The impact of the Great Recession on public and private sector pay and employment structures in two former Yugoslav countries

Commissioned by: OSF (Open Society Foundations) 2012-2013 Alumni Grant Program 
Project duration: December 31, 2013 – December 31, 2014 
Project manager: Jelena Laušev, PhD (Faculty of Economics, University of Belgrade) 
Collaborators: Iva Tomić, PhD, Ivica Rubil, PhD (The Institute of Economics, Zagreb)

Brief outline: 
The motivation for the research was to study the effects of the Great Recession on pay and employment structure in two post-communist former Yugoslav countries: Croatia and Serbia. Since October 2008 both countries were hit hard by the crisis. However, the countries chose different paths to adjust to the crisis. The research purpose was to contribute to the understanding of how the changes in public budgets due to crisis, affected pay and employment structure in the public and private sectors in Croatia and Serbia by providing both a detailed analysis of each country and a cross-country comparison. This research answered the following questions: was there a public-private sector earnings differential for workers with similar characteristics before the Great Recession; did the Great Recession cause changes in the public sector pay gap across the earnings distribution; how were various groups (i.e. by gender and educational qualification) of public and private sector workers affected by different economic policies in these two countries. Policy relevance of the review questions was to show which of the various economic policies implemented in two countries with a similar background proved more prudent and allowed better public budget adjustments to the crisis. Hence, the research on the impact of financial crisis on public sector pay was of great interest and value to a number of beneficiaries - both academics and policy practitioners.