## _wp1416 - INTRODUCTION

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---

### Overview
- Focus: labor market problems and policy challenges in South-Eastern Europe’s Western Balkan region (Albania, Bosnia and Herzegovina, Kosovo, the former Yugoslav Republic of Macedonia, Montenegro, and Serbia), hereafter “the Balkan countries.”
- Objectives of the paper:
  - (1) Document relatively weak performance of Balkan labor markets in cross-country context.
  - (2) Analyze contributing factors: unfinished transition, institutional labor-market setup (including rigidities), and labor cost factors.
  - (3) Present policy recommendations tailored to country-specific circumstances.

### Comparative labor-market performance
- Employment and participation:
  - Average ratio of employed persons to the working-age population in the Balkan countries was 46 percent in 2012, compared with 64 percent in the euro area and 63 percent among the new member states of the European Union (NMS).
  - Low employment rates reflect low activity rates and high unemployment rates.
- Youth and long-term unemployment:
  - Balkan countries have some of the highest youth and long-term unemployment rates in Europe.
- Persistence through boom years:
  - Between 2004 and 2008, real annual GDP growth in the Balkan countries averaged 5½ percent, yet unemployment rates remained high.
  - Okun’s coefficient: Balkan countries have a lower Okun’s coefficient than the NMS and the euro area periphery, implying unemployment is less responsive to cyclical growth and more persistent.

### Diagnostics: Causes of poor labor-market performance
- Classification of explanatory factors:
  - (1) Labor market institutional factors: affect matching and firm adjustment.
  - (2) Cost factors: raise wages despite excess supply; partly reflect institutional rigidities.
  - (3) Structural factors: unfinished transition and delayed European integration, shaping persistent problems.

### Institutional rigidities
- Unemployment benefits and social assistance:
  - Unemployment benefits in relation to wages fall at or below the average in cross-country comparison; benefit duration follows the standard 12-month limit in most countries—thus coverage likely expired for a large portion of the unemployed given prevalence of long-term unemployment.
  - Unemployment benefits typically are not accompanied by active labor market policies in the region.
  - Differences across countries:
    - Benefits particularly high in Bosnia and Herzegovina and Montenegro.
    - In Bosnia and Herzegovina, less than a quarter of benefits go to the poorest quintile; in Serbia, Montenegro, and Kosovo more than 50 percent of benefits go to the poorest quintiles.
- Employment protection legislation (EPL) and redundancy:
  - Redundancy rules appear tight in Bosnia and Herzegovina and Serbia; redundancy costs in most Balkan economies generally in line with advanced emerging market economies (possible exception Albania).
  - Anecdotal divergence between legislated rules and actual practices (example: Serbia’s severance payments based on lifetime employment).
  - Recent legislative moves to increase flexibility require judicial enforcement to be effective.
- Wage bargaining structure:
  - Union coverage remains extensive compared with NMS; bargaining fragmented, which can lead to inefficient outcomes (example: Serbia—sectoral wage agreements imposed on all firms).
- Policy implications (institutional):
  - Need for active labor market policies accompanying benefits.
  - Judicial enforcement of EPL reforms.
  - Move wage bargaining closer to company level in some countries.

### Cost factors
- Unit labor costs (ULC):
  - Pre-crisis (2004–08): capital inflows drove wages up; productivity gains often lagged, producing rapid ULC growth across many countries.
  - Since 2008: ULC growth moderated in Europe; among Balkan countries only Albania experienced a reduction in ULCs.
  - Country-specific dynamics:
    - Bosnia and Herzegovina: ULC deceleration driven by productivity growth.
    - Serbia: contained wage competitiveness deterioration through currency depreciation and euro-denominated wage decline.
    - Montenegro: wages continued to outpace productivity significantly.
- Wage rigidities:
  - Post-2008, countries such as Montenegro and Bosnia and Herzegovina saw growth in real wages despite rising unemployment—indicative of impaired wage adjustment mechanisms.
- Minimum wages:
  - Rule of thumb (Rutkowski, 2003): ratio of minimum to average wage for countries with high youth/low-skilled unemployment should not exceed one-third.
  - According to this rule, all Balkan economies except Montenegro have excessively high minimum wages.
- Tax wedge and labor taxation:
  - Social insurance contributions remain high in many Balkan countries (Serbia cited as an example of a high tax wedge).
  - High tax wedges likely contribute to high unemployment, low participation, and large informal sectors.
- Policy implications (cost):
  - Reduce minimum wages where distortive (Albania and Serbia highlighted).
  - Reduce tax wedge (Serbia highlighted).
  - Enhance exchange rate flexibility where feasible to support competitiveness.

