Progress in increasing income and creating jobs, but the low employment challenge remains
Since its independence in 1991, North Macedonia has made considerable progress in terms of economic development and integration into global economic markets. Despite these achievements, the country is experiencing one of the slowest income convergences with EU countries compared to peers in the Western Balkan region. In 2000, the country’s per capita income was 28 per cent of the average EU income; in 2021 the national income per person reached 38 per cent of the EU average.
According to the latest census results from 2021, the total resident population of the Republic of North Macedonia is 1,8 million inhabitants. The country lost almost 10 per cent of its population between 2002 and 2021, and is one of several depopulation hotspots in Eastern and South-eastern Europe mainly due to ageing of the population and continued emigration. According to the data of the State Statistical Office, in 2022, the labour force numbered 808,078 persons, of which 692,034 were employed and 116,045 unemployed.
The Macedonian labour market is characterized by high unemployment, and low employment and participation rates although improvements could be observed in the last decade. Gender gaps in activity and employment rates have been persistent. The labour market participation rate (age 15-64) in 2022 was 66.4 percent, with a gender gap of 24.1 percentage points (78.4 per cent for men versus 54.3 per cent for women). In 2022 the employment rate (15-64) was 56.7 per cent, still far behind the EU average (69.8 per cent). The employment gap between men and women amounts to 18.4 percentage points and is almost twice as high as in the EU. The employment rate of young people (age 15-29) was 34 per cent, well below EU rate of 49.2 per cent.
Despite the significant impact of the COVID-19 pandemic on the economy, North Macedonia’s unemployment rate has continued to decrease, following a decade-long trend. It still remains at high level, twofold than the one in the European Union, although it reached its lowest point in 2022 and stood at 14.4 per cent, with youth unemployment (age 15-29) of 25.2 per cent. Another challenge apart from youth unemployment is youth inactivity. 73,574 young Macedonians, or almost one out of five was neither in employment nor in education and training (NEET) in 2022.
The ILO in North Macedonia
With permanent presence in the country since 2009, and assistance through the Decent Work Country Program (DWCP), the ILO has been supporting the state institutions and the social partners in the areas of employment, social dialogue, labour legislation, and application of international labour standards. Moreover, the ILO is the only institutional partner to North Macedonia for the introduction and implementation of the Youth Guarantee.
The commitment to promote youth employment reflects the policy priorities that have been pursued by North Macedonia since 2018, when the Youth Guarantee - with ILO support - was piloted in the country and then rolled out nation-wide the following year. The Youth Guarantee contributed to the decline of the NEET rate in the country (from 29.7 per cent in 2018 to 22.8 per cent in 2022). In April 2023, North Macedonia adopted a new Youth Guarantee Implementation Plan for the period 2023 -2026.
The ILO continuously works on strengthening the role of the social partners to become influential actors at national and local levels, by providing evidence-based analyses and policy positions, and offering new and modern services to their membership. The most prominent example comes from the Federation of Trade Unions of Macedonia (SSM). The organization introduced a mobile application for reporting labour rights violations to trade unions and ultimately to the State Labour Inspectorate. Since its launch in early 2021, 23,555 workers received legal assistance and advice.
Macedonia has ratified 79 ILO Conventions (70 in force), including the ten fundamental Conventions. The ILO Committee of Experts has a number of requests concerning application of ratified conventions.
Text last updated May 2023