Faculty of Economics
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Item type:Publication, Stakeholder perceptions of migration policies and investment in human capital development: expert interview evidence from policymakers, labor market organizations and social partners in North Macedonia, Türkiye, Ukraine, and Ethiopia(2026-01-16); ; ; ; Introduction: Policies that combine human capital development and migration governance are necessary because migration alters the labor supply and skill distribution across economies. Through a cross-country approach, four migrant-origin countries, North Macedonia, Türkiye, Ukraine, and Ethiopia, that reflect various combinations of demographic pressures, institutional capacity, and conflict shocks are examined in this study. Methods: Using standardized qualitative expert interviews with policymakers, labor market intermediaries, and social partners, analyzed through a reflexive thematic analysis, the study explores the respondents’ perceptions and the channels through which education and migration policies, as perceived, interact to influence labor market outcomes. Results: Respondents reported that migration dynamics exacerbate structural unemployment, gender disparities, brain drain, and ongoing skill mismatches in all four countries. Interviewees highlight structural gaps in technical training and job-readiness in Ethiopia, while in Ukraine, a prime example of the disruptive effects of war, population displacement strains both education and the labor market. In North Macedonia and Türkiye, skill mismatches are pronounced by the notable emigration as well as the inefficiency of retention mechanisms. Among all studied countries, participants identified demand-based training and reliable institutional frameworks as crucial levers for reducing shortages and slowing the human capital depletion. Discussion: The comparative study emphasizes the need for policies that efficiently connect labor market demands, migration management, and education to achieve a balance between social demands and long-term socioeconomic growth. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Effects of Labour Market Measures and Policies on Improving Labour Market Performance in Central and South Eastern European (CSEE) Countries(Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, 2025-12); ; ; - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Institutions and economic growth in European post-transition economies(University of Rijeka, Faculty of Economics and Business, 2024); ; This paper discusses the role of institutions in economic growth in selected European post transition economies. During the 1990s, Central and Eastern European countries faced challenges adapting their political and economic systems to keep up with a rapidly changing global landscape. They needed new institutions like regulations, social norms, and organisations to support a capitalist economy. These institutions provide a framework for economic activity and guide individuals to act in ways that align with economic goals. They are crucial for creating a stable environment for economic growth, promoting investment and innovation, and reducing uncertainty, which is essential for economic success. To analyse this, we conduct an econometric analysis of 16 European post-transition countries from 1998-2019 using fixed-effect, Arellano and Bond’s first difference GMM estimator, and the system GMM estimator. The results indicate that institutions significantly impact economic growth. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, LABOR PRODUCTIVITY IN THE SELECTED SEE COUNTRIES: TRENDS AND DETERMINANTS(Ekonomski fakultet Univerziteta u Kragujevcu, 2024-04); ; This study examines labor productivity in the Open Balkan initiative countries (Albania, Serbia, and North Macedonia) and Southeastern Europe’s latest EU entrants (Bulgaria, Romania, and Croatia). In the study, macroeconomic and institutional factors, including the Gross National Income (GNI) per capita, the unemployment rate, the statutory minimum wage, and the labor freedom index are analyzed in relation to labor productivity. The study used econometric methods to identify the labor productivity determinants and discern the labor market differences between the two groups of countries. The key findings emphasize the pivotal role of economic development in Southeastern Europe, especially among the last EU entrants, fostering additional increases in labor productivity. The study reveals the significant influence of the labor freedom index on productivity, with nuanced implications for both groups of countries. Additionally, it highlights the tangible impact of the statutory minimum wage policies on labor productivity in the Open Balkan initiative countries, indicating potential shifts in the wage structures and broader economic landscapes. The interplay of variations in the unemployment rate emerges as a substantial factor shaping efficiency and overall productivity in the labor market across both groups. These findings provide valuable insights into the labor market complexities faced by the Open Balkan countries, underscoring the need to bridge the gaps for economic development catch-up. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Macroeconomic Determinants of Labour Productivity: An Empirical Analysis of The Republic of North Macedonia(2024-12); ; ; This study examines the determinants of labour productivity in the Republic of North Macedonia, with a particular emphasis on key macroeconomic variables such as gross investment, employment, workers' compensation, inflation, gross national income per capita, and human capital. Labour productivity is recognized as a pivotal indicator of labour market efficiency, and worker welfare, and a crucial driver of sustainable economic growth. Despite improvements in employment levels and reductions in unemployment, labour productivity in North Macedonia remains suboptimal, exhibiting stagnation and insufficient growth, especially when contrasted with increasing wages. Through the application of both correlation and regression analyses, this paper explores the strength and causal relationships between labour productivity and macroeconomic variables, highlighting their role in shaping national competitiveness and economic development. The findings align with both theoretical and empirical literature, reinforcing the significance of human capital, gross investment, and overall economic performance in driving productivity improvements. This study contributes to the discourse on structural challenges within North Macedonia's labour market and provides a basis for policy interventions aimed at fostering sustainable productivity growth and enhancing international competitiveness. