Skills supply and demand in Macedonia: Deriving lessons for future policy interventions

Nikoloski, Dimitar and Pechijareski, Ljupcho (2015) Skills supply and demand in Macedonia: Deriving lessons for future policy interventions. SEER Journal for Labour and Social Affairs in Eastern Europe, 18 (2). pp. 203-215. ISSN 1435-2869

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Macedonia is among rare countries in the world, where during the past two decades unemployment rate has constantly remained above 30 percent. The sustainability of the extremely high unemployment rate is an inexorable phenomenon that imposes needs for further investigation. In addition, Long-term unemployment has significantly contributed to an erosion of skills and motivation of unemployed workers, making them less employable over time. On the demand side of the Macedonian labour market during the past two decades have occurred significant sectoral shifts. These changes need to be followed by changes on the supply side consisting of appropriate reforms in the education system and active labour market policies that would lead to improved matching between supply and demand of skills. The problem of skill mismatch on the Macedonian labour market has been identified since the outset of the transitional process. This is particularly emphasised in the World Bank country assessments in 2003 and 2005, where among other things as reasons for high and sustained unemployment in the country are pointed out the problems related to the human capital acquiring and development. First, the effective skills of workers acquired in the previous socialist system became obsolete and inconsistent with the shifting labour demand. Second, the long duration of unemployment implied increased human capital depreciation. Third, due to the heritage from the previous socialist system the employers in the private sector lacked entrepreneurial skills. Finally, the education system remained rigid and unresponsive to labour market needs. As a consequence, many employers find it difficult to hire workers with required skills despite high unemployment. The aim of this paper is to analyse the matching between supply and demand of skills in Macedonia in order to assess the potential deficiencies and to propose appropriate policy recommendations. In addition we are interested in assessing the implications of the skill mismatch on the unemployment rate and the degree to which structural imbalances contribute for high and sustained unemployment. For this purpose we apply a comprehensive analysis of the supply and demand for skills and attempt to derive lessons for future policy interventions. As a result, we propose viable policy measures that will hopefully improve the matching between supply and demand of skills as a strategy for fighting persistent unemployment in Macedonia.

Item Type: Article
Subjects: Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions: Faculty of Economics
Depositing User: Mr Dimitar Risteski
Date Deposited: 08 Dec 2019 14:16
Last Modified: 08 Dec 2019 14:16

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