The Open Balkan countries don’t have the capacity to solve the labour shortage problem, but they can alleviate it to an extent. The benefits of migration will be distributed relatively evenly between the three countries
The removing of barriers preventing the free movement of labour within the frameworks of three Western Balkan countries is certainly an important positive event, both in an economic and a political sense.
When it comes to the practical reach of the Open Balkan initiative on the labour market, I would highlight some limiting circumstances and some favourable ones. Limiting circumstances certainly include the fact that all three countries face a lack of available labour, with Serbia hit the hardest due to the large natural decrease in the working-age population, while Albania and North Macedonia are hit more when it comes to high levels of emigration. As such, the implementation of the free labour market will create a bottleneck on the labour supply side. The second negative circumstance is the fact that the difference in average nominal earnings, and particularly real earnings in the frameworks of all three countries, is much lower than the 2:1 ratio, and this is considered as being an essential precondition for intensive labour migration. On the other hand, there are also extremely favourable circumstances for labour migration. First and foremost is gravitation – the three countries are very close to each other and daily migrations are possible between the countries that share a border. Apart from close proximity, linguistic and cultural closeness exists to a large extent, which makes it easier for workers to decide to emigrate temporarily. Similarly, surveys show that employers from all three countries prefer workers from the region to workers from more distant countries. Observing this initiative from both sides, we can conclude that the Open Balkan doesn’t have the capacity to solve the labour shortage problem, but it can alleviate it to an extent.
The benefits of migration will be distributed relatively evenly between the countries. Given that differences in earnings aren’t excessive, the main effect of opening and effectively consolidating the labour market will be in the better matching of supply and demand in certain ‘convertible’ market segments – from the construction sector to IT. Similarly, while Serbia and North Macedonia are oriented more towards the growth of industrial employment, Albania is creating new employment opportunities in the service sector, primarily in tourism.
Serbia and North Macedonia are oriented towards the growth of industrial employment, while Albania is creating new employment opportunities in the service sector, This could create space for a useful exchange of workers
We could thus see a useful exchange between these countries of workers with different qualifications. As the country with the highest earnings, the position of workers in Serbia shouldn’t worsen due to the expected arrival of a modest number of foreign workers from North Macedonia and Albania. They will all be employed as individuals, in accordance with Serbia’s current labour legislation, and will enjoy the same level of protection as domestic workers. Essentially, foreign workers are often more expensive for employers than domestic workers – considering the costs of travel, accommodation and training, but also the increased turnover of foreign employees. Generally speaking, in countries confronted by great labour shortages, the influx of workers from abroad – with the aim of implementing projects that would otherwise be difficult to implement precisely due to the labour supply bottleneck – can have a positive impact on the future employment of domestic workers due to the positive impact of those projects on GDP growth.
It should be noted that annual gross outflows of the Serbian population on the basis of labour migration total approximately fifty thousand, while inflows have stood at approximately the same level over the last few years. The overall impact on the Serbian labour market of the additional influx of workers from the region thanks to the Open Balkan initiative – which we estimate to stabilise at several thousand employees per year over the next few years – will therefore be positive, but relatively small.
