The Labour Market, Social Inequality and the Role of Emigration: The Case of the Western Balkan Economies

Abstract

It has been more than two decades since the beginning of the transition in the Western Balkan region, and its results have not shown a significant improvement in the life quality of its citizens. While economic growth rates during the post-war period were modest, with low inflation and a disappointing inflow of FDI, the process of privatisation, deindustrialisation and job cuts led to an increase in the unemployment rate and a further reduction in the overall living standard. The main aim of this chapter is to critically analyse some of the economic trends in the countries of the Western Balkans, with a particular focus on the increasing unemployment rate, income inequality and migration trends. This research covers five Western Balkan countries in comparison with the three EU countries (Bulgaria, Croatia and Romania) over the period from 2000 to 2016. The chapter reveals that the region as a whole has made modest, though uneven, progress towards becoming a functioning market economy. Also, the chapter identifies serious problems including the persistence of very high unemployment rates in the Western Balkan region, large-scale emigration, a huge outflow of educated and skilled workers and widespread poverty.