Croatia

   

Social Policies

#36
Key Findings
With significant inclusion concerns, Croatia falls into the bottom ranks (rank 36) in the area of social policies. Its score on this measure has improved by 0.1 point relative to 2014.

The education system is inefficient, with outcomes lagging behind EU standards. An experimental curriculum reform is underway, with a particular focus on improvements in STEM subjects. Poverty and social exclusion remain major problems, with the fragmented social-transfer system having little impact.

The health care system is inclusive, but quality varies widely by region, and the system runs persistent deficits. Primary care doctors took to the street during the review period to protest planned reforms. While the employment-rate gap between men and women has fallen to below the EU average, labor-market discrimination against younger women and women with children remains widespread.

The pension system is not fiscally sustainable, though ongoing reforms have improved the situation somewhat. Reintegration of ethnic-Serbian returnees remains a problem. The country has hardened its border policies, with police seeking to keep migrants from crossing the border with Bosnia-Herzegovina.

Education

#23

To what extent does education policy deliver high-quality, equitable and efficient education and training?

10
 9

Education policy fully achieves the criteria.
 8
 7
 6


Education policy largely achieves the criteria.
 5
 4
 3


Education policy partially achieves the criteria.
 2
 1

Education policy does not achieve the criteria at all.
Education Policy
6
As a percentage of GDP, public expenditure on education aligns with the EU average. However, spending is not particularly efficient. The share of 15-year-olds who underachieve in reading, mathematics and science according the PISA tests is above the EU and OECD average. Conversely, the share of early leavers from education and training is far below the EU average. The system’s inefficiency is exacerbated by the high degree of selectivity in upper secondary education. Over 70% of upper-secondary students attend such vocational schools in Croatia, which is higher than the EU average. As in other former Yugoslavian countries, however, vocational education is very weak, as there is a high degree of mismatch between what is taught and the demands of employers, so that vocational education is not an assured route to a job. The quality of tertiary education varies significantly across institutions and even between departments within universities. The share of the population aged 30-34 years who have successfully completed university education in Croatia is slightly below the EU average. The resources spent on education appear further wasted by the high level of unemployment of school and university graduates. Another problem is the high degree of inequality in access to higher education, since students from better-educated family backgrounds tend to be over-represented in higher education.

Education reform has suffered from a lack of continuity. In 2014, the Milanović government charged an expert team headed by education policy scholar Boris Jokić with providing a proposal for a new curriculum. The finalization and eventual implementation of this team’s work, which built on the contributions of more than a hundred teachers and experts from individual educational fields, faced delays under the Orešković government, but has regained momentum since fall 2017. Blaženka Divjak, who became minister of science and education in the Plenković government in June 2017, launched an experimental curricular reform that took into effect at the beginning of the new school year in September 2018. The reform comprises all subjects in the first and fifth primary-school grades, science (i.e., chemistry, biology, physics) in the seventh primary-school grade, all subjects in the first secondary-school grade and general subjects in four-year vocational schools. Accompanied by great expectations, the reform is intended to shift the focus of education from learning piles of facts to problem-solving and critical thinking. While this shift has broadly been welcomed, the minister’s focus on the strengthening of the so-called STEM disciplines in higher education has been more controversial. Critics have raised concerns that the reforms will create narrow specialists and neglect the humanistic aspect of education.

Citations:
Žiljak, T., N. Baketa (2018): Education Policy in Croatia, in: Z. Petak, K. Kotarski (eds.), Policy-Making at the European Periphery: The Case of Croatia. Cham: Palgrave Macmillan, 265-283.

Doolan, K., S. Puzić, B. Baranović, B. (2018): Inequalities in access to higher education in Croatia: five decades of resilient findings, in: Journal of Further and Higher Education 42(4): 467–481

Social Inclusion

#34

To what extent does social policy prevent exclusion and decoupling from society?

