Forecasts based on current demographic projections for Serbia indicate that the lack of labor force will become a limiting factor for the development of the economy in the short term, while the aging of the population could lead to an increase in the costs of the health system by around 50 million euros per year, and the pension system by two percent of GDP until 2040.
These are the results of the study “Demographic challenges in Serbia and in the area of ​​the Open Balkans” by economist Mihail Gajić, who says that there are a number of measures that the state can take to mitigate unfavorable trends, from changing tax policies to expanding the scope of state services to strengthening the regional labor market.
The base scenario of Gajić’s study, and based on the UN projection on the trend of the population of Serbia, says that the number of employees in our country could already reach the number of active people on the labor market in 2028 – that is, those who can work.
“It is hard to imagine that this will actually happen, since it would mean that the unemployment rate is at zero level, but the result points to the conclusion that the state of the labor market will become a slowing factor for the economy, which will not be able to find adequate personnel.” This would also mean that the number of employees would increase by 136,000 by 2040, but the workforce contingent would decrease by 191,000 people,” said Gajić, presenting the study at the conference on demographic trends organized by the association “Moms are the Law”.
UN projections warn that by 2050, the population of Serbia is expected to decrease by 20 percent, i.e. to 5.78 million people, with a significant decrease in the number of those of working age.
“It is noticeable that pronatal programs are not sufficient even in more developed countries, which then solve the issue of labor shortage by ‘importing’ workers from abroad, and often from our territories. However, since in Serbia there is a low rate of activation of the working population – or inclusion in the market of those who for various reasons cannot find a job – I believe that part of the solution should be sought there,” Gajić told us.
These measures include retraining and retraining programs, connecting the education sector and the economy, as well as expanding the range of services provided by the state.
“If you don’t have enough kindergartens or gerontological centers, then some women have to stay ‘at home’ and take care of children or elderly members of the household. It is one of the ways that can lead to greater activation on the labor market,” said Gajić, who is also the director of the Libertarian Club – Libek.
He added that the issue of tax treatment of earnings is equally important.
Sign up for business updates & specials
