Labour Market Situation in Albania

1. Labour Market Situation in Albania May 2005

2. The passage of Albania on the market economy at the beginning of 1990, experienced a substantial decline in labour force participation rate in the new labour market. • In 1998, after the pyramid scheme crisis, the male participation rate was 85 % compared to 55 % for women. • In 2000, less than two thirds of the working age population was active in the labour market. During 2005, this indicator continues to be in decline. • During 2000-2005, the female participation rate has declined with less than 50 %.

3. Demographic and labour force indicators(in thousands):

4. Labour force partcipation rate may be explained by different causes: • A considerable number of people engaged in the informal sector. • Others are discouraged, for a long time without job and out of the labour market. • A lot of Albanian people, mostly young men (600–800 thousand) are estimated as working abroad. • This decline is explaned also by the large withdrawals of women from the labour market.

5. Employment • Restructuring of the economy led to a fall in employment in general and substantially in a fall of the employment in the public sector. • Actually of the total number of the employed in the private sector is about 81 % compared with 19 % of the employed in the public sector.

6. 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 Sector Non 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 Employment by sectors (public and private) Source: INSTAT, MoLSA

7. Public sector • During 2002 were employed 186 thousand people compared with 850 thousand people that were employed in 1991. • In 2005, in the public sector 176 thousand people are employed. This decline, was mostly due to mass privatization of state –owned enterprises, of the bankruptcy and closing of a lot of activities that were not able to provide benefits. • The service sector experienced a slightly higher number of employments. • The increase of employment concerns only men, since the number of employed women remained almost at a constant level. Private sector • In 2002 about 80 % of the total number of the employed persons, was provided by the private sector. • The rapid privatization of the agricultural sector, affected the increase of the employment level in this sector. • About 57.7 % of the total number of employees in both private and public sector, are employed in agriculture private sector. • The number of the employed in the agriculture private sector continues to be very high.

8. Speaking on percentage, the labour force in Albania is employed in the following sectors: • In agriculture, forestry and fishery are employed 57.7%, • In construction about 6 %, • In manufacturing and mining industry 5.8 %, • In trade, hotel, restaurants about 10 %, • In education 5.3%, • In health 3% etc. Illegal 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.

9. Illegal workers and informal enterprises 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.

10. Unemployment • The unemployment rate relates to registered unemployed in the Offices of the National Employment Service. • Still now there are not complete and standardized surveys on labour force, unemployment rate and labour market. • The high level of informal sector, migration, the high rate of hidden unemployment in agriculture sector, and the high number of unemployed that are not registered in the public employment service, make difficult the real evaluation of unemployment and doesn’t show the real picture of labour market. • By the end of February 2005, the unemployment rate is 14.4 % compared with 16 % in 2002 and 26 % in 1992.

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

12. Analyzing the data results that : • Women continue to constitute about 49.9 % of the total registered unemployed. • Long-term unemployment constitute about 66 % of the total registered unemployed. • The majority of the long-term unemployment is made by men, while women occupied only 47.6 % of the total number. • Unemployed head of families are about 67 % of the total registered unemployment. Level of education of unemployed: • 53 % of the total number of unemployed jobseekers is constituted by people with secondary school education. • 44.5 % of the total number of unemployed jobseekers is constituted by people with high school education. • 55 % of the total number of long-term unemployed jobseekers have secondary school education. • Training and retraining of the new jobseekers, according the age and the gender constitute the most important task of VET system.

13. Institutions and Legislation Institutions • National Employment Service (NES) has 12 Regional Employment Offices and 24 Local Employment Offices. • NES provide services such as: registration of jobseekers, cash payments, advice and counseling of jobseekers, mediation, collection of information on the labour market and implementation of four programs: • Employment promotionfor unemployed jobseekers. • Employment promotion for unemployed jobseekers through training in the job place. • Employment promotion through institutional formation. • Employment promotion for unemployed women. Obligations of legislation • The Law on Employment Promotion is approved in 1995 and has been amended at 1999 and 2002.  • The employers are obliged to declaire (to report) the job vacancies within 7 days from their opening. • The employers every three months are obliged to report to the employment offices the list of employees/workers, that have been employed by the firm. • The firms for every 24 employees/workers, have to employ a person with disabilities.

