This report aims to investigate causes of unemployment in Bosnia and Herzegovina, as well as problems and solutions of unemployment in this country. Exploration of causes of unemployment is analyzed by utilizing of the book written by Rajko Tomas entitled Nezaposleni. Moreover, data related to problems of unemployment in Bosnia and Herzegovina is gathered from the book by Miomir Jaksic entitled Makroekonomija. The articles related to poverty and going abroad of young population are collected from the book Osnovi ekonomije written by Slobodan Barac and Budimir Stakic and its articles are very beneficial for our topic. Finally, the solutions of unemployment in Bosnia and Herzegovina are analyzed by utilizing online articles “Polovina gradana u BiH zivi na granici siromatva, na korak od gladi”, written by Vecernji List.
3.1 Causes of unemployment in Bosnia and Herzegovina
3.1.1 Undeclared work
First major cause of unemployment in Bosnia and Herzegovina is undeclared work. Undeclared work got significant meaning during the period of socialist development of this country, where privatization of local companies was frequent. This type of work existed in some branches, such as, agriculture, craft, construction and catering. In the past, undeclared work was only seasonal and temporary, but now, it is common in all sectors of country. Today, statistics shows that some companies do not register any worker, but these companies still exist. They use method where their workers are placed on the waiting list, but nobody guarantee them that they will be registered (Ilic, 2003). The major reason why employers do not register their employees is the high monthly cost for each worker, and using this method, they attempt to maximize their profit. Sometimes it represents an advantage for workers because they may receive higher salaries if their employer do not register them and pay fees for them. On the other hand, employees are also faced with some disadvantages such as unpaid health insurance and pension insurance. What is more, the government is conscious of existence of undeclared work, but they still do not want to break it due to their inability to decrease unemployment rate in this country. For example, if they break undeclared work, more people will be fired and it leads to increase in unemployment rate. Consequently, it is obvious from above that undeclared work is harmful for the economy of Bosnia and Herzegovina, as well as for its citizens.
Another important cause of unemployment in Bosnia and Herzegovina is corruption. At the end of each year, numerous organizations do researches related to corruption in Bosnia and Herzegovina. One of these organizations is Transparency International organization. According to Transparency International, Bosnia and Herzegovina is represented as the one of the most corrupted and the most undeveloped countries in Europe. The corruption rate in this country is calculated as 14.9%...