The World Bank and the Social Inclusion and Poverty Reduction Unit initiated and supported the development of the Study: Impact of Financial Crisis on the Labor Force Market and the Living Standards in Serbia. The Center for Liberal Democratic Studies (CLDS) analyzed the data from the Labour Force Survey and the data from the module on the impact of the global economic crisis, which was conducted by the Republic Statistical Office in April 2008.
The Ipsos Strategic Marketing agency conducted a qualitative analysis which provided insight into the impact of the crisis on the most vulnerable groups of population, as well as into how they tackled the impact of the financial crisis.
The analysis of the impact of the crisis on the labor force market and the living standards in Serbia provides a detailed overview of characteristics of the labor force market in the period preceding the crisis. It indicates that the characteristics were unfavorable – low economic activity and employment rate, and high yet decreasing unemployment rate. The labor force market is analyzed from different aspects, regarding gender, age, education level, situation in different economic sectors and the regional structure of the labor force market.
Furthermore, it provides an overview of living standards in the period preceding the crisis, marked by a significant reduction in the absolute poverty rate. The analysis tackles the impact of the crisis on the labor status (active/inactive), wages and consumption distribution during the crisis.
The conclusion of the analysis is that the living standards deteriorated and that poverty increased in Serbia during the crisis. However, the poverty level in the first half of 2009 was still lower than the level in 2006 and 2007. Furthermore, although Serbian economy was characterized by low productivity and low level of savings and export in the period preceding the crisis, Serbian economy still remained stable. This is a consequence of the mildness of recession in developed countries and low export dependence of Serbia, as well as the support of the international institutions and a number of good moves made by the National Bank.
The analysis provides recommendations for mitigating the effects of the crisis. In conditions of high public consumption and high budget deficit, Serbia does not dispose of sufficient financial resources and a wide selection of interventionist measures.
In addition to the efforts already undertaken by the Government to mitigate the effects of the crisis, the following period could also consider additional redirection of active labor market measures, in particular public works, towards regions and groups affected the most during the crisis
Regarding the national policy of financial support for the poor population, the new Law on Social Welfare should be adopted as soon as possible and the segments of the Law relating to material allowances for the poor should come into force in 2010.