10
 9

Policies very effectively enable societal inclusion and ensure equal opportunities.
 8
 7
 6


For the most part, policies enable societal inclusion effectively and ensure equal opportunities.
 5
 4
 3


For the most part, policies fail to prevent societal exclusion effectively and ensure equal opportunities.
 2
 1

Policies exacerbate unequal opportunities and exclusion from society.
Social Inclusion Policy
4
Poverty and social exclusion are significant problems in Croatia. Whereas the income quintile share ratio (S80/S20) and the Gini coefficient broadly match the EU 28 average, 1.09 million or 26.4% of the Croatian population is at risk of poverty or social exclusion, a figure higher than the EU 28 average. The trend concerning these indicators are, however, slightly positive: the income quintile share ratio (S80/S20) decreased from 5.5 in 2010 to 5.0 in 2017, while the Gini coefficient decreased from 31.5 in 2010 to 29.9 in 2017. The material and social deprivation rate (i.e., when households cannot afford at least five of the 13 items taken into account) also decreased from 22.3% down to 14.7% in 2017, which is close to the EU average of 13.7%. In addition, 10.3% of the population live in conditions of severe material deprivation (compared to 6.6% across the EU 28). An additional problem is that regional-development policy has failed to address the geographic distribution of poverty and exclusion. Poverty is especially severe in the war-affected areas of Eastern Slavonia and areas along the border with Bosnia and Herzegovina.

Social transfers suffer from extreme fragmentation and are not structured in such a way that they can have any significant impact on social exclusion. Benefits are very low, and eligibility criteria are tight. Recipients must not own anything except an apartment (no car, no savings). In an effort to address these issues, the government has begun drafting a new Social Welfare Act, planned for 2019, that would substantially increase welfare benefit amounts and would delimit the total amount that a family can receive.

Citations:
World Bank (2018): The Republic of Croatia: Systematic Country Diagnostic. Report No. 125443-HR, Washington, D.C., 40-47 (https://elibrary.worldbank.org/doi/abs/10.1596/29876).

Health

#36

To what extent do health care policies provide high-quality, inclusive and cost-efficient health care?

10
 9

Health care policy achieves the criteria fully.
 8
 7
 6


Health care policy achieves the criteria largely.
 5
 4
 3


Health care policy achieves the criteria partly.
 2
 1

Health care policy does not achieve the criteria at all.
Health Policy
4
In Croatia, most health care services are provided by the government and are part of the country’s social health insurance system. Employer and employee contributions, plus some funding from the public budget, account for 85% of all health care spending, leaving only 15% to market schemes and private spending. The system is broadly inclusive. Primary care is widely available while specialized care is provided in regional hospitals and national clinical centers which divide work on the basis of the complexity of procedures. There are 538 hospital beds per hundred thousand of the population (little more than the EU average) and around 300 practicing physicians per hundred thousand of the population, the same as in the EU. As a percentage of GDP, government spending on health care is well below the EU average. Access to care is adversely affected by the regional variation in the range of care provided, the quality of services suffers from weak organization, a lack of digitalization and an inadequate monitoring of treatment outcomes. In addition, there is evidence of significant health inequalities between low and high-income groups. The low employment rate and aging demographics have produced a persistent financial deficit within the system. In late 2017, the debt of the health care system reached more than HRK 8.2 billion – approx. 2.2% of GDP, prompting another emergency allocation from the national budget. Since EU accession, the number of physicians and other medical professionals leaving Croatia has reached alarming proportions.

The Plenković government has so far done relatively little to address these problems. While the increase in the health care insurance contribution rate from 15% to 16.5% as of January 2019 will provide additional resources, the functioning of the health care system has been left largely untouched. The long-awaited adoption of the National Hospital Development Plan took until September 2018. A new health care bill submitted in early summer 2018 triggered large protests of primary health care physicians, who took to the streets against the government reneging on its earlier promise to allow all physicians to work as private practitioners rather than as employees in community health centers.

Citations:
European Commission (2019): Country report Croatia 2019 Including an In-Depth Review of the prevention and correction of macroeconomic imbalances. SWD(2019) 1010 final, Brussels, 28-29 (https://ec.europa.eu/info/sites/info/files/2019-european-semester-country-report-croatia-en.pdf).

Radin, D. (2018) Health Policy in Croatia: A Case of Free Falling, in: Z. Petak, K. Kotarski (eds.), Policy-Making at the European Periphery: The Case of Croatia. Cham: Palgrave Macmillan, 247-264.

Families

#35

To what extent do family support policies enable women to combine parenting with participation in the labor market?

