Breaking Barriers Empowering Women in Croatia's Workforce Breaking Barriers Empowering Women in Croatia’s Workforce February 2025 Disclaimer © 2025 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The bound- aries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. 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Design and typesetting: Kuna zlatica, www.kunazlatica.hr Cover photos from left to right: © pixdeluxe / iStock © petrunjela / iStock © andreswd / iStock © jacoblund / iStock © StockPlanets / iStock © miniseries / iStock © ultramarinfoto / iStock © Portra / iStock contents 3 Contents Abbreviations and Acronyms......................................................................................................................... 6 Acknowledgments............................................................................................................................................. 7 Executive Summary........................................................................................................................................... 8 1 / Introduction and Objective.....................................................................................................................17 1.1 Evidence of Issues ................................................................................................................................ 19 2 / Barriers to Female Labor Force Participation.................................................................................. 27 1.2 Individual barriers.................................................................................................................................29 2.2 Sociocultural barriers...........................................................................................................................31 3.2 Structural and institutional barriers .............................................................................................. 33 3 / The Government’s Planned Initiatives to Support Women’s Contributions to the Labor Market............................................................ 43 4 / Actionable Recommendations.............................................................................................................49 Recommendation 1: Transforming social norms for greater equality in family roles and career choices.............50 Recommendation 2: Improving childcare access and aligning coverage with working hours.................................. 54 Recommendation 3: Facilitating smoother transitions back to work after parental leave and expanding and institutionalizing more flexible work options............................................................................ 56 Recommendation 4: Enhancing support for women in entrepreneurship and expanding access to diverse income opportunities............................................................................................. 57 Recommendation 5: Expanding long-term care facilities and alternative modes of support for the elderly....... 61 Recommendation 6: Designing gender-sensitive active labor market policies and social protection measures ....................................................................................................................................................... 63 Bibliography........................................................................................................................................................66 Breaking Barriers: Empowering Women in Croatia's Workforce 4 List of Figures Figure 1: Labor Force Participation....................................................................................................... 19 Figure 2: Employment Rates.................................................................................................................... 19 Figure 3: Employment Rates by Age Group and Gender in Croatia and the EU27..................20 Figure 3a: Female Labor Force Participation in 2023 (Five-Year Age Intervals)....................... 22 Figure 3b: Female Employment Rates in 2023 (Five-Year Age Intervals)................................... 22 Figure 4: Employment Rates by Education Attainment and Gender (Ages 20–64)................ 23 Figure 5: Employed Persons Working Part-Time, by Gender, in Croatia and the EU27 .......... 23 Figure 6: Gender Pay Gaps* in the EU27 (2010–23).......................................................................... 24 Figure 7: Gender Pay Gap (as a Percentage) by Occupational Wage Quintile in 2018: EU vs Croatia................................................................................................................................................ 25 Figure 8: Gender Distribution by Professional Status (Ages 25–49)...........................................26 Figure 9: Barriers to Labor Force Participation................................................................................. 28 Figure 10: Gender Distribution by Field of Study in Croatian Tertiary Education (Ages 25–49).................................................................................................................................................29 Figure 11: Share of Women (Ages 16–74) with Basic or Above-Basic Digital Skills in Croatia versus the EU27..........................................................................................................................................30 Figure 12: Employment Rates by Gender and Type of Household (Ages 20–49)......................31 Figure 13: Views on Sharing Domestic Responsibilities by Gender............................................ 32 Figure 14: Reasons for Inactivity Due to Caring for Children and Incapacitated Relatives (Ages 25–49)................................................................................................................................................. 33 Figure 15: Reason for Inactivity by Gender and Age........................................................................ 33 Figure 16: Average Payment Rate for Father-Specific Leave in EU member states in 2022.34 Figure 17: Kindergarten and Daycare Coverage in Croatia by County, 2022/23....................... 35 Figure 18: Kindergarten and Daycare Coverage in Croatia by Local Administrative Unit, 2022/23................................................................................................................................................ 36 Figure 19: Share of Children Ages 12 or Below Receiving Formal Childcare by Degree of Urbanization and Cost in the EU and Croatia in 2016..................................................................... 37 Figure 20: Inactivity Trap for Different Family Compositions in 2023......................................... 38 Figure 21: Registered Unemployed Women Participating in different ALMPs by age group and year.........................................................................................................................................................39 Figure 22: Average ALMP Coverage Over Time for Unemployed People Registered with CES by Gender and Age Group.....................................................................................................40 Figure 23: Long-Term (Health)Care Expenditure by Country (2015–22)..................................... 41 Figure 24: Government Measures to Support Female Labor Market Outcomes ...................45 5 List of Boxes Box 1: Sweden’s Path to High Parental Leave Uptake by Fathers................................................. 52 Box 2: The Swedish Social Insurance Agency Encouraging Employers to Promote an Equal Parental Leave Distribution..................................................................................................................... 52 Box 3: A Campaign by the City of Vienna Advocating the Balanced Sharing of Domestic and Care Work............................................................................................................................................. 53 Box 4: 1000 Girls, 1000 Futures in the United States...................................................................... 53 Box 5: The Whole-Day School (WDS) Pilot in Croatia...................................................................... 55 Box 6: Austria’s Home-Based Childminder Program for Flexible Childcare.............................. 55 Box 7: Integrated Local Services for Extended Childcare in Romania........................................ 55 Box 8: A Czech Digital Platform Matching Supply and Demand for Childcare........................ 55 Box 9: Policy Interventions that Support Female Entrepreneurship.......................................... 58 Box 10: Ireland’s Female Entrepreneurs Mentoring Program........................................................59 Box 11: Croatia’s Zaželi Program: Good Practice for Empowering Women and Expanding Elderly Care..................................................................................................................................................59 Box 12: Social Cooperatives Creating Jobs for Vulnerable Turkish and Syrian Women........60 Box 13: Leveraging the Immigrant Workforce for Sustainable Care Services in France and Spain...............................................................................................................................................................62 Box 14: Telemedicine Platforms and Digital Health Devices for the Elderly in Rural Areas in Sweden and Asia........................................................................................................................................62 Box 15: Promoting Women’s Entrepreneurship in Spain’s Green Economy...............................64 Box 16: Credit Subsidies in France........................................................................................................65 Box 17: Low-Earnings Income Allowance (LEIA)...............................................................................65 Box 18: Pilot Project on Active Labor Market Policies for Advancing Gender Equality through Decent Employment for Women in Turkey.........................................................................65 Breaking Barriers: Empowering Women in Croatia's Workforce 6 Abbreviations and Acronyms AI Artificial intelligence ALMP Active labor market policy CBS Croatian Bureau of Statistics CES Croatian Employment Services CHIF (HZZO) Croatian Health Insurance Fund (Hrvatski zavod za zdravstveno osiguranje) COVID-19 Coronavirus disease 2019 EC European Commission ECA Europe and Central Asia ECEC Early childhood education and care EIGE European Institute for Gender Equality ETF European Training Foundation EU European Union EU27 The 27 countries of the European Union EURES European Network of Employment Services Eurofound European Foundation for the Improvement of Living and Working Conditions GDP Gross Domestic Product GEM Global Entrepreneurship Monitor GMB Guaranteed minimum benefit HR Croatia ICT Information and communication technology IDC International Data Corporation IFC International Finance Corporation ILO International Labour Organization LEIA Low-earnings income allowance LFS Labor Force Survey LTC Long-term care NEET Not in employment, education, or training NGO Nongovernmental organization OECD Organization for Economic Co-operation and Development  PES Public employment services SHARE The Survey of Health, Ageing and Retirement in Europe STEM Science, technology, engineering, and mathematics UNICEF The United Nations International Children’s Emergency Fund VC Venture capital WB World Bank WDS Whole-Day School 7 Acknowledgments This document has been prepared by a team including Britta Laurine Rude (Economist, HECSP), Iva Tomic (Economist, ETC, EECM2), Andrea Sitarova (Consultant, HECSP), Marina Tkalec (Consultant, Institute of Economics, Zagreb), and Lea Karla Matić (Consultant, Institute of Economics, Zagreb), under the supervision of Mauro Testaverde (Senior Economist, HECSP). The team would like to thank Nithin Umapathi (Lead Economist, Program Leader, HECDR) for guidance during the initial phases of this task, and Helly D. Mehta (Consultant, HECSP) and Alina Petric (Economist, HECSP) for useful inputs to this work. The team also wishes to thank the peer reviewer, Jumana Jamal Subhi Alaref (Senior Econo- mist, HSASP), for her advice and contributions. The team appreciates managerial support and guidance from Jehan Arulpragasam (Country Manager, Croatia) and Paolo Belli (Practice Manager, Social Protection and Jobs for Europe and Central Asia). During the preparation of the report, the team also received insightful comments and useful material from World Bank colleagues, including Nadia Belhaj Hassine Belghith, Dhushyanth Raju, Indhira Santos, and Ana Simundza. This report is a product of the International Bank for Reconstruction and Development. The findings, interpretations, and conclusions expressed in this report do not necessarily reflect the views of the Executive Directors of the World Bank, the European Union, or the government counterparts consulted or engaged with during the study process. Breaking Barriers: Empowering Women in Croatia's Workforce 8 Executive Summary The objective of this report is to provide the government with actionable recommendations to unlock the potential of women in the Croatian labor market, based on international exam- ples and good practices that are already working in Croatia. Based on analysis of the barriers to quality employment that women face and a review of government measures addressing these challenges, this report outlines opportunities for enhancing women’s contribution to the Croatian labor market. By filling important knowledge gaps, this report aims to inform the design of policies and interventions that can improve progress toward gender equality in the country’s labor market. The labor market situation for Croatian women has improved significantly over the past decade, approaching the averages observed across the European Union (EU). Nevertheless, employment rates for young women (ages 15–24) and older women (ages 55–64) remain lower compared to their counterparts in the EU (Figure ES1). In 2023, only 19.4 percent of Croatian women ages 15–24 were employed, compared to one third in the EU. For women in the later stages of their careers (ages 55–64), the employment-to-population ratio was 47.5 percent, compared to 58.0 percent in the EU. The gender employment gap is widening for those of ages 15–24, from five to 12 percentage points during the period 2013–23, particularly affecting women with lower education, multiple children, and a Roma background. In the prime age group (ages 25–49), female labor force participation is slightly higher than the EU average, but still below that for men. Figure ES1. Female Labor Force Participation and Employment Rates by Age Groups: HR versus EU a: Female Labor Force Participation b: Female Employment Rates % % % 90 90 90 80 80 80 70 70 70 60 60 60 50 50 50 40 40 40 30 30 30 20 20 20 10 10 10 0 0 0 20-24 30-34 15-19 25-29 35-39 40-44 45-49 60-64 50-54 55-59 20-24 30-34 15-19 25-29 35-39 40-44 45-49 60-64 50-54 55-59 20-24 30-34 15-19 25-29 35-39 40-44 45-49 60-64 50-54 55-59 EU female Source: Eurostat database. EU female EU EU female Note: EU = European HRfemale Union; HR = Croatia. HR female HR HRfemale executive summary 9 When women work, they are more likely than men to work in various nonstandard forms of employment or engage in unpaid work, and they also earn less than men, with a pay gap of 7.4 percent in 2023. The overall prevalence of part-time work in Croatia is significantly lower than in the EU, yet, if women do work part-time, they are almost twice as likely to do so as men. The pay gap (7.4 percent) was significantly lower than the EU average (12.0 percent) in 2023, and it has somewhat decreased over the past decade, in line with increasing female employ- ment and tertiary education attainment (Figure ES2). However, the gender pay gap for those employed in the so-called business economy (NACE codes: B-N) was significantly larger, as it stood at 11.4 percent in 2023. The pay gap is also larger for lower-skilled jobs. Women earn less and accumulate smaller pensions, increasing their risk of poverty in old age, especially as they tend to outlive men. Figure ES2: The Gender Pay Gap* in the EU27 (2010–23) % 30 25 20 15 10 5 0 -5 Germany Bulgaria Italy Latvia Austria Croatia Czechia Greece Finland Cyprus Ireland Slovenia Romania Estonia Netherlands Sweden Spain Slovakia Lithuania Portugal Luxembourg Hungary Denmark France Poland Belgium Croatia Malta EU27 2010 2014 2018 2023 Source: Eurostat database. Note: EU27 = 27 countries of the European Union. * difference between average gross hourly earnings of male and female employees as a percentage of male gross earnings in industry, construction, and services (excluding public administration, defense, and compulsory social security). This report examines the root causes of this gender employment gap, highlighting potential individual, cultural, structural, and institutional barriers (Figure ES3). Differences in economic opportunities between men and women can be attributed to differences in their endowments and preferences, and to contextual factors such as norms and institutions. These barriers are interconnected and can exacerbate each other. While Croatian girls outperform boys