Foreign investments have reduced the quality of employment during the period 2016-2021

Foreign direct investment is an important employer in the Western Balkans and also plays a key role in skills development.

An analysis of labor market developments in the Western Balkans commissioned by the World Bank found that nearly two-thirds of jobs from foreign investors in the Region are for secondary education.

In Albania, it is noted that the quality of work offered by foreign investors has declined during the second half of the last decade. Of the total number of employees from foreign companies, only 18% had a higher education during 2016-2021, while this category occupied 22% during 2010-2015.

As can be seen in the table below, over the last few years, the share of employees with secondary education has increased, while the category with low education has also decreased.

Of the countries of the Region, specifically, in Bosnia-Herzegovina and Kosovo, the skills of jobs provided by FDI improved in the second half of the analyzed period (2016-2021), compared to the first half (2010-2015). .

This is evidenced by an increase in the percentage of high-skilled jobs and a decrease in the percentage of low-skilled jobs. However, the opposite happened with Albania and Montenegro where there was a decrease, while in North Macedonia and Serbia there were no changes.

Most of the jobs from foreign investment across the Region were not in the capital cities. Kosovo had the highest percentage of FDI jobs in its capital, with 41% of employment, followed by North Macedonia with 39% and Albania with 36%.

Foreign investments have been a main pillar of the economic model in which the economies of the Western Balkans entered following the transition from the post-communist regimes.

In the entire Region, foreign investments have employed about 180 thousand people during the last decade and constitute 19% of the total increase in employment in the region during this time. For every 5 jobs created in the region over the past decade, one was created by foreign investment.

The majority of FDI-related employment in the region was in the manufacturing sector (53%), followed by construction (23%) and retail trade (12%).

The composition of the skills employed by FDI was lower than the skills provided by the domestic market. Monitor