### Structural hurdles from unfinished transition
- Delayed transition and limited FDI:
  - Transition reforms largely began after 2000—nearly a decade after NMS—so privatization, enterprise restructuring, and business environment reforms were incomplete prior to the global financial crisis.
  - Result: weaker FDI inflows, reduced opportunities for job creation and structural diversification.
  - Sectoral structure: Balkan countries have a higher share of agriculture and a smaller share of industry than NMS on average; export-oriented industries lagging.
- Labor outflows and brain drain:
  - Emigration during the 1990s increased significantly—leading to “brain drain” and reduced aggregate human capital.
- Remittances:
  - Balkan countries have among the highest remittance inflows in the world.
  - Kosovo and Bosnia & Herzegovina received remittances equivalent to 18 and 13 percent of GDP respectively in 2011.
  - High remittances can relax household budget constraints, increase reservation wages, reduce job-search effort, potentially increase long-term unemployment, and support social stability by acting as a private safety net.
- Policy implications (structural):
  - Priority: foster structural change to attract FDI and reduce natural rate of unemployment.
  - Strengthen macroeconomic stability and improve business environment to encourage greenfield FDI and sectoral diversification.
  - Implement policies to enhance workforce skills and productivity.

### Summary conclusions and policy implications
- Region-wide patterns:
  - Structural factors (delayed transition, poor investment climate, low FDI) are the predominant drivers of poor labor-market outcomes in the Balkan countries; FYR Macedonia fares relatively better.
  - Labor-market institutional factors in the region are not uniformly worse than NMS, but compounded with structural problems in several countries.
  - Cost factors broadly similar in aggregate to NMS but problematic for Montenegro, Serbia, and Bosnia and Herzegovina.
- Policy priorities:
  - Give priority to reforms that foster structural change, attract FDI, and reduce the natural rate of unemployment:
    - Strengthen macroeconomic stability.
    - Improve business environment and competitiveness.
  - Address institutional rigidities that compound structural problems:
    - Ease redundancy costs and reform redundancy rules (Albania example).
    - Change severance payment formula tied to lifetime employment (Serbia example).
    - Improve targeting of social welfare (Bosnia and Herzegovina and Serbia).
    - Move wage bargaining toward company level in Bosnia and Herzegovina, Montenegro, and Serbia.
    - Reduce minimum wages where they are excessively restrictive (Albania and Serbia).
    - Reduce the tax wedge where high (Serbia).
    - Implement policies to enhance skills and labor productivity.
  - Emphasize comprehensive, broad-based and sustained reform effort—single-area fixes are unlikely to be sufficient.

### Key statistics and exact figures cited
- Working-age employment ratio (average Balkan countries): 46 percent in 2012.
- Euro area working-age employment ratio: 64 percent in 2012.
- NMS working-age employment ratio: 63 percent in 2012.
- Real annual GDP growth in the Balkan countries, 2004–2008: averaged 5½ percent.
- Unemployment benefit duration: standard 12-month limit in most countries.
- Remittances in 2011: Kosovo 18 percent of GDP; Bosnia & Herzegovina 13 percent of GDP.
- Minimum-to-average wage rule of thumb: ratio should not exceed one-third (Rutkowski, 2003).
- Long-term unemployment: defined as unemployment spells of 12 months or more.

### Appendices: Countries Referenced and Methodology (high-level)
- Appendix I lists country abbreviations for Balkans, NMS, Other European economies, and Non-European countries (examples: ALB — Albania; BIH — Bosnia and Herzegovina; KOS — Kosovo; MKD — Former Yugoslav Republic of Macedonia; MNE — Montenegro; SRB — Serbia).
- Appendix II outlines underlying data and ranking methodology used in the heat map, including:
  - Structural indicators (Progress in structural reforms; Business environment; FDI; Remittances) with exact ranking thresholds (for example, Progress in structural reforms: Red ("1"): <3.4; Orange ("2"): ≥3.4 but <3.7; Green ("3"): ≥3.7).
  - Institutional factors (Employment protection laws; Firing costs; Social benefits; Size and duration of unemployment benefits) with exact thresholds (for example, Size of unemployment benefits: Red ("1"): ≥56.6; Orange ("2"): ≥33.3 but <56.6; Green ("3"): <33.3).
  - Labor costs (Euro-denominated ULC growth pre- and post-2008; Exchange rate flexibility; Minimum wage; Labor taxes) with exact thresholds (for example, Euro-denominated ULC growth (Pre-2008) rankings: Red ("1"): ≥11.2; Orange ("2"): ≥5.8 but <11.2; Green ("3"): <5.8).
  - Notes on ranking construction and sample composition, including outliers disregarded and sample country list.

