Croatia is grappling with a significant demographic and labor market challenge, with a growing number of inactive individuals in the 20 to 64 age group, totaling 554,000 people. This includes 154,000 individuals aged 25 to 49 and around 304,000 aged 50 to 64. These startling statistics were revealed in a report by Večernji list.

Of particular concern is that among these inactive individuals, every eleventh holds a college degree, while every twelfth has completed their secondary education. These figures underscore the untapped potential within this demographic. The inactive population represents an untapped labor reserve in Croatia, with the possibility of reengaging older adults and retirees. As the country faces demographic challenges, mobilizing this section of the population could contribute to labor market stability and economic growth.

Current Labor Landscape

According to the latest labor force survey, Croatia had 1,611,000 employed individuals and 95,000 unemployed individuals in the second quarter of this year. These figures emphasize the importance of addressing labor force participation rates, particularly among the inactive population. It is worth noting that international labor activity monitoring methods consider anyone who has engaged in some form of work within the past two weeks as employed. Recent data shows that among individuals aged 64 and over, 66 were employed out of every 100, while nearly six (5.7) were unemployed. The remainder either remained inactive or were pursuing educational opportunities.

A Shifting Population Dynamics

Croatia is witnessing a marked population decline in younger age groups, including individuals up to 65 years old. Conversely, the number of older adults is on the rise. Alarmingly, one-third of Croatia's population is currently retired, placing Croatia among the countries with the highest retirement ratios in the European Union.

To add complexity to this situation, Croatia's statistics are transitioning to a new method for calculating employment and activity rates, based on the latest census data. Until last year, statistics relied on data from the 2011 census. This adjustment is necessary to reflect Croatia's significant population decline of 400,000 residents over the past decade.

The demographic and labor challenges facing Croatia highlight the need for comprehensive policies aimed at activating the inactive workforce and addressing the shifting population dynamics to ensure a sustainable and prosperous future for the country.