Vacancies published on portals are highly concentrated in the city of Pristina, which means that economic opportunities in other regions are not made publicly available on portals.<sup>32</sup> In Figure 38, Appendix C, we show a ranking of the 10 most frequent cities while accounting for the fact that a vacancy can indicate several potential cities for the job related to it (e.g., when firms have multiple sites in the country). If several cities are mentioned in a posting, Pristina is included most of the time. Other frequent job cities are: Prizren (197), Pejë (184), Fushë Kosovë (168), and Ferizaj (154). Postings on portals do not reflect well the economic dynamics in other regions (comparing with regional employment growth rates, see Figure 39, Appendix C). For example, the incidence of jobs in Pejë and Gjakovë is low despite strong economic activity due to the large retailers maintaining production sites there. One explanation is the type of clients for job portals, which are mostly medium to large firms highly concentrated in Pristina.<sup>33</sup>

# **VI. What are the skills needed by employers?**

In this section we present the main findings on skill demand based on job vacancy data in Kosovo. The purpose of this analysis is to explore which skills are sought after by employers who are hiring and to identify specific industry needs, at a granular level. Beyond skills, we are interested in firms’ requirements regarding education levels and previous work experience of potential employees. We use a skills taxonomy consisting of three layers, to provide as much detail as possible on the skills demanded by employers (Table 1). The general taxonomy presents three broad types of skills, namely cognitive, socio-emotional, and technical skills.

It is noteworthy that the literature on skills formation and investment in human capital interventions mainly highlights two types of skills: cognitive and non-cognitive skills (also sometimes referred as soft skills, personality traits or socio-emotional skills).<sup>34</sup> However, it is a consensus in the literature that both cognitive and non-cognitive abilities explain socio-economic (including labor) outcomes (Heckman et al., 2006 and Kautz et al., 2015), that there is a multiplicity of skills whether it is among cognitive abilities (Heckman and Kautz, 2012 and Handel et al., 2016) or non-cognitive skills (Almlund et al., 2011 and Sanchez Puerta et al., 2016), and

> 32 To conduct this analysis, we assume that for the portals where no job city but only a headquarters city was given (all portals except KosovaJob), the headquarters city is equal to the job city. We run several plausibility checks to motivate this assumption and argue that it is justified given that economic activity is very concentrated to the capital in Kosovo.

> 33 According to local HR experts, most of the jobs in secondary cities tend to be low- to medium-skilled jobs and therefore recruiting relies mostly on informal channels. This is facilitated partly due to pronounced social ties that arise in these smaller cities, while strong growth of Pristina over the last years has made informal recruiting more complex and therefore increased switching to online recruiting. Another potential explanation is that, as most headquarters are in Pristina, the figures reflect a high concentration of recruitment processes in the capital.

> 34 See Heckman et al. (2006), Cunha et al. (2006), and Kautz et al. (2015) among others.

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