Labour Market Labour Market Situation in Situation in

AlbaniaAlbania

May 2005May 2005

• The passage of Albania on the market economy The passage of Albania on the market economy at the beginning of 1990, experienced a at the beginning of 1990, experienced a substantial decline in labour force participation substantial decline in labour force participation rate in the new labour market.rate in the new labour market.

• In 1998, after the pyramid scheme crisis, the In 1998, after the pyramid scheme crisis, the male participation rate was 85 % compared to male participation rate was 85 % compared to 55 55 %% for women. for women.

• In 2000, less than two thirds of the working age In 2000, less than two thirds of the working age population was active in the labour market. population was active in the labour market. During 2005, this indicator continueDuring 2005, this indicator continuess to be in to be in decline.decline.

• During 2000-2005, the female participation rate During 2000-2005, the female participation rate has declined with less than 50 %has declined with less than 50 %..

Demographic and labour force indicatorsDemographic and labour force indicators ((in thousandin thousands)s)::

YearsYears

19921992 20002000 20012001 20022002 20032003 20042004

Total populationTotal population 31903190 34013401 30693069 30693069 31033103 31103110

FemaleFemale 16001600 17241724 15391539 15391539 15561556 15601560

Working ageWorking age populationpopulation 18491849 19391939 17671767 17671767 18131813 18151815

FemaleFemale 937937 968968 864864 864864 888888 889889

Total labour forceTotal labour force 14891489 12831283 11011101 10921092 10891089 1065.1065.

FemaleFemale 707707 529529 427427 424424 424424 425425

Labour force Labour force participation rateparticipation rate 80.580.5 66.266.2 62.362.3 61.861.8 60.160.1 5959

FemaleFemale 75.475.4 5555 4949 4949 47.747.7 47.547.5

Labour force partcipation rate may be Labour force partcipation rate may be explained by different causesexplained by different causes::

• A considerable number of people engaged in A considerable number of people engaged in the the iinformal sector. nformal sector.

• Others are discouragedOthers are discouraged, , for a long time for a long time without job and out of the labour market. without job and out of the labour market.

• A lot of Albanian people, mostly young men A lot of Albanian people, mostly young men (600(600 –– 800800 thousand thousand) are estimated as ) are estimated as working abroad. working abroad.

• This decline is explaned also by the large This decline is explaned also by the large withdrawals of women from the labour withdrawals of women from the labour market.market.

EmploymentEmployment  • Restructuring of the economy led to a fall Restructuring of the economy led to a fall

in employment in general and in employment in general and substantially in a fall of the employment substantially in a fall of the employment in the public sector.in the public sector.

  • Actually of the total number of the Actually of the total number of the

employed in the private sector is about employed in the private sector is about 81 % compared with 19 % of the 81 % compared with 19 % of the employed in the public sector.employed in the public sector.

Employment by sectors (public and Employment by sectors (public and private)private)

 

Year 1992 2000 2001 2002 2004

Total number of employed people

1,094,821

1,068,190 920,569 920,144 931,068

a) Public Sector- 614,607 191,166 188,965 186,065 176,731

-Budgetary - 122,298 120,114 118,162 130,150

-Non Budgetary - 68,868 68,851 67,903 46,581

b)Private SectorNon agriculture

60,000 116,024 205,267 207,742 213,000

c)Agriculture Private Sector

420,214 761,000 526,337 526,337 542,337

Source: INSTAT, MoLSA

Public sector Public sector • During 2002 were employed During 2002 were employed 186 thousand people compared 186 thousand people compared

with 850 thousand people that were employed in 1991. with 850 thousand people that were employed in 1991.

• In 2005, in the public sector 176 thousand people are In 2005, in the public sector 176 thousand people are employedemployed.. This decline, was mostly due to mass privatization of This decline, was mostly due to mass privatization of state –owned enterprises, of the bankruptcy and closing of a lot state –owned enterprises, of the bankruptcy and closing of a lot of activities that were not able to provide benefits.of activities that were not able to provide benefits.

• The service sector experienced a slightly higher number of The service sector experienced a slightly higher number of employments.employments.

• The increase of employment concerns only men, since the The increase of employment concerns only men, since the number of employed women remained almost at a constant number of employed women remained almost at a constant level.level.