based on most educational outcomes and more women graduate from tertiary education, women are underrepresented in science, technology, engineering, and mathematics (STEM) fields, which risks worsening inequalities in employment and wages. One of the main barriers is the unequal sharing of family duties, driven by traditional norms that place caregiving responsibilities predominantly on women. For example, the uptake of Breaking Barriers: Empowering Women in Croatia's Workforce 10 parental leave among Croatian men was only 3.6 percent in 2023. There are gaps in childcare coverage (nearly 20 percent of children ages four to six are not in early childhood education and care (ECEC) facilities), and the hours are not sufficiently aligned with full-time work. An addi- tional issue is the inaccessibility and unequal distribution of care facilities across the country, especially in an urban-rural context, thus exacerbating gender employment gaps in specific regions. Eldercare infrastructure is not sufficient, and families rely heavily on informal care provided mainly by older women, many of whom face increased poverty risks (OECD, 2023a). Additionally, the availability of flexible work arrangements for parents is limited, while systemic support for women entrepreneurs could be strengthened. Part-time work is less common for Croatian women compared to their EU peers (4.4 percent versus 27.9 percent, respectively, in 2023), and women are concentrated in sectors like education, healthcare, and services, where remote work options are less feasible. In addition, while parental leave is gen- erous in length and compensation has been increasing in recent years, for women with low earnings the abrupt removal of child allowance when transitioning to employment may create an inactivity trap, which is higher in Croatia than the EU average, despite reductions in income taxes for low earners. There are also fewer women entrepreneurs than there are male in Cro- atia (7.8 percent vs 16.0 percent, respectively, as a share of self-employed people by gender in total employment for the ages 15–64, 2023), and they often lack access to systematic support, including skills, entrepreneurship, and financial training, and suitable financial products, in particular in the case of small entrepreneurs. Figure ES3: Barriers to Labor Force Participation Institutional Individual Barriers Barriers Limitations relating Challenges related to education systems, to personal skills, policy frameworks, confidence, and health. and access to resources. Socio- Structural Cultural Barriers Barriers External factors like labor market Influences of gender conditions and norms and family workplace policies. responsibilities. Source: Adapted from Arias et al. (2014). executive summary 11 This report offers the following recommendations for improving women’s labor market outcomes in Croatia: #1 Transforming social norms for greater equality in family roles and career choices Shared Parental Responsibilities Women's Economic Empowerment Transforming Social Norms Gender-Neutral Career Guidance for Equality Increased Parental Leave Compensation Engaging Men and Boys in Interventions The government could consider continuing the already launched communication program on shared parental responsibilities, leveraging innovative tools. A business case for women’s economic empowerment could be promoted, encouraging collaboration among firms to adopt family-friendly practices, including incentives, mentoring, and equal-pay audits. Croa- tian Employment Services (CES) school counsellors could be trained in gender-neutral career guidance, and role models could be used to challenge gender biases. Additionally, increasing parental leave compensation, which is currently lower than the EU average, could incentivize more fathers to take parental leave, benefiting both parents. Interventions that tackle knowl- edge and awareness of gendered stereotypes or norms and engaging men and boys in social norm interventions could deliver significant results. Breaking Barriers: Empowering Women in Croatia's Workforce 12 #2 Improving childcare access and aligning coverage with working hours Demand Extended Analysis ECEC Hours Means-Tested Community- Subsidies Subsidized Based Models Kindergarten Improving childcare access and aligning coverage with working hours would benefit parents, thereby potentially increasing women’s presence in the labor market. Investments should continue to expand ECEC facilities into an efficiently distributed network in terms of territory and scale the Whole-Day School (WDS) program, with incentives to attract and retain qualified teachers. Based on feedback and input from parents, ECEC operating hours could be extend- ed, and entry made more flexible throughout the year. Alternative community-based childcare models could be explored, supported by local authorities and digital platforms, offering flexible options for parents working nontraditional hours, shifts, and so on. Additionally, guaranteed and subsidized kindergarten placements after parental leave would likely have positive effects on female employability. Expanding means-tested childcare subsidies for low-income families could be implemented across Croatia, as opposed to the current approach where such subsi- dies are limited only to some counties and/or municipalities. Demand analysis could shed light on how caretakers perceive the quality of care in ECEC facilities, how that affects the demand for such care, and, ultimately, barriers to female employability. executive summary 13 #3 Facilitating smoother transitions back to work after parental leave and expanding and institutionalizing more flexible work options Flexible Work Reskilling Public-Private Arrangements Initiatives Collaboration Salary Social Support Protections Expanding access to flexible work arrangements, such as telework, flexible time, and part- time contracts, can help increase women’s labor force participation. To address inadequate incomes, the government could support full salary replacement for a limited period after pa- rental leave. Additionally, reskilling and upskilling initiatives, particularly in the digital sector, could open more flexible options for women, including the use of remote platform work. This offers a better work-life balance and could be accompanied by adequate social protection and regulations on working hours. Close collaboration between the public and private sector can increase the efficiency of these initiatives. Public policies could be embedded within a work culture where programs related to parental leave and flexible work can be used without indirectly leading to employment segregation. Gender equality in the workplace certification is one potential tool. Implementing anti-discriminatory policies that sanction certain hiring practices offers additional entry points. Breaking Barriers: Empowering Women in Croatia's Workforce 14 #4 Enhancing support for women in entrepreneurship and expanding access to diverse income opportunities Counseling and Networking Initiatives Mentoring Creating platforms Providing guidance for collaboration and and support through networking among experienced mentors. women. Financial Products Skills and Social Economy Entrepreneuship Training Intiatives Access to suitable financial products Equipping women Supporting the to support with necessary skills establishment of social etrepreneurial and entrepreneurial enterprises to create ventures. knowledge. jobs. Support packages for prospective women entrepreneurs could include access to suitable financial products, counseling and mentoring, skills training, entrepreneurship training, and financial education. Municipality-driven initiatives, such as networking hubs or mentoring clinics, can foster collaboration among local women as well as with established entrepreneurs and local business networks. The Zaželi program, which has already benefited over 30,000 vul- nerable women from lower socioeconomic backgrounds who provided care for the elderly, is a promising example. For its sustainability and long-term impact, it would be beneficial for the program to receive continuous funding from central and local government, in addition to EU funds. Additionally, social economy initiatives could help women establish social enterprises and access funding to create local jobs, particularly for vulnerable groups. executive summary 15 #5 Expanding long-term care facilities and alternative modes of support for the elderly Mobility Digital Programs Health Tools Innovative Care Solutions Several strategies could be explored here. First, mobility programs could be developed to en- able migrant workers to assist with in-home care. These could include professional training, language support, and legal pathways to enter and work in Croatia. Second, fostering women’s entrepreneurship within the care market, particularly in rural areas, could be another strategy, leveraging local sectors like healthcare, sanitation, and tourism. Expanding vocational train- ing programs could help address skills gaps in the care economy and align with the EU’s Care Strategy 2022. Third, promoting digital health tools could improve service accessibility, espe- cially for the elderly in remote areas, through home monitoring tools for regular check-ins and a dedicated platform to streamline access to care services. The growth of innovative age-tech products and their increased usage in the care sector in some countries, such as Japan, offers an additional strategy for the relief of the caregiver burden on women. Breaking Barriers: Empowering Women in Croatia's Workforce 16 #6 Designing gender-sensitive active labor market policies and social protection measures Regional Upskilling and Apprenticeship Targeting Reskilling Programs Income Disregard Child Benefit Measures Synchronization These measures could be tailored in response to the unique barriers to employment that women face, providing upskilling, reskilling, and internships, particularly for women with lower levels of education who face more difficulties than men getting into the first jobs, and ensuring flex- ibility to accommodate family obligations. Subsidized apprenticeship programs can promote atypical work and address occupational gender segregation. Regional differences could also be considered when targeting beneficiaries. Employment incentives, like grants, subsidies, tax benefits, and simplified public procurement processes, can support female entrepreneurship and workforce inclusion. For example, tax incentives for childcare, parental leave, and training programs can create opportunities. Addressing information gaps through platforms connect- ing women to employers and providing training subsidies is equally important. Strengthening public employment services (PES) to deliver targeted programs for women and conduct out- reach campaigns can enhance inclusivity, while awareness initiatives can challenge gender stereotypes and drive long-term transformation. In parallel, synchronizing child benefits with income tax allowances for children can help alleviate the inactivity trap for lower-income families, reducing disincentives to work. Introducing measures such as income disregard or an earnings credit for low-income households could help smooth the transition to the labor market after parental leave and reduce reliance on social benefits. Croatia has made significant progress in many development areas, resulting in a more inclu- sive society, but future gains in female employment outcomes are possible. The solutions presented in this report offer a starting point for addressing barriers to female employability. These solutions should be tested locally, refined, and discussed with those most affected, allowing for continuous improvement in response to evolving socioeconomic challenges. 17 1/ Introduction and Objective Breaking Barriers: Empowering Women in Croatia's Workforce 18 Increasing women’s contributions to the labor market is crucial for Croatia’s economic growth and prosperity, particularly as its labor force is aging and shrinking. Despite gains over the past decade, women’s employment rates remain lower than men’s and women still earn less. This limits their current income and future pensions, leaving them more vulnerable to poverty in old age (Croatian Bureau of Statistics, 20231). As Croatia faces labor shortages, with a historically low unemployment rate of 6 percent and a general employment rate of only 71 percent in 2023 (Eurostat database)2, expanding women’s contributions to Croatia’s labor market is critical. Boosting female contributions to Croatia’s labor market can not only help to address immediate labor shortages but also contribute to higher tax revenues, strengthen the pension system, and reduce poverty. The objective of this report is to provide the government with actionable recommendations to unlock women’s potential in the Croatian labor market, supported by international ex- amples and good practices that are already working in Croatia. Based on an analysis of the barriers women face, particularly around balancing workforce participation and child-rearing responsibilities, and a review of government measures addressing these challenges, this note outlines opportunities for enhancements by providing six actionable recommendations for policymakers. The note aims to strengthen the knowledge base so as to inform the design of policies and interventions to improve progress toward gender equality in the Croatian labor market. In particular, this note aims to inform the government’s and the World Bank’s efforts to close existing gender gaps. This work builds on previous World Bank reports on this topic in Croatia, presenting updated evidence on recent gender gaps in the Croatian labor market. This note updates the findings from the 2019 Croatia Country Gender Assessment (World Bank, 2019a), an empirical study from 2020 on women’s economic opportunities in Croatia (World Bank, 2020), and a study from 2021 on Croatian women and the COVID-19 pandemic (World Bank, 2021a). In addition, it also builds extensively on the findings from two recent reports—2024’s Croatia Human Capital Review (World Bank, 2024a) and Croatia Gender Landscape (World Bank, 2024c)—while add- ing new insights concerning the key drivers and policies to reduce gender inequalities in the labor market in Croatia. The note diagnoses the most critical barriers (structural, institutional, sociocultural, and individual) that females face when accessing employment and, further, how women’s employment outcomes are constrained to a greater degree than the same outcomes for males. This is informed by key findings from thematic studies or “deep dives” into areas that have been identified as key determinants of gender gaps in the country3 and where knowledge gaps in the country or a lack of recent information are hindering the development and imple- mentation of evidence-based policy. The report relies on a combination of data sources, including household surveys, adminis- trative data, and secondary literature. This note is developed around two main components: (1) barriers to female labor force participation and (2) actionable policy recommendations. The first provides information on specific barriers (structural, institutional, sociocultural, and individual), focusing on the most recent period, using data sourced from global and domestic databases, including Labor Force Survey (LFS) data4, as well as recent research published by 1 https://podaci.dzs.hr/2024/en/77039 2 https://ec.europa.eu/eurostat/databrowser/view/lfsi_emp_a/default/table?lang=en 3 These reports are World Bank (2019a), World Bank (2020), World Bank (2021a), and World Bank (2024c). 4 Both EU-LFS data, as published on the Eurostat webpage, and LFS microdata for 2022, obtained from the CBS, have been used in this note. introduction and objective 19 the World Bank and others. The second component builds on this evidence to provide policy recommendations for reducing gender disparities in the labor market. It includes an assess- ment of implementation gaps in legal, monitoring, and evaluation systems and evidence relat- ing to existing policies and interventions to narrow or close these disparities. It also presents evidence on what works in countries with similar income levels and contexts to address the identified barriers in order to highlight policies and interventions that can move the needle toward higher female participation in the Croatian labor market. This note will help fill knowl- edge gaps regarding the identified critical issues to increase female labor force participation and enable the government to access information to make more evidence-based decisions. 