*Source: _wp1416 - INTRODUCTION (PDF).*

### 1. Selected Labor Market Indicators, 2006–2012 ......................................................................5

### _wp1416 - 1. Selected Labor Market Indicators, 2006–2012 ......................................................................5

### Major sections and themes (table of contents)
- 1. Selected Labor Market Indicators, 2006–2012 ......................................................................5
- 2. Youth and Long-Term Unemployment, 2006–2012:Q3 .......................................................7
- 3. GDP Growth and Changes in Unemployment, 1993–2011 ...................................................8
- 4. Size and Duration of Unemployment Benefits ......................................................................9
- 5. Social Assistance Spending and Targeting ..........................................................................10
- 6. Employment Protection .......................................................................................................11
- 7. Unit Labor Costs and Nominal Wages, 2004–2011 ............................................................13
- 8. Unemployment and Wages ..................................................................................................14
- 9. Minimum Wage and Tax Wedge .........................................................................................15
- 10. Business Environment, FDI and Unemployment ..............................................................18
- 11. Gross Value Added by Sector, 2011 ..................................................................................18
- 12. Labor Migration and Brain Drain ......................................................................................19
- 13. Remittances and Labor Market Performance, 2011 ..........................................................21
- 14. Cross-Country Heat Map ...................................................................................................23

### Appendices
- I. Countries Referenced in the Paper and their Abbreviations .................................................27
- II. Underlying Data and Ranking Methodology Used in the Heat Map ..................................29

*Source: _wp1416 - 1. Selected Labor Market Indicators, 2006–2012 (PDF). Canonical URL: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp1416.pdf*

### INTRODUCTION

### _wp1416 - INTRODUCTION

### Overview
- Focus: labor market problems and policy challenges in South-Eastern Europe’s Western Balkan region (Albania, Bosnia and Herzegovina, Kosovo, the former Yugoslav Republic of Macedonia, Montenegro, and Serbia), hereafter “the Balkan countries.”
- Objectives of the paper:
  - (1) Document relatively weak performance of Balkan labor markets in cross-country context.
  - (2) Analyze contributing factors: unfinished transition, institutional labor-market setup (including rigidities), and labor cost factors.
  - (3) Present policy recommendations tailored to country-specific circumstances.

### Comparative labor-market performance
- Employment and participation:
  - Average ratio of employed persons to the working-age population in the Balkan countries was 46 percent in 2012, compared with 64 percent in the euro area and 63 percent among the new member states of the European Union (NMS).
  - Low employment rates reflect low activity rates and high unemployment rates.
- Youth and long-term unemployment:
  - Balkan countries have some of the highest youth and long-term unemployment rates in Europe (Figures referenced in source).
- Persistence through boom years:
  - Between 2004 and 2008, real annual GDP growth in the Balkan countries averaged 5½ percent, yet unemployment rates remained high.
  - Okun’s coefficient: Balkan countries have a lower Okun’s coefficient than the NMS and the euro area periphery, implying unemployment is less responsive to cyclical growth and more persistent.

### Diagnostics: Causes of poor labor-market performance
- Classification of explanatory factors:
  - (1) Labor market institutional factors: affect matching and firm adjustment.
  - (2) Cost factors: raise wages despite excess supply; partly reflect institutional rigidities.
  - (3) Structural factors: unfinished transition and delayed European integration, shaping persistent problems.

