The ineffectiveness of the education system, unfavorable attitudes towards lifelong learning, the ineffectiveness of vocational training and active labor market policies, combined with brain drain, are causing skills shortages and mismatches with market demand, according to a World Bank report on Romania.

In the last 10-15 years, more than 2 million Romanians have emigrated, representing almost 20% of the labor force.

Largely due to emigration, Romania has experienced a shrinking and aging population as well as the labor force. In the last 10-15 years, more than 2 million Romanians, almost 20% of the workforce, have emigrated, many of them permanently, leading to skills gaps, labor shortages in key positions (such as doctors), distorted wage demands and a decrease in real labor productivity.

Because Romanians who emigrate tend to be younger and more educated than the rest of the population, Romanian society is aging and suffering from one of the worst cases of brain drain in the world.

Regional differences are significant, with Bucharest-Ilfova registering the lowest median age in the country (41) and the lowest proportion of the population over 65 (16.5%) – more than four years and 4.4 percentage points below the level respectively in South-Western Oltenia. Thus, demographic pressure points (eg, greater demand for more complex health care for the elderly) are more acute in underdeveloped regions where service delivery is already difficult.

Romania’s inactivity rate – The rate of people of working age who are not part of the labor force (neither working nor actively looking for work) – is 33.2%, one of the highest in the EU, and labor market participation (69.2%) ) is one of the lowest, which limits the supply of labor against the background of growing demand in the economy. The participation rate is particularly low among women, young people and people with a lower level of education.

The participation of young people in the labor market was even lower: 38.3%, which is significantly lower than the EU average (58%). The proportion of 15-24-year-olds not in employment, education or training (NEET) was 14.7%, the second highest in the EU after Italy.

• Almost half of those living in households in the bottom 40% of the income distribution do not have a formal job, and another 28% are still employed in agriculture. With rural areas experiencing higher levels of poverty, concentrations of low-skilled labor segments, and weaker labor markets, these data underscore the link between lack of employment opportunities and poverty levels.

While the supply of labor is shrinking, the demand for skills is growing, and shortages and mismatches between supply and demand are expected to become more acute as the twin transitions to green and digital advance.

Skills shortages and the mismatch between them and market demand, already significant, are deepening: the lack of relevant skills in the workforce was already the main obstacle for Romanian companies before the pandemic, according to World Bank business surveys, and the vacancy rate has doubled.

Most people with higher education are either overtrained for their profession or work in a field that does not correspond to their education

Automated manufacturing processes and an increasingly service-dominated economy require more non-standard cognitive skills such as critical thinking and socio-behavioral skills, as well as more digital skills (basic for most workers, but also advanced for jobs related from IT). .

However, there are labor shortages in both high- and low-skilled occupations (e.g., software and application developers and analysts, general practitioners and specialists, electrical, physical and engineering engineers, mechanics and car repairers, cooks, truck and driver workers motorcycles, employees of the garment industry and other related industries).

Among the urban areas of the EU, Romanian areas rank last in terms of digital skills, while rural areas in Romania are second to last.

Emigration continues to have a negative impact: while Romania has a relatively high proportion of ICT graduates (5.6% of all graduates in 2020, compared to the EU average of 3.6%), the proportion of ICT professionals in the workforce (2.2 %) is significant. lower than in the rest of the EU countries (3.9%).

There are also “oases” of digital skills, but often they seem to serve external markets: Romania is the only EU country in the top 20 suppliers of software development workers on English-language online job platforms (Otto Kässi, Vili Lehdonvirta, Index online jobs: measuring the online gig economy for policy and research, Technological Forecasting and Social Change, Vol. 137, 2018, pp. 241-248).

The general lack of digital skills among the population is a clear obstacle to the wider adoption of digital services by citizens and businesses, and may slow down the transition to green jobs that require relatively high skill levels.

The education and training system is unlikely to provide the skills the country needs,

The education and training system is struggling to provide the skills the country needs, and the lack of communication between employers, employees and education and training providers forces different stakeholders to operate in isolation. Thus, only about 20% of current labor market needs are covered.

Before the outbreak of the COVID-19 pandemic, the education system struggled to provide high-quality education for all pupils and students, and the country faced a number of human development challenges. The number of early school leavers, the level of functional illiteracy and the quality of higher education are of concern.

Romania performs particularly poorly compared to the EU average, with high numbers of NEETs and early school leavers. Romania has the lowest participation rate in lifelong learning in the EU due to cultural and systemic barriers.

Around 1% of 25-64 year olds participate in adult learning, well below national targets and below the EU average of 9.1%. In Romania, lifelong learning does not usually lead to a positive salary or career growth, nor is it valued on a personal level, especially among people over 40 years old.

Romania’s public spending on social protection and social assistance is relatively low compared to other EU member states and other countries in Eastern Europe and Asia. Thus, in addition to unequal access to services, poor people also lack the resources to invest in their human capital

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