Movements of Croatian Labour Supply and Their Implications on Migration Flows

The Croatian labour market is characterised by a low degree of activity on the part of the population, a high unemployment rate, a pronounced problem with long-term unemployment and a high structural disproportion between supply and demand. Because of the relatively high share of the unofficial economy, there is a large difference between the administrative unemployment rate and that shown by surveys. Analysis of the situation on the Croatian labour market shows that significant structural issues still remained unsolved (such as inflexibility, mismatch between supply and demand with respect to profession and education, and similar). There is still very limited creation of new jobs. The employment rates of men and women and the employment of young people are among the lowest in comparison with the EU-27 and are far from attainment of the Lisbon objectives. The high rate of economic inactivity indicates the lack of utilisation of the existing work force potential. The conducted research shows that the continued advised needs for workers is 25 time higher than the annual number of approved work permits to foreigners from 1992 to 2006, while that number was negligible in 1991. Due to this situation, Croatia still has a very strict protectionist orientation towards employing foreigners, although the fact is that this situation will have to change very quickly with accession to the EU. It can be concluded that no major changes in migration flows or any significant shifts in em¬ployment and unemployment rates can be expected until the year 2010. Although opening the borders could mean, on the one hand, the possibility of increased emigration of the Croatian work force, the expectations are that such movements, nonetheless, will not occur. It is more likely that opening borders would be connected with greater mobility of workers, both from Croatia into other countries and from other countries towards Croatia