10
 9

Family support policies effectively enable women to combine parenting with employment.
 8
 7
 6


Family support policies provide some support for women who want to combine parenting and employment.
 5
 4
 3


Family support policies provide only few opportunities for women who want to combine parenting and employment.
 2
 1

Family support policies force most women to opt for either parenting or employment.
Family Policy
5
The gender gap in the employment rate has fallen from 10.5 percentage points in 2016 (third quarter) to 8.6 percentage points in 2018 (third quarter) and is now well below the EU average of 10.8, indicating an improvement in women’s access to the labor market. However, maternity pay is relatively limited (in 1993, the government abolished the right to a full salary over the one-year period after birth of a child, as the only former Yugoslav country to do so), and child care facilities and extended-day programs at school are meager. Child care coverage is especially poor in less developed rural and semi-rural areas with low employment, reflecting the inability of local governments to pay for services. According to UNESCO reports, only 22% of the children from the poorest families (the lowest 20% by disposable income) attend kindergartens. While the share for the wealthiest 20% of the families is higher, it is still one of the lowest in the EU. Furthermore, work-life balance is unfavorable. According to the 2016 European Quality of Life Survey, only 62% of respondents in Croatia report that their working hours fit well with their family commitments, the lowest proportion of respondents reporting this imbalance in any EU country apart from Bulgaria. Women with children face challenges within the labor market. Discrimination by employers in some segments of the private sector against younger women is widespread, because it is assumed that women will eventually require maternity leave. The 2014 Family Act did not address these issues, focusing instead on expanding the legal rights of young people and clarifying child-custody issues. Due to numerous objections made after it was passed, the Constitutional Court suspended the entire Family Act in January 2015. Because of bitter conflicts between the conservative and the liberal camp in Croatia, three successive governments have refrained from submitting amended versions of the bill.

Citations:
Dobrotić, I. (2015): Politike usklađivanja obiteljskih obaveza i plaćenog rada i položaj roditelja na tržištu rada (Work-Family Policies and the Position of Parents on the Labour Market), in: Revija za socijalnu politiku 22(3): 353-374.

European Foundation for the Improvement of Living and Working Conditions (2016): European Quality of Life Survey. Dublin: Eurofound (https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef1733en.pdf).

Pensions

#41

To what extent does pension policy realize goals of poverty prevention, intergenerational equity and fiscal sustainability?

10
 9

Pension policy achieves the objectives fully.
 8
 7
 6


Pension policy achieves the objectives largely.
 5
 4
 3


Pension policy achieves the objectives partly.
 2
 1

Pension policy does not achieve the objectives at all.
Pension Policy
4
Like some other East-Central European countries, Croatia introduced a three-pillar pension system with a mandatory fully funded second pillar in the late 1990s. The average effective replacement rate for pensions is around 40%, partially due to the fact that many pensioners retire early. As a result, pensioner poverty is rather high in Croatia. However, war veterans enjoy strong privileges. As a consequence of the country’s aging demographics, the low general employment rate and the decline in the effective retirement age, the system is neither fiscally sustainable nor intergenerationally fair. Croatia has an unfavorable pensioner-to-worker ratio of 1:1.26 and the average number of years of service is 30 – much less than in most European countries. The public pension fund has shown a persistent deficit, which represents a significant risk to systemic stability. Only HRK 21 billion out of HRK 38 billion required for payment of pensions is covered by social contributions. The remaining HRK 17 billion come from the government budget, which means that 15% of the budget is allocated for pensions.

The Milanović government began to address these problems. The Pension Insurance Act of January 2014 raised the statutory retirement age from 65 to 67 and the early retirement age from 60 to 62 by 2038. The Orešković government presented plans to shorten the deadlines for raising the retirement age to 67 (for men and women alike) and for increasing the early retirement age, but these plans were not implemented. In 2018, the Plenković government finally decided to launch a substantial pension reform. The comprehensive reform package submitted to parliament in October 2018 by Minister of Labor and Pensions Marko Pavić contained two controversial provisions. First, it called for bringing forward the increase in the retirement age to 67 to 2033 and to accelerate the equalization of retirement age for men and women. Second, it included a new option for pensioners to transfer their savings from the second pillar to the first pillar, an option that would have been attractive because of the resulting eligibility to a 27% pension supplement for those receiving only first pillar pensions. Critics were quick to point out that the second provision would have severely weakened the second pillar and would have given the government the chance to fill the “gaps” in the public pensions scheme by using the transferred assets from the second pillar. Eventually, Pavić modified his original plan. While the right to transfer savings from the second to the first pillar was kept, the final legislation, passed in December 2018, made all pensioners eligible to some kind of pension supplement.

