2015年-世界发展银行全球_Insights_into_Key_Challenges_of_the_Albanian_Labor_Market_36页_1mb

Summary of Key Challenges in the Albanian Labor Market

Core Content

This document provides an overview of the labor market situation in Albania, highlighting the challenges related to employment levels, quality, and inclusivity. It discusses the impact of the global economic crisis on the labor market, the role of labor regulations, taxes, and social protection systems in shaping employment outcomes, and the importance of education and skills in improving labor market performance.

Main Challenges in the Labor Market

Labor Force Participation

• Low compared to the region: Albania's labor force participation rate is lower than the European and Central Asian average but higher than most neighboring countries.
• Gender disparities: Women have lower participation rates than men, with only 51% of women compared to 72% of men participating in the labor force.
• Youth participation: Youth participation is significantly lower than the national average, with around 68% of young women being inactive.
• Impact of economic crisis: The labor force participation rate fell by over 3 percentage points between 2007 and 2008, and continued to decline through 2013, with some recovery in 2014.

Unemployment

• Rising unemployment: The unemployment rate increased from around 14% in 2012 to 18% in 2014.
• Youth unemployment: The youth unemployment rate rose sharply, reaching 36% for young men in 2014.
• NEETs: In 2011, 15% of the youth were not in employment, education, or training (NEET).

Employment

• Low employment rates: Despite being the highest among Western Balkan countries, employment rates in Albania remain relatively low compared to the European and Central Asian average.
• Sectoral distribution: The agricultural sector is the main employer, accounting for 46% of total employment in 2011.
• Informality: Informal employment is widespread, with nearly half of non-agricultural employment being informal.
• Gender gap in employment: A 15 percentage point gap exists between male and female employment rates in 2014.
• Quality of employment: A significant portion of workers are unpaid family workers or self-employed, especially in agriculture, indicating low quality of jobs.

Key Obstacles to Inclusive and Better Quality Jobs

1. Disincentives to (Formal) Work

• Labor regulations: While some regulations are flexible, others, particularly in wage setting, are rigid. Albania ranks 123rd out of 148 countries in wage flexibility.
• Taxes and social protection:
  • Labor taxation in Albania is slightly lower than the regional average.
  • The flat personal income tax (10%) lacks progressivity, potentially discouraging low-wage earners from working formally.
  • A progressive tax system was introduced in 2014, but its impact on employment is yet to be assessed.
  • Social protection programs, such as the Solidarity Albania Program, have limited coverage and generosity, potentially discouraging employment.
  • Disability assistance benefits are generous but may be misallocated, with 11% of benefits going to individuals without functional disability.

2. Education and Skills

• Low educational attainment: Most agricultural workers have primary education or less, with over 70% having secondary education or less.
• Skill gaps: The overall skills level of the population is low, which hinders economic prospects and limits the ability of workers to access higher-quality jobs.
• Sectoral skill mismatch: The construction and services sectors also absorb a large number of low-skilled workers, while higher-educated workers are concentrated in the services sector.

3. Barriers to Work

• Informality: High informality limits access to social protections and job quality.
• Access to productive inputs: Barriers to access land, finance, and information limit job creation and economic opportunities.
• Social norms and attitudes: These can affect women's and youth's participation in the labor market, especially in terms of employment quality and opportunities.
• Childcare access: This is a significant barrier for women, especially in the context of low labor force participation and limited career advancement.
• Workplace segregation: Despite some reduction in the gender wage gap when controlling for occupation, industry, and ownership, the gap remains significant at 85% of male wages.

Conclusion

• Need for inclusive growth: Albania needs to shift towards a more inclusive and productive growth model to create better quality jobs and reduce poverty.
• Focus on quality and inclusivity: While employment levels are relatively high compared to neighboring countries, the quality of employment is poor, with high informality and low-skilled jobs dominating.
• Key areas for reform: Improving labor regulations, taxes, and social protection systems, as well as enhancing education and skills, are critical for creating better employment opportunities.
• Targeted support for vulnerable groups: Women and youth are particularly affected by labor market challenges, requiring targeted interventions to improve their economic participation and outcomes.

Key Takeaways

• Informality is widespread: It affects both employment quality and access to social protection.
• Low educational attainment and skill levels: Limit economic mobility and job quality.
• Gender and youth disparities: Highlight the need for policies that promote inclusivity and equal opportunities.
• Institutional and regulatory barriers: Remain significant obstacles to growth and job creation.
• Taxation and social protection systems: Play a key role in shaping labor market outcomes and can discourage formal employment.