Decomposition of the recent increase in the labour force participation rate in Serbia

Vera Gligorijevi?, Aleksandar Kneževi?, Damjan Baki?


The present work decomposes the recent increase in the labour force participation rate into two factors: the contribution of the age composition, and the contribution of the age- and sex-specific labour force participation rate. After a whole decade of stagnation, the labour force participation rate in Serbia has increased by 10% between 2012 and 2021, which opened the question of the deterministic basis for an increased economic activity in case of population that is aging and declining in size. For the purpose of decomposition, the method of overall rate decomposition has been used, which is considered to be the preferred standardization method. The results have shown that both the age composition as well as the age-specific labour force participation had a positive effect on the increase in overall economic activity. The effect of the age-specific labour force participation rates was significantly higher, contributing to more than 76% of the overall change, whereas the age composition resulted in only 22% change (25% change in case of male population, and 21% in case of female population). These findings shifted the research focus from aging population, as the key determinant of the labour force participation rate, towards the factors affecting the increase of specific age-related activity rates, but also towards the need to investigate the importance of other specific activity rates (apart from the age- and sex-related ones).

Key words: labour force participation rate, age composition, decomposition, working age population, Serbia

© 2023 Serbian Geographical Society, Belgrade, Serbia.

This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Serbia.

Full Text:



Berghammer, C., & Adserà, A. (2022). Growing inequality during the Great Recession: Labour market institutions and the education gap in unemployment across Europe and in the United States. Acta Sociologica, 65(4), 374–397.

Bodnár, K., & Nerlich, C. (2020). Drivers of rising labour force participation – the role of pension reforms. Economic Bulletin Article, 5, 1-17.

Burtless, G. (2013). The Impact of Population Aging and Delayed Retirement on Workforce Productivity. Center for Retirement Research Working Papers, 11, 1-49.

Canudas Romo, V. (2003). Decomposition Methods in Demography. University of Groningen.

Christiansen, L., Lin, H., Pereira, J. M., Topalova, P., & Turk, R. (2017). Unlocking the Potential of Greater Female Employment in Europe. Intereconomics, 52(1), 5-16.

Crespo Cuaresma, J., Lutz, W., & Sanderson, W. (2014). Is the Demographic Dividend an Education Dividend? Demography, 51(2), 299–315.

Das Gupta, P. (1978). A general method of decomposing a difference between two rates into several components. Demography, 15(1), 99-112.

Das Gupta, P. (1993). Standardization and Decomposition of Rates: A User’s Manual. Current Population Reports P23-186. US Bureau of the Census.

Dudel, C., & Myrskylä, M. (2017). Working Life Expectancy at Age 50 in the United States and the Impact of the Great Recession, Demography, 54(6), 2101-2123.

Esping-Andersen, G. (1990). The three political economies of the Welfare State. International Journal of Sociology, 20(3), 92-123.

European Commission (2014). The 2015 Ageing Report: Underlying Assumptions and Projection Methodologies. European Commission Directorate - General for Economic and Financial Affairs.

Gligorijevi?, V., Miri?, N., & Vasi?, P. (2014). Is skills renewal in ageing workforce possible? Evidence from Serbia. Zbornik Matice srpske za društvena istraživanja, 148, 653-664. DOI: 10.2298/ZMSDN1448653G

Gligorijevi?, V., & Vasi?, P. (2018). Doprinos starenja opadanju stope aktivnosti: kvantifikacija dekompozitnim metodom. Zbornik Matice srpske za društvene nauke, 167, 525-535.

Johnson, P. (2002). The impact of ageing: the supply of labour and human capital. In: H. Siebert (ed.), Economic Policy for Ageing Societies (pp. 111–130). Springer.

Kitigawa, E. (1955). Components of a difference between two rates. American Statistical Association Journal, 50(27), 1168-1194.

Loichinger, E. (2015). Labor force projections up to 2053 for 26 EU countries, by age, sex, and highest level of educational attainment. Demographic Research, 32(15), 443-486.

Loichinger, E., & Prskawetz, A. (2017). Changes in economic activity: The role of age and education. Demographic Research, 36(40), 1185-1208. 2017.36.40

Mason, A., & Lee, R. (2022). Six Ways Population Change Will Affect the Global Economy. Population and Development Review, 48(1), 51-73.

Nerlich, C., & Joachim, S. (2018). The economic impact of population ageing and pension reforms. Economic Bulletin Article, 2, 1-25.

Prskawetz, A., & Fent T. (2008). Workforce Aging and Labor Productivity: The Role of Supply and Demand for Labor in the G7 Countries. Population and Development Review, 34, 298-323.

Prskawetz, A., & Hammer, B. (2018). Does education matter? – economic dependency ratios by education. Vienna Yearbook of Population Research, 16(1), 1-24.

Prskawetz, A., Zagaglia, B., Fent, T., & Skirbekk, V. (2005). Decomposing the change in labour force indicators over time. Demographic Research, 13(7), 163–188.

Radivojevi?, B. (2012). Demografski izazov za socijalne reforme. In D. Vukovi? & N. Periši? (ed.), Rizici i izazovi socijalnih reformi (pp. 65-79). Fakultet politi?kih nauka.

Radivojevi?, B., & Jovanovi? Gavrilovi?, B. (2018). Niska ekonomska aktivnost starijeg stanovništva u Republici Srbiji – uzroci i posledice. Zbornik Matice srpske za društvene nauke, 167, 573-584.

Radivojevi?, B., & Nikitovi?, V. (2010). Održivost radne snage u uslovima intenzivnog demografskog starenja. Zbornik Matice srpske za društvene nauke, 131, 455-465.

Republi?ki zavod za statistiku (2021). Anketa o radnoj snazi, IV kvartal 2021. Beograd: Republi?ki zavod za statistiku.

Sanderson, W. C., & Scherbov, S. (2013). The Characteristics Approach to the Measurement of Population Aging. Population and Development Review, 39(4), 673-685,

Vaupel, J., & Canudas Romo, V. (2002). Decomposing demographic change into direct vs. compositional components. Demogrpahic Research, 7(1), 1-14.


  • There are currently no refbacks.