1.1 Evidence of Issues The labor force participation and employment rates of Croatian women have improved steadily over the past decade, following general economic and labor market trends, bringing them closer to EU averages. Sustained economic growth as of 20155 has brought significant changes to the labor market in Croatia, creating new jobs and thus substantially decreasing the level of unemployment. However, as the Croatian population is rapidly ageing and shrink- ing,6 part of the labor demand in recent years has been met by foreign workers, which is also a rapidly increasing trend—as of 2024, the share of foreign workers among the total employed population was about 10 percent. Between 2013 and 2023 the employment rate for the work- ing-age population (20–64) increased from 57 percent to 71 percent, but this is still below the EU average of 75 percent. At the same time, the participation of women in Croatia’s labor mar- ket improved from 62.9 percent to 71.5 percent (see Figure 1), nearing the EU average of 74.8 percent. Over the same period, the employment-to-population ratio among Croatian women increased from 52.8 percent to 66.9 percent (see Figure 2), slightly below the EU average of 70.2 percent and the fifth lowest in the EU. Figure 1: Labor Force Participation Figure 2: Employment Rates % ages 20–64 % ages 20–64 90 90 85 85 80 80 75 75 70 70 65 65 60 60 55 55 50 50 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2020 2021 2022 2023 Source: Eurostat database. EU male EU female EUmale eu male eu EUfemale female HREuropean Note: EU = the male Union; HR = Croatia. HR female HRmale male hr female HRfemale hr 5 With an interruption in 2020 due to a COVID-19-induced recession. 6 In the period 2011–21 (between two censuses) the total population of Croatia decreased by almost 10 percent, while the average age increased from 41.7 to 44.3. Breaking Barriers: Empowering Women in Croatia's Workforce 20 While Croatian prime-age women (ages 25–49) have a higher employment rate than their EU counterparts, younger (ages 15–24) and older women have lower employment rates compared to their EU peers. In 2023, 79.6 percent of Croatian women ages 25–49 were employed, above the EU average of 77.1 percent. In contrast, only 19.4 percent of Croatian women ages 15–24 were employed, compared to 33.0 percent in the EU. For women in the later stages of their ca- reers (55–64), the employment-to-population ratio was 47.5 percent versus 58.0 percent in the EU (see Figure 3). These figures highlight the unique challenges that women face in different stages of their lives, and the need for targeted strategies to address them. Figure 3: Employment Rates by Age Group and Gender in Croatia and the EU27 Men Women % % 50 50 ages 15–24 40 40 30 30 20 20 10 10 0 0 2010 2012 2014 2016 2018 2010 2012 2014 2016 2018 2020 2022 2008 2020 2022 2008 EU27 HR EU27 HR % % 100 100 ages 25–49 80 80 60 60 40 40 20 20 0 0 % % 2010 2012 2014 2016 2018 2010 2012 2014 2016 2018 2020 2022 2020 2022 2008 2008 100 100 90 EU27 90 EU27 % % 80 100 80 100 70 70 ages 25–54 60 80 60 80 50 60 50 60 40 40 30 40 30 40 20 20 20 20 10 10 0 0 0 0 2010 2012 2014 2016 2018 2020 2022 2010 2008 2012 2014 2016 2018 2020 2022 2008 2010 2012 2014 2016 2018 2010 2012 2014 2016 2018 2020 2022 2020 2022 2008 2008 eu27 EU27 EU27 eu27 EU27 EU27 HR croatia HR croatia introduction and objective 21 % % 100 100 90 90 % % 80 100 80 100 ages 55–64 70 70 80 80 60 60 50 60 50 60 40 40 30 40 30 40 20 20 20 20 10 10 0 0 0 0 2010 2012 2014 2016 2018 2020 2022 2008 2010 2012 2014 2016 2018 2020 2022 2008 2010 2012 2014 2016 2018 2020 2022 2010 2012 2014 2016 2018 2008 2020 2022 2008 EU27 EU27 EU27 eu27 EU27 eu27 HR croatia HR croatia Source: Eurostat database. Note: EU27 = 27 countries of the European Union; HR = Croatia. Compared with Croatian men, some employment gaps for women have persisted over the past decade and widened, particularly for younger age groups (ages 15–24), while the gap slightly narrowed for older women (ages 55–64) (see Figure 3). The difference between the employment rates of young men and women (ages 15–24) increased from five percentage points to almost 12 percentage points from 2013 to 2023. This development is mainly driven by women with primary and secondary education, who face greater difficulty in securing their first job than men; women with more than two children; and Roma women (World Bank, 2020). However, the NEET (not in employment, education or training) rate7 for young (ages 15–24) women in Croatia is somewhat lower than for men—9.6 percent versus 10.1 percent in 20238—suggesting that more young women than men are in education. The gender gap in employment has, however, narrowed among those ages 55–64, likely driven by the raised retirement age for women since 2010 and a law introduced in 2019 allowing people to work part-time while still receiving a full pension (World Bank, 2024c). Given that this group comprises almost a quarter (23.9 percent in 2023) of the working age (ages 15–64) female population and less than a fifth (17.9 percent in 2023) of the labor force, it represents significant untapped potential in the Croatian work- force. However, 22 percent of this group has lower levels of education (in comparison to only 7.4 percent of those ages 25–54), suggesting that their skill level might be behind their low participation in the labor market. In the prime-age group (ages 25–49), female labor force participation is slightly higher than the EU average, but still below that for men. For the prime-age group (ages 25–49), the employment gap has remained at around seven percentage points over the last decade (see Figure 3), possibly relating to family planning, childbearing, and child-rearing, with the average age of first-time mothers being 29.6 years (World Bank, 2024c). However, the available data do not suggest that Croatian women leave the labor market during motherhood (Figures 3a and 3b). This is most likely related to the fact that once employed, they have the legal right to take paid maternity leave for up to a year (or unpaid leave for up to three years) and return to their 7 In general, this age group participates less in the labor market compared to the other age groups, as they are more likely to still be in education; thus, the focus needs to be not only on the unemployed but also on the ’idle’ portion of the younger-age group (neither working nor building skills for work in the future). 8 If we take the broader younger-age group, that is, those ages 15–29, the female NEET rate is higher than the male in 2023 (12.7 percent versus 11.0 percent). Breaking Barriers: Empowering Women in Croatia's Workforce 22 previous job, which means that they are officially employed during this period. However, some of them might not take a job if they are planning to have a family, or if they are in nonstandard employment, they may not have access to maternity leave; thus, the employment rate is lower than for men in the same age group. Figure 3a: Female Labor Force Figure 3b: Female Employment Rates in Participation in 2023 (Five-Year Age 2023 (Five-Year Age Intervals) Intervals) % % 90 % % 90 90 90 80 80 70 80 80 70 60 70 70 60 50 60 60 50 40 50 50 40 30 40 40 30 20 30 30 20 10 20 20 10 0 10 10 0 20-24 30-34 15-19 25-29 35-39 40-44 45-49 60-64 50-54 55-59 0 0 20-24 30-34 25-29 35-39 15-19 40-44 45-49 60-64 50-54 55-59 20-24 30-34 15-19 25-29 35-39 40-44 45-49 60-64 50-54 55-59 20-24 30-34 15-19 25-29 35-39 40-44 45-49 60-64 50-54 55-59 EU female EU female HR EU HR female EU female EU female Source: Eurostat database. HRfemale HR Note: EU = the female Union; HR = Croatia. European HRfemale Highly educated Croatian women fare much better than those with a lower level of educa- tion. In general, there are more female than male graduates at the tertiary education level (60.6 percent versus 39.4 percent in 2022); however, the fields of study differ substantially. While women predominantly choose business, administration, and legal studies, followed by health and welfare, men are more represented in engineering, manufacturing, and construction.9 Something similar is true at the secondary level of vocational education, in which 60 percent of the students are men, with the most dominant fields of study being engineering, manu- facturing, and construction, while women at the secondary vocational level mainly graduate with qualifications in services, followed by business, administration, and legal studies. In 2023, 85.9 percent of Croatian women ages 20–64 who attained tertiary education were employed, which is more than the EU average of 84.0 percent and almost the same as the male rate of 87.4 percent (see Figure 4). In contrast, only 32.2 percent of Croatian women who attained primary education were employed (more than a third of those were in the 55–64 age group), compared to 46.8 percent in the EU and 47.2 percent for men. One potential explanation for such trends is that women with lower levels of education tend to have more children and more childcare obligations (World Bank, 2024c). 9 Nevertheless, the share of female STEM (natural sciences, mathematics, and statistics; information and communication technologies; and engineering, manufacturing and construction) graduates (as a percentage of all STEM graduates) at the tertiary education level was higher in Croatia than in the EU in 2022 (38.3 percent versus 35.4 percent). introduction and objective 23 Figure 4: Employment Rates by Education Attainment and Gender (Ages 20–64) % % 90 % Men 90 % Women 80 90 90 80 70 80 80 70 60 70 70 60 50 60 60 50 40 50 50 40 30 40 40 30 20 30 30 20 10 20 20 10 0 10 10 0 2010 2012 2014 2016 2018 2020 2022 2008 0 0 2010 2012 2014 2016 2018 2020 2022 2008 2010 2012 2014 2016 2018 2020 2022 2008 2010 2012 2014 2016 2018 2020 2022 2008 Less than primary, primary, and lower secondary Less education than primary, primary, and lower secondary Less education Less than primary, primary, and lower Less than Upper than primary, primary, secondary, primary, primary, and and lower lower secondary post-secondary, non- education secondary education secondary education tertiary Upper education Upper secondary, secondary, and post-secondary, non- post-secondary, non-tertiary education tertiary education Upper secondary, and post-secondary, non- Upper secondary, Tertiary Tertiary educationand post-secondary, non- education tertiary education tertiary Tertiaryeducation education Source: Eurostat database. Tertiary education Tertiary education When women work, they are more likely than men to work in various part-time, temporary jobs or engage in unpaid work. The overall prevalence of part-time work in Croatia is signifi- cantly lower than in the EU, in particular for women (4.4 percent vs. 27.9 percent, respectively) (see Figure 5). However, if women do work part-time, they are almost twice as likely to do so as men (Eurostat database10). Figure 5: Employed Persons Working Part-Time, by Gender, in Croatia and the EU27 35% 30% 25% 20% 15% 10% 5% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Eurostat database. EU27 male Note: EU27 = 27 countries of the European Union; HR = Croatia. hr male eu27 female hr female 10 https://ec.europa.eu/eurostat/databrowser/view/lfsi_pt_a/default/table?lang=en Breaking Barriers: Empowering Women in Croatia's Workforce 24 Women in Croatia earn less than men, with the pay gap at 7.4 percent, which is lower that the EU average. This pay gap is not only significantly lower than the EU average (12.0 percent in 2023), but it has also somewhat decreased over the past decade, in line with increasing female employment and tertiary education attainment (Figure 6)11. Additionally, the wage gap has been more pronounced for individuals with lower levels of educational attainment, where Croatian women earned 17 percent less than men in 2018—the largest disparity in the EU. It has also been pronounced for the highest-paying jobs, where women earned 13 percent less than men (see Figure 7). Previous results (World Bank, 2020) suggest that the systematic selection into certain occupations or fields of education does not contribute to a gender gap in wages sig- nificantly, meaning that females are not disproportionally distributed in low-wage occupations or educational fields. However, the returns of well-paid occupations or educational fields are lower for women than for men, which may explain high within-industry gender wage gaps.12 Figure 6: Gender Pay Gaps* in the EU27 (2010–23) % 30 25 20 15 10 5 0 -5 Germany Bulgaria Italy Latvia Austria Czechia Greece Cyprus Ireland Slovenia Romania Estonia Finland Netherlands Sweden Spain Slovakia Lithuania Portugal Poland Croatia Luxembourg Hungary Denmark France Belgium Croatia Malta EU27 2010 2018 20102023 2014 2014 2018 2023 Source: Eurostat database. Note: EU27 = 27 countries of the European Union. * difference between average gross hourly earnings of male and female employees as a percentage of male gross earnings in industry, construction, and services (excluding public administration, defense, and compulsory social security). 11 This comparison takes into account those employed in industry, construction, and services (excluding public administration, defense, and compulsory social security). The pay gap that includes public sector activities, that is, industry, construction, and services (excluding the activities of households as employers and extra-territorial organisations and bodies), was similar, 7 percent in 2023; however, pay gap for the so-called business economy (NACE codes: B-N) stood at 11.4 percent in 2023. Obtained from the Eurostat database: https://ec.europa.eu/eurostat/databrowser/view/earn_gr_gpgr2__custom_15784068/ default/table?lang=en. 12 Oaxaca decompositions of raw wage gap showed that differences in observable characteristics (that is, occupation and field of education) between males and females explain a small share of the observed gender gap. This means that if Croatian women had the same characteristics as Croatian men, the observed wage gap would only be reduced by a small amount. A large percentage of the gap remains unexplained and can be attributed to differences in “returns” to those characteristics, which is usually interpreted as discrimination (World Bank, 2020). introduction and objective 25 Figure 7: Gender Pay Gap (as a Percentage) by Occupational Wage Quintile in 2018: EU vs Croatia % 20 18 16 14 12 10 8 6 4 2 0 Low-paid Low-mid-paid Mid-paid Mid-high-paid High-paid EU EU Croatia croatia Source: Eurofound (2021), based on the Structure of Earnings Survey microdata for 2018. Note: EU = European Union. The EU aggregate is based on 25 member states (no data for Austria and Ireland). The three most important factors that positively contribute to explaining the gender pay gap in the EU are working time, sector, and supervisory responsibilities (Eurofound, 2021), as well as gender biases. Apart from women making up the highest share of those in family worker roles, more than half of the workers in the public sector are women (see Figure 8), predomi- nantly in healthcare and education. Part-time opportunities are also more prevalent in these two sectors, where the share of women in part-time roles reached 72 percent (World Bank, 2024c). The wage gaps in higher-skilled and higher-paying occupations are likely attributed to fewer women than men taking on supervisory roles, with only 20.3 percent of top executives in major national companies being female (EIGE and Eurofound, 2023). Gender biases might also play a role. International research shows that women often experience gender biases, even in female-dominated workplaces (Stephenson, Dzubinski, and Diehl, 2023). These bias- es are due to male culture, exclusion, self-limited aspirations, lack of sponsorship, and lack of acknowledgement. The share of women among entrepreneurs is also lower than that of men (see Figure 8). In 2023, the share of self-employed women represented 7.8 percent of total employment, compared to 16.0 percent for men for the ages 15–64 (Eurostat database13). In 2021, only 18.6 percent of the 135,869 existing companies were exclusively owned by women, while 11,053 were co-owned, resulting in a total women’s ownership share of 26.7 percent. In 2023, women owned 37 percent of the registered craft businesses (World Bank, 2024d). Evidence from Romania shows that gender gaps in entrepreneurship can be due to gaps in financial inclusion and access to assets, harmful gender norms, motherhood, lack of childcare, and eldercare demands (Robayo-Abril and Rude, 2023a). A detailed assessment could shed light on the drivers in the Croatian context. 13 https://ec.europa.eu/eurostat/databrowser/product/view/lfsa_egaps?category=labour.employ.lfsa.lfsa_emp Breaking Barriers: Empowering Women in Croatia's Workforce 26 Figure 8: Gender Distribution by Professional Status (Ages 25–49) Family worker Public sector worker Private sector worker Entrepreneur Contract worker Farmer 0 25 50 75 100 Percentage Share of Gender (%) Women Men Source: LFS (2022). Women are also less likely to be in leadership positions. For example, only 23.4 percent of sen- ior and middle management positions were held by women in 2022 (World Bank, 2022). This is a decrease compared to 20 years ago, when the rate stood at 26.8 percent. The share is below those reported for most countries in the Europe and Central Asia (ECA) region, showing that Croatia is lagging. High performers in this area are France, Sweden, and the UK, for example, which report shares of around 40 percent. Women’s lower participation in the labor force, combined with a higher likelihood of work- ing in part-time or temporary jobs leads to a 23.5 percent gender pensions gap (Eurostat database14). Given that women live longer on average than men, these dynamics put them in a financially vulnerable situation. Around 22 percent of women lived below the at-risk-poverty and material deprivation thresholds compared to 17.7 percent of men, and over 11 percent of women were experiencing material deprivation in 2022, significantly higher than the rate of 7.6 percent for men (World Bank, 2024d). 