Croatia’s Disability Employment Gap Among Worst in Europe, OECD Report Warns

An OECD report has warned that Croatia’s disability system remains outdated and heavily medicalised, leaving people with disabilities facing some of the highest poverty and lowest employment rates in Europe. The study calls for major reforms, including modern functioning-based assessments, stronger rehabilitation services and earlier support to improve inclusion in work and society.

A major new OECD report has delivered a blunt warning about the state of disability inclusion in Croatia, arguing that thousands of people with disabilities remain locked out of jobs, education and social participation despite years of reforms. The study, prepared with support from the European Commission and funded by the European Union, says Croatia continues to record some of the worst disability employment outcomes in Europe while poverty among disabled people keeps rising.

The report was developed in co-operation with several Croatian institutions, including the Ministry of Labour, Pension System, Family and Social Policy, the Institute for Disability Assessment, Professional Rehabilitation and Employment of Persons with Disabilities (ZOSI), the Croatian Pension Insurance Institute, the Croatian Employment Service and disability organisations.

Poverty and Unemployment Remain Deeply Linked

According to the OECD, the biggest problem facing disabled people in Croatia is exclusion from the labour market. Only 23.4% of people with disabilities were employed in 2023, making Croatia one of the worst-performing countries in the European Union.

This weak employment participation has pushed many disabled people into poverty. Around one in three people with disabilities now live in low-income households, far above the European average. The report notes that while employment among people without disabilities has improved steadily in recent years, disabled Croatians have largely been left behind.

Education is another serious concern. Only one in ten people with disabilities has completed upper secondary education or higher, about half the average seen across Europe. The OECD warns that poor access to education is directly feeding into unemployment and long-term dependence on social welfare.

An Outdated System Under Pressure

The report strongly criticises Croatia's disability assessment system, describing it as overly medical, fragmented and slow. Different government institutions still require separate disability assessments for pensions, social benefits and rehabilitation services, creating duplication and confusion for applicants.

ZOSI, the institution responsible for carrying out assessments, is struggling with rising workloads and severe staff shortages. Long waiting times for decisions have become common, delaying access to financial support and rehabilitation services.

The OECD argues that the current system focuses too heavily on medical diagnoses and impairment percentages rather than looking at how people actually function in daily life. This means many assessments fail to capture the real challenges people face in work, mobility, communication or independent living.

Mental Health Cases Are Rising Fast

Mental health has emerged as one of the fastest-growing issues in Croatia's disability system. Conditions such as anxiety, depression and post-traumatic stress disorder are becoming increasingly common among applicants, especially younger people and war veterans.

However, the OECD says the current assessment model is poorly designed to deal with mental illness. Existing disability tables often underestimate the impact of psychiatric conditions, while rules requiring "permanent" incapacity fail to reflect the fluctuating nature of many mental health problems.

The report warns that Croatia is likely to see even more disability claims linked to mental health in the future, making reform increasingly urgent.

OECD Pushes for Modern Assessment Tools

To modernise the system, the OECD recommends introducing the World Health Organization Disability Assessment Schedule, known as WHODAS. Unlike the current diagnosis-based approach, WHODAS measures how people function in real life across areas such as mobility, communication, self-care and participation in society.

The OECD says the tool is scientifically tested, internationally recognised and better aligned with modern human rights standards. It could also reduce pressure on Croatia's overstretched system by allowing trained non-medical professionals, such as social workers and rehabilitation specialists, to carry out assessments.

Reform Must Go Beyond Assessments

The report stresses that changing assessments alone will not solve Croatia's disability inclusion problems. It calls for earlier intervention for workers on long-term sick leave, stronger rehabilitation services and better coordination between employers, healthcare providers and employment agencies.

Croatia's rehabilitation centres are described as one of the country's stronger assets, but the OECD says they currently reach too few people and often intervene too late to prevent long-term unemployment.

In the end, the report concludes that Croatia faces a critical choice: continue relying on an outdated system centred on incapacity, or build a modern disability policy focused on inclusion, participation and equal access to work and society.