A. Institutional rigidities
- Unemployment benefits and social assistance:
  - Unemployment benefits in relation to wages fall at or below the average in cross-country comparison; benefit duration follows the standard 12-month limit in most countries—thus coverage likely expired for a large portion of the unemployed given prevalence of long-term unemployment.
  - Unemployment benefits typically are not accompanied by active labor market policies in the region.
  - Differences across countries:
    - Benefits particularly high in Bosnia and Herzegovina and Montenegro.
    - In Bosnia and Herzegovina, less than a quarter of benefits go to the poorest quintile; in Serbia, Montenegro, and Kosovo more than 50 percent of benefits go to the poorest quintiles.
- Employment protection legislation (EPL) and redundancy:
  - Redundancy rules appear tight in Bosnia and Herzegovina and Serbia; redundancy costs in most Balkan economies generally in line with advanced emerging market economies (possible exception Albania).
  - Anecdotal divergence between legislated rules and actual practices (example: Serbia’s severance payments based on lifetime employment).
  - Recent legislative moves to increase flexibility require judicial enforcement to be effective.
- Wage bargaining structure:
  - Union coverage remains extensive compared with NMS; bargaining fragmented, which can lead to inefficient outcomes (example: Serbia—sectoral wage agreements imposed on all firms).
- Policy implications (institutional):
  - Need for active labor market policies accompanying benefits.
  - Judicial enforcement of EPL reforms.
  - Move wage bargaining closer to company level in some countries.

B. Cost factors
- Unit labor costs (ULC):
  - Pre-crisis (2004–08): capital inflows drove wages up; productivity gains often lagged, producing rapid ULC growth across many countries.
  - Since 2008: ULC growth moderated in Europe; among Balkan countries only Albania experienced a reduction in ULCs.
  - Country-specific dynamics:
    - Bosnia and Herzegovina: ULC deceleration driven by productivity growth.
    - Serbia: contained wage competitiveness deterioration through currency depreciation and euro-denominated wage decline.
    - Montenegro: wages continued to outpace productivity significantly.
- Wage rigidities:
  - Post-2008, countries such as Montenegro and Bosnia and Herzegovina saw growth in real wages despite rising unemployment—indicative of impaired wage adjustment mechanisms.
- Minimum wages:
  - Rule of thumb (Rutkowski, 2003): ratio of minimum to average wage for countries with high youth/low-skilled unemployment should not exceed one-third.
  - According to this rule, all Balkan economies except Montenegro have excessively high minimum wages.
- Tax wedge and labor taxation:
  - Social insurance contributions remain high in many Balkan countries (Serbia cited as an example of a high tax wedge).
  - High tax wedges likely contribute to high unemployment, low participation, and large informal sectors.
- Policy implications (cost):
  - Reduce minimum wages where distortive (Albania and Serbia highlighted).
  - Reduce tax wedge (Serbia highlighted).
  - Enhance exchange rate flexibility where feasible to support competitiveness.

C. Structural hurdles from unfinished transition
- Delayed transition and limited FDI:
  - Transition reforms largely began after 2000—nearly a decade after NMS—so privatization, enterprise restructuring, and business environment reforms were incomplete prior to the global financial crisis.
  - Result: weaker FDI inflows, reduced opportunities for job creation and structural diversification.
  - Sectoral structure: Balkan countries have a higher share of agriculture and a smaller share of industry than NMS on average; export-oriented industries lagging.
- Labor outflows and brain drain:
  - Emigration during the 1990s increased significantly—leading to “brain drain” and reduced aggregate human capital.
- Remittances:
  - Balkan countries have among the highest remittance inflows in the world.
  - Kosovo and Bosnia & Herzegovina received remittances equivalent to 18 and 13 percent of GDP respectively in 2011.
  - High remittances can relax household budget constraints, increase reservation wages, reduce job-search effort, potentially increase long-term unemployment, and support social stability by acting as a private safety net.
- Policy implications (structural):
  - Priority: foster structural change to attract FDI and reduce natural rate of unemployment.
  - Strengthen macroeconomic stability and improve business environment to encourage greenfield FDI and sectoral diversification.
  - Implement policies to enhance workforce skills and productivity.