14 https://ec.europa.eu/eurostat/databrowser/product/view/ilc_pnp13?category=livcon.ilc.ilc_ip.ilc_pn 27 2/ Barriers to Female Labor Force Participation Breaking Barriers: Empowering Women in Croatia's Workforce 28 Differences in economic opportunities between men and women can be attributed to dif- ferences in their endowments and preferences, and to contextual factors, such as norms and institutions (see Figure 9). Individual barriers include women’s skills, confidence to ap- ply for jobs or start a business, and health status. Cultural barriers stem from societal norms and gender stereotypes, particularly around caregiving responsibilities, which often place a disproportionate burden on women. Structural barriers involve societal factors such as the unequal division of unpaid labor and limited access to flexible working arrangements. Institu- tional barriers arise from legal and regulatory frameworks, organizational practices, or support structures, the absence of which can, in turn, disadvantage women. These barriers are inter- connected and can exacerbate each other. For example, insufficient childcare support may reduce a woman’s confidence to pursue entrepreneurial activities or to believe in her skills, while in contexts with strong traditional gender norms that place primary caretaking respon- sibility on women, insufficient long-term care infrastructure compounds these issues further and limits women’s labor market participation. Figure 9: Barriers to Labor Force Participation Institutional Individual Barriers Barriers Limitations relating Challenges related to education to personal skills, systems, policy confidence, and frameworks, and health. access to resources. Socio- Structural Cultural Barriers Barriers External factors like labor market Influences of gender conditions and norms and family workplace policies. responsibilities. Source: Adapted from Arias et al. (2014). barriers to female labor force participation 29 1.2 Individual barriers Croatian girls and women start strong in education, outperforming boys in reading and achieving higher participation rates in tertiary education. Based on the Human Capital Index from 2020, with complete education and full health, a girl born in Croatia will be 74 percent as productive when she grows up as she could be, compared to a value of 68 percent for Croatian boys (World Bank, 2024c). The following figures illustrate the education gap in favor of girls: ○○ Early school leaving. Only 1.2 percent of girls, compared to 2.7 percent of boys, left school early in Croatia in 2023, well below the EU average for girls of 7.7 percent (Eurostat database15). ○○ Skills and knowledge. Boys and girls perform at similar levels on average in mathematics, but girls outperformed boys in reading by 34 points (PISA, 202216). ○○ Tertiary education. Among Croatian women ages 15–64, 29.2 percent completed tertiary education in 2023, compared to an EU average of 33.7 percent for women and 20.5 percent for Croatian men. The increase from 22.6 percent in 2016 for women was more rapid compared to men’s tertiary education attainment, which increased from 17.4 percent during the same period (Eurostat database17). Female tertiary education graduates are underrepresented in STEM fields but overrepresented in fields such as education, health, business, and humanities. The fields of information and commu- nication technology (ICT) and engineering are dominated by male graduates, with females making up around 18 percent and 19 percent, respectively, of the graduates in these areas (see Figure 10). On the other hand, close to 80 percent of graduates in pedagogical studies are females. As pro- gress in artificial intelligence (AI) and digital transformation accelerates, the underrepresentation of Croatian women in STEM and ICT fields, where many high-paying and career-advancing roles are emerging, risks exacerbating the gender inequalities in both employment and wages (OECD, 2023b). Figure 10: Gender Distribution by Field of Study in Croatian Tertiary Education (Ages 25–49) Education Health and welfare Social sciences, journalism and information Business, administration and law Arts and humanities Natural sciences, mathematics and statistics Agriculture Generic programs and qualifications Services Unknown Engineering, manufacturing and construction ICT 0 25 50 75 100 % Women Men Source: LFS (2022). 15 https://ec.europa.eu/eurostat/databrowser/product/view/edat_lfse_14?category=educ.educ_outc.edatt.edatt1 16 https://www.oecd.org/en/publications/pisa-2022-results-volume-i-and-ii-country-notes_ed6fbcc5-en/croatia_65a72a90- en.html 17 https://ec.europa.eu/eurostat/databrowser/view/edat_lfs_9903/default/table?lang=en Breaking Barriers: Empowering Women in Croatia's Workforce 30 A higher share of Croatian women has basic or above-basic digital skills compared to their EU counterparts (see Figure 11). While 59 percent of Croatians have above-basic digital skills, exceeding the EU average of 55.6 percent in 2023, a slightly higher share of Croatian men (60 percent) has basic digital skills than women (57.7 percent). In theory, more women could be ready for remote work options. Due to their higher concentration in jobs that cannot be done remotely (for example, in teaching, healthcare, and service work), these options are primarily available to women working in higher-skilled jobs and mainly in urban areas (World Bank, 2021a). Figure 11: Share of Women (Ages 16–74) with Basic or Above-Basic Digital Skills in Croatia % versus the EU27 % 90 90 80 62 80 70 70 60 60 60 50 % of female population ages 16–74 58 50 40 40 30 56 30 20 54 20 10 10 0 52 0 20-24 30-34 15-19 25-29 35-39 40-44 45-49 60-64 50-54 55-59 20-24 30-34 25-29 35-39 15-19 40-44 45-49 60-64 50-54 55-59 50 2021 2023 EU female Source: Eurostat database. Note: EU27 = 27 countries of the European Union. EU female HR EU27 female croatia EU27 Croatia HRfemale Lower confidence in their ability to establish and manage a business is also a barrier pre- venting more women than men from becoming entrepreneurs. According to GEM (2023) more Croatian women than men start business out of necessity (74.5 percent of women versus 67.9 percent of men) rather than opportunity (36.8 percent of women versus 55.6 percent of men). Fewer women believe they have the skills to start a business (67.9 percent versus 79.3 percent for men), can recognize a business opportunity (55.6 percent versus 64.2 percent), or are undeterred by fear of failure (43.6 percent versus 52.1 percent) (GEM, 2023). World Bank– commissioned focus groups have revealed that many women entrepreneurs feel inadequately informed about available resources, including training programs and available funding oppor- tunities (World Bank, 2024d). In Croatia, women have a longer lifespan than men, and health outcomes show no clear gender gap. Health outcomes are also an important human capital outcome and contribute to productivity (Stephens and Toohey, 2022). Therefore, it is crucial to study if there are gender gaps in health outcomes in Croatia. According to the Gender Equality Index (202318), the health domain exhibits the lowest level of gender inequality. In 2022, women had a higher life expec- tancy at birth (80 years) compared to men (74 years) (EIGE and Eurofound, 2023). Women have slightly more healthy years at birth than men (59.3 versus 57.9), although self-perceived health was better among men, with 65 percent rating their health as good or very good, compared to 18 https://eige.europa.eu/gender-equality-index/2023/country/HR barriers to female labor force participation 31 61 percent of women (EIGE and Eurofound, 2023). Roma women experience a higher incidence of health concerns, particularly in maternal health (World Bank, 2019a). Adolescent pregnancy rates are relatively low. The adolescent pregnancy rate, which fre- quently leads to school dropouts among girls and young women (Ghose and John, 2017), is also low in Croatia, standing at 8.2 per 1,000 women ages 15–19 (World Bank, 2022). This rate has decreased significantly over time and is below the ECA average. 2.2 Sociocultural barriers In Croatia, societal norms strongly support traditional gender roles, with 60 percent of the population in 2017 endorsing the idea that a woman’s primary responsibility is to man- age the home and family, well above the EU average of 44 percent (World Bank, 2019a). While women (ages 20–49) who are single and without children experience higher employment rates than their male counterparts, this trend reverses for women living in a couple or a couple with children who assume the primary caregiving responsibilities (see Figure 12). These trends showcase the existence of a motherhood penalty for women with children. % % 100 90 100 Figure 12: Employment Rates by Gender and Type of Household (Ages 20–49) 90 80 Single adult without Adult living in a couple Adult living in a couple with 80 70 % children % without children % children 100 70 60 100 100 60 50 80 80 80 50 40 60 60 40 60 30 40 40 30 40 20 20 10 20 20 20 10 0 0 0 00 2010 2012 2014 2016 2018 2008 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2017 2018 2019 2020 2021 2022 2023 2020 2021 2022 2023 2010 2012 2014 2016 2018 2020 2022 2008 EU27 Source: Eurostat database. EU27 Men HR Women Men Woman Men Woman Men Woman HR Stereotypes also drive gender gaps in STEM and lead to further second-order negative effects as women progress in their careers in STEM fields. International evidence shows that gender stereotypes are a significant driver of gender gaps in STEM (Verdugo-Castro, García-Holgado, and Sánchez-Gómez, 2022). These stereotypes might further lead to hiring discrimination, reduced opportunities for career advancement, lower social capital (for example, fewer pro- fessional networks), and an unwelcoming and threatening work environment (Casad et al., 2021) as women advance in STEM careers, potentially leading to dropouts and occupational segregation. The patriarchal views which negatively affect women’s labor force participation are more present among men than women and are also more pronounced in Croatia than in other European countries (World Bank, 2020). While it seems that women tend to advocate for a more equitable distribution of responsibilities, men generally support the traditional division of labor (see Figure 13). At the same time, about 40 percent of women express concerns that Breaking Barriers: Empowering Women in Croatia's Workforce 32 engaging in work may hinder their ability to foster strong parent-child relationships, and when women (ages 25–49) are inactive due to caretaker duties, almost 80 percent (compared to approximately 50 percent of men) do so out of choice (see Figure 14). More than one fifth of Croatians believe that men should have more rights to a job than women when jobs are scarce (World Value Survey, 2017–22). The share is significantly higher among women than men (26.4 percent versus 15.8 percent). These views also affect the perception of women in leadership positions, which might con- tribute to a glass ceiling. For example, nearly one fifth of Croatian men and women believe that men make better political leaders than women (World Value Survey, 2017–22). The share is nearly as high among men as among women, showing unconscious biases in both genders. Similarly, 12.3 percent of Croatians think that men make better business executives than women do (World Value Survey, 2017–22). Men are more likely to (strongly) agree with this statement than women. These data indicate significant biases against women in leadership positions. International evidence shows that women leaders experience biases even in female-domi- nated work environments. Male culture, exclusion, self-limited aspirations, lack of sponsor- ship, and lack of acknowledgement persist even in women-dominated work environments (Stephenson, Dzubinski, and Diehl, 2023). Moreover, the so-called “queen bee” effect, whereby women leaders distance themselves from junior women and legitimize gender inequality in their organization, persists both in male- and female-dominated environments (Derks, Van Laar, and Ellemers, 2016). The “queen bee” effect is a consequence of gender inequality, similar to the self-distancing observed in other marginalized groups. Figure 13: Views on Sharing Domestic Responsibilities by Gender A family is stronger when fathers A working mother can establish not only support the family just as warm and secure a Boys have the same obligations financially, but also take care of relationship with her children as to help with household chores the children a mother who does not work as girls Men Women Mothers should make most of the Household work should be shared If the child is ill, the father decisions on how to bring up their by partners equally should also go on sick leave children Men Women 0 20 40 60 80 0 20 40 60 80 0 20 40 60 80 % Strongly disagree agree disagree strongly agree neither agree nor disagree Source: EIGE (2023). barriers to female labor force participation 33 Figure 14: Reasons for Inactivity Due to Caring for Children and Incapacitated Relatives (Ages 25–49) Want to provide care themselves Relevant care services not affordable Other factors were decisive Relevant care services not available 0 20 40 60 80 % Women Men Source: LFS (2022). 3.2 Structural and institutional barriers In the context of these norms, caretaking duties fall disproportionally on women, and for women ages 25–49 who do not work, caring for children or relatives is the main barrier to employability (see Figure 15). Over 5 percent of women (ages 20–64) are inactive due to car- egiving responsibilities, compared to 0.3 percent of men of the same age. This “motherhood penalty” brings a reduction in earnings due to lower participation as well as fewer hours worked and lower wage rates (Cortes and Pan, 2023). The likelihood of female labor force participation decreases significantly as the number of children in the family rises, and approximately 50 per- cent of women interrupted their careers for at least one month due to caregiving compared to only 1.5 percent of men. Among women who interrupted their careers, 71.2 percent were out of work for over a year, while only 12.1 percent of men experienced the same (World Bank, 2020). Figure 15: Reason for Inactivity by Gender and Age Not looking for a job Age 15-24 Age 25-49 Age 50-64 Care for children or relatives Other reasons Education or training No adequate job Illness or disability Other family reasons Other personal resons Waiting list 0 20 40 60 80 0 20 40 60 80 0 20 40 60 80 % Women Men Source: LFS (2022). Breaking Barriers: Empowering Women in Croatia's Workforce 34 Family duties are shared unequally. Despite a relatively generous parental leave policy, only 3.6 percent of men used parental leave in 2023 and 50.2 percent took advantage of the two- week paternity leave entitlement. This uptake is low despite the introduction of a policy in which part of the parental leave is earmarked for fathers and providing a two-month bonus, increasing compensated parental leave from six to eight months, in cases where both parents take it.19 Social norms, low awareness, a perception of financial loss, and difficulties faced by fathers in using parental leave likely contribute to the lower uptake. In an Ipsos survey, over 90 percent of respondents believed that fathers faced difficulties with employers when using parental leave, and 56 percent said that fathers encountered more challenges with employers than mothers. Additionally, a survey conducted by Ipsos for Croatia’s Central State Office for Demography and Youth, in 2023, brought to light that only 61 percent of the surveyed respond- ents were aware of the right to paternity leave, and that financial loss was the main deterrent for fathers considering paternity leave, which is of note given that the average compensation rate for father-specific leave in Croatia was 62 percent in 2022, compared to the EU average of 71 percent (see Figure 16). Figure 16: Average Payment Rate for Father-Specific Leave in EU member states in 2022 % 100 90 80 70 62 60 50 40 30 20 10 0 Bulgaria Italy Germany Latvia Austria Slovak Republic Ireland Cyprus Slovenia Greece Romania Finland Sweden Netherlands Estonia Spain Luxembourg Portugal Czech Republic Lithuania Poland France Belgium Hungary Denmark Croatia Malta Source: European Parliament and the OECD (2022). Note: The term ‘average payment rate’ indicates the percentage of previous earnings that the benefit replaces throughout the paid leave entitlement for an individual earning 100 percent of the average national full-time earnings. 