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 is unchanged relative to 2014.

The education system is inefficient, with outcomes lagging behind EU standards, and socioeconomic status strongly affecting outcomes. A long strike succeeded in winning salary increases for teachers. Poverty and social exclusion remain major problems, with the fragmented social-transfer system having little impact. Significant pockets of extreme poverty persist.

The healthcare system is inclusive, but quality varies widely by region, and the system runs persistent deficits. Per capita spending levels are near the EU’s lowest. Childcare coverage is minimal, especially in rural and semi-rural areas. 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. Trade-union pressure forced the government to retreat on retirement-age increases. Reintegration of ethnic-Serbian returnees has made progress. Civil-rights groups have criticized the country for using police to push refugees back from its borders.

Education

#32

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
5
As a percentage of GDP, public expenditure on education aligns with the EU average. Pupil to teacher ratios in both the primary and secondary education system are even lower than in most other EU member states. Still, educational performance is relatively weak. A greater proportion of Croatian 15 year olds underachieve in mathematics (31%) compared to the OECD average (24%), according to the PISA 2018 tests, while performance is rather similar to the OECD average in reading and science. Since 2006 when Croatia joined the PISA program, average performance in reading and mathematics has been relatively stable. The mean score in reading has increased slightly from 477 in 2006 to 479 in 2018 (OECD average is 487), while the mean score in mathematics has fallen slightly from 467 to 464 (OECD average is 489). However, there was a significant deterioration in the average score in science from 493 in 2006 to 472 in 2018 (OECD average is 489).

The PISA tests also reveal substantial inequalities in educational attainment at the end of compulsory education. In reading performance, socioeconomically advantaged students outperformed disadvantaged students by 63 score points, although this was a smaller gap in comparison to the 2009 PISA. In addition, while 10% of advantaged students achieved the highest grade in reading, only 2% of disadvantaged students achieved this level of attainment. The PISA results reveal a strong relationship between socioeconomic status, and performance in mathematics and science, although this relationship is somewhat weaker in Croatia than on average among OECD countries.

The poor quality of and inequity in primary education carry over into a high degree of selectivity in upper (post-compulsory) secondary education. Over 70% of upper-secondary students attend vocational schools, a greater proportion than elsewhere in the European Union, while 30% attend general secondary schools (gymnasia). Whichever type of school is attended, entry to the labor market is problematic following completion of studies. In 2019, according to Eurostat, the unemployment rate of people with a general secondary school background who had graduated within the previous five years was 36.5%, while it was 26.4% for people with a vocational education background (compared to an average of 22.3% for all education system graduates within five years of graduation). The share of the population aged 30 – 34 years old who have completed higher education was 34.1% in 2018, substantially below the EU average of 40.7%.

Access to higher education is unequal, as students from better-educated family backgrounds are over-represented in higher education. However, this outcome is not caused by the presence of burdensome tuition fees acting as a barrier to entry, especially since higher education is overwhelmingly financed out of the public purse. This has more to do with the cost of living for students in major cities and the lack of private scholarships for students from poorer families. The employment rate for recently graduated students is far below the EU average. It is very common that employers in the private and even public sector complain of the lack of necessary skills on the part of recent graduates.


Education policy 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. Blaženka Divjak, minister of science and education, launched an experimental curriculum reform 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. The Croatian National Center for External Evaluation of Education’s recent evaluation of teachers and pupils exposed to the experimental curriculum found that outcomes were poor and satisfaction with the way experimental classes worked was very low. After organizing the longest strike in Croatian history (more than 35 days), teachers’ unions succeeded in pressuring the government into granting teachers more than a 10% salary increase in 2020. However, it is unlikely that there will be a significant improvement in educational outcomes unless a meritocratic system for compensating and promoting staff, paired with political accountability at the highest level, is established.

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 (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

OECD (2019): Programme for International Students Assessment (PISA) Results from PISA 2018 – Country Note Croatia. Paris.

