From inactivity to work: unleashing the untapped potential of the labour force in Serbia

Arandarenko, Mihail and Vladisavljević, Marko and Žarković Rakić, Jelena (2012) From inactivity to work: unleashing the untapped potential of the labour force in Serbia. In: From Global Crisis to Economic Growth. Which Way to Take? Centar za izdavačku delatnost Ekonomskog Fakulteta, pp. 273-299. ISBN 978-86-403-1278-3

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High participation rate of population is important for growth, especially for an aging population. This is also the reason why the European Union’s (EU) the Europe 2020 Strategy — sets a target of 75 percent labour force participation of the population aged 20 to 64. For Serbia, an aspiring EU country with an aging population, it is important to consider policies to increase the activity rate and unleash the untapped potential of the inactive labour force. The main aim of this paper is to identify subgroups of population with especially high inactivity rates, reveal main causes of inactivity and analyze policies that could increase employment probabilities of inactive population. Using latest Labor Force Surveys (LFS) the paper provides a structure of inactive persons disaggregated by sex, region, type of settlement, age, reason for failing to search for jobs and education level. Furthermore, using econometric binary choice models, the paper analyses reasons behind high inactivity rates, accounting for different individual characteristics. Finally, labor market dynamics is examined by constructing transition matrices based on LFS panel data. In order to increase participation rate and converge towards corresponding European Union activity indicators, this paper further discuses key policy interventions needed to decrease inactivity rates in the Serbian labour market. We argue that labour taxation and benefit design are some of the key factors behind high levels of inactivity among the working age population. We also analyze those labour market institutions which increase outflows into inactivity and cause prolonged periods of joblessness for important part of the labour force in Serbia.

Item Type: Book Section
Additional Information: COBISS.ID=44966415
Uncontrolled Keywords: inactivity, labour market, Serbia
Research Department: Welfare Economics
Depositing User: Jelena Banovic
Date Deposited: 30 Jun 2016 12:06
Last Modified: 03 May 2020 21:42

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