Labour market situation in the country

According to the available data, employment rate reached 41.54%, marking the highest level since 2006. BiH has one of the lowest female employment and labour force participation rates in the Balkans, approximately 42.17% of women aged 15 and over being active in the labour force. The working-age population 15-64 was 2.257 million in 2024, slightly down from 2.277 million in 2023. Overall unemployment rate in Q3 2024 decreased to 12.2% from 13.3% in Q2 2024. Youth (under 25) unemployment remained high, with rates around 31.4% in September 2024. The share of youth not in employment, education or training (NEET) reached 17.6 percent the same year (ILO, 2024). The share of informal employment in total employment is relatively high and stands at 20 percent (ILO, 2024). In addition, emigration has become a pressing concern, depriving BiH of the young and skilled workers on which the development of its labour market will depend. The country has one of the lowest female employment rates in the Balkans (stood at 35% in 2022, significantly lower than the male employment rate of 55% (ILO, 2024). The share of informal employment in total employment is relatively high and stands at 20 percent (ILO, 2024).

In 2019, BiH had approximately 287,900 young people aged 15-24, with most holding medium-level education (upper secondary), and only a small portion having completed tertiary education (Study of Youth Employment in BiH, 2019). Youth labour force participation was 35.4%, higher among men (39.8%) than women (29.9%), and participation strongly correlated with education level, ranging from 59.6% for highly educated youth to just 6.3% for those with low education.

The youth employment rate was low at 23.4%, though it had improved from previous years, while the youth unemployment rate remained high at 33.8%, despite a significant decline from 45.8% in 2017. Young women faced particularly low employment rates and higher unemployment rates, partly due to traditional gender expectations and a lack of public childcare (Abaz and Hadzic, 2020).

Main concepts

Youth unemployment in BiH consistently remains among the highest in Europe, estimated around 27–35%, compared with lower regional averages. This chronic lack of opportunities drives a steady outflow of young, skilled individuals seeking better prospects abroad.

There is a pronounced gap between educational output and labour market demands. Vocational education follows outdated curricula and lacks practical, work-based learning, leaving graduates unprepared for modern roles. BiH’s fragmented post-war governance has led to institutional inefficiencies, lacking flexible contractual arrangements, limited mobility, and limited labour market reform, factors that sustain both informality and structural unemployment.

A growing share of youth work in the platform economy (e.g., delivery, ride-share) under precarious conditions. Classified as independent contractors, these workers typically lack access to unemployment benefits, sick leave, occupational safety, and guaranteed minimum income.

Policy responses have been limited, youth-focused budgets are minimal compared to EU countries, and many local governments lack active youth strategies or dedicated officers (Study of Youth Employment in BiH, 2019). Research suggests that expanding training, internships, and active labour market programs can significantly improve youth employment outcomes (Pilav-Velic, 2019; Okicic, 2020).

The UNDP report on the Analysis of Barriers to Entrepreneurship Development in BiH highlights that the entrepreneurial culture in BiH is generally perceived as poor. Specifically, 21.4% of respondents rated it as unsatisfactory, while an additional 41.1% gave it low scores. Furthermore, 73.2% of surveyed entrepreneurs reported having no practice of holding meetings with ministries or government bodies, reflecting a lack of supportive business culture. The report also suggests that due to negative experiences, there is little interest in building future cooperation with chambers of commerce or other potentially helpful institutions.