Croatia is facing significant challenges in its labor market, characterized by a shortage of workers and inadequate skills among the existing workforce. These issues are compounded by demographic pressures, emigration, and institutional factors that limit labor force participation. The education and training systems are also not fully aligned with the needs of the labor market. In response to these challenges, the Croatian government has been working to activate more people into employment, focusing particularly on young individuals who are not in employment, education, or training (NEET).
The NEET rate in Croatia has decreased from a peak of 22.3 percent in 2013 to 11.8 percent, nearing the EU average of 11.2 percent as of 2023. However, young Croatians in NEET status face various challenges depending on their age, gender, and education level. The largest group within this category comprises those with secondary vocational education training (VET), followed by individuals with tertiary education. More than half of the NEET population are women. There are also regional disparities in youth unemployment rates across different parts of Croatia.
A recent report analyzes the economic context and root causes of youth unemployment and inactivity in Croatia. It identifies key barriers to employment for Croatian youth and reviews current government efforts while offering actionable recommendations for improvement.
On the demand side of the labor market, obstacles include a lack of quality jobs, a restrictive business environment, and limited access to finance. On the supply side, issues such as lack of job-relevant skills—particularly among VET graduates—insufficient work experience, and caregiving responsibilities disproportionately affecting women have been highlighted.
The report suggests several policy recommendations:
1. Strengthening the Labor Market Information System (LMIS) by integrating real-time data and adopting a user-friendly public interface.
2. Deploying lifelong human capital development solutions by adjusting the education system dynamically to meet evolving needs and expanding apprenticeships and internships.
3. Tailoring services to diverse target groups through enhanced data-driven profiling and targeted outreach strategies.
For these recommendations to be effective, they should be accompanied by measures aimed at improving productivity on the demand side and addressing family responsibilities alongside embedded social norms.