LABOUR HOARDING AND THE FUNCTIONING OF THE LABOUR MARKET IN CROATIA
Main researcher
: CRNKOVIĆ, SANJA (79724) Assistants
MARUŠIĆ, SVETISLAV (79671)
KEROVEC, NADA (174121)
Type of research: basic Duration from: 01/01/91. to 12/30/93. Papers on project (total): 22
Institution name: Ekonomski institut, Zagreb (2)
Communication
Phone: 235-700/30
Fax: 235-165
E-mail: sanja.crnkovic@ekist.eizg.hr
Summary: The theoretical framework for the functioning of the labour
market was defined. A detailed overview was given of the long and short
term labour market functioning in Croatia with an attempt to quantify all
the seperate elements of labour supply. A comparison with long term trends
in labour demand indicated a chronic labour surplus which was
consequtively absorbed on foreign labour markets and the shadow economy.
Two features of the labour market recieved special attention i.e. the
autonomous and asymmetric behaviour of employment in varying economic
conditions. An estimate was given for the extent of labour hoarding i all
the sectors and branches of the economy from 1965 to 1987. A psychological
profile of the average worker in the social sector of Croatia was given
with respect to worker adaptability and readyness for change towards a
more market oriented environment. The analyisis is based on a survey of a
sample of large firms in the social sector. The fourth part of the study
gives a review of economic policy measures in developed market economies
for achieving a greater measure of flexibility in the labour market.
Measures to eliminate rigidities are given special attention. The results
of the first years' work were published in the book entitled "The labour
market in Croatia". The second part of the project consisted of
preparations for the institution of the first Croatian Labour force
survey. There are significant differences in the content of the elementary
labour market cathegories in Croatian and ILO statistics. Any serious and
complementary work in the field of labour economics necessitates the
application of international standards in labour statistics. In this vain
a methodological material was prepared based on ILO recommendations which
will be used for the preparation of a labour survey questionnaire. The
preparations for the first labour force survey are under way. The pilot is
planned in November 1995. and the full-scale survey will take place after
the population census in June 1996.
Keywords: labour market, labour supply, labour demand, unemployment, labour hoarding, flexibility on the labour market, labour market disequilibrium, underemployment, discouraged workers, the added worker effect, work in the shadow economy, labour force survey, international standards
Research goals: PHASE I: The aim of the first year of research was
to: 1)determine the theoretical framework for the analysis of the
functioning oflabour markets in general and the Croatian labour market in
particular. Thebasic results indicate that the Croatian labour market was
characterized by along term and chronic labour surplus in the post Second
World War period. Employment dynamics show autonomous behaviour in
relation to short termeconomic conditions i.e. employment rates are
positive regardless of the stage in the business cycle. Job creation in
the modern socialist sector was not extensive enough to absorb the
pressure on employment from the traditional agricultural sector. 2) The
second aim was to determine and estimate the extent of labour hoarding at
a desaggregated level. The results show that the extent of labour hoarding
was small and even falling up to the late 70s. Thereafter, and especially
towards the end of the analysed period, there was a substantial increase
in the phenomenon with more than 300.000 workers employed but without
sufficient work. It is shown that the same level of GDP could have been
attained with a 23.5% smaller work force had the previously attained
levels of labour productivity been maintained. 3) The third aim was to
provide an empirically verified psichological profile of the average
worker in view of estimating his/her adaptability to change, especially a
change towards a market economy. The results of a survey carried out on a
sample of Croatian social sector firms show that workers harbour a
significant degree of unwillingness to adapt to new conditions, a lack od
independent thinking and judgement and a dearth of inventivness and
initiative in their work environment. Most of these traits were attributed
to the previous self-management system and they present a real challenge
to the inaugeration of modern management and workers participation systems
in a competitive environment. 4) The aim of the fourth part was to
describe the various measures of economic policy in the field of labour
market regulation. A wide range of policies, their aims and effectiveness
were discussed in view of their applicability in the Croatian setting. 5)
The aim of the fifth part was to outline possible measures of active
and/or pasive labour market policy in order to reduce the labour market
disequilibrium and to stimulate employment. It was deduced that the
government was at present incapabale of financing a comprehensive safety
net for all the workers who would become laid-off as a result of
restructuring, privatization and the present recession. All the viable
options lie in the realm of an active labour market policy which should
include fiscal measures which would reduce the total cost of labour, the
reduction of costs of hiring and firing and the reduction of redtape
necessary for registration of small businesses and household workschemes.
This legislation should be buttressed by credit extension especially to
stimulate self-employment. In war damaged areas government and foreign
funds should go into public works with the aim of rebuilding the
infrastructure, employ the local population and raise the purchasing power
and thus demand. PHASE II and III: The aim of these two phases of the
project was to create preconditions for bringing the present labour
statistics in line with international standards. Firstly, all the major
differences between the two sistems were outlined. It was shown, for
example, that our unemployment rates showed only the number of registered
unemployed in relation to a labour force which did not account for
significant numbers of workers in the private sector as well as the shadow
economy which has immense proportions in Croatia. Similarly, there are
many de facto employed workers among the unemployed and they do not
satisfy all of the ILO criteria for attaining the unemployment status. In
view of the untransparent situation on the labour market it was decided to
prepare the methodologicalmaterials for the inaugeration of a labour force
survey. A methodological material was compiled on the basis of United
Nations and ILO materials which will serve to work out a questionnaire
relevant in the Croatian setting. Preparations are under way for the first
labour force survey in Croatia in June 1996. Other information about the project.