In-work poverty in Montenegro

Abstract

Abstract Montenegro has the highest in-work poverty (IWP) rates among all ex-Yugoslav countries. Although the IWP rate in Montenegro is significantly below the average poverty rate for the entire population, it has increased substantially since 2013. Despite that, IWP is rarely discussed as an important topic in the media or by policymakers, although some policies do target the working population at risk. This article starts with the identification of factors that affect IWP and differences in IWP of specific population groups between Montenegro and selected ex-Yugoslav countries (Slovenia and Serbia). As low earnings and low wages from employment are the main causes of IWP, the article focuses on the analysis of policies that influence income: minimum wage policy, family policy and tax policy and their influence on IWP of specific population groups. We use SILC data to map trends of IWP, while further analysis is based on desk review and expert interviews. We conclude that the approach to IWP in Montenegro requires more integrated policies that should target population groups most exposed to IWP.