Human Capital and Unemployment in Transition Economies: The Case of Kosova

In this paper we explore the issues of human capita in Kosova, a country which is characterised by high unemployment and large-scale emigration. Using data from the Riinvest Labour Force and Household Survey (December 2002), we estimate the probability of being unemployed for those who are of working age, are active in the labour force and reside in Kosova. Apart from this, we estimate the probability of emigrating for those of working age. There seems to be some systematic patterns: (i) those who are unemployed are not randomly selected from the labour force; (ii) those who emigrate are not randomly selected from working age population. The empirical results show that the individuals residing in rural areas face higher probability of being unemployed. Consequently, they tend to emigrate more compared to those residing in urban areas. Second, males and married people face lower probability of being unemployed. But they also tend to emigrate more compared to their respective counterparts. Third, although the more educated individuals face lower probability of being unemployed in Kosova, they tend to emigrate more than less educated individuals. These research findings might be used for developing policy proposals.