Review of Labour Force Survey in B&H 2017 – more realistic representation of workforce in RS

These days media in Republic of Srpska are reporting of 263 476 employed persons, which is the highest number in history, referring to data published by Employment Office of RS. At the same time, Agency for Statistics of B&H publishes Labour Force Survey 2017, given the information of 313 000 employed persons in RS.

Where does the difference come from?

Unlike the Employment Office of RS, which defines registered workers (working in enterprises, institutions, as entrepreneurs etc.) as employed persons, Agency for Statistics of B&H used a definition that also included non-registered workers, working in enterprises or as entrepreneurs.

“Employed persons are persons aged 15 years and above and in the referent week they: (a) worked at least one hour for salary or fee, regardless of their formal status, or (b) didn’t work, but had a job they will return to.”

If we search for the number of unemployed persons in Labour Force Survey 2017, which is 116 274 according to Employment Office data, we will see it is 83 000. Therefore, significantly minor. Once again, definition of unemployed persons is different between Employment Office of RS and Agency for Statistics of B&H. Employment Office implies that unemployed persons are persons registered at Employment Office as active job seekers, and Agency for Statistics implies that they are persons who didn’t perform activities for salary, or were seeking for a job. (More about active and passive job seekers you can read in my previous blog.)

“Unemployed persons are persons aged 15 and above who: (a) in referent week didn’t perform any activities for a salary or a fee, (b) during four weeks (referent week and three previous weeks) were actively seeking for a job or found a job and will start working soon, (c) could start working in the next two weeks, if they were offered a job.”

 

Employment Office of RS (October 2017) Agency for Statistics of B&H (April 2017)
Number of employed persons 236 476 313 000
Number of unemployed persons 116 274 83 000

As in my previous blog, I need to underline that RS, as well as whole B&H, isn’t a place with surplus of workforce anymore, but a place with deficit of workforce. Number of working age population is decreasing at significant speed. Firstly that was recognized by local enterprises, who in the beginning had difficulties to find skilled workforce, and nowdays have more and more problems to find any workers. A drastic example happened recently in Visoko, where enterprise Prevent opened a call for employing 400 people, and they only found 2.

Only during the last 2 years, number of working age population in RS decreased by nearly 50 000. The trend is, unfortunately, speeding up: between 2015 and 2016 number of working age population decreased by 18 000, and between 2016 and 2017 by 29 000.

2015 2016 2017
Working age population in RS 885 000 867 000 838 000

In the meantime…

In the meantime, Council of Ministers of B&H and Government of Republic of Slovenia have an agreement on employing citizens of B&H in Slovenia through 3 employment offices in B&H, which is being more and more exploited.

2013 2014 2015 2016 2017 (until October)
Numbers of B&H citizens employed in Slovenia through employment offices in B&H 661 1870 2677 4478 8123

How much incorrent secondary data are? (In context of employment in RS)

Republic of Srpska (federal unit of Bosnia and Herzegovina) has, based on Employment Office records, 116 274 job seekers as of October 2017. According to these data, unemployment is significant. Someone could say there is not enough jobs in Srpska, since these people can’t find one. Even Employment Office, in such deficit of jobs, published advertisements for employing our people in Slovenia, Slovenian Post Office for example, or various private owned businesses. Apparently, they have deficit of workers, and we have plenty.

Is this so?

When you talk to domestic enterprises and people from these enterprises, you’ll hear they have serious problems finding not only skilled workforce, but more and more any workforce. Also, projects organizing trainings for acquisition of skills for work in industry have problems with low number of unemployed people applying to these trainings.

So, something here isn’t right.

There are many unknown elements in this equation, but now I want to concentrate on one of them, which is of technical nature. Number of listed unemployed persons, or active job seekers, does not corelate to real situation.
Namely, job seekers are divided into two groups: passive and active. Passive job seekers (an oxymoron) are not seeking for a job. They are registered in the Employment Office records because of exercising their constitutional rights on health insurance. Even though they are called “job seekers”, they are not job seekers. Everybody is aware of that and they do not participate in this number of 116 274 job seekers.
Active job seekers should be really seeking for the job. They are, from time to time, contacted by Employment Office for job interviews in enterprises. They do make the number of 116 274 job seekers. Problem with reliability of the job seekers list exists because of the way job seekers are classified in active or passive group – they declare themselves as passive or active. Part of those people, de facto passive job seekers, are declaring themselves as active ones in fear they will be deleted from the list and loose their constitutional right on free health insurance. While talking to employees of Employment Office, you can hear that number of active job seekers varies depending on statements of high-ranking RS Government officials regarding deleting passive job seekers from the list. During the job interviews, these persons say to potential employer that they participate only pro forma.

I’m not sure is it possible to determine approximate number of such cases, but I’m afraid they make too large percentage of the active job seekers. This could, partly, explain wrong perception of Republic of Srpska as area with surplus of unemployed people.

In any case, secondary data should be defined the way that they make easier, instead of they make more difficult proper treatment of the problem they are related to.