19 Women are entitled to six months of maternity leave, with 100 percent salary support, and they can transfer part of the maternity leave to fathers after 70 days. Fathers are granted 10 days of paid paternity leave, which they can use until the child turns six months old, otherwise they lose this benefit. After the child turns six months old, both parents can take parental leave until the child turns eight. The first eight (if taken and shared by both parents) or six (if taken by one parent) months are fully compensated, while the rest is paid in relation to the amount of the base salary being compensated, with a cap of 995.45 euro per month in 2024. After parental leave, parents also have the right to work part-time in case the child needs enhanced care, with compensation of 125 percent of the monthly budget base for full-time work (551.80 euro in 2024), until the child turns three. Read more at HZZO (2024): https://hzzo.hr/rodiljne-i-roditeljske-potpore. barriers to female labor force participation 35 Despite increasing ECEC coverage, gaps still remain. Almost 20 percent of children ages three to six do not attend ECEC facilities. In 2023, the participation of children under three in formal childcare stood at 29.6 percent, compared to an EU average of 37.4 percent. For preschool-age children (ages three to six), the participation rate was 82.3 percent, one of the lowest in the EU (Eurostat database20). Participation is low until the age of four (70.9 percent versus 93.5 percent for the EU), but the rate rises from the age of five (86.8 percent vs 96.3 percent) (EC, 2023). ECEC facility coverage varies too. It is highest in the City of Zagreb (95.1 percent), while Slavonia’s five counties exhibit the lowest coverage, ranging from 63.3 percent to 75.5 percent (see Figure 17 and Figure 18). Figure 17: Kindergarten and Daycare Coverage in Croatia by County, 2022/23 City of Zagreb 30.2 95.1 Istria 30.8 86.3 Primorje-Gorski Kotar 25.8 86.0 Šibenik-Knin 26.5 85.8 Međimurje 21.7 84.8 Split-Dalmatia 15.6 84.4 Varaždin 23.5 83.9 Zadar 16.6 82.1 Dubrovnik-Neretva 24.0 81.8 Average 23.2 81.4 Zagreb 30.6 78.6 Koprivnica-Križevci 20.6 77.0 Virovitica-Podravina 10.5 75.5 Karlovac 21.1 72.2 Krapina-Zagorje 23.0 69.8 Požega-Slavonia 16.6 69.7 Bjelovar-Bilogora 16.7 67.9 Vukovar-Syrmia 20.3 67.7 Lika-Senj 18.0 67.6 Sisak-Moslavina 21.8 67.5 Osijek-Baranja 16.8 daycare 67.0 (below age 3) Brod-Posavina 12.5 63.3 kindergarten 0 20 40 60 80 100 % Daycares (below age 3) Source: Central Bureau of Statistics. Note: The figures represent the share (in percent) of children in kindergartens and daycares in the population from ages four to seven years and ages zero to three years, respectively. Data for childcare are for the 2022/23 school year, while population data come from the 2021 census. 12.5 16.8 21.8 18.0 20.3 16.7 16.6 23.0 21.1 10.5 20.6 30.6 23.2 24.0 16.6 23.5 15.6 21.7 26.5 25.8 30.8 30.2 20 https://ec.europa.eu/eurostat/databrowser/view/educ_uoe_enra21/default/table?lang=en Breaking Barriers: Empowering Women in Croatia's Workforce 36 Figure 18: Kindergarten and Daycare Coverage in Croatia by Local Administrative Unit, 2022/23 Source: Central Bureau of Statistics. Note: The figures represent the share (in percent) of children in kindergartens and daycares in the population from ages zero to six years. Data for childcare are for the 2022/23 school year, while population data are from the 2021 census. Insufficient formal education and childcare hours challenge working parents. For school-age children up to the age of 12, many still attend formal education for less than 30 hours per week, which falls short of covering full-time workdays for parents. This trend is gradually improving though. In 2023, 59 percent of school-age children up to the age of 12 were in education or formal childcare for up to 29 hours per week, down from 66.2 percent in 2022. Conversely, the share of those who participated for 30 hours or more increased to 40 percent, up from 33.5 percent the previous year (Eurostat database21). Tuition fees for ECEC vary locally and can be an obstacle to participation. Overall, financial support for childcare has been lower in Croatia than in other EU countries (see Figure 19). The childcare funding system is decentralized, with less-developed municipalities facing higher costs. These municipalities set the subsidized prices that parents must pay, and it is mainly lower-income families in these areas that struggle both with affordability and lower levels of childcare coverage. According to a United Nations Children’s Fund (UNICEF) study in 2020, 69 percent of children live in areas where tuition fees are not linked to household income, and 47 percent live in areas where recipients of social assistance have to pay full fees. However, some mostly urban areas have linked tuition fees to household income, making ECEC more accessible. The central government plans to support municipalities through a new cofinancing 21 https://ec.europa.eu/eurostat/databrowser/product/view/ilc_caindformal?category=livcon.ilc.ilc_lv.ilc_ca barriers to female labor force participation 37 model for operating costs, based on the number of children enrolled in ECEC facilities and the development category of each municipality (European Commission, 2023). Figure 19: Share of Children Ages 12 or Below Receiving Formal Childcare by Degree of Urbanization and Cost in the EU and Croatia in 2016 % 30 26.2 25.2 24.6 25 21.9 20 15 8.9 8.1 10 7.2 7.3 6.4 5 2.8 2.2 1.0 0.8 0.2 0.8 0.8 0 Full or Cost free Full or Cost free Full or Cost free Full or Cost free reduced reduced reduced reduced price price price price Total Total Cities Cities Townsand Towns suburbs and suburbs Rural Ruralareas areas Source: Eurostat database. eu27 croatia The Labor Act allows part-time work and, from 2023, also the right to request flexible work- ing arrangements or telework. Yet only 4.4 percent of women (ages 25–49) work part-time and 13 percent can work from home (World Bank, 2024a). Employers are obliged to consider such requests but are not required to approve them. Croatian women are overrepresented in jobs that cannot be carried out remotely, and part-time opportunities in paid work are rare (World Bank, 2024a). The lack of remote working options disproportionally impacts women working in lower-skilled jobs. During the COVID-19 pandemic, working remotely was possible for 62 percent of tertiary-educated women compared to 7 percent of women with less than an upper-secondary education. Similarly, 42 percent of urban women could work from home, while only 31 percent of rural women could (World Bank, 2021a), which was compounded by lower ECEC coverage in rural areas. The current design of the child allowance and tax system may be contributing to an inactiv- ity trap22, posing challenges related to reentering the workforce after absences, especially for women. The inactivity trap is most pronounced for single individuals with two children with earnings at 50 percent of the average wage, where the inactivity trap can be as high as 90 percent, indicating a strong disincentive to work (see Figure 20). For this family structure, the inactivity trap is largely due to the reduction of the guaranteed minimum benefit (GMB), housing benefit, deductions for pension-related social security contributions, and, to a less- er extent, child allowance. In contrast, for second earners earning 67 percent of the average 22 An inactivity trap, representing the implicit tax on returning to work for individuals who are inactive and not eligible for unemployment benefits but qualify for income-tested social assistance, quantifies the portion of any additional gross wage that is subject to taxation. Breaking Barriers: Empowering Women in Croatia's Workforce 38 wage, the inactivity trap is due to a reduction in child allowance and the mandatory 20 percent pension-related social security contributions (World Bank, 2020). Unlike the GMB and housing benefit, which are phased out over time, child allowance is subject to a direct income assess- ment without specific measures to reduce the benefit-withdrawal tax for individuals starting a new job, for example, through an income disregard. This sudden termination of child allowance might deter lower-earning women from working, as any extra income they earn through work results in a commensurate decrease in their benefits. Figure 20: Inactivity Trap for Different Family Compositions in 2023 % A single parent supporting two 100 children and earning 50 percent of the average income 90 80 70 60 50 40 30 20 10 0 Bulgaria Italy Latvia Germany Austria Greece Cyprus Slovenia Estonia Ireland Romania Finland Spain Netherlands Sweden Luxembourg Slovakia Lithuania Portugal Czech Republic Belgium Hungary Poland France Denmark Croatia Malta EU27 % A dual-earning couple with two 70 children, where both spouses earn the average wage 60 50 40 30 20 10 0 Bulgaria Austria Italy Latvia Germany Cyprus Greece Ireland Estonia Finland Sweden Spain Netherlands Romania Slovenia Slovakia Czech Republic Portugal Luxembourg Malta Hungary Poland France Denmark Belgium Lithuania EU27 Croatia Source: European Commission database: https://europa.eu/economy_finance/db_indicators/tab/. Note: The inactivity trap measures the short-term financial incentive for an inactive person not entitled to unemployment benefits (but potentially receiving other benefits, such as social assistance) to move from inactivity to paid employment. It is defined as the rate at which the additional gross income of such a transition is taxed. See: https://economy- finance.ec.europa.eu/economic-research-and-databases/economic-databases/tax-and-benefits-indicators-database/ methodology-tax-and-benefits-indicators-database_en. barriers to female labor force participation 39 While Croatia possesses a compensation scheme for temporary incapacity, it disincentiv- izes women’s labor force participation. Parents in Croatia get compensated for temporary incapacity for work due to the care of a sick child under the age of three, at an amount of 100 percent of the compensation base23. The compensation base is the average salary based on the previous six months before the month in which the case occurred. The salary compensation is calculated and paid by the employer, but at the expense of the Croatian Health Insurance Fund (CHIF), with a cap on the monthly compensation equal to 565.04 euro. The CHIF, how- ever, does not calculate the cap on a monthly basis but on an hourly basis, limiting the hourly wage to 3.21 euro. This interpretation is very costly and disincentivizing for parents of young children, especially those with higher earnings.24 The compensation and associated penalty mainly affect women, since in 2023 82.1 percent of cases of temporary incapacity for work due to the care of a child under the age of three involved women. Active labor market measures for the unemployed, especially those focused on reskilling and upskilling, have increased over the past four years for both men and women. Young women (ages 15–29) who register with CES get the most benefit from employment subsidies and training in order to get employment. The uptake of training, especially through a voucher scheme for reskilling in green and digital skills, has seen a rise over the past four years. Ad- ditionally, women ages 30–54 are the group that benefited the most from both training and self-employment grants. For women ages 55 and above, those who were unemployed benefited from employment subsidies and training, as well as subsidies to preserve jobs (see Figure 21). Figure 21: Registered Unemployed Women Participating in different ALMPs by age group and year. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2021 2022 2023 2024* 2021 2022 2023 2024* 2021 2022 2023 2024* 15-29 30-54 55+ training Training self-employment subsidies Employment subsidies Direct employment works mobility: i choose job creation or public labour subsidies Self-employment croatia subsidies Labour mobility: direct job creation I choose Croatia or public works Subsidies to preserve jobs subsidies to preserve jobs Source: CES. Note: * = from January to September 2024; ALMP = Active labor market policy. 23 https://hzzo.hr/obvezno-zdravstveno-osiguranje-0/naknada-place-za-vrijeme-privremene-nesposobnosti-za-rad. As of 2025 the base is planned to be increased: https://zdravlje.gov.hr/vijesti/rastu-naknade-za-bolovanje/6756. 24 The government, however, has announced recently that this compensation will increase (Jutarnji list, 2023). Breaking Barriers: Empowering Women in Croatia's Workforce 40 However, over the period 2021–24, only 26.3 percent of unemployed women were covered by an active labor market policy (ALMP), compared to 30.4 percent of men. Apart from women ages 55 and above, unemployed women registered with CES participate in ALMP programs at lower rates than men (see Figure 22). Women also face challenges in receiving unemploy- ment benefits, with only 30 percent of unemployed women receiving them, compared to 40 percent of men (World Bank, 2021a). Additionally, the employment support programs seem to primarily benefit individuals who are already well-positioned to find jobs. In 2022, 87 percent of ALMP beneficiaries had higher levels of education and shorter periods of unemployment, although they made up just 63 percent of the unemployed (World Bank, 2024a). Job creation and self-employment incentives were effective mainly for skilled, recently unemployed individ- uals but less so for those with lower skill levels or irregular work histories (World Bank, 2024a). Figure 22: Average ALMP Coverage Over Time for Unemployed People Registered with CES by Gender and Age Group % coverage by almps - women 70 coverage by 60 almps - men 50 40 30 20 10 0 2021 2022 2023 2024* 2021 2022 2023 2024* 2021 2022 2023 2024* 15-29 30-54 55+ Source: CES. Note: * = from January to September 2024. Coverage is measured as the percentage of persons utilizing some of the active labor market policy (ALMP) programs offered by Croatian Employment Services (CES) in a specific year out of the average number of unemployed in the respective (age and gender) group. The increase in the statutory retirement age for women and the introduction of a 2019 law allowing part-time work while maintaining a full pension contributed to reducing the em- ployment gap for women ages 50–64. Following the introduction of the law, the number of part-time pensioners almost doubled during the period 2020–23, with women comprising 35 percent of this group (World Bank, 2024a). This policy likely demonstrates the appeal of balanc- ing family and financial needs in later life (World Bank, 2024c). However, gender differences in retirement choices persist, with women retiring earlier than men, contributing to higher rates of retired women in the 55–64 age group. By 2030, the statutory retirement age will equalize for both genders, but early retirement remains a significant factor affecting female labor force participation. The pension gender gap also arises as a consequence of labor market exits due to having children. The government previously established that a woman would get six months of pensionable service for each child, while it has been announced that as of 2025, this will increase to a year of pensionable service per child. Meeting the rising demand for long-term care (LTC) for the aging population in Croatia remains a challenge. Caretaking duties fall disproportionally on women. The Croatian LTC barriers to female labor force participation 41 sector is underfunded. At less than 0.5 percent of GDP, its spending on LTC is the third lowest in the EU, a figure that has remained stagnant from 2015 to 2022 (see Figure 23). Around 31 percent of the persons ages 50 and above who are perceived to need LTC report receiving inadequate support for their needs, especially in rural areas with uneven coverage and lim- ited access to service providers, according to data from the 2022 Survey of Health, Ageing and Retirement in Europe (SHARE, 2024). Estimates suggest that up to 38 percent of people ages 50 and above provide informal care (Bađun, 2023). In a survey of family carers, nearly 75 percent of respondents were women, with a mean age of 62, and 70 percent of them were not working; of this 70 percent, close to 45 percent of carers were retired, and around half were living below the poverty line (OECD, 2023a). Women are more likely than men to adjust their work arrangements, reduce their working hours, take time off, opt for part-time roles, or exit the workforce entirely when providing care. For women ages 25–54 with elderly relatives, the likelihood of labor market participation is 2.7 percentage points lower than those without, after controlling for education and age (World Bank, 2020). Figure 23: Long-Term (Health)Care Expenditure by Country (2015–22) 3 3.0 3 3 2.5 3 2 2.0 2 2 Percentage of GDP (%) 1.5 2 1 1.0 1 1 0.5 1 0 0.0 Latvia Bulgaria Greece Cyprus Romania Slovakia Portugal Lithuania Hungary Poland Croatia 0 Bulgaria Italy Latvia Austria Germany Greece Cyprus Czechia Romania Slovenia Ireland Estonia Finland Spain Netherlands Sweden Slovakia Portugal Luxembourg Lithuania Hungary Poland France Denmark Belgium Croatia Malta EU27 Croatia Latvia Bulgaria Italy Greece Cyprus Romania Estonia Slovakia Portugal Lithuania Hungary Poland Croatia 2015 2015 2015 2015 2022 2022 Source:2022 Eurostat database. Note: EU27 = the 27 countries of the European Union. 