Country Brief - Romania

ROMANIA 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 Romania, 2011 3%

3%

5% 24%

Retirees

7% Early retirees Low-educated rural mothers without work experience Inactive middle-aged wives 15%

Long-term unemployed educated single youth Working-age long-term unemployed Working-age newly unemployed 24%

Low-educated and rural disabled

19% High priority Medium priority

Source: World Bank staff analysis

The analysis for Romania identified a total of 4.1 million out-of-work individuals (unemployed and inactive) between ages 16 and 64 for the year 2011 (total population: 21.4 million). Of the eight profiles identified in Romania (Figure 1), five emerge with a “high” or “medium” priority for action given their activation need, potential, and barriers. Long-term unemployed educated single youth and workingage long-term unemployed are considered to have a high priority for activation mainly due to their strong exposure to poverty and the scarring effects of being detached from the labor market for long periods of time. Low-educated rural mothers without work experience, inactive middle-aged wives, and workingage newly unemployed are classified as medium priority owing to either their lower activation potential or lower poverty risk. Retirees, early retirees and low-educated and rural disabled are not prioritized for activation measures or policies due to their lower activation need (having reached official retirement age) and potential (many report strong limitations on capacity to work).

Figure 2 maps the prioritized clusters according to the labor market and social barriers that might limit their labor market activation. The individuals grouped in the working-aged newly unemployed profile are still quite close to the labor market and are therefore located in the lower left quadrant in the figure.

Activation measures for these individuals 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.

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ROMANIA

PORTRAITS OF LABOR MARKET EXCLUSION |

The individuals included in both long-term unemployed profiles, on the other hand, face higher labor market barriers and, therefore, will require more ‘intensified activation’. These two high priority profiles could benefit from measures that help with job market re-entry, training, and mobility. Job-start programs that offer placement through subsidized internships, accompanied by professional and life-skills training, could be a promising line of action for the long-term unemployed educated single youth, breaking the common barrier of required work experience for many entry-level positions. Moreover, in order to combat any behavioral and attitudinal detachment from the labor market that may result after long periods of unemployment, programs that subject individuals to a (time-limited) public works requirement, combined with training, job search, and skills support could also be implemented.

Figure 2: Activation Types of Prioritized Clusters in Romania High

Labor market barriers (education, skills, experience)

|

Hard-to-serve (skills, special support)

Intensified Activation (TVET, Skills)

Low-educated rural mothers without work experience

Long-term unemployed educated single youth Working-aged long-term unemployed

Inactive middle-aged wives

Working-aged newly unemployed

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

Lastly, low-educated rural mothers without work experience and inactive middle-aged wives are shown in the upper right quadrant of Figure 2 given the relatively higher social barriers to their potential activation. Measures for the women represented in these two clusters are similar in nature, ideally with options that enable women to choose the measure that would correspond best to their needs. In general, these women could benefit from greater access to social and public services near their home (such as child or elder care) as well as from job-search assistance and professional training.

For the low-educated rural mothers without work experience short-term placements with training opportunities might help overcome the barrier of required work experience. 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 them to hold jobs.

General social protection and labor policy priorities should address the labor market barriers and disincentives that the outof-work population faces. Improving access to services such as child and elder care, broader labor market reforms that consider more flexible work schedules, and education reforms that ensure quality and relevance in expanding the tertiary education system could be items in 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

9083_Country_Brief_Romania.pdf 2

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

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