The Serbian Labor Market During the Covid-19 Pandemic: An Assessment of the Government’s Response to the Crisis

The Serbian Labor Market During the Covid-19 Pandemic: An Assessment of the Government’s Response to the Crisis

Slobodan Kotlica

Faculty of Business and Law, MB University, Belgrade, Serbia

Nataša Stanojević

Institute of International Politics and Economics, Belgrade, Serbia

Abstract

During the Covid-19 pandemic many governments have implemented large socio-economic packages, providing massive fiscal support to protect employment, households and vulnerable populations. The focus of this research is on the types and effects of employment-related measures of the government of Serbia.

Direct employment-related measures of the government were: compensation of salaries to companies in order to preserve employment, financial assistance and facilitation of business to enterprises with the condition of retaining workers, measures relating to certain categories of employees or sectors. Besides, as indirect employment related measures, a set of measures of non-selective payments to the entire population, often called “helicopter money” was implemented with aim to increase domestic demand, and consequently production and employment.

The research question is: “What effects these measures have produced on the employment in Serbia”? Methodology of research included: descriptive statistics, classification and cost/benefits analysis.

The research found that, among the employment-related measures applied in Serbia, all types of assistance to companies had a positive effect, but the long-term effects would be only possible by intensifying efforts to achieve greater transparency of employees in temporary and additional jobs, as well as labor inspection, especially in the private services sector. Another important result is that mechanism of “helicopter money” has successfully stimulated domestic demand. The benefits of Serbian government measures significantly outweigh the costs of fiscal deficit and increasing of public debt.

Keywords: Covid-19, Serbia, Unemployment, Employment-related measures, Fiscal support.