Youth unemployment becoming a serious concern in Southeast Europe

In a rapidly changing economic environment in Southeast Europe, many university graduates are unemployed. At a World Bank conference –“Young People in Eastern Europe and Central Asia: From Policy to Action”– held in Rome in May, many said that the unemployment trend could slow economic growth and lead to increased poverty and crime in the region.

By 2005, the new EU member states had all recovered their levels of GDP after the 1990s. The Southeast European countries, however, were slower to recover. Croatia, Serbia, Montenegro, Bosnia and Herzegovina (BiH) and Macedonia were plagued by internal turmoil from the Balkan conflict.

Today, Slovenia’s employment rate is above the EU-15 average of 65.2%, but Macedonia’s is just over 30%. Croatia is still 10% below the EU-15 average. The unemployment problem in the region is considered serious, as the majority of those unemployed are under the age of 30.

In most countries in the region, there is cause for concern. In Albania and Turkey, most 18-24 year olds have not completed a secondary education.

The educational systems in Southeast Europe are being pressured, both domestically and internationally, to deliver skills required by the labour market, but are currently unable to handle the needs of the youth in the region.

“It is disgraceful what the government is offering to us after six years of studies, hard work and forbearance. I completed a degree in electrical engineering with a high average and in record time, and what is my perspective today in Serbia?” says Milos Pavlovic, 24, of Belgrade. “We all hoped that with time, things will get better in Serbia, but evidently nothing is changing.”

Vocational and technical education in the region also fails to achieve the school-to-work-transition for the young. Almost 90% of vocational school graduates in 2003 were unemployed from one to five years after graduation, according to the World Bank and UNICEF. In BiH, technical school graduates have far less chances of finding a job compared to those with a general secondary education.

Without job prospects, the young are forced to seek other means of creating an income. They often turn to the black market or criminal activity. In Serbia, the younger generations are twice as likely to become involved in the black market dealings compared to older adults.

Many young people are also leaving their home countries to get a good education, find an adequately paid job and embark on a career. This “brain drain” on the region is becoming almost as serious a problem as the unemployment factor itself. In Kosovo, more than half of the youth population is seeking to emigrate to Western Europe, the United States or Canada, in hopes of finding a career.

The World Bank studies found that the youth unemployment problem can be solved by creating more jobs, which requires a better investment climate. The main impediments to investment and, consequently, job creation are excessive market regulations, administrative barriers and high taxes, the Bank says.

If these high unemployment rates continue, they will affect social and economic dynamics in perverse ways, which may hinder the region’s quest to embark on sustained economic development.