Romania: Working conditions of young entrants to the labour market

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

According to official statistical data, in the second quarter 2009, the employment rate for young persons varies greatly from one age group to another: 9.6% in the age group 15 to 19 years, 41.3% in the age group 20 to 24 years, and 75.7% in the age group 25 to 29 years. Further and more detailed information can be found in the national statistic research, inquiries and surveys only for the age groups 15 to 24 years or 15 to 34 years, but without the particulars that can identify them as 'young entrants', as defined in the current comparative study. The greatest majority of the measures initiated by the authorities and the social partners cater for the period of transition from school to active life. The working conditions for young entrants to the labour market are, unfortunately, of a lesser interest for the authorities or social partners for them to be reflected in dedicated studies.

Introduction

This EWCO CAR is specifically focused on the group of “young entrants to the labour market”. This group includes all young people (between 15 and 30 years old) who have recently entered into the labour market (i.e., people with a work experience shorter than 1-2 years in the labour market), with relative independence of their age and for whom work is their main and core activity. This definition excludes young people for whom studies are their main activity but who combine their studies with some remunerated activity as part of their training programmes (e.g. apprenticeships in dual systems), as well as unemployed young people, even if they are actively looking for a job (see Background note for more detailed information on the concept of young entrants to be considered in the research).

The CAR coordinating team is conscious that such as “narrow” definition of “young entrants to the labour market” can make difficult the identification and collection of relevant information on the topic. Therefore, and in the case no national information is available using this “narrow” definition, National Correspondents can use a “proxy” definition of “young entrant to the labour market” as any young person (i.e. between 15 and 30 years old) who is in employment, irrespectively of the number of years of experience that he/she has in the labour market (again, unemployed young people are excluded from the analysis).

The questionnaire focuses on the following topics:

• General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups (around 700 words)

• Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country (around 600 words)

• Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis (around 500 words)

• Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market (around 500 words)

• Final commentary on the main results (around 100 words)

Block 1: General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national research/studies) on a number of working conditions-related variables specifically related to young entrants to the labour market in comparison to other age groups. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified in relation to other age groups, stressing the causes and rationale of these differences

Suggested extension of this section: around 700 words

The inquiry into the 'Entry of young people into the labour market', conducted by the National Institute of Statistics (Institutul Naţional de Statistică, INS), and attached as a module to the 'Household Labour Force Survey', in the Second Quarter 2009, shows that 43.2% of a total of approximately 4.3 million persons in the age bracket 15 to 29 years were in employment (Table 1).

Source: 'Entry of young people into the labour market', INS, Bucharest, 2009.

The share of employed persons varies greatly from one age group to another: 9.6% in the age group 15 to 19 years, 41.3% in the age group 20 to 24 years, and 75.7% in the age group 25 to 29 years.

Further and more detailed information can be found in the national statistic research, inquiries and surveys only for the age groups 15 to 24 years or 15 to 34 years, but without the particulars that can identify them as 'young entrants', as defined in the current comparative study.

1.1 Career and employment security issues

The inquiry run by INS every four years into 'Salary Disparities and Their Generating Factors' reveals that, in October 2006, the number of employees on record in the age group 15 to 24 years was 311,084 (accounting for 7.0% of the total number of employees in the entire national economy), which, by October 2010, had dropped to 232,456 (5.7% of all employment).

The distribution of employees between the major occupational categories indicates that the youths aged 15 to 24 years held a larger share of the operative jobs in sectors like services, retail, and other assimilated occupational groups (21.2% in 2010), and an even a larger proportion among unskilled labour (23.3%, same year) (Table 2).

Source: Calculations based on the data from 'Salary Disparities and Their Generating Factors', INS, Bucharest, 2008 and 2012.

In October 2006, young workers in the age group 15 to 24 years earned an average gross hourly salary of EUR 1.2 (60% of the average at national economy level), and of EUR 1.9 (70% of the average) in October 2010.