Social Inclusion

#30

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, over one million people (23.8% of the Croatian population) were at risk of poverty or social exclusion in 2018, three percentage points above the EU-28 average, although this is an improvement from 1.25 million people (32.6%) in 2012, in the immediate aftermath of the economic crisis. The material and social deprivation rate for persons not in employment (i.e., when households cannot afford at least five of the 13 items taken into account) also decreased from 28.9% in 2014 to 18.3% in 2018 and is now broadly similar to the EU-28 average. However, there are significant pockets of extreme poverty with 8.6% of the population living in conditions of severe material deprivation (compared to 5.9% across the EU-28).

Social transfers suffer from extreme fragmentation and are not structured in such a way that they have a significant impact on social exclusion. Benefits are very low and eligibility criteria are tight, so only 2% of the population receive social welfare. Recipients must not own anything except an apartment (i.e., no car or savings). This results in high levels of marginalization and exclusion among the poorest families. In particular, families with school-age children who live on the minimum social assistance scheme (GMB) are on average able to cover only about half of their material needs. These families use various coping strategies, including borrowing from relatives and friends, going into arrears on utility bills (which can lead to utility services being cut off), and selling items from home. Parents in such families often go hungry so that their children have enough to eat. There is a growing concern about the quality and availability of nursing homes, both private and public. In the coming years, familiarization of elderly care is likely to increase as in other Mediterranean countries, which will negatively affect intergenerational solidarity and labor market outcomes.

In 2018, in an effort to address these issues, the government adopted the Action Plan for the Improvement of Social Benefits 2018 – 2020, which has unfortunately failed to improve the adequacy or coverage of social assistance, and has had little impact on the extent of social exclusion or marginalization.

Citations:
European Parliament (2018): The Employment and Social Situation in Croatia. Luxembourg: European Parliament, Policy Department for Economic, Scientific and Quality of Life Policies (http://www.europarl.europa.eu/committees/en/supporting-analyses-search.html).

Health

#35

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 healthcare 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 healthcare 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 European Union. As a percentage of GDP, government spending on healthcare is well below the EU average (6.8% vs 9.8%). In terms of expenditure per capita, Croatia spends less than €1,300, with only Romania and Latvia lagging further behind. The structure of expenditure is unfavorable, and too much is spent compared to the EU average on drugs and medical equipment, which could be improved by scaling up purchases and increasing transparency, as well as by rationalizing the prescription of drugs and antibiotics. Prevention programs are seriously under-resourced. The low employment rate and aging demographics have produced a persistent financial deficit within the system. Since joining the European Union, the number of physicians and other medical professionals leaving Croatia has reached alarming proportions.

Access to care is adversely affected by regional variations in the range of care provided, the quality of services suffer from weak organization, a lack of digitalization and the inadequate monitoring of treatment outcomes. In addition, there are significant health inequalities between low- and high-income groups. Life expectancy in Croatia is 78.2 years, lower than the EU average of 81.0. Healthy life expectancy at the age of 65 is five years, one of the lowest in the European Union. Croatia has the eighth highest obesity rate in the EU-28 and also has one of the highest prevalence of daily smokers.

The Plenković government has so far done relatively little to address these problems. While the increase in the healthcare insurance contribution rate from 15% to 16.5% as of January 2019 has provided additional resources, the functioning of the healthcare system has been left largely untouched. The long-awaited adoption of the National Hospital Development Plan took until September 2018 and its implementation has been largely unsatisfactory. A recent series of scandals around Minister of Health Milan Kujundžić has once more shown the pervasiveness of corruption in the healthcare system.

