07 Feb IMPLEMENTATION OF MEASURES TO COMBAT YOUTH UNEMPLOYMENT IN CROATIA
The number of unemployed young people in Croatia has been very high for years, and Croatia is at the top in terms of the rate of unemployed young people in the EU. In September 2021, 28,000 young people in Croatia were unemployed, and the unemployment rate was 20%, which means that every fifth young person in Croatia is unemployed. The average unemployment rate in all EU countries is 16%, although the figure is slowly falling after a temporary jump due to the pandemic. Unemployment or the inability to find work in the appropriate level of education or desired sector is a particular problem. It can be concluded that the media do not report enough on the problems and needs of young people who are unemployed. The global economic crisis has caused disruption in the labor market in the European Union and Croatia, and young people have proven to be the most vulnerable group. Increasing the employability of young people in Croatia should be one of the most important priorities for addressing. Croatia relies on EU funds to solve the problem of youth unemployment, and respects the goals set by the EU in this area.
The Youth Guarantee is a new approach in solving the issue of youth unemployment, which seeks to activate all persons under the age of 25 (in the Republic of Croatia under the age of 30!) As quickly as possible on the labor market. The measures of the Youth Guarantee in the Republic of Croatia may include all young NEETs who have reached the age of 15 and are under 30 years of age. Although the Recommendation of the Council of the European Union on the Establishment of the Youth Guarantee Scheme stipulates that the Guarantee should cover persons aged 15 to 25, at the initiative of Croatia and several other members, it also enables persons under 30 to be included in the measures. Today, most states have moved the age limit to 30. In Croatia, the priority is young people in NEET status with lower qualifications and highly educated young people without work experience because analyzes show that they have the hardest time finding employment. Also, priority is given to inactive young people, ie young NEETs who are not registered in the records of the Croatian Employment Service.
In the process of preparation for employment, the Croatian Employment Service organizes numerous activities to ensure the fastest possible employment of young people, which includes active employment policy measures. These measures are implemented with the aim of encouraging employment, additional education of workers and preservation of jobs, taking into account the specific needs of users.
ACTIVE EMPLOYMENT POLICY MEASURES
Through active employment measures, entrepreneurship is developed throughout Croatia, employment is increased and, through support for education, training, investments are made in the competitiveness of workers in the labor market. Young people, as a target group, can be found in all measures.
-Employment aid– which aims to encourage the employment of disadvantaged or extremely disadvantaged persons and persons with disabilities by co-financing the cost of the gross amount of salary to employers for a period of 12 months or 24 months. The Institute awards a monthly lump sum amount of support, regardless of the actual cost of the employer in accordance with the level of education and the possibility of using the tax relief for the co-financed person.
– Support for self-employment – is granted to unemployed persons to cover the costs of establishing and starting a business entity in the following organizational forms: crafts, companies, self-employed and institutions. Support may also be granted to several unemployed persons if they will jointly establish and start a new business entity, or continue with the business of the existing business entity they have taken over. The aim of this measure is to provide financial support to unemployed people who decide to start their own business, which lasts 24 months. The amount of subsidy for this measure is up to 120 thousand kuna.
In addition to measures related to green and digital jobs, the measure Biram Hrvatska as an extension of measures for self-employment attracted the greatest public attention. The measure I choose Croatia after January 1, 2022 can be used by returnees from the European Economic Area. The measure provides additional support of HRK 50,000 to returnees who decide to become self-employed. People who decide to relocate their business to less developed regions can receive support of HRK 25,000.
– Traineeships – traineeship grants can be granted to employers who, as natural or legal persons, and persons established on the basis of special regulations, independently and permanently perform economic activities, as low-value employment grants that do not have the characteristics of state employment aid. The aim of this measure is to enable persons to work independently by encouraging the employment of persons by co-financing the cost of their gross salary and other costs to employers, all in accordance with this measure. The duration of this measure is 12 months, and the amount of the subsidy is 100% of the amount according to the amount of the trainee’s gross salary, which is 85% of the gross salary of the job, which does not include the amount of overtime, night, shift, field or any other right in accordance with the provisions of the Labor Law of other applicable regulations and acts.
An internship can lead to employment, but no intern is guaranteed a job. Namely, internships can also be accepted in activities for which young people are not directly educated or are not sure that they would like to do that job in the future. Nevertheless, such an internship can bring new experiences, knowledge and acquaintances that may be useful in the future.
Young people can be employed in Croatia completely independently without the support or mediation of the employment service and without subsidies, and the employer who hires them may be exempt from certain benefits. When concluding an employment contract, the employer may use one of the two fiscal reliefs in the form of exemption from the obligation to calculate and pay contributions to the salary, according to the Law on Contributions. Thus, we have a first employment allowance of one year for persons without registered pension insurance and a five-year permanent employment allowance for young people, provided that the young person has not previously had an indefinite employment contract with the same employer.
The latest measure that has been introduced is tax relief for young people, under which young people under 25 will not pay income tax, and young people aged 25 to 30 will pay only 50% of the planned amount.
EFFECTIVENESS OF MEASURES
From year to year, the Republic of Croatia is trying to reduce the youth unemployment rate through various measures. For 2022, measures for green and digital activities have been introduced, the documentation that grant applicants must submit has been reduced, the maximum support for self-employment will be raised to HRK 150,000 and a number of other activities.
According to the Croatian Employment Service, almost 28 percent of new users of self-employment funds were under 29 years of age. Although young unemployed people decide independently, depending on their business plan, whether to start a business, a limited liability company or the simplest form of company, most of them start a business. Out of 1,054 newly enrolled young people, 70 percent of them received support for self-employment from the Croatian Employment Service.
Active youth policy measures in Croatia have so far proved to be effective and significantly improve the labor market perspective of young people who choose to use them. Whether it is self-employment measures that teach us entrepreneurial spirit, internship measures that lead us to work, training measures, employment support and others. Many measures such as job retention due to the economic crisis caused by the pandemic have proven effective because many jobs have been saved. Various measures and activities seek to reduce youth unemployment and emigration, as well as their return because young people are the driving force of any society.