Macedonia, former Yugoslav Republic of - Poverty, Jobs and Firms : An Assessment for 2002???2006

This poverty assessment report is based upon pre-crisis data for the period 2002-2006. Though some may have reservations that this information base is not well suited to informing public policy choices of today, this view would be short-sighted. Economic development is not an overnight occurrence. It is also not something that can be reversed through an economic shock, no matter how virulent. The analysis of data from the first half of this decade reveals small though perceptible shifts in the transmission channels for poverty reduction, that is, labor markets and enterprises. Thus, the reform process which began earlier this decade indeed saw some positive changes emerging in the real sector. These are captured in this report and provide an understanding of how the complex issue of poverty can be addressed in the future. The remainder of this executive summary provides an overview of the main findings of the analysis. The following main areas discussed in the poverty assessment: (i) a description of the extent of poverty, the characteristics of the poor, trends in non-income and income dimensions of poverty over 2002-2006, and inequality; (ii) the role of economic growth, employment changes, and social transfers in affecting poverty rates; (iii) job dynamics and the characteristics of firm birth and destruction and its linkages to job opportunities, labor productivity, and long-term income growth; and (iv) policy reforms that will lead to poverty reduction.