A Gender Perspective Analysis of the Interaction between Public and Private Sector Employment – A Study of Western Balkan Countries
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Abstract
This paper examines the connection between expanding public-sector employment and its impact on private-sector job growth. Our focus is on understanding whether public hiring “crowds in” or “crowds out” private jobs, and further, if crowding out occurs, whether it leads to “partial crowding out” (reducing unemployment), “full crowding out” (no change in unemployment), or “more than full crowding out” (increased unemployment). This paper uses data from 2006 to 2022 from five Western Balkan (WB) countries: Albania, Bosnia & Herzegovina (BiH), Montenegro, North Macedonia, and Serbia. The findings show a strong negative link between public and private sector job growth. Similar to the unemployment model, the results suggest “full crowding out,” meaning each new job in the public sector leads to roughly one fewer job in the private sector. This implies that adding public jobs does not create new jobs overall, but simply shifts them from one sector to another. Also, traditional gender roles shape labor markets in the WB, leading to lower labor force participation rates for women compared to men and influencing the dynamics between public and private employment sectors.
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