Private sectorPrivate sector• In 2002 about 80 % of the total number of the employed In 2002 about 80 % of the total number of the employed

persons, was provided by the private sector. persons, was provided by the private sector.

• The rapid privatization of the agricultural sector, affected the The rapid privatization of the agricultural sector, affected the increase of the employment level in this sector.increase of the employment level in this sector.

• About 57.7 % of the total number of employees in both private About 57.7 % of the total number of employees in both private and public sector, are employed in agriculture private sector. and public sector, are employed in agriculture private sector.

• The number of the employed in the agriculture private sector The number of the employed in the agriculture private sector continues to be very high.continues to be very high.

  

Speaking on percentage, the labour force in Albania Speaking on percentage, the labour force in Albania isis

employed in the following sectors:employed in the following sectors:

• In agriculture, forestry and fishery are employed In agriculture, forestry and fishery are employed 57.7%, 57.7%,

• In construction about 6 %,In construction about 6 %,• In manufacturing and mining industry 5.8 %,In manufacturing and mining industry 5.8 %,• In trade, hotel, restaurants about 10 %, In trade, hotel, restaurants about 10 %, • In education 5.3%, In education 5.3%, • In health 3% etc.In health 3% etc.

Illegal EmploymentIllegal Employment The level of the informality or black market in

Albania is high. This problem makes unreliable the indicators of the employment and unemployment rate.

 

Illegal workers and informal Illegal workers and informal enterprisesenterprises Year % informal worker % informal enterprises

  All sectors Construction Sector

All sectors Construction Sector

2000 26.9 15.4 32.2 4.6

2001 21.9 23.4 27.5 7.6

2002 19.1 19.6 28 7.9

2003 20.1 22.3 18.3 7

2004 22.6 22.4 20.9 21.6

Source: MoLSA

From the surveys results:• The workers that work in black market go from 30 % in 2000 to 20% during 2004.

• In construction this indicator is higher.

• There is a high number of informal enterprises not registered in fiscal administration.

• During 2000-2004, the number of informal enterprises that carry out activities in the

construction sector go from 7-15 %.• The same situation results also in some service sectors like bars and restaurants etc.

Unemployment Unemployment • The unemployment rate relates to registered The unemployment rate relates to registered

unemployed in the Offices of the National unemployed in the Offices of the National Employment Service.Employment Service.

• Still now there are not complete and standardized Still now there are not complete and standardized surveys on labour force, unemployment rate and surveys on labour force, unemployment rate and labour market.labour market.

• The high level of informal sector, migration, the high The high level of informal sector, migration, the high rate of hidden unemployment in agriculture sector, rate of hidden unemployment in agriculture sector, and the high number of unemployed that are not and the high number of unemployed that are not registered in the public employment service, make registered in the public employment service, make difficult the real evaluation of unemployment and difficult the real evaluation of unemployment and doesn’t show the real picture of labour market.doesn’t show the real picture of labour market.

• By the end of February 2005, the unemployment By the end of February 2005, the unemployment rate is 14.4 % compared with 16 % in 2002 and 26 rate is 14.4 % compared with 16 % in 2002 and 26 % in 1992.% in 1992.

Number of the unemployed registered by Number of the unemployed registered by sex, status and education. sex, status and education.

Year   1993 2000 2001 2002 2004

Total registered unemployed 301,289 215,085 180,513 172,385 157,008

Female-  

141,001 101,919 85,420 81,326 75,150

Total unemployed with unemployment benefits

106,783 21,894 14,322 11,184 10,467

Total long-term unemployed  

194,506 192,724 165,656 160,466 103,563

Unemployed registered :-With secondary school education.

156,892 104,604 89,309 87,297 84,100

-With high school education 

136,685 104,615 87,097 82,267 70,165

-With university education 

7,712 5,866 4,107 2,821 2,743

Source :INSTAT, MoLSASource :INSTAT, MoLSA

Analyzing the data results that :Analyzing the data results that :  

• Women continue to constitute about 49.9 % of the total Women continue to constitute about 49.9 % of the total registered unemployed.registered unemployed.