Source: Calculations based on INS data regarding salary earnings and the average RON/EUR monthly exchange rates for October 2006 and October 2010, as published by the National Bank of Romania (Banca Naţională a României, BNR).

Compared to the 55 - 64 years age group, the average gross hourly wage of young workers in the 15 to 24 years age group stood at 46% in 2006, and 63% in 2010.

By occupational groups, the greatest differences between the earnings of young workers and those of other age groups can be noticed in the first major occupational group (members of parliament and government, etc), while the hourly salary of youths working in services, retail and alike, or even as unskilled labour, is higher than the national average of each occupational category, and also than the other age groups (Table 3).

The differences between the average gross hourly earnings of men and women among youths are visibly smaller than those in other age groups (Table 4).

Source: Calculations based on INS data regarding salary earnings and the average RON/EUR monthly exchange rates for October 2006 and October 2010, as published by BNR.

The working time is regulated by the Labour Code (as amended under Act 53/2003, and republished in 2011), which provides that for youths between 15 and 18 years of age (Romanian legislation forbids employment of youths below the age of 15 years) the daily working time may not exceed 6 hours/day, and 30 hours/week, compared to 8 hours/day, and 40 hours/week, which is the normal working time for full-time workers.

Young workers below 18 may not be required to do overtime or night work. The Labour Code also entitles them to an additional annual leave of at least three business days. In Romania, the minimum length of an annual leave is 20 working days.

Statistical data do not indicate notable differences in the average number of paid hours between the various age groups.

In 2010, for example, while the average number of paid hours in October was 168 hours for all employment, the paid hours for the age group 15 to 24 years was 167 hours, with other differences being observed between some of the major occupational groups (Table 5).

Source: 'Salary Disparities and Their Generating Factors', INS, Bucharest, 2008 and 2012.

With a constantly decreasing number of monthly paid working hours (which may be explained as an effect of the economic and financial crisis), the differential between men and women had a slightly increasing tendency in the reference period October 2006 - October 2010 (Table 6).

Source: 'Salary Disparities and Their Generating Factors', INS, Bucharest, 2008 and 2012.

National Free Trade Unions Confederation of Romania Frăţia (Confederaţia Naţională a Sindicatelor Libere din România Frăţia, CNSLR Frăţia) made a study on the 'Configuration of Unequal Opportunities in Romania – Causes and Effects. A Sectoral Analysis' The study was the outcome of a project financed from the Sectoral Operational Programme for Human Resources Development, and co-financed from the European Social Fund (September 2011) and reveals that a worker's satisfaction for having a job increases with the age.

Among young workers below the age of 24 years, the first motive of satisfaction at work is how much money they make (36.7% of the respondents), followed by the degree of safety for the future the job provides (31.1%). Personal professional satisfaction comes first for 22.2% of the respondents, and career development is the main reason of satisfaction for 10% of them (Table 7).

Source: 'Configuration of Unequal Opportunities in Romania – Causes and Effects. A Sectoral Analysis', CNSLR Frăţia, September 2011.

The match between the current occupation and the workers' professional background also grows with the age: 51.1% of the workers under 24 years of age said that what they were currently doing was outside their specialisation. The rate of mismatch went down to 33% among the workers in the age segment 25 to 34 years, and further down to 16.2% for workers aged 35 to 44 years, and to 8.8% among those aged over 55 years.

1.2 Skills development

Employers are legally bound, under the Labour Code, to ensure vocational training for all their employees at least once every two years in the companies with at least 21 employees, and at least once every three years in companies of less than 21 employees.

During the training period, the employees are entitled to enjoy all the rights afforded to them by law and contract.

Another research, titled 'The Impact of Vocational Training and Vocational Readjustment on Labour Supply and Demand', and conducted in May - June 2012 by the National Trade Union Bloc (Blocul Naţional Sindical, BNS) points to the fact that, during the preceding three years, of all the participants in professional programmes, only a share of 42.7% of the interviewees had been involved in vocational training/readjustment courses programmes (377,427 persons),with attendance rates of 79.5% among the youths aged 15-24 years, and 46.4% among the young persons aged 25-34 years, compared to 39.3% among persons aged 35-44 years, 35.3% among those aged 45-54 years, and 31.3% among workers over the age of 55 years.