14. Barriers in Employment Services • High level of informal labor, influences the level of interest of job seekers. • 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 taxes are still high. • The ratio between passive and active employment policies and programs should be improved in the future. • The lack of coordination in the implementation of strategies that encourage the integration of groups in need such as: women, young people, roma community etc. • Passivity and expectation of some persons or groups in need, to profit from social support programs. • Low educational level (58 % with eight-years of school education) of the job seekers has brought difficulties in their employment. • The lack of specialized institutions within the field of vocational training, which deal with compilation of standards, development of curricula, the procedures of licensing and accreditation. • Lack of continuity of education and vocational training.

15. Policies to face the barriers and to improve the Labour Market Performance. • The “National Strategy on Employment and Vocational Training” defines the priorities for the development of employment, vocational training and modernization of employment services. • During 2004, for the first time , with the support of CARDS project is done the study “Demanded skills in the Labour Market” in 621 enterprises. Through this study has been realised: • Qualified evaluation of the immediate needs for skills. • Evaluation of the local offer in order to guarantee training in the public and private sector, identification of the profiles and professions. • Were defined the most demanded professions-occupations of the labour market. • Support of four VET centers in the biggest regions of Albania..

16. Improvement of public vocational education training system through: • Geographical distribution of vocational training network, in the area with social problems. • Enforcement of the capacities in the existing Vocational Training Center, increasing of their autonomy and improvement of the certification system. • Modernization of curricula and establishment of a system of standards, certification, evaluation and assessment. • Elaboration of the Occupations list and standards at national level.

17. 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 Development of employment and vocational training Source:MoLSA

18. For vocational training • Actually, funds on Vocational Training System functioning are doubled compared with funds of 2000. • Investments are focused on establishing new Vocational Training Centers and on modernization of existing Public Vocational Training Centers.   • The number of people trained in public vocational training centers has been doubled compared with 2000. • Another positive development, at 2004, have been the investments for the construction of two new Vocational Training Centers in the regions with a high rate of unemployment. • Vocational Training intend the integration and reintegration in the labour market of: orphans , roms, trafficked women, people with disabilities etc. and offering services to the employed people that need training in order to be more appropriate with the change of the new labour market. • For the above mentioned categories, vocational training is free.

19. For promotion of employment programs • The fund for employment promotion programs for 2004 was 200 millions of leke and are implemented 139 projects. • The medium duration of the employment is about 7 month for each person. The women constitute about 60 % of the total number of employed in all projects. • The medium cost for each new job created is 1030 USD. • For the first time the priorities of employment have been women jobseekers, trafficked women, women with disabilities, women divorced, roma women etc. • For the future MOLSA is working on:  • Improving the legislation and simplify the administrative procedures. • Increasing the transparency through public information and increasing the level of monitoring for the projects. • Strengthening the relation with the business, chamber of commerce, social partners and with other actors of the labour market.

20. Modernization of employment services. • Mediation is considered as one of the most important route for increasing employment. • During 2004, Employment Offices, using mediations, employed twice the number of the persons employed during 2003. • Mediations had as primary objective the employment of people sustained from the programs of unemployment benefits and social assistance. • During 2001-2005 National Employment Service of Albania has closer worked with the ANPE of France , to improve the quality of services, in four biggest regions of Albania. • From 2004 we are working with Swedish National Labour Market Board, to raise the efficiency of employment services and to create the labor market information system.

21. The evaluation of the employment policies as well as identification of the proper recommendations have been done within the framework of the Stability Pact in cooperation with ILO and Council of Europe. These recommendations are included in programs like: • The amendment of the Law for Promoting of Employment and of the Law “About the Labour Inspectorate”. • Supporting the Private Employment Agencies, cooperating with the public employment offices and exchange information related to the job vacancies in the market. • The identification of the responsibilities of MoLSA and MoE for the technical professional education, for providing short and medium terms courses. • The geographical expansion of the vocational training network especially in the areas of high unemployment rate. • The increase of the capacities of existing centers of vocational training, curricula modernization, compilation of occupational list and their standards.

22. Integration of macroeconomic policies with employment and social protection. • Investments on human resources development, to cope the discrepancies between the capacities on the labor market and lacks in the national system of education and vocational training. • Activation of labor market policies. Changing form passive labor market policies in active ones through training and retraining of contingents. • Improving the quality of employment services according to the models and standards, training of the employment’s offices staff. • Strengthening social dialogue, improving the capacities of partners in collective agreements, especially about the salaries and working conditions. • Improvements on the information systemproduction and dissemination of official statistics, establishing of a complete database for Labour Market issues.