• Long-term unemployment constitute about 66 % of the Long-term unemployment constitute about 66 % of the total registered unemployed.total registered unemployed.

• The majority of the long-term unemployment is made by The majority of the long-term unemployment is made by men, while women occupied only 47.6 % of the total men, while women occupied only 47.6 % of the total number. number.

• Unemployed head of families are about 67 % of the total Unemployed head of families are about 67 % of the total registered unemployment.registered unemployment.

Level of education of unemployed:Level of education of unemployed:

• 53 % of the total number of unemployed jobseekers is 53 % of the total number of unemployed jobseekers is constituted by people with secondary school education.constituted by people with secondary school education.

• 44.5 % of the total number of unemployed jobseekers is 44.5 % of the total number of unemployed jobseekers is constituted by people with high school education.constituted by people with high school education.

• 55 % of the total number of long-term unemployed 55 % of the total number of long-term unemployed jobseekers have secondary school education.jobseekers have secondary school education.

Training and retraining of the new jobseekers, according Training and retraining of the new jobseekers, according the age and the gender constitute the most important task the age and the gender constitute the most important task of VET system.of VET system.

Institutions and LegislationInstitutions and Legislation

InstitutionsInstitutions • National Employment Service (NES) has 12 Regional Employment National Employment Service (NES) has 12 Regional Employment

Offices and 24 Local Employment Offices.Offices and 24 Local Employment Offices.

• NES provide services such as: registration of jobseekers, cash NES provide services such as: registration of jobseekers, cash payments, advice and counseling of jobseekers, mediation, collection payments, advice and counseling of jobseekers, mediation, collection of informationof information on the labour on the labour market and implementation of four market and implementation of four programsprograms:: Employment promotionEmployment promotion for unemployed jobseekers. for unemployed jobseekers. EmploymentEmployment promotion f promotion for unemployed jobseekersor unemployed jobseekers through through

training training in the job place. in the job place. Employment promotionEmployment promotion t through institutional formation. hrough institutional formation. Employment promotionEmployment promotion f for unemployed women.or unemployed women.

Obligations of legislationObligations of legislation• The Law on Employment Promotion is approved in 1995 and has The Law on Employment Promotion is approved in 1995 and has

been amended at 1999 and 2002been amended at 1999 and 2002. . 

• The employers are obliged to declaire (to report) the job vacancies The employers are obliged to declaire (to report) the job vacancies within within 7 days from the7 days from theirir opening opening..

• The employers every three months are obliged to report to the The employers every three months are obliged to report to the employment offices the list of employees/workers, that have been employment offices the list of employees/workers, that have been employed by the firmemployed by the firm..

• The firms for every 24 employees/workers, have to employ a person The firms for every 24 employees/workers, have to employ a person with disabilitieswith disabilities..

Barriers in Employment ServicesBarriers in Employment Services

• High level of informal labor, influences the level of interest of High level of informal labor, influences the level of interest of job seekers.job seekers.

• High level of taxes payments in the social insurance scheme. (At High level of taxes payments in the social insurance scheme. (At 2002 the level of taxes has decreased from 45.9% to 41.9 %). The 2002 the level of taxes has decreased from 45.9% to 41.9 %). The taxes are still high.taxes are still high.

• The ratio between passive and active employment policies and The ratio between passive and active employment policies and programs should be improved in the future.programs should be improved in the future.

• The lack of coordination in the implementation of strategies The lack of coordination in the implementation of strategies that encourage the integration of groups in need such as: that encourage the integration of groups in need such as: women, young people, roma community etc.women, young people, roma community etc.

• Passivity and expectation of some persons or groups in need, to Passivity and expectation of some persons or groups in need, to profit from social support programs.profit from social support programs.

• Low educational level (58 % with eight-years of school education) Low educational level (58 % with eight-years of school education) of the job seekers has brought difficulties in their employment. of the job seekers has brought difficulties in their employment.

• The lack of specialized institutions within the field of vocational The lack of specialized institutions within the field of vocational training, which deal with compilation of standards, development training, which deal with compilation of standards, development of curricula, the procedures of licensing and accreditation.of curricula, the procedures of licensing and accreditation.

• Lack of continuity of education and vocational training.Lack of continuity of education and vocational training.

