families who provide them with financial support to cover their expenses. Consequently, the young persons have a diminished interest to search for a job and this attitude on long run could have a dubious effect and influence on the personal choices. Overall, there is a long school to work transition period, which discourages young people to actively participate in the labor market.