The present Torino Process assessment analyses the main challenges for the development and use of human capital in Kosovo and how education, training and labour market policies could respond. It discusses in more detail current key issues and policy responses related to governance in vocational education and training (VET), the high youth unemployment rate and female inactivity. It draws on information provided in the national Torino Process report for Kosovo[2] Dukagjin Pupovci compiled the national report in 2018, which was endorsed by national stakeholders. It can be accessed at the following web link: https://openspace.etf.europa.eu/trp/torino-process-2018-2020-kosovo-national-report.
and other sources. The assessment is addressed to policy-makers and their partners in the country who are concerned with the design and implementation of education, training and labour market policies. At the same time, the assessment can inform the design of new programmes or projects by the European Union (EU) or other donors.

Key messages include revising current governance and legal arrangements in VET to further advance VET system reforms at this point in time, with a view to better aligning VET provision with labour market needs and enhancing VET quality. Youth employment requires a multifaceted approach, ranging from developing young people's practical skills to offering targeted training and job opportunities by employment services and employers. Furthermore, a joined-up, cross-government approach, addressing child and elderly care issues, maternity regulations, women's property ownership, women's education, skills and entrepreneurship, can help address the huge female inactivity levels.

This report starts with a short country overview and the strategies for human capital development (Chapter 1). Chapter 2 looks at demographic developments and their implications for educational planning, the economic and labour market contexts, as well as education and training, and related key challenges for human capital development. Chapter 3 reviews the current governance and institutional arrangements in VET, which currently appear to form a major stumbling block to further VET reforms in Kosovo. In addition, this chapter discusses in more detail the issues, policies and recommendations related to youth unemployment and the high female inactivity rate and the related huge underutilisation of skills. Chapter 4 provides a conclusion. Finally, Annex 1 summarises the key recommendations in table format, while Annex 2 provides a chart of Kosovo's education and training system.

Kosovo is a relatively young country, having gained independence in 2008. The country is also young for another reason: in 2019, young women and men under the age of 25 made up 42.4% of the population, compared to a rate of 47.3% in the 2011 census (KAS).

The legacy of the war, which ended in 1999, is still manifest and has contributed to economic underdevelopment, high unemployment, and dependency on the international donor community and emigrants' remittances.

The EU has played a leading role in the international effort to build a new future for Kosovo since 1999. The EU Office in Kosovo ensures permanent political and technical dialogue between Kosovo and the EU institutions. Kosovo has a European perspective as part of the wider Western Balkans region. On 1 April 2016, a Stabilisation and Association Agreement between the EU and Kosovo entered into force. In November 2016, the Kosovo government together with the European Commission launched the European Reform Agenda to define reform priorities.

A government programme for the period 2017 to 2021 (Kosovo government, 2017) was adopted, building on four pillars:

1. Rule of law – with a focus on combating corruption and organised crime by introducing changes in legislation and conducting a full functional review of the rule of law sector;
2. Economic development and employment – with the aim to ensure sustainable economic development at an average growth rate of 5–7% annually;
3. Euro-Atlantic integration – strengthening Kosovo's position in the international community by increasing recognition by other countries and ensuring membership in relevant international organisations;
4. Sectorial development – with a focus on education, health, social welfare, environment and spatial planning, as well as culture, youth and sports' (Pupovci, 2019, p. 8).

There is no shortage of national strategies and action plans in Kosovo, notably the National Development Strategy (NDS) 2016–2021 (Prime Minister's Office, 2016), the National Programme for the Implementation of the Stabilisation and Association Agreement, the Strategy on Education and Career Orientation 2015–2019, the Quality Assurance Strategy for Kosovo Pre-University Education 2016–2020, Kosovo's Education Strategic Plan (KESP) 2017–2021 (MEST, 2016), the Sector Strategy of the Ministry of Labour and Social Welfare 2018–2022 (MLSW, 2017a) and the Action Plan: Increasing Youth Employment 2018–2020 (MLSW, 2017b).

The strategies and action plans provide longer lists of relevant challenges and reform priorities. To name just a few, interventions linked to human capital development as the first pillar of the NDS include: 1) enhancing the quality of teaching and learning; 2) linking education programmes with labour market demand; 3) improving testing, inspection and accreditation in education; 4) optimising expenditure in education by advancing data collection systems; and 5) addressing informal employment and creating adequate working conditions for employees (Prime Minister's Office, 2016).

KESP was a widely consulted document and sets the path for developing the entire education system. The main challenges in VET, as one of seven KESP areas, are described as: 1) the non-compliance of VET programmes with labour market requirements; 2) the lack of teaching materials for VET; 3) a missing core curriculum for VET; 4) issues with students' professional practice in schools and internships in companies; and 5) the lack of career guidance and counselling.

MLSW's Sector Strategy cites the following key challenges: 1) the limited inclusion of unemployed people in employment services; and 2) the lack of active labour market measures that particularly focus on women and young people (Pupovci, 2019, p. 8 ff.).

The MLSW's Action Plan has a cross-sectoral nature, covering key challenges in VET in relation to young people's transition to the labour market and listing relevant measures (MLSW, 2017b).

In its Economic Reform Programme (ERP) 2019–2021, the Kosovo government views skills and employment policies mainly within the confines of the existing education, training and labour market policy delivery systems. The government (Kosovo government, 2019) commits itself to:

improving the quality and increasing the inclusion of children in pre-university education, which includes a new law, additional public institutions and a core curriculum for pre-school education (p. 89 ff.);

increasing the quality of VET based on labour market requirements by reviewing or drafting standards, curricula and teaching materials; supplying workshop facilities, cooperating with employers and undertaking professional practice in schools and companies (p. 88 ff.);

reforming higher education through completing and implementing the legal framework; developing quality assurance mechanisms; and increasing participation in international higher education and research programmes (p. 91 ff.);

increasing the access of young people and women to the labour market through quality employment services and active employment and entrepreneurship measures (p. 93 ff.).

These measures aim to increase the quality of education, enhance the employability of the workforce and ultimately contribute to economic development and growth.