The remaining share of 58.2% of the total number of respondents attended refresher or specialisation courses, with the following distributions between age groups: 20.5% for the 15 to 24 years segment, 54.3% for the 25 to 34 years segment, 61.6% for workers aged 35 to 44 years, 65.4% for 45 to 54 years, and 61.9% for workers aged over 55 years.

1.3 Health and well being

No information available.

1.4 Reconciliation of working and non-working life

No information available.

Block 2: Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions within the group of young entrants to the labour market, for a series of variables. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 600 words

See Block 1.

2.1 Personal characteristics of young entrants

The information published in the INS inquiry regarding the 'Entry of young people into the labour market', indicates that in the Second Quarter 2009, only a share of 38.1% of the total of 5.9 million young persons aged 15 to 34 years had a significant job (40.8% of the male population, and 35.5% of the female population; 33.9% for the young population in the urban areas, and 44.3% for the young population in rural areas).

The significant job is the jon of any kind, irrespective of the status in employment, the employment modality, working regime (temporary or permanent) or working schedule (part time or full time) were person worked for salary or other incomes in cash or in kind for an over three months period.

The young persons aged 15 to 34 years and holding a significant job adequate to their social and professional standing were employees in a proportion of 69.3% of the total; 71.5% of these on the female side, 67.2% on the male side, 94.2% on the urban side, and 43.9% on the rural side (Table 8).

Source: Calculations based on data from 'Entry of young people into the labour market', INS, Bucharest, 2009.

The self-employed or the unpaid family workers accounted for 30% of the entire number of young workers with a significant job: 55.8% of them in the rural areas, and only 6.3% in the urban areas.

See also Block 1.

2.2 Occupational characteristics

See Block 1.

Block 3: Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis

NCs are kindly requested to provide information on the following items: NCs are kindly requested to provide information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions amongst the group of young entrants to the labour market in comparison to the situation five years ago. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 500 words

3.1 Please provide information on the evolution of working conditions of young labour entrants in the last five years. Have working conditions of this group improved/deteriorated in comparison to the existing situation five years ago (before the economic crisis began)? What are the reasons for these changes

The main challenge for young persons in Romania during the economic and financial crisis has been to find a job, and, once found, to maintain it.

In the reference period 2006-2010, although the total number of employees in the Romanian economy dropped by some 10%, the number of employees in the age bracket 15 to 24 diminished by 25.3%, while the share of workers in the age groups 55 to 64 years grew by 17.5%.

The economic crisis has generated changes in the structure of the national economy, which made it even harder for employment seekers to find work.

In three major occupational segments that, in 2006, used to provide some 50% of all the jobs held by young workers in the age range 15 to 24 years, the loss of jobs was much greater than the overall average loss for each occupational segment, and than the all-country average loss.

Most affected were the skilled workers qualified to provide maintenance and fine tuning of machinery and installations. In this occupational class, the number of young employees aged 15 to 24 years dropped from 48,300 in 2006 to 22,900 in 2010 (by more than 52%).

Among the operators and assembly workers for machinery and installations, the number of young employees shrank from 48,000 to 28,000 persons (respectively by 46%). The occupational group of operative personnel in services and retail lost some 10,000 workers (15%).

3.2 Based on possible existing prospective studies, please provide information on the expected evolution of employment levels and working conditions of young labour market entrants in your country in the near future (coming 2-3 years)

Due to the shortage of jobs, graduates of secondary education continue their studies in the tertiary level, hoping that this will boost their employment opportunities.

When completing their tertiary studies, young persons generally seek employment requiring academic education, and, if they fail at home, they look for better chances abroad.

Block 4: Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market

4.1 Identify main recent national measures/initiatives (1-2) put in place in your country by public authorities in order to improve employment opportunities and working conditions for young entrants to the labour market.

