In-depth | Economy

Jobless in the Pandemic

By - 15.06.2020

Rising unemployment and the agency dealing with it.

On one of the small roads off Bill Clinton Boulevard in Prishtina, there is the building of a little-known, yet important agency that during the pandemic has become one of the most sought-after institutions.

Muhamet Klinaku jokes that the public agency where he works has never gotten this much publicity before, and that nothing could have done a better job to put them in the news as the COVID-19 virus has over the past several weeks.

The Director of the Labor Market branch at Kosovo’s Employment Agency explains what he means. He says that promotion is important to the agency because there is a need to expand the reach of the institution. Few people know what the agency offers and how it is meant to serve them.

“We wouldn’t have got this much promotion even by paying lots of money,” Klinaku says.

The devastating effect that the pandemic has had on the job market is what brought the much needed promotion to the Employment Agency.

Over the past two and a half months, the number of people registered as unemployed has surged to 170,000. Until March 13 the agency had 90,000 unemployed people registered and looking for a job, a number that has been consistent since the agency began functioning  independently in 2017, according to Klinaku. The Employment Agency’s  numbers go through till the end of May.

In the first four months of 2020, Over 37,000 unemployed people registered for benefits.

Crowds of people, often in violation of the social distancing measures, gathered in front of the agency’s regional offices to formally register as unemployed to receive financial support from the government’s emergency fiscal package. 

The 179.6 million euros emergency fiscal package, approved by the previous government on March 30, contained 15 measures designed to help individual workers, businesses and public organizations cope with the financial difficulties brought upon by the pandemic.

Measure Three with a budget of 61 million euros gave financial support to companies by subsidizing monthly salaries with the sum of 170 Euros for two months. It also subsidized 50% of rent for small and medium enterprises.

Measures Seven and Eight of the plan were aimed at helping the employees of bakeries, grocery stores and pharmacies with a subsidy of 100 euros per person for two months. A 130 euros payment for citizens who lost their jobs for a period of three months was also included.

According to “The Impact of the COVID-19 Pandemic on the Labor Market,” a report recently published by the GAP Institute, the number of job seekers multiplied by 40 times in April to 31,550. 

Even in a country that normally has a high unemployment rate the pandemic has caused a crisis.

During the first four months of 2020, Over 37,000 unemployed people registered for benefits. That number could grow further in the coming months if the new government does not deliver a new economic plan soon.

Nearly half of them (16,820) are women. 

“Given the very high rate of women’s economic inactivity to begin with and other employment barriers, the unemployment rate among women may rise even further,” the report says.

Most of the unemployed that have registered themselves at the Employment Agency during this period are said to be able to work in low skilled professions, including agriculture, gastronomy, transportation and crafts.

“Jobseekers mainly chose low-skilled professions (10,757) or services and sales (1,889), while a small number of jobseekers chose the armed forces (7) and factory operators (39),” the GAP report points out.

The vast majority or 60% of these jobseekers are uneducated, while 29% have completed primary and secondary vocational education. About 7% graduated with a secondary education, while 4% have higher education.

Most job seekers with a higher education, meaning those with a bachelor or master’s degree are women; while most uneducated job seekers are men, the GAP Institute reports.

GAP’s data goes through the end of April.

But this is an unusual situation for the agency. Even in a country that normally has a high unemployment rate the pandemic has caused a crisis. The Employment agency had difficulty placing job seekers in normal times, how it will handle the increased need remains to be seen.

What the agency does

The Employment Agency of the Republic of Kosovo (EARK) was established in January 2014, the agency’s main responsibilities are the implementation of labor market policies drafted by the Ministry of Labour or other higher relevant institutions; connecting the unemployed and businesses to each other; vocational training, monitoring and providing support by other means to job seekers and professionals willing to engage in the labor market.

Normally around 30,000 people are added to the workforce every year, Klinaku says. More than 13,000 unemployed are registered by EARK and the imbalance between these numbers is where the problem stands. It will take many years of reforms and steady economic development to mitigate the situation, something that Kosovo seriously lacks.

The agency stands as an intermediary between the unemployed and businesses looking for a workforce with certain qualifications, mostly jobs that require vocational training in the gastronomy and construction businesses. The agency also offers vocational training in 35 different professions — welding and cooking among others — in seven different training centers across the country.

The education system does not prepare people for the requirements of the job market.

