POVERTY AND EMPLOYMENT STATUS: EMPIRICAL EVIDENCE FROM NORTH MACEDONIA

Abstract

Poverty and social exclusion are often associated with unemployment, but being employed is not always sufficient to provide decent living conditions for workers and their families. The ‘low-wage’ workers similarly as unemployed are often associated with an image of men and women struggling to support their families and living at risk of poverty and social exclusion. Dealing with the social stratification engendered from the employment status of workers in the post-transition countries represents a challenging task for the academics and policymakers. The aim of the paper is to assess the determinants of poverty in North Macedonia from the point of view of employment status, particularly the differences between low-paid and unemployed workers. We assess the factors affecting the probability of at-risk-of poverty status by estimating a logit model on cross-section data separately for employed and unemployed persons in 2015. The analysis draws from an examination of micro data from the Survey on Income and Living Conditions (SILC) whose main scope is to enable the compilation of statistics on income distribution, as well as indicators of monetary poverty. Besides other personal and household characteristics, being low-paid appears as the most important factor for at-risk-of poverty status among employed persons, while the low work intensity is the most responsible factor for at-risk-of poverty status among unemployed persons. In addition, our analysis reveals that the social transfers do not satisfactorily cover these categories, which assumes that we need a much broader arsenal of respective policy measures aiming to reduce poverty among the vulnerable labour market segments. The proposed policy recommendations cover the following areas: education and training, active labour market policies, unionisation and collective bargaining, wage subsidies and taxation and statutory minimum wage.