Citations:
Bejaković, P. (2018) The Croatian Pension System and Challenges of Pension Policy, in: Z. Petak, K. Kotarski (eds.), Policy-Making at the European Periphery: The Case of Croatia. Cham: Palgrave Macmillan, 229-245.

Bezovan, G. (2018): Croatia: Will the Reform of the Pension System Contribute to Improving the Adequacy and Sustainability of Pensions? European Social Policy Network, Flash Report 2018/69, Brussels.

Integration

#25

How effectively do policies support the integration of migrants into society?

10
 9

Cultural, education and social policies effectively support the integration of migrants into society.
 8
 7
 6


Cultural, education and social policies seek to integrate migrants into society, but have failed to do so effectively.
 5
 4
 3


Cultural, education and social policies do not focus on integrating migrants into society.
 2
 1

Cultural, education and social policies segregate migrant communities from the majority society.
Integration Policy
3
Migration to Croatia is largely limited to ethnic Croats from neighboring countries, who are de facto integrated and have citizenship and equal access to labor market, social system and education. Other groups of migrants are very small and there is no policy directed at integrating them. Integration is complicated by weak inter-sectoral cooperation of institutions responsible for carrying out immigration issues with local communities and civil society organizations. The treatment of returnees from among the 200,000 Croat citizens of Serbian ethnicity expelled from the country in 1995 represents a significant gap in migration policy. Many refugees have not been able to return to Croatia, as they were stripped of their rights to socially owned housing after the war.

Since 2016, Croatia has drifted away from its originally relatively compassionate and humane treatment of refugees taking the Balkan route. The closing of the borders in Hungary and other neighboring countries has created fears that the country might become a rallying point for refugees. The police have tried hard to prevent the thousands of migrants gathering in the northwestern part of Bosnia-Herzegovina (the greater area of the city of Bihać) to enter the country. Only 425 persons sought asylum in Croatia in 2018, 6% more than in 2017.

Safe Living

#26

How effectively does internal security policy protect citizens against security risks?

10
 9

Internal security policy protects citizens against security risks very effectively.
 8
 7
 6


Internal security policy protects citizens against security risks more or less effectively.
 5
 4
 3


Internal security policy does not effectively protect citizens against security risks.
 2
 1

Internal security policy exacerbates the security risks.
Internal Security Policy
8
In Croatia, crime represents no significant threat to public safety and security. The police are generally effective in maintaining public order and combating crime. The police and prosecutor’s office collaborate effectively with international organizations and countries in the southeast European region, the European Union and internationally. Intelligence services cooperate with their counterparts within NATO and the European Union, and act within an integrated security system. Croatia does not face significant terrorist threats. Organized crime affects the country mostly through transnational and regional crime networks involved in drugs and human and arms trafficking.

Global Inequalities

#37

To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in developing countries?

10
 9

The government actively and coherently engages in international efforts to promote equal socioeconomic opportunities in developing countries. It frequently demonstrates initiative and responsibility, and acts as an agenda-setter.
 8
 7
 6


The government actively engages in international efforts to promote equal socioeconomic opportunities in developing countries. However, some of its measures or policies lack coherence.
 5
 4
 3


The government shows limited engagement in international efforts to promote equal socioeconomic opportunities in developing countries. Many of its measures or policies lack coherence.
 2
 1

The government does not contribute (and often undermines) efforts to promote equal socioeconomic opportunities in developing countries.
Global Social Policy
4
The Croatian government takes part in the activities of international organizations to which the country belongs; these are mostly in the field of international security and involve armed-forces personnel in various roles. The government does not have a well-developed international-development policy and is little more than a passive participant in most other joint international activities. Trade policy is mostly focused on regional and EU relations, with the government lacking an independent policy beyond this context. For trade issues related to international development, the government follows the policy of the European Union and other international organizations. Since joining the EU, Croatia’s international assistance policy has improved. The National Strategy for Development Cooperation 2015 – 2020 has been adopted, and the country aims to increase its development aid to 0.33% of GDP by 2030. This includes funds for the European Development Fund, which distributes aid at the EU level.
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