Policies to face the barriers and to Policies to face the barriers and to improve the Labour Market improve the Labour Market

Performance.Performance.• The “National Strategy on Employment and Vocational The “National Strategy on Employment and Vocational

Training” defines the priorities for the development of Training” defines the priorities for the development of employment, vocational training and modernization of employment, vocational training and modernization of employment services. employment services.

• During 2004, for the first time , with the support of CARDS During 2004, for the first time , with the support of CARDS project is done the study project is done the study ““Demanded skills in the Labour Demanded skills in the Labour Market” in 621 enterprises. Through this study has been Market” in 621 enterprises. Through this study has been realised:realised:

• Qualified evaluation of the immediate needs for skills. Qualified evaluation of the immediate needs for skills. • Evaluation of the local offer in order to guarantee Evaluation of the local offer in order to guarantee

training in the public and private sector, identification of training in the public and private sector, identification of the profiles and professions.the profiles and professions.

• Were defined the most demanded professions-Were defined the most demanded professions-occupations of the labour marketoccupations of the labour market..

• Support of four VET centers in the biggest regions of Support of four VET centers in the biggest regions of Albania..Albania..

Improvement of public vocational Improvement of public vocational education training system through:education training system through:

• Geographical distribution of vocational training Geographical distribution of vocational training network, in the area with social problems.network, in the area with social problems.

• Enforcement of the capacities in the existing Enforcement of the capacities in the existing Vocational Training Center, increasing of their Vocational Training Center, increasing of their autonomy and improvement of the certification autonomy and improvement of the certification system.system.

• Modernization of curricula and establishment of a Modernization of curricula and establishment of a system of standards, certification, evaluation and system of standards, certification, evaluation and assessment. assessment.

• Elaboration of the Occupations list and standards Elaboration of the Occupations list and standards at national level.at national level.

Development of employment and Development of employment and vocational trainingvocational training

Year 1999 2000 2001 2002 2003 2004 2005

Employment Promotion Fund (in million of leke) Number of the employed with this fund

300   

7621

550  

11773

400  

5010

310  

4030

150  

2100

200  

3400

100

Vocational Training Fund (in million of leke)

Number of people trained with this fund

30  

4780

33  

7277

38  

7252

69  

8558

70  

8097

79  

8500

71

Investment, (in million of leke):a. Employment Offices b. Public Vocational Training Centers

   

109 -

 

110 -

 

155 -

 

37 

49

 

14 

58

 

1 

85

Source:MoLSA

For vocational trainingFor vocational training

• Actually, funds on Vocational Training System functioning Actually, funds on Vocational Training System functioning are doubled compared with funds of 2000.are doubled compared with funds of 2000.

• Investments are focused on establishing new Vocational Investments are focused on establishing new Vocational Training Centers and on modernization of existing Public Training Centers and on modernization of existing Public Vocational Training Centers.  Vocational Training Centers.  

• The number of people trained in public vocational training The number of people trained in public vocational training centers has been doubled compared with 2000.centers has been doubled compared with 2000.

• Another positive development, at 2004, have been the Another positive development, at 2004, have been the investments for the construction of two new Vocational investments for the construction of two new Vocational Training Centers in the regions with a high rate of Training Centers in the regions with a high rate of unemployment. unemployment.

• Vocational Training intend the integration and Vocational Training intend the integration and reintegration in the labour market of: orphans , roms, reintegration in the labour market of: orphans , roms, trafficked women, people with disabilities etc. and offering trafficked women, people with disabilities etc. and offering services to the employed people that need training in services to the employed people that need training in order to be more appropriate with the change of the new order to be more appropriate with the change of the new labour market.labour market.

•   For the above mentioned categories, vocational training is For the above mentioned categories, vocational training is free.free.

For promotion of employment For promotion of employment programsprograms

• The fund for employment promotion programs for 2004 was The fund for employment promotion programs for 2004 was 200 millions of leke and are implemented 139 projects. 200 millions of leke and are implemented 139 projects.

• The medium duration of the employment is about 7 month for The medium duration of the employment is about 7 month for each person. The women constitute about 60 % of the total each person. The women constitute about 60 % of the total number of employed in all projects.number of employed in all projects.

