3.1 General context
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Labour market situation in the country
Youth employment
The activity rate of Croatian youth is among the lowest in Europe, and in 2022, it was 44.6%for young people aged 15-29. Based on research findings from a nationally representative sample of 2 000 young people (Ilišin and Spajić-Vrkaš, 2015), out of 508 surveyed young employees, the majority (38.0%) were employed in small private enterprises or crafts. Employment in large private enterprises (26.5%) was almost equal to working in the public sector (23.7%). Employment in family businesses, private companies, or crafts is at modest levels, representing less than tenth of the youth population combined. Regarding the type of contracts signed by young people, half of them are employed on indefinite full-time contracts (49.8%), and 41.7% have definite period full-time contracts. A small portion of them holds positions with for certain (4.6%) or indefinite (2.8%) reduced working hours, i.e. part-time jobs. The average number of working hours indicates that nearly half of young people (46.9%) work standard hours (40 hours a week). One-third of them (33.5%) work above the average, up to 50 hours a week, while those working more than 50 hours constitute 9.1%. Additionally, 11.4% of youth work less than the average. The earnings of young people are largely below the national average. Specifically, 14.2% receive monthly wages below HRK 2 500, 28.9% earn between HRK 2 501 and 3 500, 21.8% receive HRK 3 501-4 500, 17.1% earn HRK 4 501-5 400, and only 18.1% have wages around the national average.
Youth unemployment
At the time of writing, Croatia in in the 10th place when countires in Europe are rated by unemployment rate. This enduring social challenge is amplified by precarious work and increasing numbers of young people choosing long-term emigration. The overall unemployment rate for young people aged 15-29 in 2022 was 13.7%. Breaking down the figures into age subgroups, the rates were 35.2% for those aged 15-19, 14.9% for those aged 20-24, 10.2% for those aged 25-29, and 12.1% in the 20-29 subgroup.12.1%. 22.4% of young people (aged 15 to 29) have low education levels (less than primary, primary, and lower secondary education), while 13.5% have attended upper secondary education (upper secondary and post-secondary non-tertiary education). In 2022, the percentage of long-term unemployed young people aged 15-29 was 4.0%, a significant decrease from 15.15% in 2015. The EU average for 2022 was 2.8%. The share of youth outside the education system, training, and the labour market (NEET) is also relatively high, and in 2022, it was 13.3% for the 15-29 age group.
Ilišin and Spajić-Vrkaš (2015) found that within the unemployed group, 62.9% of young people are supported by their parents during unemployment, 38.4% occasionally engage in various jobs, 12.6% are supported by their employed spouse, 10.5% receive cash benefits from the Croatian Employment Service, 1.8% receive assistance from humanitarian organisations, and 0.8% have another source of unemployment support.
Main concepts
Active labour market measures to assist unemployed individuals in returning to work include job placement services, benefit administration, and labour market programmes such as training and job creation. (Source: OECD)
Career guidance refers to services and activities designed to assist individuals, of any age and at any point throughout their lives, in making educational, training, and occupational choices and managing their career. (Source: OECD)
The employment rate represents persons in employment as a percentage of the economically active population. (Source: Eurostat, EU-LFS)
The International Labour Organization (ILO) defines unemployed persons as individuals who:
- are without work
- are available to start work within the next two weeks, and
- have actively sought employment at some time during the previous four weeks
The unemployment rate is the percentage of the unemployed people in the labour force (total employed and unemployed). (Source: Eurostat, EU-LFS)
Long-term unemployed persons are persons who have been unemployed for a year or longer. Long-term unemployment shares indicate the proportion of long-term unemployed individuals within the total unemployed population in the same age group. However, in this report, young people are categorised as long-term unemployed after being unemployed for six months or longer. (Source: Eurostat, EU-LFS)
Self-employed individuals are those engaged in their own business, professional practice, or farming to make a profit. They may work on their own or have at least one employee. (Source: Eurostat, EU-LFS)
Skills forecasting measures at the national level assess the labour market friction between the demand for and supply of skilled labour within defined education groups in the upcoming period, typically the next five years.