2022 In summary, the evidence generated confirms that several mechanisms are hampering fe- male employability in Croatia: –– Education. Girls outperform boys in relation to most educational outcomes, and more women graduate from tertiary education. However, women are underrepresented in STEM fields. With the increased demand for lower-skilled labor and ICT skills, the skills mismatch makes it challenging, mainly business, administration, law, and humanities graduates, to find jobs. As progress in AI and digital transformation accelerates, this gender gap in STEM risks worsening inequalities in employment and wages. International evidence suggests that gender stereotypes most likely contribute significantly to the gender gaps in STEM. –– Family responsibilities. Child-rearing and caregiving duties are the primary reasons for wom- en’s nonparticipation in the labor market. Traditional norms, which place disproportionate Breaking Barriers: Empowering Women in Croatia's Workforce 42 caregiving expectations on women, exacerbate this issue and limit labor force participation mainly for women who are young, have lower levels of education, have more than two chil- dren, have elderly relatives inhabiting their household, and are from a Roma background. An additional factor is the inaccessibility and unequal distribution of care facilities across the country, especially in an urban-rural context. –– Parental leave, child benefits, and transition to employment. Parental leave is generous in length, while compensation has been increasing in recent years. For women with low earnings, the abrupt removal of child allowance when transitioning to employment may create an inactivity trap, which is higher in Croatia than the EU average, despite a reduc- tion in income taxes for low earners. –– Sharing of parental duties. The uptake of parental leave among men is low. Norms, low awareness of parental leave options, perceptions of financial loss, and difficulties faced by fathers in the workplace when using leave seem to impact this. –– Childcare. Access and coverage have improved, but gaps remain, particularly in the Pan- nonian region and rural areas. Operating hours are not sufficiently aligned with full-time work. ECEC tuition fees vary locally, and in some areas, particularly where fees are not linked to household income, they may pose a barrier to participation. –– Working arrangements. Part-time and flexible work options are available but, overall, used less compared to the EU average. In terms of remote work, most women are concentrated in sectors (for example, services, education, and healthcare) where such arrangements are less feasible. –– Female entrepreneurship and female leadership positions. Women are underrepresented among entrepreneurs, and tend to lack access to suitable financial products, training, and coaching on establishing and growing a business, in particular outside of large urban centers. Gender norms also negatively affect the perception of women in leadership positions. Cro- atia reports a relatively low share of women in senior and middle management positions. –– Adult care. Long-term institutional care coverage and access is insufficient, and homecare by relatives places a disproportional burden on women. 43 3/ The Government’s Planned Initiatives to Support Women’s Contributions to the Labor Market Breaking Barriers: Empowering Women in Croatia's Workforce 44 The government’s key strategic and legal documents to support more women to strengthen their labor market outcomes include: ○○ The National Plan for Gender Equality (until 2027)25 and its related Action Plan (until 2024)26. Its objective is to improve women’s position in the labor market, with specific targets to increase female employment and activity rates and to support women’s entrepreneurial skills and access to loans for women-owned small businesses. ○○ The Strategy for Demographic Revitalization (2033)27. It aims to support families and youth, allow balanced mobility, and to increase fertility rates through the expansion of ECEC, flexible work arrangements, and extending maternity and paternity benefits.  ○○ The government program (2024–28)28. This document commits to increasing access to affordable childcare, improving primary education infrastructure, and expanding cash benefits for families. ○○ Labor-related legal acts. These include the Act on Gender Equality29 promoting gender equality and promotion against gender-based discrimination in the workplace; the Labor Act30, which transposes EU directives on work-life balance and grants rights to flexibility at work to parents of young children; and the Act on the Labor Market31, which supports the unemployed with active labor market measures delivered through CES. Through these, the government has introduced several policies, measures, and resources that target different barriers that limit female labor market outcomes. These include (1) pol- icies for parental leave, part-time work, and tax incentives, (2) investments in childcare infra- structure for better access and coverage, (3) legal protection supporting equal pay and against workplace discrimination, and (4) support for older women to stay longer in the workforce, as well as cross-cutting measures such as (5) support services and resources for unemployed persons (subsidies, training, reskilling, and upskilling), and improvements in the education and lifelong-learning systems to better prepare the population for labor market needs (see Figure 24). 25 https://natlex.ilo.org/dyn/natlex2/r/natlex/fe/details?p3_isn=115042 26 https://mup.gov.hr/UserDocsImages/Strateski%20planovi/Ravnopravnost%20spolova/AN%20ACTION%20PLAN%20 for%20promoting%20and%20establishing%20gender%20equality%20for%20the%20period%20from%202023%20 to%202027.doc 27 Strategy for the demographic revitalization of the Republic of Croatia until 2033, Official Gazette, no. 36/2024.. 28 Program of the Government of the Republic of Croatia 2024–28, https://vlada.gov.hr/UserDocsImages/ZPPI/Dokumenti%20 Vlada/2024/Program_16_Vlade_RH.pdf 29 https://ravnopravnost.gov.hr/UserDocsImages/dokumenti/Zakoni/2018/Act%20on%20Gender%20Equality%20ENG. pdf 30 https://uznr.mrms.hr/wp-content/uploads/labour-act.pdf 31 https://natlex.ilo.org/dyn/natlex2/r/natlex/fe/details?p3_isn=109128 The Government’s Planned Initiatives to Support Women’s Contributions to the Labor Market 45 Figure 24: Government Measures to Support Female Labor Market Outcomes Barriers measures →→ Introduction of paternity leave (two weeks fully paid) →→ Increase in parental benefits for six months (employed and #1 self-employed) →→Campaign to promote parental leave as standard and encourage choice for fathers Gender norms →→ Public events to raise the level of knowledge and awareness and parental about gender equality →→ Gender equality education for educational staff to encourage leave students to choose future educational and career paths free of gender stereotypes →→ Capacity strengthening of the state administration to implement the principle of gender equality in everyday work and the creation of gender-sensitive public policies →→ Supporting the transition of working parents to the labor market after parental leave. #2 →→ €500 million32 invested in preschools since 2012 to achieve the target preschool program coverage of 80% of children →→ Free textbooks and food, and cofinancing of transportation Childcare →→ Plan to have a guaranteed place in early childhood education and care (ECEC) for every child after parental leave access →→ Supporting the participation of children from low socioeconomic backgrounds in early education →→ Increasing the flexibility of early childhood programs →→ ECEC cofinancing to reduce childcare costs →→ Investing in personnel capacity and reducing the cost of primary education for parents. #3 →→ Increase in care leave allowance to six months, for a child up to the age of seven years →→ Additional flexible work options (the right to work from Flexible work a separate workplace in case of important personal needs, arrangements for example, for a child up to the age of eight years or a sick family member. If rejected, an employer must state the reasons in writing). Breaking Barriers: Empowering Women in Croatia's Workforce 46 Barriers measures →→ More favorable pension calculations to incentivize staying in work #4 for longer →→ Part-time work with full pension entitlements introduced →→ Promoting positive contributions from the elderly through Support for media campaigns older workers →→ Reducing regional disparities in care for the elderly →→ Offering free courses to improve technological and computer skills for the elderly →→ Improving services to help older people live independently →→ Encouraging volunteering and intergenerational relationships to support the elderly. #5 →→ Financing for subnational authorities to employ 4,000 hard-to-employ women to provide care to 195,000 elderly people (Zaželi program) Support for wom- →→ Improving the position of rural women by implementing educational workshops to increase the number of women owners of family-owned farms en's employment →→ Improving access to favorable loans and grants for female-owned with a focus on vul- businesses (Croatian Bank for Reconstruction and Development) nerable groups →→ Providing business training and mentoring programs for women from micro-, small-, and medium-sized enterprises. #6 →→ Increasing the amount of financial support and its coverage for families with newborns and young children (including pronatalist supplement Financial support support for third and fourth children) →→ Maintaining tax allowances for those with dependent children for families →→ Reducing income tax for families at risk of poverty →→ Fiscal relief for youth employment. Cross-cutting measures ○○ Reskilling and upskilling Skills ○○ Scholarships for students microcredentials program for studying to be STEM teachers green and digital skills, for the development ○○ Investment in student housing employed and unemployed for the ○○ Careers counseling in ○○ Public employment office workforce and schools and expanded grants to start businesses careers information and ○○ Scholarships and quotas to guide support for counseling center networks students to short study programs education Sources: The National Plan for Gender Equality until 2027 and Demographic Revitalization Strategy for Croatia until 2033. The Government’s Planned Initiatives to Support Women’s Contributions to the Labor Market 47 The government’s approach tries to lift all barriers to employment faced by women. The main instruments introduced by the government are financial incentives; tax relief; investments into childcare infrastructure with the idea of having a guaranteed place for every child at the end of parental leave; support for increasing the number of STEM teachers; scholarships aimed at guiding students to study fields with job opportunities; job creation for vulnerable women providing elderly care; communication campaigns normalizing the sharing of parenting duties between parents; the training, reskilling, and upskilling of unemployed persons aimed towards digital sectors with increased demand for labor; and improving access to loans and entrepre- neurial training, particularly for women entrepreneurs. This is in line with international evidence which shows that the most successful outcomes arise when comprehensive approaches are adopted—ones that address multiple barriers simultaneously and are backed by strategic investments and reforms as well as collective action (World Bank, 2024b). Countries with higher female labor force participation achieved this typically through comprehensive approaches that combine affordable childcare (Sweden), job protection, a reduction in the tax burden of secondary earners (Canada), incentives to em- ployers to provide flexible work arrangements, the right to flexible working hours enshrined in laws and a higher share of parental leave being reserved for fathers (Sweden); but also support for cultural shifts normalizing a more balanced sharing of caretaker duties between genders seems the most effective approach. Breaking Barriers: Empowering Women in Croatia's Workforce 48 49 4/ Actionable Recommendations Breaking Barriers: Empowering Women in Croatia's Workforce 50 Based on the analysis of the underlying factors preventing women from fully contributing to Croatia’s labor market, the following section offers six actionable recommendations. Drawing on international examples, these recommendations could enhance the impact of the measures implemented as part of the Demographic Revitalization Strategy and the National Plan for Gender Equality. #1 Transforming social norms for greater equality in family roles and career choices Shared Parental Responsibilities Women's Economic Empowerment Transforming Social Norms Gender-Neutral Career Guidance for Equality Increased Parental Leave Compensation Engaging Men and Boys in Interventions ○○ The government could consider increasing the compensation rate for parental leave to motivate more fathers to take it and increase women’s labor force participation. The evidence shows that an increased uptake of leave by fathers is strongly linked to individual earmarking (Duvander and Johansson, 2012; Haas and Rostgaard, 2011). However, there is no evidence that nontransferable leave alone is sufficient to increase the use of parental leave by fathers unless it is well paid (Karu and Tremblay, 2018; EIGE and Eurofound, 2023). Extending efforts to increase the parental leave uptake is important, because if childcare is no longer considered the sole domain of women and more fathers take parental leave to stay at home and look after their children in their first year, the outcomes for gender equality include increased women’s labor market participation, reduced gender pay gaps, and increased male participation in household work (EIGE and Eurofound, 2023). For Sweden’s approach on how to achieve higher parental leave uptake by fathers, see Box 1. ○○ The legislative changes in parental leave could benefit from communications support to counter existing norms and improve uptake. The already launched communications on shared parental responsibilities aimed toward the families could be completed by communications aimed at employers (see Box 2) as well as enhanced by innovative tools (see Box 3). actionable recommendations 51 ○○ A business case for women’s economic empowerment could be promoted, encouraging collaboration among firms to adapt gender-sensitive and family-friendly practices, including incentives, mentoring (Cortes and Pan, 2023), and equal pay audits (EIGE, 2013). For example, the Kapsch Group, operating in the otherwise male-dominated IT and engineering fields, implemented gender-sensitive recruitment strategies offering flexible working arrangements, and developed career advancement programs tailored for women, including leadership training and peer mentoring for women, to support career growth.32 ○○ CES school counsellors could be trained in gender-neutral career guidance, and role models could be used to challenge gender biases (Olsson and Martiny, 2018). ○○ To effectively narrow the gender gap in STEM, policies could focus on addressing the multifaceted influences shaping individuals’ educational and career choices, with a focus on the family, educational environment, peer groups, and broader cultural norms (Verdugo- Castro, García-Holgado, and Sánchez-Gómez, 2022). Specifically, policies could foster positive self-concept, self-efficacy, self-confidence, and self-perception in individuals. By nurturing these qualities, individuals—particularly women and other underrepresented groups—will be better equipped to make educational and career decisions aligned with their personal goals and aspirations, contributing to more equitable outcomes across fields and professions. Leveraging the role of teachers and other interpersonal interactions, for example via mentorship programs or unconscious bias training, has been found to be effective (Yu, Luo, and Shu, 2023). In the United States, for example, the “1000 Girls, 1000 Futures” mentorship program was established (Box 4). ○○ It is also recommended to implement organizational change interventions, such as the National Science Foundation–funded ADVANCE intervention33, targeting three key areas: (a) enhancing recruitment efforts to attract diverse applicants, which includes training search committees in inclusive hiring practices; (b) strengthening support systems for women through mentoring, networking, and professional development initiatives; and (c) improving the work climate by educating the workforce on gender bias, with a particular focus on raising awareness among male workers. These interventions can create a more supportive and equitable environment that fosters diversity and retention within institutions. International evidence supports the effectiveness of this type of intervention in the academic environment, for example, Casad et al. (2021). Similarly, implementing antidiscriminatory policies that sanction certain hiring practices is an effective tool to address gender segregation more broadly (Das and Kotikula, 2019). ○○ Engaging men in tackling harmful gender norms is also crucial. One example is the MenCare campaign in South Africa, which has been active in more than five regions, to tackle existing beliefs about men’s roles as fathers and caregivers. MenCare consists of programs, advocacy initiatives, and campaigns. Evaluations of the program show its positive effects on attitudes toward gender equality and gender norms (Kedde et al., 2018). 32 Read more at https://eige.europa.eu/gender-mainstreaming/good-practices/ how-attract-women-workplace-and-keep-them-there. 