Unemployment was a major problem for Yugoslavia in the late 1980s. During that period, over 875,000 Yugoslavs worked abroad and as much as 25 percent of workers employed in the productive social sector were classified as surplus labor; nevertheless, more than 1.2 million people were registered as unemployed in 1988. This was about one-sixth of the total working-age population of Yugoslavia that year.

Yugoslav unemployment statistics were based on the number of people who registered with the government as job seekers in the social sector. Several factors caused inaccuracies in such figures, however. Students often registered as job seekers in order to receive better health benefits; many workers registered if they were seeking a job better than the one already held; and some of the unemployed did not register because they saw no prospect of getting a job.

Because unprofitable Yugoslav enterprises often were supported by the government and prevented from going into bankruptcy, workers in the social sector rarely lost their jobs before the reform of 1990. Therefore, a large proportion of job seekers in the 1980s were young people. In 1988 over 92 percent of the unemployed were under age forty, and nearly 57 percent were under age thirty. Yugoslav unemployment also tended to be long-term: according to official statistics for 1988, although almost one-quarter of the unemployed were able to find work in less than six months, almost 62 percent were without a job for over one year, many for more than three years. A third characteristic of Yugoslav unemployment was the large regional differences in unemployment rates. In 1986 Slovenia was at virtually full employment while the underdeveloped region of Kosovo had more than one job seeker for every two workers employed in the social sector.

Several factors interacted to raise unemployment in Yugoslavia in the 1980s. Immediately after World War II, peasants made up about four-fifths of the population. Rural workers increasingly were forced into the cities to seek jobs, better health care, improved earning potential, and pensions. Two government policies stimulated this movement. Following traditional Marxist development patterns, Yugoslavia concentrated investments in heavy industry, directing capital away from agriculture and further impoverishing the peasants. And the policy of discouraging nonfarm private business eliminated a potential alternative economic activity. Marxist ideology obliged social sector enterprises to absorb extra labor, even if it meant redundancy and decreases in labor productivity. (see table 12, Appendix).

The economic reforms of the 1960s gave market forces more influence in enterprise management decisions, which helped eliminate excess labor. Fortunately for Yugoslavia, at this time several West European countries required imported labor; Yugoslav workers were encouraged to leave the country for temporary jobs in Western Europe. Then the oil price shock and worldwide recession of 1979 dropped labor demand in Western Europe and forced many Yugoslav guest workers to return home. Domestic enterprises returned to conditions of surplus labor and low productivity. By the late 1980s, however, the guest worker force was again contributing substantial amounts of hard currency to the Yugoslav economy.

In the late 1980s, measures such as improved health care and pensions attempted to raise the rural standard of living and draw some of the unemployed out of the cities; but in 1990 prospects for stemming unemployment still seemed poor. The primary goal of the 1990 economic reform was to reduce Yugoslavia's runaway inflation. But the new anti-inflation policies aggravated the unemployment problem as they improved labor productivity (see The Reforms of 1990 , this ch.).

Data as of December 1990

NOTE: The information regarding Yugoslavia (former) on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Yugoslavia (former) Labor and Unemployment information contained here. All suggestions for corrections of any errors about Yugoslavia (former) Labor and Unemployment should be addressed to the Library of Congress and the CIA.