Messing up unemployment numbers

Unemployment in Kosovo is the highest in the region. According to data from the Agency of Statistics, only in 2014 unemployment has risen by 5 percentage points, from 30 to 35 percent. This means that last year alone, the unemployment rate increased to 18 percent, a figure that does not coincide with any other economic statistics. Economic growth of just 1 percent cannot reflect the rise in unemployment to 18 percent.

The Agency of Statistics changed this number in 2014. Last year, the agency received criticism from civil society and opposition parties due to the artificial reduction of unemployment by increasing the number of inactive people. One is considered inactive if s/he is not employed, not looking for work and not ready to start a job. The unemployment survey report for 2013 was published a few days before the 8 June elections last year.

Even the World Bank expressed reservations about the delays in the publication of that report due to the high level of unemployment that resulted from last year's survey.

“Failure to calculate 702.238 Kosovars, equal to an absolute majority (58.3%), who were simply written off from the data, is a major problem. Only four other countries in the world show a similarly high rate of inactivity; these include East Timor (62.1%), Moldova (59.3%), Gaza (58.8%) and Samoa (58.5%)”, writes Lumir Abdixhiku, executive director of Riinvest, on his Facebook profile.

Kosovo’s neighbouring countries have much lower rates of inactivity: Montenegro (50.1%), Serbia (47.5%), Albania (44.9%) and Macedonia (44.8%) – which gives an average of 46.8%.

“If we estimate that Kosovo has a comparable inactive workforce as the other countries in the region – which is the highly likely scenario – then in Kosovo there would be 562.764 inactive citizens versus 639.724 ones – this in turn leads to an unemployment rate of 50.1%, not 35.1%. I guess the first step in solving the problem is to acknowledge its existence ", continues Abdixhiku.

In the Agency’s report for 2014, which was released on Tuesday, there are several aspects that have changed compared with the 2013 report. In 2014, KAS says that the number of active persons was 1.1 percent higher. “From 41.6% of the population that is economically active, 35.3% are unemployed,” said the report on unemployment in 2014. In 2013, unemployment was 30 percent. Expressed in concrete figures, according to official data in 2014 the number of unemployment persons was 176.743. So, in 2014 the number of unemployed individuals has increased by 31.914 persons, whereas in 2013 that number equalled to 144.829 persons.

The increase of unemployment numbers, according to KAS, is caused by several factors. The first is the loss of jobs. Data shows that in 2014 the number of employed persons was 323.508 or only 26.9 percent of persons that are able to work. In 2013, the number of employed people was 338.364 or 28.4 percent of working age persons. This shows that in 2014, 14.856 people who were previously employed have lost their job.

"The employment rate [suffered] an increase of about 3% from 2012 to 2013 and a decrease of 1.5% from 2013 to 2014", states the KAS report.

Another factor that has contributed to the growth of unemployment was the disappointment of persons from the past years. In 2014 it was estimated that 58.4 percent of the working age population was not economically active. This means that they were not employed and were not looking for work during the past four weeks, or were not available to start work within two weeks. In 2013, the level of inactive population was 59.5 percent.

Aside the large number of women and children, inactive population includes also a group of people who are able to work, but that the same time are discouraged due to their past inability to find a job. “Out of 58.4% of the working age population that is inactive, 18.2% (128,400 people) did not look for jobs, because they thought there were no jobs. Discouraged workers make up 10.7% of the working age population, with similar levels for women and men”, is reported by KAS for 2014. The number of discouraged persons has decreased by 15,300. This number represents those who were considered discouraged (inactive) in 2013 and that have started to look again for work in 2014, thus moving into the unemployed group.

Agron Demi, director of GAP Institute, says that the current report is more realistic than the previous ones, even though there are still some issues. “The 35.3% unemployment rate is not realistic. Moreover, if one reads the whole KAS report, one can easily understand how the methodology does not allow to properly calculate unemployment in Kosovo,” said Demi. Demi considers the number of people who do not want to work, or inactive population as referred to in the report, as disturbing.

Demi adds that the level of employment is also an indicator of the severe situation of the private sector. “Given that employed population amounts to about 323 thousand a people, and that the public sector employs about 100 thousand persons, one can deduce that having 1/3 of the employment covered by the public sector is a proof of the desperate situation of the private sector ", he said. According to him, a quarter of workers have unstable jobs.

“Even KAS admits that not all of these 323 thousand employees are regularly (year-round) employed. Over 81 thousand of these employees are thought to have an unstable employment, employment without a contract, periodic/intermittent employment, and/or income that does not cover their monthly expenses," he added.

The KAS report on the labour force survey shows significant gender-based differences among employees. Only 1 in 5 women of working age are active in the labour market, or 21.4%. While only 12.5 percent of women of working age are employed. Most women said they were inactive due to family obligations.

Merita Berisha
Pristina, July 2015