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The economics of tobacco farming in North Macedonia(European Publishing, 2023-10-08); ; Tobacco leaf cultivation occupies around 3.2 percent of total arable land in North Macedonia. North Macedonia is the second largest producer of oriental-type tobacco leaf after Turkey. In 2021, the total production of tobacco was 24,329 tons from 15,457 hectares of land, with an average yield per hectare of 1,574 kilograms. North Macedonia ratified the Framework Convention on Tobacco Control (FCTC) in 2006, which introduced a legal commitment for the reduction of tobacco production and consumption as well as to help those who are employed in the tobacco sector to find alternative viable livelihoods. The process of EU integration will require the reduction of crop-specific subsidies, likely leading to less income to tobacco farmers and an eventual reduction in the area harvested. The Government adopted a new Strategy for Tobacco Production (2021–2027) in which there is envisaged indirect support for tobacco farmers, but reparations will be made with education and counseling for future change to other crops. Tobacco farming traditionally has been supported by the Government of the Republic of North Macedonia. However, there is not enough research on the economic livelihood of tobacco farmers. Тo fill this gap and to provide results to support evidence-based policy and decision-making, a survey with a nationally representative sample was conducted. The survey comprises 806 farming households from 14 municipalities (urban and rural) in the top tobacco- producing regions in North Macedonia. Target groups (categories of respondents) for the survey are the following: 1. tobacco farmer (the respondent is a farmer who grew tobacco in 2021); 2. former tobacco farmer (the respondent is a farmer who grew tobacco in any year before 2021 and now cultivates other agricultural crops); and 3. never tobacco farmer (the respondent is a farmer who cultivates any agricultural crop other than tobacco and never cultivated tobacco previously). Survey results: - Around half of tobacco farmers are not turning a real profit. While most tobacco farmers believe they achieve positive “perceived” profits (excluding the value of household labor), with only a few households perceiving negative profits, around half of the households actually achieved negative “real” profits. - Most farmers struggle financially, living with an average monthly income below the average net monthly wage and below the value of the minimum household consumer basket. - Pensions and remittances are one of the most important components for maintaining an adequate level of income and standard of living for tobacco farmers’ families. Although they spend the most time in the field, current tobacco farmers have a higher incidence of poverty compared to former and never tobacco farmers. - Compared to former tobacco workers or never tobacco workers, the median current tobacco farmer devotes more time to growing crops. The median male farmer worked 1400 hours on tobacco cultivation, while the median male former and never tobacco farmers worked 1000 hours and 1260 hours, respectively. - Тhe children of tobacco farmers are more involved in farming relative to other farmers’ children. Children’s help in the harvesting of tobacco is 2.3 times more common compared to children’s help in harvesting other crops; however, no farmer reported hiring children to help with tobacco cultivation and children do not appear to be engaged in potentially harmful activities related to pesticide/ herbicide application. - Compared to other crop activities, tobacco cultivation typically requires significantly more pesticide. Pesticides are related to persistent health challenges for farmers and damage the environment through contamination of groundwater and watersheds. - Tobacco farmers show signs of green tobacco sickness, a form of acute nicotine poisoning. - Current tobacco farmers are more likely to rent land for farming compared to former and never tobacco farmers. In the survey, 22.2 percent of current tobacco farmers and 13.7 percent of former tobacco farmers stated that they rent land from others. - The vast majority of farmers reported having a contract with a leaf buyer. Survey results shows that almost all tobacco farmers (94 percent) in all major tobacco-growing regions have signed contracts with tobacco leaf buyers. More than half (57 percent) of the tobacco farmers say they are satisfied with the concluded tobacco agreement, while 36 percent are not. Tobacco cultivation is not as profitable as the government suggests. Thus, highlighting tobacco as a highly profitable crop is unfounded. This research indicates it would be much better for tobacco farmers, in terms of labor and economic efficiency, to reorient and grow another crop or pursue other economic activities in their local economy (such as wage work or small business). Around half of tobacco farmers are not turning a real profit. The opportunity cost for unpaid family labor makes growing tobacco unprofitable. Revenues of tobacco farmers decrease significantly when the opportunity costs are calculated. Household members could better allocate their labor to other tasks that earn money; not doing so results in significant economic loss for those tobacco families. Poverty rates among tobacco farmers are slightly higher than the nationwide poverty rate. Current tobacco farmers have the highest incidence of poverty when considering per capita income. Despite their high poverty rate, only a small share of tobacco farmers use some form of social assistance. Input costs for growing tobacco are typically very high, particularly compared to most other crops. