April the 23rd, 2025 – 500,000 working age Croats are allegedly not even seeking work, despite employers scrambling to fill positions and being forced to acquire foreign labour.
As Poslovni Dnevnik/Josipa Ban writes, as employers continue to struggle to find workers, being instead pushed to import them, the domestic market is home to an entire army of inactive working-age people. Close to half a million working age Croats seem to neither be working or looking for work.
There are almost as many of them as there are employed (1.517 million economically inactive people compared to 1.684 million employed people). While the share of employed Croats has grown over the past decade (from 43% in 2014 to 51% last year), the share of economically inactive people has fallen slightly over the same period (from 47% to 46%), according to data from the Labour Force Survey of the Central Bureau of Statistics.
500,000 working age croats not seeking work is a complex issue
The explanation for so many working age Croats not working or seeking work is actually more of a complex problem than it might initially seem. The economically inactive Croats are an extremely heterogeneous group. Their activation requires taking a series of different and systematic measures. There are few of them of course, but they are all too often poorly tailored and inconsistent. That’s why, after all, we aren’t really witnessing a serious decline in the number of those who could work, but in those who are not even bothering to seek work.
This is of course not good because “activating the potential of inactive people would not only improve economic indicators but also contribute to greater social cohesion and quality of life in Croatia,” emphasised Predrag Bejaković, an independent economic analyst.
He explained that the high rate of working age Croats not working or looking for a job is the result of a combination of demographic changes, mismatches between education and the labour market, and inadequately adjusted social and economic policies. “The solution to this problem lies in strategic reforms that will include all age groups and social classes, starting from young people, women, to the elderly and people with disabilities,” he pointed out.
the issue of early retirement in croatia
These are all groups that are largely economically inactive, but according to data from the Labour Force Survey for 2024, the over-65s are in the lead (55 percent share). However, the fact that there is potential for their economic activation is evidenced by the fact that more than half a million (507,000) Croats between the ages of 20 and 64 appear to be avoiding the labour market like the plague.
Valerija Botrić, a researcher at the Institute of Economics in Zagreb, noted that given the structure of the inactive population, no significant activation potential is visible. “This doesn’t mean that there’s no possibility of positive changes and additional increase in activity,” she added.
Botrić noted that across all age groups, although there are different causes, there is a higher representation of women among the current makeup of economically inactive Croats. An additional concern is that the majority of inactive individuals aren’t even looking for work and simply do not want to work, warned Botrić. “The most common reason for this attitude is that they’re retired or they’re people who aren’t looking for work due to various health problems,” she explained.
“This response points to the problematic nature of the domestic pension system, which has enabled early retirement for a lot of people,” warned Bejaković.
Botrić added that the greatest activation potential can be found in the group that wants to work, but isn’t actively looking for a job. “Within this group, the largest share is those who aren’t actively looking for work because they believe there are no suitable jobs on the market,” he pointed out.
highly educated people aren’t immune
Statistics also show that the share of highly educated people in the total number of working age Croats not working or seeking work has increased over the past decade (by 4.2% to 13.5%). The share of those with vocational education, who make up by far the largest share of the inactive population, has increased even more (by 4.3% to 43%). Predrag Bejaković attributed the phenomenon to the mismatch between the education system and the labour market, and the reluctance to accept other jobs. “It must made very clear to young people that if they decide to go to school or study for a so-called surplus profession, they’ll have a hard time finding a job related to it,” he said.
Measures and possibilities for activating the economically inactive do exist. So far, they have mainly been aimed at the older and younger population, according Botrić. As a positive example, he cites changes in the pension system that have enabled retirees to return to the labour market and that the move is yielding results because more and more retirees are continuing to work in some capacity. However, we still aren’t seeing any results in measures related to the employment of people with disabilities. This is primarily because, despite quotas and incentives, most employers would sooner fine than just employ them.
structural changes in the labour market
There’s also been no visible progress in retraining or acquiring new skills for working age Croats who have been left behind due to structural changes in the labour market. This will probably become an increasingly prominent problem over the coming years. Botrić noted that vouchers for acquiring certain skills were introduced relatively recently to solve this issue. However, due to the way the measure is tailored, long-term unemployed people can’t use them. For this, they should be registered with the Croatian Employment Service, which they usually aren’t. It turns out that vouchers are used by the employed, not the unemployed.
Bejaković agrees that lifelong education and retraining should be further encouraged because this would make it easier for the “discouraged” working age Croats, i.e. the long-term unemployed, to return to the labour market. In addition, he emphasised, we must work on measures to support women through family policies.
“Increasing the availability of kindergartens and nurseries, subsidising childcare costs, and encouraging flexible working can help women stay economically active during motherhood. Such measures have already yielded results in Scandinavian countries,” she pointed out, adding that it’s difficult to secure a place in a kindergarten in Zagreb, let alone in smaller communities.
Bejaković also noted that the social benefits system needs to be reorganised. For example, if a person receives the guaranteed minimum wage, they’re unlikely to accept a job because it will most often only bring them a few hundred euros more than the salary they already receive. Accepting a job, in that case, isn’t profitable because going to work carries its own costs. Therefore, the social benefits system should be tied to work activity, in such a way that it pays the user to accept a job and become active in the labour market. Such a change would also contribute to reducing the ubiquitous and difficult-to-measure undeclared work and the grey economy, Bejaković concluded.