### Summary conclusions and policy implications
- Cross-country heat-map summary (region-wide patterns):
  - Structural factors (delayed transition, poor investment climate, low FDI) are the predominant drivers of poor labor-market outcomes in the Balkan countries; FYR Macedonia fares relatively better.
  - Labor-market institutional factors in the region are not uniformly worse than NMS, but compounded with structural problems in several countries.
  - Cost factors broadly similar in aggregate to NMS but problematic for Montenegro, Serbia, and Bosnia and Herzegovina.
- Policy priorities:
  - Give priority to reforms that foster structural change, attract FDI, and reduce the natural rate of unemployment: strengthen macroeconomic stability; improve business environment and competitiveness.
  - Address institutional rigidities that compound structural problems:
    - Ease redundancy costs and reform redundancy rules (Albania example).
    - Change severance payment formula tied to lifetime employment (Serbia example).
    - Improve targeting of social welfare (Bosnia and Herzegovina and Serbia).
    - Move wage bargaining toward company level in Bosnia and Herzegovina, Montenegro, and Serbia.
    - Reduce minimum wages where they are excessively restrictive (Albania and Serbia).
    - Reduce the tax wedge where high (Serbia).
    - Implement policies to enhance skills and labor productivity.
  - Emphasize comprehensive, broad-based and sustained reform effort—single-area fixes are unlikely to be sufficient.

### Key statistics and exact figures cited
- Working-age employment ratio (average Balkan countries): 46 percent in 2012.
- Euro area working-age employment ratio: 64 percent in 2012.
- NMS working-age employment ratio: 63 percent in 2012.
- Real annual GDP growth in the Balkan countries, 2004–2008: averaged 5½ percent.
- Unemployment benefit duration: standard 12-month limit in most countries.
- Remittances in 2011: Kosovo 18 percent of GDP; Bosnia & Herzegovina 13 percent of GDP.
- Minimum-to-average wage rule of thumb: ratio should not exceed one-third (Rutkowski, 2003).
- Long-term unemployment: defined as unemployment spells of 12 months or more (source definition used in the paper).

*Source: _wp1416 - INTRODUCTION*

### Appendix I. Countries Referenced in the Paper and their Abbreviations

### _wp1416 - Appendix I. Countries Referenced in the Paper and their Abbreviations

### Balkans
- ALB — Albania
- BIH — Bosnia and Herzegovina
- KOS — Kosovo
- MKD — Former Yugoslav Republic of Macedonia
- MNE — Montenegro
- SRB — Serbia

### NMS (New Member States)
- BGR — Bulgaria
- HRV — Croatia
- CZE — Czech Republic
- EST — Estonia
- HUN — Hungary
- LVA — Latvia
- LTU — Lithuania
- POL — Poland
- ROM — Romania
- SVK — Slovak Republic
- SVN — Slovenia

### Other European economies
- AUT — Austria
- BLR — Belarus
- BEL — Belgium
- DEU — Germany
- DNK — Denmark
- ESP — Spain
- FIN — Finland
- FRA — France
- GBR — United Kingdom
- GRC — Greece
- IRL — Ireland
- ITA — Italy
- LUX — Luxembourg
- MDA — Moldova
- NLD — Netherlands
- PRT — Portugal
- RUS — Russia
- SWE — Sweden
- TUR — Turkey
- UKR — Ukraine

### Non-European countries
- ARM — Armenia
- AZE — Azerbaijan
- GEO — Georgia
- KAZ — Kazakhstan
- KGZ — Kyrgyz Republic
- TJK — Tajikistan
- UZB — Uzbekistan

### Appendix II. Underlying Data and Ranking Methodology Used in the Heat Map — Indicator Definitions, Samples, and Rankings

Structural Indicators
- Progress in structural reforms
  - Underlying Data: The European Bank for Reconstruction and Development’s 2012 Transition Report: the average of six transition indicators (large- and small-scale privatization; governance and enterprise restructuring; price liberalization; trade and foreign exchange system; and competition policy).
  - Underlying Sample: 15 countries shown on the upper-right panel in Figure 10.
  - Rankings:
    - Red ("1"): <3.4
    - Orange ("2"): ≥3.4 but <3.7
    - Green ("3"): ≥3.7
- Business environment
  - Underlying Data: Percentile ranking in "Ease of Doing Business, 2012" database of the World Bank.
  - Underlying Sample: Sample of 31 European economies
  - Rankings:
    - Red ("1"): <53.8
    - Orange ("2"): ≥53.8 but <75.8
    - Green ("3"): ≥75.8
- Foreign direct investment (FDI)
  - Underlying Data: FDI stock per capita in thousands of U.S. dollars.
  - Underlying Sample: 14 countries shown on the bottom-left panel in Figure 10.
  - Rankings:
    - Red ("1"): <5.7
    - Orange ("2"): ≥5.7 but <9.8
    - Green ("3"): ≥9.8
- Remittances
  - Underlying Data: Inflow of remittances as a percentage of GDP.
  - Underlying Sample: 16 countries shown on Figure 13.
  - Rankings:
    - Red ("1"): ≥7.9
    - Orange ("2"): ≥4.3 but <7.9
    - Green ("3"): <4.3