33 https://new.nsf.gov/funding/opportunities/advance-advance-organizational-change-gender-equity-stem-academic Breaking Barriers: Empowering Women in Croatia's Workforce 52 Box 1 Sweden’s Path to High Parental Leave Uptake by Fathers Sweden’s approach to achieving a more balanced sharing of parental duties included earmarking the leave reserved for fathers, gradually increasing its length, and compensating the leave as a percentage of the most recent salary. In Sweden, women and men are entitled to 480 days of paid parental leave (16 months) per child. 90 days are reserved for each parent and cannot be transferred to the other parent. These reforms started back in 1974 when the government introduced a gender-neutral paid parental benefit.34 In 1995, one paid nontransferrable month was reserved for fathers, leading to an increase in uptake. By 2015, 44 percent of men had tak- en their reserved days for children born in 2013.35Reform in 2002 expanded this leave further, adding an additional month reserved for fathers, boosting the uptake further. The effects were heterogeneous. Upon introducing the first earmarked month in 1995, fathers who otherwise would not have taken leave showed increased uptake; the 2002 reform increased the uptake of parental leave mostly among fathers who, instead of taking 30 and 40 days of leave, started taking more than 50 days (Avdic and Karimi, 2018). Further research shows that fathers who are not taking leave increasingly face economic constraints, such as low income, lower earnings than the mother, and weak labor market attachment (Aldén, Boschini, and Tallås Ahlzen, 2023). Box 2 The Swedish Social Insurance Agency Encouraging Employers to Promote an Equal Parental Leave Distribution On its information portal on parental leave, the agency encourages employers with the fol- lowing text: Your responsibility as an employer and an equal withdrawal Parental insurance was established so that all parents will be able to combine work with par- enthood. As an employer, you have a responsibility to encourage a more equal withdrawal of parental benefit. But there is also much to gain from it. And employers’ attitudes play an important role when parents are faced with decisions about how to share parental leave. Norms that exist in society regarding how men and women are expected to behave can also be found among employers. What can you as an employer gain from a more equal withdrawal? 34 https://www.government.se/articles/2020/11/three-important-welfare-reforms-to-promote-gender-equality-in-sweden/ 35 https://eige.europa.eu/publications-resources/toolkits-guides/gender-equality-index-2019-report/parental-leave- policies?language_content_entity=en#:~:text=The%20introduction%20of%20the%20father's,Duvander%20%26%20 Haas%2C%202018 actionable recommendations 53 Keep and attract new employees If you as an employer make it easier for your employees to share the responsibility for children, you become a more attractive employer. The right skills in the company provide a competitive advantage and is a prerequisite for the success of the business. As an employer, you also need to comply with the Discrimination Act and ensure that the em- ployment conditions in your operations are equal for men and women according to the law. 36 Box 3 A Campaign by the City of Vienna Advocating the Balanced Sharing of Domestic and Care Work Launched in 2012, the campaign Four Walls – Four Hands aimed to raise awareness about the unequal distribution of domestic and care duties between men and women. Through a microsite, a Facebook page, printed material, and a smartphone application, it allowed couples to monitor and compare their household contributions. The campaign connected unpaid domestic work with the gender pay gap. At the times of highest use, the campaign reached around 156,000 users per week and 488 users discussed the campaign regularly.37 Box 4 1000 Girls, 1000 Futures in the United States The 1000 Girls, 1000 Futures program is a year-long virtual initiative that pairs high school girls interested in STEM with inspiring female mentors. Through this program, participants engage in unique educational activities designed to build essential skills for the twenty-first century. They also join a global network of female STEM leaders, gaining valuable connections and support. The program is open to students who identify as female.38 36 https://www.forsakringskassan.se/english/for-employers/parental-leave/parental-leave-employee 37 https://eige.europa.eu/gender-mainstreaming/good-practices/using-social-media-campaign-domestic-work?language_ content_entity=en 38 https://www.youthop.com/fellowships/1000-girls-1000-futures-mentorship-program-the-new-york-academy-of- sciences-2022 Breaking Barriers: Empowering Women in Croatia's Workforce 54 #2 Improving childcare access and aligning coverage with working hours Demand Extended Analysis ECEC Hours Means-Tested Community- Subsidies Subsidized Based Models Kindergarten ○○ Investments should continue, expanding ECEC facilities into a territorially efficiently distributed network and scaling the WDS program (see Box 5), with incentives to attract and retain qualified teachers. ○○ Based on feedback and input from parents, ECEC operating hours could be extended and entry made more flexible throughout the year. In 2017, women whose children attended longer school days had a higher employment rate, 60 percent compared to 55 percent, than those whose children had shorter school days (World Bank, 2020). ○○ The quality of childcare is a crucial determinant of the demand for formal childcare (Sosinsky, 2012). A childcare demand analysis could shed further light on the extent to which the quality of childcare impacts demand and, consequently, female labor force participation in the case of Croatia. ○○ Alternative community-based childcare models could be explored and supported by local authorities (see Box 6 and Box 7), and digital platforms could also be developed (see Box 8) to offer flexible options for parents working nontraditional hours, shifts, and so on. ○○ Guaranteed and subsidized kindergarten placements after parental leave, expanding the means-tested childcare subsidies available for low-income families, could be implemented across Croatia, as opposed to the current approach where such subsidies are limited only to some counties and where central funding is used to bridge urban-rural financing gaps for kindergartens without any influence over the prices that parents pay. ○○ Compulsory preschool programs can increase female labor force participation. For example, an impact evaluation of this type of school reform in Romania showed positive effects on the female labor force participation of the mothers of affected children (Robayo-Abril and Rude, 2023b). actionable recommendations 55 Box 5 The Whole-Day School (WDS) Pilot in Croatia A World Bank–supported project, the WDS model aims to transition Croatian primary schools from double shifts to a whole day of school, increasing the hours that children spend at school to allow parents, especially mothers, more time for paid work. Based on the model that was pi- loted in 62 Croatian primary schools in 2023/24, a full national rollout in 2027/28 is expected to generate a 6 percent increase in paid work for mothers not working and with children attending school for five hours or less. Because more mothers will be generating income from paid work, the gender income gap is expected to be reduced by 3 percentage points (World Bank, 2021b). Box 6 Austria’s Home-Based Childminder Program for Flexible Childcare This home-based childcare program, financed through subsidies from local or regional govern- ment authorities, aims to provide parents with more flexible childcare than traditional ECEC facility options, based on the child’s needs and the parents’ work schedule needs. The childmin- ders provide care for multiple children within their home, including cooking and providing play opportunities. They require a permit from the responsible administration authority to look after children. While the respective subnational authorities set conditions for childminders, they typ- ically require proof of pedagogical training, and ongoing training is expected. Parents can find these childminders through dedicated online platforms belonging to subnational authorities.39 Box 7 Integrated Local Services for Extended Childcare in Romania The municipality of Cluj-Napoca implemented a coordinated school bus service as part of its broader Strategy for climate-neutral and smart cities. This initiative connects schools, local bus companies, and the police to form an integrated service aligned with school hours. While it eases congestion, it also reduces demands on parents for caregiving by providing safe and more efficient transport for students. The service is supported by a smart mobility application that allows parents and the authorities to track the service in real time.40 Box 8 A Czech Digital Platform Matching Supply and Demand for Childcare Hlidacky.cz, established by Brno-based computer science students, is currently the largest real-time matching platform in the region for connecting parents with reliable caretakers. Providers publish their availability online, and parents can locate a caretaker in their area through a flexible online application. The platform also offers various verification processes, background checks, and first aid courses for caretakers. 39 https://www.oesterreich.gv.at/themen/familie_und_partnerschaft/familie-und-kinderfuersorge/kinderbetreuung/2/ Seite.370140.html 40 Primăria Cluj-Napoca. (n.d.) Autobuze școlare cu circuit închis. Available at: https://primariaclujnapoca.ro/educatie/ autobuze-scolare-cu-circuit-inchis/ Breaking Barriers: Empowering Women in Croatia's Workforce 56 #3 Facilitating smoother transitions back to work after parental leave and expanding and institutionalizing more flexible work options Flexible Work Reskilling Public-Private Arrangements Initiatives Collaboration Salary Social Support Protections ○○ Expanding access to flexible work arrangements, such as telework, flex-time, and part-time contracts, can help increase women’s labor force participation (Subramaniam et al., 2015). Evidence from 25 European countries shows that fathers and mothers are more likely to request flexible work options (Magda and Lipowska, 2022). However, these policies need to be embedded in a work culture that allows for their implementation (Das and Kotikula, 2019). In addition, these policies should be carefully evaluated for potential second-order negative effects on gender equality. For example, an online experiment in the US showed that men who made flexplace requests to care for a child were perceived significantly more positively than women who did so (Munsch, 2016). Therefore, these policies need to be accompanied by training around unconscious bias (Javier et al., 2022). Currently, Croatian labor legislation allows parents to work part (half)-time after returning to work from parental leave. Additionally, as of 2023, there is a possibility for parents with children up to eight years of age to request flexible work arrangements (remote work).41 However, this is left up to the employer’s discretion and is often not approved.42 In addition, working part-time usually significantly reduces income43, which disincentivizes its usage. Finally, it would be important to ensure that flexible work arrangements are accompanied by family policies that reduce care dependency (Lukemann, 2024). 41 Dobrotić and Kovač (2023), however, warn that simply expanding rights to flexible work arrangements in Croatia without considering existing gender norms and work culture can result in more negative than positive outcomes. Albanesi (2023) further discusses how remote work and its accompanying flexibility are predominantly accessible to individuals in managerial and professional roles, leaving a large part of the work force unaffected. 42 https://www.index.hr/vijesti/clanak/ministarstvo-odbilo-prijedlog-sindikata-o-radu-od-kuce/2606359.aspx 43 For example, assuming an average gross salary of 2,041 euro in February 2024, a person in Zagreb working half-time could earn a gross salary of 1,020.50 euro. According to an estimate of the living wage obtained from WageIndicator (https://wageindicator.org/), this is only 60.3 percent of the estimated lower bound of living costs in Zagreb. actionable recommendations 57 ○○ The certification of family-friendly companies is an additional starting point to incentivize employers to implement family-friendly work environments. This type of certification has demonstrated beneficial effects in Finland, for example (Havia, 2023).44 ○○ Reskilling and upskilling initiatives, particularly in the digital sector, could open more flexible options for women, including remote work. While these can offer better work-life balance, they could lead to a worsening of job quality (OECD, 2017); thus, they should be accompanied by adequate social protection and regulations on working hours. #4 Enhancing support for women in entrepreneurship and expanding access to diverse income opportunities Counseling and Networking Initiatives Mentoring Creating platforms Providing guidance for collaboration and and support through networking among experienced mentors. women. Financial Products Skills and Social Economy Entrepreneuship Training Intiatives Access to suitable financial products Equipping women Supporting the to support with necessary skills establishment of social etrepreneurial and entrepreneurial enterprises to create ventures. knowledge. jobs. ○○ To effectively mitigate barriers to female entrepreneurship, a tailored approach is essential. Recognizing the diversity of challenges faced by women entrepreneurs, interventions should be designed with nuanced and targeted strategies in mind. A recent review of the available evidence emphasizes that support initiatives must move beyond one-size-fits-all solutions to address the specific needs and contexts of female entrepreneurs (Ubfal, 2024). By implementing customized support measures, policymakers can better foster a conducive 44 In Croatia, there is currently a certificate available for firms which promote work-life balance for both mothers and fathers (MAMFORCE and DADFORCE, respectively); however, it is not mandatory or a condition for companies in any sense. More info is available here: https://mamforce.com/solutions/certificate/. Breaking Barriers: Empowering Women in Croatia's Workforce 58 environment for female entrepreneurship. The support packages for prospective women entrepreneurs could include access to suitable financial products, counseling and mentoring, skills training, entrepreneurship training, and financial education. Box 9 gives an overview of the recommendations from the international literature. ○○ Municipality-driven initiatives, such as networking hubs or mentoring clinics, can foster collaboration among local women as well as with established entrepreneurs and local business networks (see Box 10). ○○ To ensure the sustainability and long-term impact of the successful Zaželi program (see Box 11), support given to vulnerable women from lower socioeconomic backgrounds to provide care for the elderly should continue. It would be beneficial for the program to receive continuous funding from central and local government, in addition to the EU funds. ○○ Social economy initiatives could help women to establish social enterprises and access funding to create local jobs, particularly for vulnerable groups (see Box 12). Box 9 Policy Interventions that Support Female Entrepreneurship ○○ Enhance access to entrepreneurial training and education. Increasing women’s access to training on not only how to start but also how to scale and sustain a business could significantly support female entrepreneurship. Early education in business and entrepreneurship skills, irrespective of gender, has been shown to positively impact future entrepreneurial pursuits (Jardim, Bártolo, and Pinho, 2021). Reducing gender disparities in tertiary education (Dutta and Mallick, 2018; Gawel, 2021) and promoting women’s participation in the fields of ICT and STEM could also yield positive results. Tailored approaches, especially for entrepreneurs from vulnerable groups, have been found to be more effective (OECD and the European Commission, 2021). ○○ Promote women’s entrepreneurship networks, mentorship, and peer support. Research by Markussen and Røed (2017) shows that peer effects explain a significant portion of the gender gap in early-career entrepreneurship. Supporting networks, mentoring, and tutoring programs among both female and male entrepreneurs, as well as young women, could help bridge this gap, with potential ripple effects throughout the entrepreneurial ecosystem (Noguera et al., 2015). ○○ Increase the representation and investment power of female general partners and strengthen diversity and inclusion strategies among venture capital (VC) and angel investors. The European VC and angel investor landscape is predominantly male, and studies suggest that this may contribute to gender biases that restrict female entrepreneurs’ access to funding (IDC, 2022). A more diverse investment environment could reduce these biases and improve access to financial resources for women entrepreneurs. actionable recommendations 59 ○○ Develop sustainable financing options for women and enhance communication about gender-smart investment initiatives. Persistent gaps in women’s access to finance have been documented in previous research. Possible solutions include designing loans to be more inclusive (Chowdhury, Yeasmin, and Ahmed, 2018) and fostering broader financial inclusion (Goel and Madan, 2019). Additionally, addressing the gender gap in land ownership by providing alternative collateral options could expand women’s access to financing (IFC, 2019). ○○ Implement interventions targeting restrictive gender norms around women in business. Many women entrepreneurs face social norms that deter them from engaging in business. Prior studies indicate that the effectiveness of entrepreneurship training is linked to the extent of the traditional norms that women face (Field, Jayachandran, and Pande, 2010). We recommend interventions aimed at shifting these conservative attitudes around gender and entrepreneurship, as supported by earlier research (Yordanova and Tarrazon, 2010; OECD and the EC, 2021). Box 10 Ireland’s Female Entrepreneurs Mentoring Program Implemented between 2011 and 2013, the program’s aim was to support women entrepreneurs in their first years of business, helping them to navigate challenges and to grow and sustain their businesses. The program was coordinated by the Galway Chamber of Commerce with partners in several Irish cities, and it offered expert mentoring. 