Youth and work: the paradoxes of Romania

In Europe, Romania has one of the lowest general unemployment rates and one of the highest youth unemployment rates. And the trend is not getting better

Romania is not a country for young people. The statistics show that hundreds of thousands of young people (between 15 and 24 years old) have no job. The youth unemployment index is in fact among the highest in the EU, at 22.9%. Paradoxically, as reported by the National Institute of Statistics, in November the general unemployment rate was 5.4%, one of the lowest in Europe.

Among the causes of youth unemployment we find low wages. According to a survey carried out in January by the largest online recruitment platform, eJobs, young people aged between 18 and 25 consider that the correct salary for them should be between 3,000 and 7,000 lei (600-1,400 Euros). For the vast majority of survey participants (86.2%), salary is actually the most important factor for accepting a job.

Compared to other age categories, generation "Z" is then interested in doing work from home (34.6%) while 51.8% would like to work in hybrid mode with the possibility of deciding how many days to be in the office. "Young people, on the other hand, are not very attached to the profile of the companies and do not attach much importance to whether the employer is a start-up or a multinational", Raluca Dumitra, head of marketing for eJobs, explains to the Bucharest press.

In the EU, some Eastern European countries achieve the highest level of integration of young people into the labour market. In fact, the lowest youth unemployment rates are recorded in three regions of the Czech Republic and three of Hungary (below 4%). The dynamics in Romania are very different: with the exception of its north-west, with about 7% youth unemployment, the employment situation of young people remains a concern. Furthermore, uneven economic development means that youth unemployment varies considerably from one region to another. The most concerning situation occurs in the Oltenia region, south-west of the country, where the average youth unemployment rate is 21.6%, the highest at the national level.

Among the first places in the EU for school dropout

According to Eurostat, school dropout in Romania increased in 2021 by three percentage points compared to the previous year.

Since 2011, when Romania passed the current education law, an estimated 450,000 children have dropped out of school before finishing middle school. The Romanian authorities have never managed to lower the 10% dropout  threshold (despite their commitment to do so by 2020).

More than 15% of young people in Romania aged between 18 and 24 have not completed the eighth grade. In other words, out of a class of 25 children, 4 of them dropped out of school very early.

The data on NEETs, young people aged between 15 and 19 who do not study and do not work, should also be included in this context. According to the most recent Eurostat data, the EU average of young people who do not study and do not work is 6.8% between the ages of 15 and 19: in Italy it is 13.2% – the worst in Europe – followed closely by Romania with 12.1% and Malta with 10.0%.

School dropout has significant implications for the lives of young people and the future of the country, resulting in a reduced ability to find work and lower wages. Furthermore, young people who drop out of school are often more likely to live in poverty, have mental health problems, and have lower civic participation. Romania is among the first three EU countries to lose their working-age population: causes include low birth rate, aging of the population and, last but not least, migration abroad where work is better paid.

European policies

In the new programming for EU cohesion policies 2021-2027, 7.3 billion Euros of the European Social Fund Plus  (ESF+) will be dedicated to projects that improve access to work, in particular for young people, quality education, and inclusive, and vocational training. Huge resources that also follow up on initiatives from previous years such as, among many others, the Youth Employment Initiative, launched to provide support to young people living in regions where the unemployment rate was above 25%.

In the face of huge European resources, Romania – like indeed many other European countries – was able to use a small part. In 2019, the country occupied the last place for the use of European funds intended to reduce youth unemployment, according to what has also recently been underlined by former Romanian MEP and European Commissioner Corina Cretu.

Furthermore, in Romania there is great regional heterogeneity regarding the ability to spend the funds made available. Some regions have managed to invest at least half of the funds available, others have not managed to spend even 10% of the total.

Reduction of unemployment

According to an analysis by the website www.cursdeguvernare.ro  over the last decade, Romania has managed to reduce youth unemployment by 2.3 percentage points, among the worst performers in the EU. The Netherlands (-2 percentage points), Germany (-1.4 percentage points), and Luxembourg (-1 percentage points) did "worse", but starting from much lower youth unemployment: in fact, these data demonstrate more effective policies.

Two countries recorded increases: Sweden (+0.1 percentage points) and Austria (+0.8 percentage points). At the European level, the youth unemployment rate has decreased by 6 percentage points in the last decade. Another particularity of the labour market in Romania is the very high ratio between the youth unemployment rate and the general unemployment rate, equal to 2.3, the second highest level in the EU, after that of Portugal, equal to 2.4.

Economic growth, but not for everyone

Romania is among the European countries with the highest economic growth in the EU. The European Commission estimates growth of around 3% for the current year and also for the next, which means positioning itself in third place in the ranking of the 27 EU members. But Romania's economic growth – in this situation – risks having little impact on the prospects of young Romanians: a quarter of them risks remaining unemployed in the coming years as well.