Youth employment in North Macedonia has faced challenges since the beginning of the economic transition and the establishment of the country in 1991. The unemployment rate of youth aged 15 - 24 has remained at a high level, which is of serious societal concern. In 2019, 35 per cent of Macedonian young people[1] active in the labour market were unemployed, far above the EU average of 17.9 per cent[2]. Since 1991, the labour market has failed to create enough jobs for young graduates.

Long-time unemployment is another key concern and challenge for young people seeking access to decent work. Half of the unemployed youth aged between 15 and 24 are unemployed for more than 24 months. This reflects the challenging school to work transition driven by skills mismatches and inadequate job opportunities.

ADULT vs YOUTH – DETERMINANTS OF EMPLOYMENT OUTCOMES

Youth unemployment rates typically exceeds those of prime-age adults. In North Macedonia, the youth unemployment rate is 2.1 times higher than the total unemployment rate[3]. The reasons for the higher incidence of unemployment among the youth is driven by the macroeconomic condition of the country (economic cycle, labour force participation, employment institutions, etc.) as well as by the personal and family characteristics of young people (education, marital status, area of residence, financial condition of his/her household, etc.). Additionally, the youth unemployment rate is more sensitive to the economic cycle because young persons are less experienced, less protected, and are usually on a temporary employment contract, which allows the employers to easily fire/hire them. The following three facts weaken the youths’ position at the labour market:

First, employment protection legislation significantly affects young people’s situation in the labour market. North Macedonia has a relatively extensive national labour legislation that regulates labour relations, labour administration, labour inspection, employment security, equality and promotion, employment and work conditions, safety and health at work, maternity protection, employment of vulnerable and indigenous people, etc. Additionally, the country has ratified many international conventions and protocols that refer to the employment legislation. However, young persons–as a particular category–are not covered under any special law. They are only included in the general legislation, meaning that the same measures and principles rule both youth and adult labour market participants.

As a particular category, the youth population was covered within the Operational plan for ALMPs in 2015, where the participation rate of youth in each measure was explicitly presented. Although the share of total expenditure for ALMPs targeting youth increased over the years, it counted for only 0.05% of the GDP in 2019[4]. In 2018, the Government of North Macedonia introduced the Youth Guarantee measure, which guaranteed an opportunity for employment, education or training for each person under the age of 29 within 4 months of registration with the Employment Service Agency. It was piloted only in three (out of 80) municipalities in the country. For the pilots, 1,879[5] young persons were employed and around 13,000 persons received other services like counselling, professional orientation, individual plan preparation, or were included in the active labor market policies without direct employment.

Second, the incidence of temporary employment contracts is higher among youths. This makes them more sensitive to the changes in the economic cycle, because it is easier for employers to fire a worker with a temporary contract compared to a worker that has signed a permanent employment contract. In North Macedonia, temporary employment contracts are more widespread among young persons. According to the ILO’s  statistics, 15.3 per cent of the total employees in North Macedonia have signed a temporary contract, while 34.7 per cent of the young employees aged between 15 and 24 possess employment contract with limited duration[6].

Third, the rules for hiring and firing workers are weaker in less developed countries like North Macedonia. This is confirmed by the Fraser Institute that estimates the indexes of labour market regulation and the rules of firing and hiring regulation within the human freedom index. The estimated index of North Macedonia has a bigger value compared to the index of the EU countries, for example, showing that the this country has ‘freer’ regulation for firing and hiring workers, while in the EU countries, the rules are more rigid and do not allow the employers to fire/hire workers easily.

As an economic research and policy institute, Finance Think remains committed to generating knowledge through research that puts the issue of youth employment on the agenda of policymakers. We support the development of evidence-based national policies and strategies to improve young people’s access to decent jobs and build strong employment institutions to protect and embed security in the workplace.

Finance Think is a Decent Jobs for Youth partner and is committed to generate knowledge to inform youth employment policies in North Macedonia. See the commitment

by Despina Tumanoska, Program coordinator at FINANCE THINK – Economic Research & Policy Institute.

This article is part of the Decent Jobs for Youth Blog Series: Youth Rights & Voices. The Blog Series highlights the impact of the COVID-19 pandemic on young women and men in the world of work and discusses action-oriented policy responses and solutions. If you would like to comment or contribute, please contact decentjobsforyouth@ilo.org.

[1] Source: Eurostat

[2] Source: Eurostat

[3] The ratio is calculated by the author. Since the total unemployment rate in the country in 2019 is 17.3%, the ratio counts for 2.1.

[4] Source: Author’s calculation based on data from the Employment State Agency North Macedonia

[5] Source: Ministry of Labour and Social Policy North Macedonia

[6] Source: International Labor Organization Database