Institutional Factors
- Employment protection laws
  - Underlying Data: World Bank (2012): Cumulative score based on responses to eight questions related to redundancy rules.
  - Underlying Sample: 31 countries shown on the upper panel in Figure 6.
  - Rankings:
    - Red ("1"): 2-4
    - Orange ("2"): 5-6
    - Green ("3"): 7-8
- Firing costs (weeks of salary)
  - Underlying Data: World Economic Forum (2011): Redundancy costs in weeks of salary.
  - Underlying Sample: 31 countries shown on the bottom panel in Figure 6.
  - Rankings:
    - Red ("1"): ≥46
    - Orange ("2"): ≥23 but <46
    - Green ("3"): <23
- Social benefits
  - Underlying Data: Social assistance spending in percent of GDP.
  - Underlying Sample: 26 countries shown on the upper panel in Figure 5.
  - Rankings:
    - Red ("1"): ≥2.8
    - Orange ("2"): ≥1.7 but <2.8
    - Green ("3"): <1.7
- Size of unemployment benefits
  - Underlying Data: Unemployment benefits as percentage of gross average wage (for a single person without children).
  - Underlying Sample: 28 countries shown on the upper panel in Figure 4.
  - Rankings:
    - Red ("1"): ≥56.6
    - Orange ("2"): ≥33.3 but <56.6
    - Green ("3"): <33.3
- Duration of unemployment benefits
  - Underlying Data: Maximum duration of unemployment benefits in months.
  - Underlying Sample: 29 countries shown on the bottom panel in Figure 4.
  - Rankings:
    - Red ("1"): ≥27
    - Orange ("2"): ≥16 but <27
    - Green ("3"): <16

Labor Costs
- Euro-denominated ULC growth (Pre-2008)
  - Underlying Data: Average annual rate of ULC growth during 2005–08 period.
  - Underlying Sample: 25 countries shown on the upper panel in Figure 7.
  - Rankings:
    - Red ("1"): ≥11.2
    - Orange ("2"): ≥5.8 but <11.2
    - Green ("3"): <5.8
- Euro-denominated ULC growth (Post-2008)
  - Underlying Data: Average annual rate of ULC growth during 2005–08 period.
  - Underlying Sample: 29 countries shown on the middle panel in Figure 7.
  - Rankings:
    - Red ("1"): ≥3.4
    - Orange ("2"): ≥0.4 but <3.4
    - Green ("3"): <0.4
- Exchange rate flexibility (exchange rate regime)
  - Underlying Data: Exchange rate regimes.
  - Underlying Sample: Countries in the heat map
  - Rankings:
    - Fixed
    - ...
    - Flexible
- Minimum wage
  - Underlying Data: Minimum wage as a percentage of average wage.
  - Underlying Sample: 23 countries shown on the upper panel in Figure 9.
  - Rankings:
    - Red ("1"): ≥46.3
    - Orange ("2"): ≥35.1 but <46.3
    - Green ("3"): <40.4
- Labor taxes
  - Underlying Data: Tax wedge defined as the share of income tax and social security contributions by employers and employees over total labor costs.
  - Underlying Sample: 30 countries shown on the bottom panel in Figure 9.
  - Rankings:
    - Red ("1"): ≥49
    - Orange ("2"): ≥40.4 but <49
    - Green ("3"): <27.2

Notes
- 1/ The rankings were constructed by dividing the minimum-to-maximum range of each indicator into three equal parts. The following outliers were disregarded when constructing minimum-to-maximum ranges: Hungary in the FDI category, Belgium in the unemployment benefits category, Portugal in the firing costs category and Ireland in the labor taxes category.
- 2/ The sample includes ALB, AUT, BGR, BiH, CZE, DEU, DNK, ESP, EST, FIN, FRA, GBR, GRC, HRV, HUN, IRL, ITA, KOS, LTU, LUX, LVA, MKD, MNE, NLD, POL, PRT, ROM, SRB, SVK, SVN, SWE.

*Appendix I and Appendix II as provided in _wp1416 - Appendix I. Countries Referenced in the Paper and their Abbreviations*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp1416.pdf_