• The medium cost for each new job created is 1030 USD. The medium cost for each new job created is 1030 USD.

• For the first time the priorities of employment have been For the first time the priorities of employment have been women jobseekers, trafficked women, women with disabilities, women jobseekers, trafficked women, women with disabilities, women divorced, roma women etc. women divorced, roma women etc.

• For the future MOLSA is working on: For the future MOLSA is working on:  Improving the legislation and simplify the administrative Improving the legislation and simplify the administrative

procedures. procedures. Increasing the transparency through public information and Increasing the transparency through public information and

increasing the level of monitoring for the projects.increasing the level of monitoring for the projects. Strengthening the relation with the business, chamber of Strengthening the relation with the business, chamber of

commerce, social partners and with other actors of the labour commerce, social partners and with other actors of the labour market.market.

  

Modernization of employment Modernization of employment services.services.

• Mediation is considered as one of the most important Mediation is considered as one of the most important route for increasing employment. route for increasing employment.

• During 2004, Employment Offices, using mediations, During 2004, Employment Offices, using mediations, employed twice the number of the persons employed employed twice the number of the persons employed during 2003.during 2003.

• Mediations had as primary objective the employment of Mediations had as primary objective the employment of people sustained from the programs of unemployment people sustained from the programs of unemployment benefits and social assistance. benefits and social assistance.

• During 2001-2005 National Employment Service of During 2001-2005 National Employment Service of Albania has closer worked with the ANPE of France , to Albania has closer worked with the ANPE of France , to improve the quality of services, in four biggest regions improve the quality of services, in four biggest regions of Albania. of Albania.

• From 2004 we are working with Swedish National From 2004 we are working with Swedish National Labour Market Board, to raise the efficiency of Labour Market Board, to raise the efficiency of employment services and to create the labor market employment services and to create the labor market information system.information system.  

The evaluation of the employment policies as well as The evaluation of the employment policies as well as identification of the proper recommendations have been done identification of the proper recommendations have been done within the framework of the Stability Pact in cooperation with within the framework of the Stability Pact in cooperation with ILO and Council of Europe. These recommendations are included ILO and Council of Europe. These recommendations are included in programs likein programs like: :

  

• The amendment of the Law for Promoting of Employment and of The amendment of the Law for Promoting of Employment and of the Law “About the Labour Inspectorate”.the Law “About the Labour Inspectorate”.

• Supporting the Private Employment Agencies, cooperating with Supporting the Private Employment Agencies, cooperating with the public employment offices and exchange information related the public employment offices and exchange information related to the job vacancies in the marketto the job vacancies in the market..

• The identification of the responsibilities of MoLSA and MoE for The identification of the responsibilities of MoLSA and MoE for the technical professional education, for providing short and the technical professional education, for providing short and medium terms coursesmedium terms courses..

• The geographical expansion of the vocational training network The geographical expansion of the vocational training network especially in the areas of high unemployment rate.especially in the areas of high unemployment rate.

• The increase of the capacities of existing centers of vocational The increase of the capacities of existing centers of vocational training, curricula modernization, compilation of occupational list training, curricula modernization, compilation of occupational list and their standards.and their standards.

  

• Integration of macroeconomic policies with employment Integration of macroeconomic policies with employment and social protection. and social protection.

• Investments on human resources development, to cope Investments on human resources development, to cope the discrepancies between the capacities on the labor the discrepancies between the capacities on the labor market and lacks in the national system of education and market and lacks in the national system of education and vocational training. vocational training.

• Activation of labor market policies. Changing form Activation of labor market policies. Changing form passive labor market policies in active ones through passive labor market policies in active ones through training and retraining of contingents.training and retraining of contingents.

• Improving the quality of employment services according Improving the quality of employment services according to the models and standards, training of the to the models and standards, training of the employment’s offices staff.employment’s offices staff.

• Strengthening social dialogue, improving the capacities Strengthening social dialogue, improving the capacities of partners in collective agreements, especially about the of partners in collective agreements, especially about the salaries and working conditions. salaries and working conditions.

• Improvements on the information systemImprovements on the information system production and production and dissemination of official statistics, establishing of a dissemination of official statistics, establishing of a complete database for Labour Market issues. complete database for Labour Market issues.