Workers across the Western Balkans spend long hours at their jobs, but the region produces substantially less economic value per worker than the European Union, highlighting a productivity gap that wage increases alone cannot close.
The latest comparable World Bank indicator, which measures gross domestic product per employed person in constant purchasing-power-adjusted dollars, places most Western Balkan economies at less than half the EU level.
Latest available estimates put output per employed person at approximately $47,600 in Albania, $55,800 in Bosnia and Herzegovina, $55,900 in Montenegro, $43,000 in North Macedonia and $58,600 in Serbia. Kosovo’s estimate is considerably higher, at around $82,000, although the figure should be interpreted cautiously because the indicator incorporates modelled employment estimates and can be distorted in economies with low labour-force participation and large informal sectors.
The corresponding EU figure was about $117,300 per employed person in 2024, more than twice the level recorded in most of the Western Balkans. The World Bank defines the indicator as GDP divided by total employment, adjusted for differences in purchasing power.
The figures do not mean that individual workers in one country necessarily work harder or perform better than those in another. They reflect differences in technology, machinery, infrastructure, management, skills, business organisation, informality and the types of industries in which people are employed.
Serbia: Long Hours, Limited Output
Serbia illustrates the region’s central productivity problem.
Workers in the country recorded an average working week of more than 40 hours in recent official data, significantly above the EU average. Yet Serbia’s output per employed person was only around half the EU level.
A Serbian economic analysis found that the country’s employees worked 41.3 hours per week in 2024, while average hourly compensation stood at €9.60, compared with around €30 in the EU and €34 in the euro area.
The productivity gap was especially wide in agriculture, where output per hour in the EU was estimated to be 8.7 times higher than in Serbia. EU information-technology productivity was nearly three times higher, while Ireland’s highly internationalised technology sector produced roughly 12 times more value per worker than Serbia’s.
Serbia’s difficulty is therefore not primarily a shortage of working hours. It is the limited amount of capital, technology and added value supporting each hour of work.
North Macedonia: Productivity Gains Do Not Reach All Workers
North Macedonia recorded one of the lowest productivity levels in the region, at around $43,000 per employed person, little more than one-third of the EU level.
A World Bank analysis found that productivity had increased among Macedonian companies after the pandemic, but that real wage growth did not initially keep pace. The most productive businesses were often exporters, foreign-owned companies and ICT firms employing a relatively small and specialised section of the workforce.
Much of the country’s employment growth remained concentrated in lower-productivity manufacturing, including textiles, basic production and assembly operations with limited domestic technological development.
The result is an economy in which productive firms exist but have weak links with domestic suppliers, smaller businesses and the wider labour market. Skills mismatches and limited worker mobility further prevent employees from moving towards more productive and better-paid jobs.
North Macedonia’s average working week reached about 39.5 hours in 2025, compared with 35.9 hours in the EU, according to Eurostat-based figures.
Albania: Europe’s Long Hours Meet Persistent Informality
Albania’s output per worker was estimated at around $47,600, or about 41% of the EU level.
Its workers also record some of Europe’s longest hours. Salaried employees worked an average of 43.7 hours per week in 2023, according to the Regional Cooperation Council’s 2025 review, compared with an EU average of about 36 hours. Around 14% of Albanian workers regularly worked more than 50 hours per week.
Albania’s labour market has improved, with the employment rate among people aged 20–64 reaching 74.1% in 2024 and unemployment falling to 9.2%. But informality still affected approximately 28% of non-agricultural employment, limiting access to social protection and reducing incentives for companies to invest in skills and technology.
The country also faces a human-capital constraint. Only 23% of adults possessed basic digital skills, while adult participation in training and lifelong learning was among the lowest in Europe.
These weaknesses leave many workers concentrated in agriculture, construction, retail, tourism and other labour-intensive activities in which long hours do not necessarily generate high output.
Bosnia and Herzegovina: Fragmentation Holds Back Investment
Bosnia and Herzegovina produced around $55,800 per employed person, less than half the EU benchmark.
The country’s productivity challenge is closely linked to political and administrative fragmentation, limited private investment, a large public sector and the slow reallocation of workers and capital towards more competitive industries.
Nominal wages increased substantially between 2020 and 2024, but faster wage growth does not automatically improve competitiveness when it is not supported by comparable gains in output.
Bosnia also continues to lose skilled and working-age residents through emigration. Labour shortages can push wages higher, but without investment in automation, workforce skills and business expansion, they can also raise employers’ costs without improving production.
Montenegro: Tourism Raises Output but Creates Vulnerabilities
Montenegro’s productivity was estimated at approximately $55,900 per employed person, around 48% of the EU level.
Its service-based economy benefits from tourism, real estate and foreign investment, which help produce relatively high output with a small employed population. However, the country remains vulnerable to seasonal employment, external shocks and the concentration of economic activity along the Adriatic coast.
Tourism can generate substantial income, but seasonal and relatively low-skilled jobs do not necessarily create the technological spillovers required for sustained productivity growth.
Montenegro must therefore move beyond increasing visitor numbers and develop higher-value tourism, digital services, renewable energy and stronger domestic supply chains.
Kosovo: A High Estimate Masks a Weak Labour Market
Kosovo’s World Bank estimate of approximately $82,000 per employed person is the highest among the six Western Balkan economies, but it does not mean that Kosovo has the region’s strongest or most efficient labour market.
The figure is partly affected by Kosovo’s unusually low employment and labour-force participation. When GDP is divided among a comparatively small recorded employed population, measured output per employed person can appear high.
Kosovo continues to face unemployment of around 11%, low participation among women and a large share of informal or economically inactive people. Its employment is concentrated in trade, construction, manufacturing and public services rather than high-productivity export industries.
The World Bank cautions that modelled employment estimates are subject to uncertainty and should not be used mechanically to rank countries, especially where national data coverage is limited.
The EU Produces More in Fewer Hours
EU workers aged 20–64 worked an average of 35.9 hours per week in 2025, including full-time and part-time employees. Greece had the longest EU working week at 39.6 hours, while the Netherlands recorded the shortest at 31.9 hours.
Average hourly labour costs in the EU reached €33.50 in 2024, compared with €37.30 in the euro area. These figures include wages, employer contributions and other employment expenses.
Western Balkan employers pay much less, but low wages do not automatically make their businesses competitive. When output per working hour is also low, companies struggle to absorb higher salaries, invest in innovation or compete in more sophisticated markets.
This explains the apparent contradiction across the region: workers consider themselves underpaid for the hours they put in, while employers complain that wages are rising faster than productivity.
Both can be correct.
Hard Work Cannot Replace Technology and Institutions
The regional gap reflects economies that continue to depend heavily on labour-intensive production, imported technology, low-value services and public investment.
Foreign-owned manufacturers have created jobs and exports, but many operate as isolated production facilities with limited links to local suppliers, research institutions or domestic innovation.
Agriculture remains fragmented and undercapitalised. Small farms, ageing machinery and weak market connections mean that workers often put in long hours while producing far less than agricultural employees in the EU.
Public administrations also absorb skilled workers but frequently fail to deliver services efficiently enough to reduce business costs or support private investment.
Closing the gap will require investment in machinery, digitalisation, research, vocational education, management quality and energy and transport infrastructure. It will also require stronger links between foreign investors and local companies, allowing technology and knowledge to spread through the economy.
The Western Balkans does not primarily have a problem with people unwilling to work. Its challenge is an economic model that demands long hours while providing workers with too little technology, capital and institutional support to turn those hours into higher value.