Country Brief - Bulgaria

BULGARIA PORTRAITS OF LABOR MARKET EXCLUSION

“Portraits of Labor Market Exclusion” sheds new light on the life situations and labor market experiences of individuals and households in the years of the financial, economic, and employment crisis between 2008 and 2011. In this joint project of the European Commission and the World Bank, profiles of the unemployed and inactive populations were developed via a clustering analysis of data from the European Income and Living Conditions Survey. The analysis takes a comprehensive view of policy making, focusing on both the labor market attachment of a country’s out-of-work population, their participation in social protection programs, as well as their poverty profile.

Figure 1: Classes of Out-of-Work Population in Bulgaria, 2011 3% 12% 23% Middle-aged unemployed Retired women Stay-at-home young mothers 13% Single male NEETs Retired and early-retired men Low-educated rural long-term unemployed 19% Low-educated early-retired and disabled 15%

15%

High priority Medium priority

Source: World Bank staff analysis

The analysis for Bulgaria identified a total of 1.56 million out-of-work individuals (unemployed and inactive) between ages 16 and 64 for the year 2011 (total population: 7.33 million). Of the seven profiles identified in Bulgaria, four emerge with a “high” or “medium” priority for action given their activation need, potential and barriers. Middle-aged unemployed, low-educated rural long-term unemployed, and single male NEETs are considered to have high priority for further activation. Together, they account for 50 percent of the out-of-work population. Stay-at-home young mothers are considered of medium priority owing to their non-declared unemployment and to the significant share who have at least one working adult in their households. Retired women, retired and early-retired men, and loweducated early-retired and disabled are not prioritized for activation in the report due to their lower need and potential (almost 80 percent of the low-educated early-retired and disabled report a strongly limited capacity to work).

As shown in Figure 2, the single male NEETs cluster is relatively close to the labor market, but considered high priority due to the scarring effect that long spells of unemployment can have on the young (43 percent of the individuals in this profile are long-term unemployed). Activation measures for this group should focus on market-based types of interventions, such as providing information on job openings and assisting in job search, application, and job-matching intermediation—services that could be provided through public employment services (PESs) or private employment agencies. Additionally, job-start programs that offer placement through subsidized internships accompanied by professional and

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BULGARIA

PORTRAITS OF LABOR MARKET EXCLUSION |

life-skills training could help in breaking the common barrier faced by younger cohorts of required work experience for many entry-level positions.

The middle-aged unemployed profile consists of individuals that will require more intensified activation to help with job market re-entry, training, and mobility. Taking into account the years of work experience (18 years on average) and potential industry and trade knowledge of the individuals in this group, reconnecting them to their previous field of employment, building on their acquired skills, and upgrading missing functional or technical skills may strengthen their case with new employers. The older out-of-work population in this group is particularly at risk of skills obsolescence as the skills demanded by employers change. Activation policies should create the conditions for the development of a market for adult education and training services. Moreover, in order to combat any behavioral and attitudinal detachment from the labor market that may result after long periods of unemployment (50 percent have been looking for jobs for more than 12 months), programs that subject individuals to a (time-limited) public works requirement, combined with training, job search, and skills support could also be implemented. Finally, mobility measures should also be taken into account, particularly when considering that 64 percent of the individuals in this cluster lives in rural areas.

The individuals in the low-educated, rural, long-term unemployed cluster are considered to face higher labor and social barriers than those in the previous one, driven by their high poverty risk (69 percent belong to the first income quintile), low educational attainment, and given that they predominantly live in rural areas.

Additionally, 61 percent of the individuals of this group are longterm unemployed. By reconnecting individuals in these groups with previous employment experiences, they could be equipped with missing functional or technical skills, second-chance apprenticeship programs, and upper secondary school certificates.

Mobility support could be an important service, as well as improving social inclusion benefits and linking them to activation to improve their welfare.

Finally, the stay-at-home young mothers, considered a medium priority for activation measures, could benefit from greater access to social and public services near their home (such as childcare), as well as from job-search assistance and professional training.

Figure 2: Activation Types of Prioritized Clusters in Bulgaria High

Labor market barriers (education, skills, experience)

|

Hard-to-serve (skills, special support)

Intensified Activation (TVET, Skills) Low-educated rural long-term unemployed Middle-aged unemployed

Stay-at-home young mothers

Single male NEETS

Special Support (care for dependents, transport, social, health)

Market Ready (job info, matching, search assistance)

High Social barriers (childcare, gender, poverty, disability)

Source: World Bank staff analysis and assessment

Those with previous work experience (46 percent) could build on it to gain labor market entry. Another possible line of action would be offering community-based social work and entrepreneurship education to help in labor market integration. In addition to training in job hunting and basic functional skills, (temporary) mobility support for transportation and housing should also be considered to help women in this group find employment in regional or larger cities. Moreover, improving flexibility in work schedules—including part-time and home-based work—in order to facilitate combining work with other responsibilities would make it easier for women to hold jobs.

Bulgaria could benefit from improving the activation approach toward its out-of-work population, especially in light of the projected demographic shift. General social protection and labor policy priorities should also be considered to address the labor market barriers and disincentives that the out-of-work population faces. Improving access to services such as child and elder care, broader labor market reforms that consider more flexible work schedules, policies that eliminate mobility barriers, and education reforms that ensure quality and relevance in expanding the tertiary education system can be items on the policy agenda. Moreover, broader economic reforms that strengthen job creation and entrepreneurship are crucial in fostering labor market attachment.

In this sense, all efforts need to be embedded into activities for economic growth and job demand creation.

Note: Base data for this analysis was harmonized EU SILC (Survey of Income and Living Conditions), released by Eurostat in 2013 with a time-lag of 2 years, referring to the year 2011.

Financed by the European Commission www.ec.europa.eu/social

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http://www.worldbank.org/en/country/bulgaria

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