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EACEA National Policies Platform: Youthwiki
Serbia

Serbia

3. Employment & Entrepreneurship

3.1 General context

Labour market situation in the country 

As stated in the research Youth and Entrepreneurship in the Republic of Serbia, in recent years small and medium enterprises and entrepreneurs have become carriers of economic growth in Serbia. In general, Serbian economy is showing certain advancement on the world lists of competitiveness, innovation, business development and the like. Thus, Serbia has advanced by four places on the World Bank's 2020 list - "Doing Business List” and is now ranked 44thout of 190 countries.

Nevertheless, the economy of the Republic of Serbia is still characterized by a low level of innovation. According to innovation performance, Serbia is classified in the group of countries of moderate innovators and it lags behind the EU average (0.504) and most European countries. In the latest report, the Global Innovation Index for 2019, Serbia fell by two places and is on the 57th place out of 129 countries (Ibidem).

When it comes to the unemployment rate, it has fallen in the past years from 17.7% to 10.4%. The total number of employees in 2019 was 2,173,135, which is an increase of 2% compared to 2018. There were 377,439 entrepreneurs and employees in legal entities, as well as self-employed persons, which is an increase of 3.6% compared to the previous year (Registered Employment, annual average 2019 in Youth and Entrepreneurship in the Republic of Serbia).

According to the data provided by the National Bank of Serbia (Narodna banka Srbije) in the document Macroeconomic Developments of Serbia, the unemployment rate declined both in quartal 4 of 2018 and for the whole year. According to the annual labour force surveys, unemployment rates for the period 2008-2019 are as follows

Serbia

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Unemployment rate in %

13.6

16.1

19.2

23.0

23.9

22.1

19.2

17.7

15.3

13.5

12.7

10.4

Source: Macroeconomic Developments of Serbia 

Although general unemployment has fallen, it is still very high among young people (at the level of one fifth). According to the Labour Force Survey 2018, some improvements when it comes to young people, rates of activity, employment, unemployment and inactivity in 2018 in relation to 2017 were:

Young population aged 15-24

2018

(%)

2017

(%)

Changes in relation to the previous year

(%)

Rate of unemployment

29,7

31,9

‐2,2

Rate of employment

21,1

20,9

0,2

Rate of inactivity

70,0

69,4

0,6

Rate of activity

30,0

30,6

‐0,6

Source: Labour Force Survey, 2018 

According to data on youth unemployment from September 2019 presented in Youth and Entrepreneurship in the Republic of Serbia, the number of unemployed youth in Serbia is 102,895, which represents 20.5% of the total number of unemployed. Practically, one fifth of the total unemployed in the Republic of Serbia are young people aged 15 to 30.

Figures in the table below show that even if the position of young people in the labour market has been improved compared to the previous period, young people in Serbia still face significant barriers in the labour market.  

3.1.1

Source: National Employment Action Plan for 2020 in Youth and Entrepreneurship in the Republic of Serbia

When it comes to self-employment, young people in Serbia rarely choose it their first choice.  In this respect, young people in Serbia do not differ much from their peers in the EU. According to available research by the International Labour Organization, there are different reasons why young people choose self-employment:

3.1.2

Source: Transition of young women and men in the labor market of the Republic of Serbia in Youth and Entrepreneurship in the Republic of Serbia

As it can be seen young people opt for self-employment only after a certain period of inability to find a paid job. In terms of business challenges, young entrepreneurs believe that by far the biggest challenge is the issue of insufficient financial resources, followed by competition in the market and legal regulations, however with a significantly lower frequency of responses.

The same research (Transition of young women and men in the labour market of the Republic of Serbia in Youth and Entrepreneurship in the Republic of Serbia),showed that most young entrepreneurs received money to start their own business from family or friends (51,4%) and only 1,2% took a loan from a bank of from a state institution (4,5%).

The survey done in 2016 by the Serbian Chamber of Commerce, the Youth Commerce Forum and the Serbian Development Agency (Youth and Entrepreneurship in the Republic of Serbia) focused on the needs of potential and existing young entrepreneurs in Serbia. According to this survey, young entrepreneurs consider placement and the market to be the biggest business problems (30%) collection of receivables (22%), the attitude that state institutions do not provide real support (20%), and the fear of being punished by the Tax Administration for regulations to which they are not referred (19%).

Main concepts 

The current employment policy is defined by the Employment Act, 2014 (Zakon o radu, 2014).  Additionally, there are several strategies and accompanying action plans and programmes that are related to the youth employment and entrepreneurship. Most important are:

  • The National Youth Strategy 2015-2025 - aims to encourage job creation, self-employment, and entrepreneurship among young people by implementing its Action Plans. 
  • The National Employment Strategy 2011-2020 - aims to improve job matching services and training and provided subsidies to disadvantaged people and self-employment. It focuses on mediation in employment, provision of guidance and counselling service on career planning, providing subsidies for the employment of unemployed persons in the category of young people under 30 years of age, support to self-employment, further education and training, providing incentives for hiring of unemployment benefit recipients.
  • The Strategy on Science and Technological Development of the Republic of Serbia 2016-2020 with the goals to strengthen the link between science, industry and society to encourage innovation, to engage young researchers in scientific projects, etc.
  • The Strategy for Education Development in Serbia 2020 with one of the priorities to introduce youth entrepreneurship in education and training programmes, etc.

Detailed review of abovementioned documents can be found in the study “Analysis of the Regulatory Framework for Entrepreneurs Focusing on the Three Most Potential Sectors, Proposing Simplified Procedures for Young Entrepreneurs” of the Ministry of Youth and Sports.