Performance of Western Balkan six regarding the European Pillar of Social Rights: 2025 Review on North Macedonia

Nikoloski, Dimitar (2025) Performance of Western Balkan six regarding the European Pillar of Social Rights: 2025 Review on North Macedonia. Technical Report. Regional Cooperation Council, Sarajevo.

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Abstract

The European Pillar of Social Rights (EPSR) Review 2025 for North Macedonia provides an in-depth evaluation of the economy’s progress in aligning with the 20 principles of the Pillar. It reveals a mixed picture of social and labour market developments: sustained legislative activity and targeted reforms are gradually transforming key social systems, yet persistent structural barriers, especially related to youth employment, informality, education mismatches, and social inclusion, continue to hinder full convergence with EU standards. This executive summary presents the key developments, achievements, and challenges across the three EPSR segments: (i) Equal opportunities and access to the labour market; (ii) Fair working conditions; and (iii) Social protection and inclusion.
North Macedonia’s labour market continues to face challenges with low employment and participation rates, where youth are disproportionately affected. To address these issues, the Government implemented targeted programs under the Economic Reform Programme 2024-2026. The flagship measure is the economy-wide Youth Guarantee (YG), offering education, employment, or training to young people within four months of registration. From 2022 to 2024, over 65,000 participants were engaged, and approximately 40% successfully transitioned to employment or further training. However, the success rate dropped from 43% (2022) to 38.9% (2024), indicating the need for better targeting and support.
The 2024 Law on Adult Education introduced a comprehensive system for the Validation of Non-Formal and Informal Learning (VNFIL), enabling low-skilled individuals to acquire recognized qualifications. The Adult Education Centre (AEC) is now responsible for accrediting providers and training staff. The new Adult Education Strategy 2025-2030 emphasizes inclusiveness, digital access, local engagement, and data-driven policymaking. Yet, the system remains underdeveloped, with challenges related to municipal engagement, data quality, and insufficient adult learning participation, especially among older and low-educated segments. In addition, a new concept for post-secondary education, adopted in 2025, promotes high-quality vocational education aligned with labour market needs, emphasizing applied learning, modular programs, and employer recognition of qualifications. Still, significant mismatches persist between labour supply and demand, particularly for technical and digital skills, and efforts to strengthen vocational training infrastructure must be accelerated.
Despite strong legal and institutional frameworks, gender disparities in employment persist. In 2024, women’s activity rate was 43.1% versus 61.8% for men and similarly skewed employment rates (38.3% vs. 53.6%). Gaps diminish with higher education levels but remain problematic at lower education levels. The Gender Equality Strategy 2022-2027 promotes equal access to rights, resources, and representation. The Gender Equality Index rose from 62 (2019) to 64.5 (2022), approaching the EU average. GEI indicates that improvements were most notable in areas of political power and knowledge, but significant gaps remain in income and time use. Informality remains a major concern, particularly in agriculture, services, and seasonal jobs. The Law on Work Engagement introduces simplified digital registration for temporary, casual, and seasonal workers, enabling access to pensions, healthcare, and unemployment insurance. The reform marks a critical step toward expanding the formal workforce and strengthening social protection. The Strategy for Formalizing the Informal Economy 2023-2027 outlines actions to improve tax compliance, reduce regulatory burdens, and increase trust in institutions. These measures are expected to expand the tax base, promote fair competition, and reduce labour market segmentation.
Average gross and net wages have steadily increased since 2022, while the minimum wage has been adjusted annually based on inflation and wage growth. Although this helps improve living standards and reduce poverty, concerns remain over employer compliance, particularly in informal sector, and the need to align wage growth with productivity. Debates between trade unions and employer organizations continue regarding the methodology for setting the minimum wage. A tripartite commission has been formed to explore more robust, consensus-based models. Amendments to the Law on Labour Relations made Sunday the default weekly rest day, enhancing work-life balance. Exceptions apply to essential services, with compensation and additional rest mandated. Flexibility in working hours exists legally but is rarely practiced, with only limited uptake of innovative scheduling. Work-life balance remains under pressure from recent amendments allowing extended overtime for strategic projects. The OSH Strategy 2021-2025 focuses on improving health and safety systems, reducing workplace accidents, and strengthening inter-agency collaboration. Reported accidents dropped from 147 in 2022 to 93 in 2023, though underreporting remains a concern. A stronger role for the economy’s Labour Inspectorate and improved data systems are key next steps.
The Guaranteed Minimum Assistance (GMA) remains the backbone of the social safety net. Between 2022 and 2024, the average monthly GMA benefit increased from EUR 123 to EUR 139, while the number of recipients declined, reflecting potential improved targeting and activation. GMA is now linked to labour activation measures, requiring beneficiaries to participate in employment programs and accept job offers. The digitalization of welfare services has begun through amendments to the Law on Social Protection, enabling e-application and interoperability with other public databases. These efforts improve efficiency but must be scaled up for full economy coverage. North Macedonia offers child allowances, education support, disability allowances, and parental incentives. Preschool enrolment has increased steadily, but long waiting list, especially in urban centres, indicate a need for expanded capacity. Amendments to the Law on Child Protection aim to fully digitalize benefit delivery and expand service availability, particularly for vulnerable families.
The long-term unemployed and those who lost their jobs due to privatization continue to receive Material Allowance, though the number of recipients is declining due to retirement trends. New activation pathways link GMA beneficiaries to employment services through Individual Activation Plans, developed by social workers and employment counsellors. Cooperation between Centres for Social Work and Employment Centres has improved, though their institutional capacity remains a concern. Despite a comprehensive legal and policy framework, Roma, persons with disabilities, and rural populations remain under-served. In this context, the Roma Inclusion Strategy 2022-2030 sets eight strategic goals, and a 2025 review will assess progress. Inclusion efforts are supported by community-based service expansion, deinstitutionalization, and municipal-level programming. Social dialogue structures, including the Economic and Social Council (ESC) and 15 Local ESCs, have institutionalized tripartite cooperation. However, their influence on policy remains limited. The draft Law on Labour Relations, which is under consultation builds on the identified gaps in 2022 EPSR report aiming to modernize labour relations, strengthen trade union rights, and increase collective bargaining coverage. However, challenges remain regarding the weak engagement of social partners in legislative processes, low coverage in the private sector and lack of inclusive consultation mechanisms.

Item Type:	Monograph (Technical Report)
Subjects:	Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions:	Faculty of Economics
Depositing User:	Efp Eprints
Date Deposited:	24 Mar 2026 04:40
Last Modified:	24 Mar 2026 04:40
URI:	https://eprints.uklo.edu.mk/id/eprint/11465

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