In Croatia, initial steps to reform therailway sector date back to the middle of the first decadeof the 2000s, with the formation of Croatian railways as aholding company. To help with further reforms of theCroatian railway sector, over the period 2011-2013, theWorld Bank was engaged in dialogue with the CroatianGovernment and the Croatian railway companies which resultedin a Croatian railway policy note. The poverty and socialimpact analysis (PSIA) is an analysis of the intended andunintended consequences of policy reforms on the wellbeingor welfare of different social groups, with particular focuson the poor and vulnerable. PSIA offers a set of analyticaland process tools that: (a) determine distributional impactsto improve the analytical underpinnings of policy making;and (b) engage appropriate stakeholders in the policy-makingprocess. The report is divided into following sections:first section gives executive summary. The introductionprovides information on the economic situation in Croatia,including unemployment rates and pensions, the situation ofthe railway sector, and data on the restructuring process ofthe Croatian railways companies in second section. The thirdsection contains the results obtained from the groupdiscussions and in-depth interviews which are divided intofour parts: the circumstances upon leaving the railwaycompanies, after leaving, transferring to a new workplace,and the broader impacts on the community, including theimpacts of closed and reduced lines. The last part of thesection contains recommendations based on the obtained results.