Background Study on Employment and Labour Market in Romania

Romania's adoption of a more gradual approach in restructuring and privatizing the state-owned sector has resulted in industry with an unchanged structure that remains the main cause of social and economic decline. Employment has shown a steady decline. Industrial employment has decreased dramatically. Sectors like transport, hotels, and restaurants have faced a lower decline, but agriculture, health, education, public administration, trade, and finance have had a positive evolution. High levels of income tax and social contributions have motivated development of a "black labor market." Despite relatively low unemployment rates, the labor market has not provided sufficient job opportunities, especially for new entrants. Partial explanations are the unpredictable evolution of the economy, inexperience of vocational education and training units in monitoring local labor market development, and limited cooperation with employers and labor market institutions. Almost two-thirds of unemployment is concentrated in urban areas. Key obstacles to employment are skills mismatch, inadequate training and retraining programs, low mobility of the labor force, and information shortages regarding vacancies. No legislation and no coherent policy on continuing vocational education or job creation exist. (Appendixes include tables; organization of education and training provision; and unemployment regulations. Contains 28 references.) (YLB)