30 women entrepreneurs were matched with 15 mentors, and they met monthly for over a year. The mentors were experienced business owners, and it was the intensity of the 2 to 1 mentee- mentor ratio, supported by nine mentoring clinics across Ireland providing additional consultation, that contributed to the suc- cess of the program. Additionally, the program was integrated with the European Network of Mentors for Women Entrepreneurs, which offered extensive networking and guidance. A way in which the program could have been improved would have been removing the requirement for the participants to have at least one employee, as many Irish female entrepreneurs are self-employed, without staff.45 Box 11 Croatia’s Zaželi Program: Good Practice for Empowering Women and Expanding Elderly Care Launched by the Ministry of Labor, Pension System, Family and Social Policy, with joint funding from the European Social Fund, the program targets women with low educational attainment in areas with high unemployment. It offers them paid work as home assistants to older people 45 https://eige.europa.eu/gender-mainstreaming/good-practices/mentoring-women-entrepreneurs?language_content_ entity=en Breaking Barriers: Empowering Women in Croatia's Workforce 60 and people with disabilities, particularly in rural, remote, and island areas. Women receive a minimum wage under a contract for up to 30 months and training to improve their future job prospects. Since 2017, Zaželi has employed around 33,000 women and provided home care to approximately 195,000 older individuals. In its fourth phase, Zaželi plans to support an addi- tional 66,000 users with a new workforce of several thousand women and men.46 Box 12 Social Cooperatives Creating Jobs for Vulnerable Turkish and Syrian Women Four social cooperatives established in Türkiye generated over 500 jobs for Syrian refugee and Turkish vulnerable women. Many had low levels of skills or no prior experience in the labor market. With the support of the World Bank, the program provided capacity building, training, and networking to establish and grow social cooperation, along with childcare and transpor- tation, helping women overcome barriers to work. Additionally, a Social Entrepreneurship Community of Practice was formed, gathering 900 actors across central and local authorities, universities, the private sector, and NGOs to strengthen networking, entrepreneurship culture, and local partnerships and to raise awareness of the social economy. The social economy includes organizations such a cooperatives, social enterprises, mutual societies, and nonprofits that prioritize community and social impact over profit. They are im- portant in helping to create local jobs, particularly in underserved areas. They typically focus on addressing issues like social inclusion, environmental sustainability, and economic inequality, and they reinvest profits into community initiatives rather than returning them to sharehold- ers. In Belgium and Portugal, women account for more than 70 percent of employment in the social economy, while in France, Poland, and Italy the range is from 46 to 66 percent. The Eu- ropean Commission estimates that Croatia already has almost 23,000 jobs in social economy entities that operate as associations. It could build on this experience to tap further into their potential to create local jobs, particularly for the vulnerable, including women. Women are strongly represented in associations and foundations, while in cooperatives the figure varies by country and by sector.47 46 https://esf.hr/esfplus/natjecaji/socijalno-ukljucivanje/zazeli-prevencija-institucionalizacije/; https://www.hzz.hr/ premijer-plenkovic-na-potpisivanju-novih-ugovora-iz-4-poziva-za-program-zazeli/ 47 European Commission (2024). actionable recommendations 61 #5 Expanding long-term care facilities and alternative modes of support for the elderly Mobility Digital Programs Health Tools Innovative Care Solutions ○○ Mobility programs could be developed to enable migrant workers to assist with in-home care. These could include professional training, language support, and legal pathways to enter and work in Croatia (see Box 13). ○○ Fostering women’s entrepreneurship within the care market, particularly in rural areas, could be another strategy, leveraging local sectors like healthcare, sanitation, and tourism. Expanding vocational training programs could help address skills gaps in the care economy and align with the EU’s Care Strategy 2022.48 ○○ Promoting digital health tools could improve service accessibility, especially for the elderly in remote areas, through home monitoring tools for regular check-ins (see Box 14) and a dedicated platform to streamline access to caretaker services. ○○ The technological revolution in elderly care offers additional opportunities to take over caregiver responsibilities, for example via the use of innovative age-tech products. Their usage has increased in the care sector in some countries, such as Japan, and these can offer additional relief to the caregiving burden placed on women. However, the full employment of robots to replace human caregivers is unlikely in the foreseeable future, as revealed by experiments in Japan (Wright, 2019) and also due to ethical concerns (Gallagher, Nåden, and Karterud, 2016). 48 The EU’s Care Strategy 2022 aims to address the challenges of an aging population, gender inequalities, and labor market participation by focusing on several key priorities: (1) improving the quality, accessibility, and affordability of care services; (2) promoting gender equality within the care economy by improving working conditions and career opportunities for care workers, who are predominantly women; (3) supporting women’s participation in the labor market by reducing their caregiving burden; and (4) adapting to demographic changes with a sustainable care system. The strategy also encourages the leveraging of the digital and green transition to obtain better care services and emphasizes the professional training of care workers. Read more in ILO (2018) and European Commission (2022). Breaking Barriers: Empowering Women in Croatia's Workforce 62 Box 13 Leveraging the Immigrant Workforce for Sustainable Care Services in France and Spain Research by Cortes and Pan (2023) underscores the potential for immigrants to alleviate labor shortages and the need for more flexible child- and adult-care options, which could in turn en- hance women’s participation in the workforce. Their study found that by taking over care and household tasks, foreign workers allowed highly skilled women to extend their working hours. This has broader implications in a country like Croatia: it has been seeing the emigration of its middle-aged population, which can leave the elderly relatives without care, while at the same time seeing an increased inflow of migrant workers. To address the shortages in adult care in the long term, it is necessary to improve working con- ditions, provide professional training, raise wages, and, potentially, recruit additional migrant workers (Bađun, 2022). Ensuring that they meet high professional standards is crucial, as is creating legal pathways for them to get such jobs. A labor mobility program, modelled after a Global Skill Partnership, could provide a viable solution. Such a program is typically implemented in two phases. In a planning phase, a com- prehensive feasibility assessment for a skills partnership is conducted. This includes a detailed examination of technical aspects, such as the required occupational and educational levels for care workers in both the recipient and sending countries, visa pathways, levels of collabo- ration on labor migration, and suitable public and private institutions. This analysis forms the basis for a mobility partnership to recruit skilled care workers from the sending country. The planning phase is followed by a more operational pilot, which includes selecting and recruiting workers, visa processing, and skills recognition. The estimated costs for similar elderly care programs differ between France, Senegal, Spain, and Colombia. In France and Senegal, the estimated costs for the first and pilot phases are 150,000–250,000 euro and 2–3 million euro, respectively. The project would last 30–36 months and employ 75–100 skilled care workers annually. The estimated funding for a comparable project with 300–600 workers in Spain and Colombia amounts to 1.84–2.76 million euro. The cost per care worker is estimated at around 5,000 euro in Spain and 11,000 euro in France. Box 14 Telemedicine Platforms and Digital Health Devices for the Elderly in Rural Areas in Sweden and Asia Several pilot programs are already using digital tools and telemedicine for elderly care. For example, in Sweden, nurses play an important role in providing healthcare services in rural areas. They manage small cottage-hospitals for emergency care, which do not always have a doctor on site. They use telemedicine platforms to facilitate specialist care for the elderly. In Indonesia and Vietnam, the private sector plays an important role in accelerating the uptake of telemedicine platforms in a user-friendly way. For example, Unilever provides QR codes on dental and soap lines that customers can scan to access a free or subsidized consultation with actionable recommendations 63 healthcare provider partners. Additionally, various wearable sensors for monitoring vital signs and medical alert systems with fall detection can be used to support the elderly, and, when integrated with the broader internet of things, healthcare solutions can provide continuous monitoring and predictive analytics to prevent emergencies.49 #6 Designing gender-sensitive active labor market policies and social protection measures Regional Upskilling and Apprenticeship Targeting Reskilling Programs Income Disregard Child Benefit Measures Synchronization ○○ These measures could be tailored in response to the unique barriers to labor force participation that women face, providing upskilling, reskilling, and internships, particularly for women with lower levels of education, who face more difficulties than men getting their first jobs, and ensuring the flexibility of these measures to accommodate family obligations. These programs could include gender-sensitive indicators (see Box 15). ○○ Governments can use employment incentive programs to address the barriers to female employability, for example, grants and subsidies; tax incentives; and public procurement incentives (Kronfol, Nichols, and Tran, 2019). Examples are grants or credit subsidies for female entrepreneurs, such as in France (see Box 16) (BPI France, 2024). On the tax side, tax incentives for firms to provide services such as childcare, parental leave, and training are a tool, as are tax incentives for female entrepreneurs or female‐owned or -managed businesses. Regarding public procurement incentives, an example comes from 2014, when the South 49 World Economic Forum: https://www.weforum.org/stories/2023/08/telemedicine-collaborations-bridge-healthcare- access-asia-underserved-communities/. Breaking Barriers: Empowering Women in Croatia's Workforce 64 Korean government adjusted its public contracting regulations to simplify the process for female entrepreneurs to compete for contracts (Kronfol, Nichols, and Tran, 2019). ○○ Addressing potential gaps relating to information and facilitation is also crucial. For example, governments can support platforms and initiatives that facilitate the connection of women and employers (Kronfol, Nichols, and Tran, 2019). Similarly, they can support qualification or certification programs for women. Providing training subsidies to female employees and businesses can help bridge skills gaps and create equal opportunities for women. For instance, Malaysia encourages companies to provide training for women reentering the workforce, with these training programs managed by an independent third-party partner (Kronfol, Nichols, and Tran, 2019). ○○ Synchronizing child benefits with income tax allowances for children can help alleviate the inactivity trap for lower-income families, reducing disincentives to work. Introducing measures such as income disregard or an earnings credit for low-income households could help smooth the transition back to the labor market after parental leave and reduce reliance on social benefits (see Box 17). ○○ It is important to develop PES’s capacity for programs targeted at women. For example, support programs should consider women with caring responsibilities, those returning to the labor market after a break for child rearing, single parents, and women in rural areas (ETF, 2023). Currently, women participate less in ALMPs than men (Figure 22), while they comprise more than half of those registered as unemployed. Comprehensive needs profiling and targeted services for both unemployed and inactive women are detrimental. Moreover, outreach campaigns should be tailored to inactive women, and ALMPs should be monitored for their gender inclusiveness and responsiveness (see Box 18). While an increasing number of countries design female-dedicated ALMPs, their effectiveness is restricted by social norms and gender stereotypes (ETF, 2023). To change social norms, it is essential to accompany ALMPs with activities that raise awareness and promote gender transformation. Box 15 Promoting Women’s Entrepreneurship in Spain’s Green Economy The Spanish Ministry for Ecological Transition implemented a project (2022–23) with the objective of promoting the entry of more women entrepreneurs into the green economy, particularly in rural areas. For this, gender-sensitive indicators were developed in the project to analyze data related to women’s participation and understand the barriers they face in ecological sectors. As such, the project generated data as a foundation for more inclusive strategies, serving as a model for gender mainstreaming in environmental policy.50 50 https://eige.europa.eu/sites/default/files/documents/good-practices-on-gender-mainstreaming-in-the-european-green- deal.pdf#page=29. actionable recommendations 65 Box 16 Credit Subsidies in France The Garantie EGALITE Femmes (EQUALITY Women Guarantee, previously known as FGIF) is a national program aimed at supporting women entrepreneurs. Its goal is to make it easier for women to obtain bank loans to start, acquire, or grow their businesses. The EQUALITY Wom- en Guarantee supports women entrepreneurs who start or take over a business, specifically targeting those registered as job seekers or in precarious situations. This guarantee applies to businesses established or acquired within the last three years and requires the woman to have an active role in decision-making, even if there are multiple partners. It covers up to 80 percent of a bank loan, up to 50,000 euro, for a maximum term of 84 months. The guarantee does not require personal collateral but allows the bank to secure assets funded by the loan, with a one-time guaranteed cost of 2.5 percent of the guaranteed amount. The loan must fi- nance either business investments or working capital needs. Box 17 Low-Earnings Income Allowance (LEIA) The introduction of incentives for labor market participation, coupled with a social safety net, could be realized through a LEIA. A LEIA is a benefit designed to be inclusive and financially rewarding specifically for workers with very low earnings; it provides a benefit as a percentage of earnings up to a certain maximum amount. The benefit remains the same once this max- imum is reached until earnings hit a phase-out point. After that, the benefit decreases with each additional euro of income until it is completely phased out. Households with per capita incomes above this level are not eligible for the benefit. The thresholds used in the design can be based on the subsistence minimum (for the maximum benefit) and the income level of the poorest deciles (for the phase-out). Additional features, such as higher benefits for households with children, can be added to adapt the benefit to the circumstances of different countries, ensuring fairness and equity in the system. 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