In the new issue of Public Sector Economics, Hermes Morgavi analyses whether it is worth raising the normal retirement age, starting from a standard cross-country panel error correction model. Several empirical innovations are introduced to better capture the influence of countries’ demographic composition, the possibility of early retirement, the importance of private pension funds and early exit pathways. These changes result in larger and more heterogeneous predicted effects of changes in the normal retirement ages on the older-age employment rate and average age of labour market exit across countries.

Ajaz Ayoub, Tahir Ahmad Wani and Abid Sultan examine the impact of public debt on economic growth in BRIC nations – Brazil, Russia, India, and China – over 1996-2022 using wavelet coherence and cross-wavelet analysis to capture both short-term dynamics and long-term trends. The study highlights the need for tailored debt management strategies aligned with country-specific economic conditions to support sustained and inclusive growth.

Josip Raos and Ivana Čičak analyse how the reallocation of workers among firms influences aggregate wages in Croatia. Although wage movements are largely linked to changes in real economic activity, the role of labour reallocation is often overlooked. Analysis of firm-level data in Croatia from 2002 to 2023 reveals that labour reallocation has a significant impact on wages and productivity, with countercyclical effects on wages until 2021, turning procyclical after the pandemic. Unlike wage patterns, the countercyclical effect on productivity persisted from 2002 to 2023.

Nikola Buković and Danijel Baturin explore Work Integration Social Enterprises (WISEs) and their potential to transform the Croatian skill-formation regime. Using data from 13 European countries, they examine the state of such enterprises in Croatia, their role in skill development, and their position within the broader post-socialist context. Although limited by the small size of the sector and lack of support, WISEs have the potential to strengthen coordinating capacities of the national skill formation system – especially if clearer distinctions are made based between those focused on permanent and temporary integration of workers with support needs. This in turn creates an opening for a more active involvement of these firms in both education and active labour market policy.

Vinko Zaninović, Zoran Ježić and Alen Host explore how distance from home affects students’ academic performance. In the article, distance from the home region is used as a proxy for motivation to analyse educational outcomes of students at the Faculty of Economics and Business in Rijeka, with grade point average (GPA) and the number of passed courses as key variables. The results show that smaller distance from home decreases the number of passed courses but has no effect on GPA, indicating the need for educational policies aimed at increasing the motivation of local students.

Ivana Prica, Imane El Ouizgani and Will Bartlett analyse the phenomenon of qualification and skill mismatch among university graduates in two countries – Morocco and Serbia. The survey reveals simultaneous overqualification and underskilling of university graduates, a high incidence of graduate mismatch combined with low-wage penalties in the public sector, high levels of mismatch and associated relatively high-wage penalties among women graduates, and an amelioration of skill mismatch over time due to on-the-job learning and job switching.

This issue ends with a book review by Hrvoje Hrnkaš of 35 Years of Public Sector Reform in Central Europe by Michiel S. de Vries and Juraj Nemec.