Croatia has reduced its underemployment rate from 14.5% in 2020 to 11%, which is still high in comparison to some other Central and Eastern European countries, the Vecernji List daily reported on Monday.

Underemployment is a measure of employment and labour utilisation in the economy that looks at how well the labour force is being used in terms of skills, experience, and availability to work.

Croatian Employers’ Association (HUP) chief economist Hrvoje Stojic told Vecernji List that underemployment is the sum of jobless persons, part-time employees, and those who are inactive or cannot be employed.

This cut of Croatia’s underemployment rate is not only the reflection of a fall in unemployment but also a fall in the share of inactive population who “do not seek employment but are available”.

Stojic said that in terms of a share of inactive population, Croatia ranks higher than other countries in the CEE region and that this is is characteristic of EU Mediterranean countries, partly as a consequence of rentierism.

For instance, Slovenia’s underemployment rate is sightly above 6%, Czechia’s rate is 4% and Hungary’s is below 6%.

Croatia’s employment rate is 70%, five percentage points below the EU average, and almost 8 pp below the CEE region’s average.

Croatia’s employment rate rose also due to the hiring of foreign workers. In 2022, the number of work permits for foreigners increased threefold compared with 2021.