Labour shortage in Romania

Population decline and ageing directly impact the labour market in Romania

Bogdan Matei, 13.03.2019, 13:35

Although the exact figures do not always concur, all the demographic surveys of the past decade point to the same conclusion: Romanias population is dwindling and ageing. The most recent such survey, commissioned by the Concordia Employers Association, and made public on Tuesday, is no exception. According to its findings, if the demographic decline and migration trends carry on at the same pace, Romanias population will drop to 18 million by 2030. By 2060, the pension system dependency ratio, which is the number of pensioners relative to contributors, will be close to 100%.

Entitled “A Quantitative and Qualitative Analysis of the Romanian Labour Market, the survey estimates that the number of employees will drop from 8.4 million in 2016 to 7.3 million in 2030. The authors also say that, in terms of the job supply, geographic polarisation will deepen and the most economically dynamic regions, namely Bucharest-Ilfov in the south, the west and the north-west of the country, will also report the highest labour deficits. At national level, this deficit already amounts to some 300,000 people this year, and it may go well over half a million by 2023.

The authors have also identified important population segments, around 2 million people, which are included neither in the labour market, nor in the education and vocational training system. “What we find, in other words, is untapped human potential. This phenomenon requires in-depth analysis, to enable us to understand the causes of this situation and subsequently to outline measures able to help them enter the labour market, reads the report.

Some proposed solutions for the labour crisis mentioned in the study include closer cooperation between the education system and the labour market, aimed at modernising vocational and technical training, and implementing a strategy and an action plan to end the demographic decline.

Commentators are rather sceptical that these trends can be reversed in the short and medium run. The population decline started 3 decades ago, shortly after the fall of the communist regime, when abortion was decriminalised. And migration, which picked up speed after Romanias EU accession in 2007, will continue as long as the national labour market remains hardly rewarding. Bogdan Hossu, the leader of one of the countrys most important trade union association, Cartel Alfa, says that Romania ranks first in the European Union by share of employees below the poverty threshold, namely 20%.

(translated by: Ana-Maria Popescu)