However, certain problems have prevented the effective functioning of the agency, beyond the lack of reforms and economic development without which the institution cannot function properly.

Insufficient funding from the government has limited the ability of the agency to have more of an impact on the unemployed, as it only gets 6 million euros per year. 

Except for the operations expenditure, Klinaku says that the sum is sufficient to support only 3,500 persons in the frame of the active measures the agency has the right to use to make sure that those who are looking for a job get the necessary support.

“In correlation with the GDP, the contribution given to the agency is only 0.38% of the state’s budget,” says Klinaku.

Another problem that the agency constantly faces is the discrepancy between the training and education that the job seekers have and the requirements businesses need for job openings.

The lists of job seekers that are registered in the agency are dominated by people who have a basic education with no specialized training, making it very tricky to match them with a certain job opening. The education system does not prepare people for the requirements of the job market.

Klinaku says that 40 to 50 % of the people who have undergone vocational training that the agency offers have benefitted from it by securing a job or getting other offers toward securing a regular income. Over 5,500 people are certified in different professions yearly.

How to improve it

Mevlyde Hyseni worked for Friedrich-Ebert-Stiftung, a German NGO, as a program manager in Prishtina for nine years and worked on several youth, vocational and employment programs. She says that Kosovo’s Employment Agency and other relevant institutions related to jobs should learn from the practices in Germany, where there is a dual education system in place with vocational training lasting for no less than two and a half years and up to five years in certain cases.

In Kosovo, work training with certifications is provided for no more than six months.

“The two main pillars of economic success are academic and vocational education that provide the economy with academic and non-academic professionals,” Hyseni says.

Dual vocational training in Germany is a system where theoretical lessons in schools and practice in companies are combined.

Half of the youth in Germany that finish comprehensive education choose to continue in vocational education for one of 300 training programs offered in the framework of the dual vocational system.

“Those who select this path have a secure professional and financial future as they get good qualifications and the European market needs these professionals,” Hyseni said.

Dual vocational training in Germany is a system where theoretical lessons in schools and practice in companies are combined. The system is attractive to youth because they are paid under a contract with the company while they undergo theoretical learning at school.

Hyseni also agrees that the state of the education system is the main problem behind the inefficacy of the Employment Agency and other relevant institutions.

“The state of the non-academic vocational education system is worse because the vocational schools often lack the practical lessons,” she says. 

“The youth unemployment is around 60% while there are thousands of jobs in need of qualified workers.” Hyseni continued.

An economics professor at the University of Belgrade, Mihail Arandarenko, explains that some of the problems with the institutions responsible for the development of the job market in Serbia, including the employment agency, are similar to those in Kosovo.

“I know that in our region there are many doubts about the usefulness of public employment services, that stems partly from their often bureaucratic and rigid attitude toward their key function — to serve the needs of their clients,” he says.

Serbia has undertaken many reforms within its National Employment Service over the last twenty years, in a bid to improve efficiency by introducing client orientation to the process of linking job seekers to employers and to improve the scope and effectiveness of active labor market programs (ALMPs). 

But, many problems still remain.

“ALMPs are not well funded — they are only around 0.1% of GDP. Some of them are not well targeted either — helping those who most likely do well on the labor market even without them, and not helping those who need them the most,”  Arandarenko says.

The Employment Agency faces an enormous task with few options with no end to the pandemic in sight and the number of unemployed continue to grow.

The most vulnerable groups that would need the help of the employment institutions are mostly people with disabilities, unskilled workers, women, youth straight out of school, members of ethnic minorities, and so on.

In general, Arandarenko thinks that employment agencies should be an important part of institutional infrastructure anywhere, especially in a European country in the 21st century.

“The EA counselors should be trained to be something like general practitioners for the ‘labor market health’ of the labor force.”

The new government of Kosovo hasn’t approved any new economic measures to help businesses get back on their feet even as Kosovo’s economy has been opening up.The Employment Agency faces an enormous task with few options and no end to the pandemic in sight. Meanwhile, the number of unemployed continues to grow.K

Feature image: Majlinda Hoxha / K2.0.

Editor’s note: The text has been clarified to explain the difference between the GAP Institute data and the Employment Agency of Kosovo’s data.





This article has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of Kosovo 2.0 and GAP Institute and can in no way be taken to reflect the views of the European Union.