About the ILO in Serbia

Incomplete economic transition impacting labour markets

Serbia has been undergoing an unfinished transition from a centrally planned to a market economy for nearly 30 years interrupted and also partially reversed by the aftermath of the Balkan Wars in the 1990ies. Being the largest country of the Western Balkans, it has a strategic importance for EU accession negotiations with the candidate countries from this region.

The incomplete transition has its effects on labour markets. While unemployment has dropped (10% for age of 15 and above, Q3 2021, Serbia continues to struggle with relatively low labour force participation, high inactivity, a large portion of youth neither in employment nor in education, and a large share of the state-owned enterprises and institutions in the national GDP. Informality continues to be high, the quality of jobs requires substantive improvement, and there is a need for further reform of the occupational safety system. The long-standing labour legislation reform is relevant both for EU accession and for advancement of social dialogue.

The Covid-19 pandemic only led to a mild contraction of GDP in 2020 (-1%) and growth picked up quickly in 2021 (+7%, est.). A large but not very targeted response package of the government in 2020, corresponding to around 13% of GDP, helped to mitigate the economic fall out of the pandemic. The impact of the pandemic on labour markets was stronger with a decline of working hours of 4.7% in 2020 which according to ILO calculations is equivalent to 170,000 full time jobs. In 2021, labour markets saw a small increase of working hours (+0.9%), but the recovery of labour markets is lagging.

ILO interventions in Serbia

Serbia has been a member state of the ILO since the year 2000. The country has ratified 77 ILO International Labour Standards (Conventions), including all eight fundamental conventions. Starting 2008, the ILO has been providing technical assistance on employment creation, labour law reform, promotion of social dialogue and collective bargaining, and improved working conditions including protection from unacceptable forms of work.

The current Decent Work Country Programme with Serbia (2019-2022) focuses on more and better jobs (new employment strategy, improved working conditions, enhanced business environment, minimum wage fixing) and improved labour market governance (improved social dialogue, alternative resolution of labour disputes). Through the programme, ILO also supports the EU accession negotiations of Serbia, especially on chapter 19 covering employment and social policies.

In response to the Covid-19 pandemic the ILO produced a detailed assessment of the impact of the crisis on the labour market (jointly with the European Bank for Reconstruction and Development).

Text last updated 1/22.