LABOUR MARKET ADJUSTMENTS IN A TRANSITION ECONOMY OF THE CENTRAL AND EAST EUROPE - ALBANIA

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LABOUR MARKET ADJUSTMENTS IN A TRANSITION ECONOMY
OF THE CENTRAL AND EAST EUROPE - ALBANIA

• Arsena Gjipali, PhD
• Faculty of Business and Economics
• Tirana University

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General trends of LM in Albania

• Double digit unemployment rate
• Around 15 from 2000 and on.
• Highest for females than males
• High rate of long-term unemployed (90)
• Falling employment
• Among the lowest in the region of less than 50
  of LF.
• Young demographic structure

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Adjustment of the LM

• Adjustment of LM into non-participation of the
  labour force
• Emigration
• Informal labour market
• Hindered unemployment (more than 50 of labour
  force in agricultural sector).
• Poor labour reallocation
• Between sectors
• Across regions
• Mismatch of human capital supply and demand.

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Recommendations for government decisions

• Improve macroeconomic performance
• Improve the matching processes
• Provision of incentives to measure and raise
  educational and professional attainment.
• Design a complementary package of policy
  measures
• Increase positive externalities of labour demand
  and supply from investing into human capital.
• Improve social infrastructure
• Support productive activities
• Encourage capital accumulation, skill
  acquisition, invention, technology transfer.

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Challenges for labour market policy

• Redress the problem of low employment
• Creation of high productivity jobs in the
  private non-agricultural sector.
• Domestic firms
• Attract FDI (improve domestic climate)
• Reduce the area of informality
• Build a coherent LM policy
• Establish proper legal and institutional LM
  framework
• Monitor and enforce procedures
• Aim Active labour market policies
• Build a system of comprehensive statistical
  information.