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 further dropped (9 per cent for age of 15 and above, 2022), Serbia continues to struggle with relatively low labour force participation and high inactivity including a large portion of youth neither in employment nor in education or training. Informality continues to be high, the quality of jobs requires substantive improvement, and there is a need for further reforms of the occupational safety and health system. The long-standing labour legislation reform is relevant both for EU accession and for the advancement of social dialogue.

The post-Covid-19 pandemic recovery, after a mild contraction of GDP in 2020 (-1 per cent) was swift, with the GDP growth of 7.5 per cent in 2021, and another 2.3 per cent in 2022. The employment rates are also back to pre-pandemic levels. The key long term labour market challenge is a shortage of labour, already quite severe in some sectors. The workforce further contracted by 51,400 workers (-1.2 per cent) in 2022 because of a quickly aging population and the emigration of working age population.
The impact of the war in Ukraine and the energy price increases were primarily felt through inflation of 15.8 per cent at the end of 2022, which particularly affected the most vulnerable populations.

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 ten 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 last Decent Work Country Programme with Serbia (2019-2022) focused 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). A new planning framework for continuing ILO’s support to Serbia is currently being drafted.

Text last updated May 2023