Citations:
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 for 15 – 64 year olds is 12.0 percentage points in Croatia compared to 10.2 in the EU-28 (Eurostat data, Q2 2019). It has increased from just 7.6 in Q2 2015 indicating a worsening of the situation over time. Maternity pay is relatively limited. In 1993, the government abolished the right to a full salary over the one-year period after the birth of a child, being the only former Yugoslav country to do so. Similarly, childcare facilities and extended-day school programs are meager. In 2020, the maternity pay cap between the sixth and 12th months of leave will be raised from HRK 3,991 per month to HRK 5,564 per month. Childcare 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 European Union. 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 member state 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 at 39% is the second lowest in the European Union, partly because many pensioners retire early. Only 15% of pensioners worked for 40 or more years. As a result, pensioner poverty is high in Croatia, with almost one-third of pensioners at risk of poverty or social exclusion. Though approximately 170,000 retirees enjoy privileged pensions, among them more than 70,000 war veterans. 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. Almost half of the pension spending is covered by the government budget rather than by social contributions, which means that pensions account for 15% of the government budget.

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. In October 2018, the Plenković government submitted a substantial pension reform to parliament which 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 pointed out that the second provision would severely weaken the second pillar. In response the final legislation, passed in December 2018, was slightly modified so that all pensioners would be eligible to some kind of pension supplement. In 2019, trade unions gathered about three-quarters of a million signatures for a referendum on the issue, and forced the government to back down and introduce amendments to the law to lower the official state retirement age to 65, while allowing those who wish to do so to continue working beyond that age. In late 2019, the government also announced the introduction of “national pensions” for citizens who have never worked or have worked less than 15 years from 2021 onwards.

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. (2019): Croatia: Mitigating poverty among the elderly by introducing a “national pension.” European Social Policy Network, ESPN Flash Report 2019/60, Brussels.

Bezovan, G. (2019): Trade unions mobilize citizens’ support for referendum against recent pension reform. European Social Policy Network, ESPN Flash REport 2019/24, Brussels.

Integration

#24

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. In 2018, only 800 persons sought asylum in Croatia. Generally, Croatia’s economic and social model is not attractive to potential asylum-seekers and migrants, which will exacerbate Croatia’s future demographic and economic challenges. There is neither a strategy to attract culturally similar immigrants, which could facilitate integration, nor a policy to integrate existing migrants. Integration is complicated by weak inter-sectoral cooperation between institutions responsible for carrying out immigration issues with local communities and civil society organizations. The integration of Serbian returnees who fled the country during the Homeland War has made relatively good progress, even if access to adequate housing remains a key challenge.

Since 2016, Croatia has drifted away from its relatively compassionate treatment of migrants and 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. In 2019, the number of people illegally entering the country increased substantially. Croatia has refrained from building barricades and using barbed wire, but sought to protect the Croatian, EU and future Schengen border with 6,500 police officers. Civil rights organizations have criticized the country for violently pushing refugees back.

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
7
In Croatia, crime represents no significant threat to public safety or security, although property crime is on the rise in tandem with burgeoning tourism activity. The homicide rate is still below the EU-28 average, but higher in 2019 than the previous year. Family-related violence has also risen in 2019. Despite the police continuing to effectively maintain public order and combating crime in general, police effectiveness has been dropping. While Croatia has the fourth largest number of police officers per 100,000 inhabitants in the EU-28, almost one third of police officers are deployed to protect the country’s borders. Over the years, the employment of (often superfluous) administrative staff in the Ministry of the Interior has come at the expense of police officers’ presence in the field. Field officers are generally poorly paid and often overstretched. Several high-profile cases of police officers’ malfeasance and the ensuing attempts to cover up these cases, and even some extortion attempts on behalf of police officers has reduced public confidence in the police force’s integrity. 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.

Global Inequalities

#41

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
3
The Croatian government takes part in the activities of international organizations to which the country belongs. For trade issues related to international development, the government follows the policy of the European Union and other international organizations. The government does not have a well-developed international-development policy. However, since joining the European Union, 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. More than 80% of the official development aid is generally directed to Southeast European (SEE) countries. Of Croatia’s ODA, 72% is multilateral aid and 23% is bilateral aid. In 2019, this aid amounted to HRK 250 million, HRK 200 million less than what had been budgeted for 2018. This figure puts Croatia far below the officially endorsed goal of 0.33% of GNI for the new EU member states.
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