What is the real cause of the decline in unemployment: brain drain or economic growth?

Serbian Prime Minister Ana Brnabic wants to disprove the fact that unemployment is falling because people are leaving the country. Many economists, however, refute her claim.

“The current unemployment rate is 10.3%,” Brnabic said at the presentation of the Council of Foreign Investors’ White Book, adding that she expects the third-quarter figures to show single-digit unemployment.

She also responded to those economists who said that the decline in unemployment as a consequence of the Serbian citizens leaving for abroad to work, adding that unemployment has not decreased due to emigration.

“I want to refute these critics who say that unemployment is decreasing because people are leaving the country; employment is increasing and it currently stands at 49.2% while before it was 41.8%, and this is the reason for the fall in unemployment,” the PM said.

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Experts do not dispute the fact that unemployment has been reduced in part by job creation and economic growth, but say that the main cause of the fall in unemployment is actually the working-age leaving Serbia to work abroad.

A professor of the Faculty of Economics in Belgrade, Danica Popovic says that “the data show that we are improving, but the statistical reduction in unemployment is influenced by the number of people emigrating from Serbia, and also by the methodology that has changed”.

“Another factor to consider when it comes to statistics collated by the National Employment Office is that people who have refused a job offer are deleted from the Office’s register. In addition, unemployed people who did not show up at regular consultations are also removed from the register,” says economist Mijat Lakicevic.

Lakicevic also says that there are indications, however, that the number of employees in Serbia has increased, but agrees that work-able citizens leaving the country is one of the factors that has the effect of the declining unemployment.

The new research methodology, he says, changes things. “According to the old methodology, only long-term job contracts were taken into account; now other types of job contracts are included in the statistics,” says Lakicevic.

These are temporary jobs and jobs for a limited amount of time, then people who are hired via youth cooperatives, seasonal workers, etc. “All you need to do (to be statistically relevant) is to work a day for 20 minutes and you are immediately registered as an employed person, at least from the statistical point of view,” says Danica Popovic.

Migration expert Vladimir Grecic says that, according to OECD data, about 41,000 people left Serbia on average every year in the decade from 2007 to 2016.

“The figure for 2017 is 48,000 and these are just people who left for the OECD countries. Not to mention Russia, Arab countries, etc. So, in these 11 years there were about 500,000 people who have left the country,” said Grecic.

According to the Eurostat data, in 2017, there were 7,040,272 people living in Serbia. A year later, that number dropped to 7,001,444, while according to data for 2019, Serbia has a population of 6,963,764.

(Bizlife, 13.11.2019)

https://www.bizlife.rs/posao/sta-se-krije-iza-pada-nezaposlenosti-odlasci-ili-privredni-rast/

 

 

 

This post is also available in: Italiano

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