Measure I - The National Plan for Rural Development - Priority Axis I - Developing competitiveness in the agricultural and forestry sector, Key Area of Intervention 112 - Settlement of Young Farmers, starting with 2010.

The Implementation Body is the Ministry of Agriculture and Rural Development (Ministerul Agriculturii şi Dezvoltării Rurale, MADR). The measure is applicable to the entire territory of Romania, in the agricultural sector.

The main objectives of Measure I are to:

- improve and boost competitiveness in the agricultural sector by supporting young persons to settle down in the countryside, and to upgrade their farms in tune with the requirements of the environmental legislation, and in compliance with standards of hygiene, livestock wellbeing, and safety at work;

- improve the management of farmsteads by way of appointing new, more capable, managers.

Specific objective: to increase the revenues obtained from farmstead operation by young farmers, and to bring an infusion of young rural workers.

The non-refundable financial aid is a maximum of EUR 10,000/farmstead that is worth at least 6 units of economic dimension, each such unit qualifying for EUR 1,200, plus a settlement premium of EUR 2,000/unit. The total amount of aid may not exceed EUR 25,000/farmstead.

Target group: farmers that have not reached the age of 40 years, be they private individuals, or registered as corporate entities, or as independent workers, whose core activities are related to farming, and whose farmsteads are worth between 6 and 40 units of economic dimension.

According to the 'Annual Report on Progress in Implementing the National Plan of Romania for Rural Development', published in 2012, a total number of 11,600 applications were submitted in the time span 2010-2011, of which 5,640 young farmers qualified for aid.

In 2011, contracts were signed for 2,568 projects, totalling approximately EUR 51 million, which is an average of some EUR 19,850/project.

The rate of absorption of European funds made available for this Measure was only 15% of the amount allocated.

Following an evaluation of the Programme, the Romanian competent authorities proposed, and the European Commission approved, that the worth of the aid should be raised from EUR 25,000 to EUR 40,000, and that the target group should be enlarged to include graduates of vocational schools other than strictly specialised in farming trades, provided that they are enrolled in a training scheme financed also from European funds.

Measure 2 - Programme to stimulate young entrepreneurs to start and develop micro enterprises, developed by the Ministry of Economy (Ministerul Economiei, ME) through its Agency for the Implementation of Projects and Programmes regarding Small and Medium Enterprises (Agenţia pentru Implementarea Proiectelor şi Programelor pentru Întreprinderile Mici şi Mijlocii, AIPPIMM). The Programme was approved to take effect at the beginning of 2011, and is opened to all economic sectors, less financial brokering and insurance, real estate transactions, gambling and betting businesses, etc.

The Programme's objectives are to develop entrepreneurial skills in young people, in order to help them adapt to the requirements of market globalisation, and gain access to sources of finance.

The aid granted is a de minimis amount of maximum EUR 10,000 per entrepreneur; for the year 2012, the annual budget available stood at approximately EUR 7.2 million.

Target group: young persons up to the age of 35 years, who incorporate, for the first time, a company fitting the description of micro enterprise.

A number of 6,800 such micro enterprises were established by the end of 2012.

As the allocated amount was found to be too small, the Government decided to offer guarantees for the loans granted to young entrepreneurs (80% of the worth of loan applied for, but no more than EUR 80,000), and to exempt them from the obligation to pay social security contributions for maximum four employees, for an indefinite period of time.

4.2 Identify main recent initiatives (1-2) put in place in your country by social partners (either at national, sector or company level) in order to improve working conditions amongst young entrants to the labour market.

No information available.

Commentary by the NC

The greatest majority of the measures initiated by the authorities and the social partners cater for the period of transition from school to active life. They consist of training courses in various trades, financial support to companies that hire fresh graduates, and support to companies that open their premises for practice-on-the-job to students and graduates, etc.

The working conditions for young entrants to the labour market are, unfortunately, of a lesser interest for the authorities or social partners for them to be reflected in dedicated studies.

Chivu Luminita, Institute of National Economy, Romanian Academy