The study includes an analysis ofinequality patterns in terms of labor force participation aswell as a review of policy responses, and areas for possiblefurther policy action. In particular, the report looks atthe two main dimensions of inequality that characterizeMacedonia’s labor market: gender and ethnicity. Almost halfthe female working age population is inactive, whereas maleinactivity is considerably lower. Labor market outcomes alsovary significantly with ethnicity. In particular, a stronginteraction exists between gender and ethnicity, with ethnicminority women forming a particularly vulnerable group.Hence, it is worthwhile to investigate in more detail howgender and ethnicity shape the Macedonian labor market, andhow public policy could be used to increase labor marketparticipation and job opportunities for women and ethnicminorities. This report is organized as follows. First, thereport describes the main characteristics of the Macedonianlabor market, emphasizing the most important patterns ofinequality in terms of labor market participation (sectiontwo). Section three addresses the possible causes of theseinequality patterns. Section four discusses potential policyresponses and concludes.