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Economic Report: Kosovo labor market

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Kosovo is blessed with young, skilled, multilingual and motivated labor force with a strong entrepreneurial spirit and a widespread knowledge of main European languages.
With 70 percent of the population being under the age of 35, Kosovo is considered to have the youngest population in Europe. Due to the multiethnicity of the Kosovar society this young population has a high literacy of foreign languages. Albanian and Serbian are both official languages.

In addition, Kosovo has a very large international community in its territory and as a result English has de-facto been established as a third official language. Kosovars speaking German and other European languages are due to the large Kosovar Diaspora also numerous in Kosovo.

Taking into consideration the high availability of the work force and the liberal labor law that governs the local labor market, hiring employees in Kosovo is both time saving and simple. According to the Business Condition Index of the World Bank Kosovo can outperform many highly developed countries when it comes to the simplicity of hiring new employees. Thesame applies to the cost of making redundant which, corresponding to a salary of 20 weeks is far below the regional average.

Furthermore, the highly flexible labor market offers a sufficient work force with varied skills and levels of education and training. Although according to the data covering jobseeker statistics the majority of the labor market supply consists of basic skilled labor, there are sufficient quantities of highly educated jobseekers as well.

The main advantage of the Kosovo labor force remains its low cost. With the average monthly wage estimated at EUR 236 it is the most competitive in the region.

Comparison of the labor cost in the region is shown in the table 5 (right). Furthermore, the income taxes in Kosovo being only 5 percent of the average gross salary are very low, and the wages are unburdened by costly social contributions, unlike the salaries in most neighbouring countries. The only mandatory contributions are those for individual pension savings accounts, financed by the employer (5 percent) and the employee (5 percent) contributions on total gross wages paid.

There are two main regulations governing employment issues in Kosovo, the labor Law Provisions (Regulation No. 2001/27) and the General Collective Agreement. The labor-related legal framework has been built from scratch in recent years and as a result, specific regulations are far more compatible to those found in the European Union than in any other regional country. Female employees are entitled to at least 12 weeks paid maternity leave upon the birth of a child. This leave is considered as a working period and is to be paid by the employer at a rate of no less than two-thirds of the employee’s current earnings.

Employees are required to notify the employer within 48 hours of taking sick leave. Where sick leave is taken as a result of a work related accident, or illness, the employee is entitled to his/her normal pay for such period.

Work Permits for foreigners

Beside the minimal working age (18) there are no further restrictions in entering into a contract of employment. Foreigners are only obliged to apply for a temporary tax number at the local tax administration authority.

Types of Employment Contract

The employment types are: full time, part time and work at home. Specific clauses that must be included in the contract can be found in Kosovo’s labor law (Regulation No. 2001/27).
This report is part of a series prepared by the Economic Initiative for Kosovo (ECIKS), an organization supporting the economic development and foreign investments in Kosovo.   

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Anna Wiman

Anna Wiman
Freelance Writer and photographer

Elizabeth Gowing

Elizabeth Gowing
Co-Founder at The Ideas Partnership NGO

Henry H. Perritt Jr.

Henry H. Perritt Jr.
Professor of Law Chicago-Kent College

Drilon Gashi

Drilon Gashi
Comm. Counselor to the Prime Minister

Arlind V. Bytyqi

Arlind V. Bytyqi
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