How Structural Changes Affect Enterprises’ Expectations about Employment in Serbia?

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Kosovka Ognjenović


This article examines enterprises’ responses to structural changes in the economy of Serbia caused by both transitional changes and the global economic crisis, as well as by influences of other accompanying factors. An assessment of the enterprises’ expectations in terms of short-term dynamics of employment needs is provided. Enterprises use different coping strategies, but their potentials for growth and development are particularly tight. The multinomial logit econometric models are employed in order to estimate outcomes in the enterprises’ expectations with respect to changes in job flows. The coefficient estimate of the variable that measures the amount of engaged labour at the level of an average enterprise in Serbia shows a statistically significant influence that this variable has on the enterprises’ decisions about the fluctuations of workers. Taking the decision that would not result in changes in the number of employees as a baseline alternative, the first rational choice of the employers would be to dismiss old or to employ new workers if they expect unfavourable, i.e. favourable, trends, respectively. The estimated multinomial logit model can be used for predictions of employers’ decisions about expected in(out)flows of workers. However, a parsimonious multinomial model was estimated, implying that more accurate predictions would be obtained by using the model with more explanatory variables. For the purpose of the analysis presented in this article, a micro set of the survey data provided by the Public Employment Service of Serbia is used. The survey, with enterprises as primary sample units, was carried out in 2011.

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