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Labour Productivity, Wages, and Inflation: Evidence from Selected Central and South-East European Countries(Eurasian Economists Association, 2024-01-18); The relationship between inflation, worker wages, and labour productivity growth has been a widely discussed topic among academics in recent decades. Labour productivity is a critical component for maintaining and improving the competitiveness of national economies and establishing sustainable economic growth. The increase in labour productivity serves as the foundation for increasing workers' wages, thereby enhancing their purchasing power and overall well-being. However, empirical data from Southeast European countries indicate that labour productivity growth rates have been insufficient to enable catch-up with their Western European counterparts. Additionally, these countries have experienced significant inflation rates in recent years, resulting in a notable decline in real wages for workers. Therefore, the gap between labour productivity and workers' wages has not only failed to diminish but has, in fact, widened over the past few decades. The primary objective of this paper is to examine the interrelationships among labour productivity, workers' wages, and inflation in Central and Southeast European countries, specifically the Balkan EU countries, Balkan non-EU countries, and the Visegrád group of countries. The findings reveal a short-term causality among inflation, labour productivity, and the statutory minimum wage in these three groups of countries. Furthermore, there is evidence of a bidirectional causal relationship running from the minimum wage and inflation to labour productivity, and vice versa, in the short term. Additionally, the introduction of a minimum wage shock significantly influences the future values of labour productivity and inflation. The adverse effects of an externally induced increase in the statutory minimum wage are particularly noticeable in Western Balkan non-EU countries. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The Impact of Labor Institutions on Shadow Economy and Shadow Employment in North Macedonia(University of Belgrade - Faculty of Economics and Business, 2023); ; ; The importance of the informal economy is seen in the fact that more than 60% of world employment operates in some form of informal economy. Additionally, on average, about 35% of GDP in developing countries is generated in the informal sector, while the informal sector in these countries employs about 70% of the workforce. In the case of the Republic of North Macedonia, this proportion ranges from 36% to 24% for the period 2006 - 2021 which confirm the relevance of this research. The aim of the paper is first to estimate the level of informal economy in the country and furthermore to analyze the impact of the main determinants - labor market determinants on the informal production and informal employment in the Republic of North Macedonia. We employ regression analyses for the period 2006-2021 to determine the key factors behind informal economy and informal employment. The following variables are included in the analysis: Labor Freedom, Tax Burden, Business Freedom, Minimum Wage, and Self-Employed workers. The results of the empirical analysis show that the increase in Labor Freedom and Tax Burden has statistically significant impact on informal production growth, while increase in Business Freedom statistically significantly reduces the informal economy. The increase in the proportion of the minimum wage relative to the average wage causes a reduction in informal production. Regarding informal employment, the obtained results show that the growth of Labor Freedom and Business Freedom has statistically significant impact on informal employment. Also, regarding the self-employed, the growth of this category of employment has statistically significant positive impact on the growth of informal employment. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Theoretical Foundation of The Great Decoupling Between Productivity and Labor Compensation(Institute of Knowledge Management, 2020-12-16); The dynamic increase in labor productivity has led to a complete distortion of the equilibrium in the distribution of national income between the factors of production - labor and capital. The postulates of the classical economic thought that the increase of labor productivity provides a solid base and automatically leads to an increase of labor compensation, in the last 3 decades do not correspond to the empirical trends. In most countries of the world, the increase in workers' compensation significantly lags behind the increase in labor productivity, which contributes to the "fruits" of the intense increase in labor productivity becoming more difficult to access for the average worker. In most countries of the world, although the increase in labor productivity contributes to increasing the economic "cake", fewer workers participate in its distribution. The theoretical postulates that the relationship between labor productivity growth and workers' compensation growth is one-to-one relation that is the subject of analysis and debate among economists around the world. The analysis of the theoretical arguments and postulates, but also the empirical confirmation of the existence of great decoupling between productivity and labor compensation will be the main focus of this paper. Namely, the widespread trend of separation of workers 'incomes from the increase of labor productivity, is increasingly gaining strength and leads to a significant separation of productivity from workers' compensation, in almost all developed economies. Some of the theoretical aspects that will be analyzed focus on the factors that influence the intensification of labor productivity growth such as technological progress, structural factors, and institutional factors. Furthermore, the paper will describe the main trends in labor productivity and workers' compensation, following the example of Europe and the United States. The results of this paper will provide a summary of the theoretical foundations and key empirical results associated with the existence of a growing trend of great decoupling. - Some of the metrics are blocked by yourconsent settings
Item type:Publication, External Adjustment and Flexibility of the Exchange Rate Regime: The Case Of Transition Countries(Faculty of Economics, University of Banja Luka, 2021-06-30); Milton Friedman’s traditional claim is that flexible exchange rates facilitate external adjustment by means of their corrective movements before the balance of payments crisis occurs. In order to test this hypothesis, we employ the first order autoregression based on the panel data on exchange rate regime and external balance expressed as the share of balance of goods and services in GDP. The sample covers 16 Central and Eastern European (CEE) and 12 Commonwealth of Independent States (CIS) transition countries over the period 2000-2019. The results, which are based on the sample of all transition countries, failed to prove that more flexible exchange rate regimes facilitate external adjustment. When the analysis was performed on two groups of countries separately, the results showed that the deficit of balance of goods and services in CIS countries has a higher persistence compared to CEE countries. However, a more flexible exchange rate regime does not facilitate external adjustment. On the other hand, in CEE countries, the relationship between exchange rate regime flexibility and the rate of balance of goods and services reversion exists, proving that Friedman’s hypothesis does hold.