Labour market flexibility trends examined
Published: 22 August 2005
This article examines current developments in various aspects of flexibility on the Bulgarian labour market.
Official data for 2004 indicate that the Bulgarian labour market still has a low degree of flexibility. Nearly 15 years since the beginning of the process of liberalisation, only 2% of employed people work part time, 8% work on a temporary basis, 10% are self-employed and a similar percentage have 'atypical' employment contracts.
This article examines current developments in various aspects of flexibility on the Bulgarian labour market.
Working hours flexibility
Bulgaria's 'official' labour market remains relatively inflexible in terms of working time and working hours. According to the Labour Code, the normal duration of the working week is 40 hours, though lower for some categories of staff working under conditions hazardous to their health. Successive changes in labour legislation (in 1992, 2001 and 2004 - BG0408101N) have provided more freedom for employers to reduce employee's working hours and to offer part-time employment. However, official labour market monitoring in 2004 found that less than 2% of employed people identified themselves as part-time workers. Detailed analysis of the data from the National Statistics Institute (NSI) on actual working hours indicates that in December 2004 only 5.5% of the workforce worked fewer than the standard regulated working hours per week - see table 1 below. More women than men work fewer than the usual weekly working hours (7% and 4% of the total respectively).
| Weekly working hours | Total | Men | Women | Public sector | Private sector |
| Up to 39 | 5.5 | 4.2 | 6.9 | 5.3 | 5.7 |
| 40-49 | 81.3 | 79.5 | 83.3 | 88.1 | 75.3 |
| 50-59 | 3.3 | 4.2 | 2.2 | 0.6 | 5.6 |
| Over 60 | 2.0 | 2.6 | 1.2 | 0.6 | 3.2 |
| Not stated | 8.0 | 9.4 | 6.3 | 5.5 | 10.1 |
Source: Employment and unemployment, NSI, 2004
As table 1 shows, flexibility in the duration of working hours is higher in the private sector. Only 6.5% of public sector employees work outside the regulated working hours, mostly below the norm. The rising proportion of employment in the private sector, especially in the area of services, is an important factor in increasing flexibility in working hours.
In terms of shift work, 71% of industrial enterprises operate shifts. Most of these industrial enterprises use two or three shifts, and on average 41% of staff do shift work regularly - see table 2 below. This share is highest (50%) in consumer goods enterprises. In enterprises producing investment goods, only 22% of the personnel do shift work.
| Working schedule | Industry - total | Industry - end-consumption goods | Industry - intermediate-consumption goods | Industry - investment goods |
| % of the personnel working: | ||||
| Shift work | 41 | 50 | 41 | 22 |
| Saturday work | 20 | 20 | 23 | 8 |
| Sunday work | 19 | 21 | 22 | 9 |
| Night shift | 19 | 14 | 25 | 10 |
Source: Employment and unemployment, NSI, 2004
Due to the low popularity of work with reduced and variable working hours, the various models of flexible employment are not yet very widespread in Bulgaria. Labour force survey data for the past 10 years clearly outline the working hours flexibility trends. The share of those working less than the standard 40-hour week fluctuates around 6% and the share of those working more than the standard hours is about the same.
Working reduced hours is mainly a forced decision, imposed by the employer or a specific economic situation and not due to the free choice of the employees concerned. On the other hand, the share of people working longer than the normal working hours reflects particular conditions on the Bulgarian labour market. Employees prefer to work longer for the same employer than additional hours for another employer. The preferences of employers, especially those in the private sector, are similar.
Flexibility in employment status
In terms of employment status, those people classed as 'self-employed' or 'unpaid family workers' can be seen as 'flexible' workers, and their share of the total workforce amounted to 12.2% in 2004 - see table 3 below. Men are more likely than women to be self-employed or an employer, or to be employed in the private sector. On the other hand, women are more likely to be employees in the public sector.
| Status | Employers | Self-employed | Employed in public sector | Employed in private sector | Unpaid family workers |
| Gender | |||||
| Men | 5.6 | 12.1 | 27.4 | 53.3 | 1.3 |
| Women | 2.1 | 7.7 | 33.9 | 53.0 | 3.2 |
| Total | 3.9 | 10.0 | 30.5 | 53.2 | 2.2 |
Source: Employment and unemployment, NSI, 2004
Education is another factor influencing labour market flexibility. The main conclusion deriving from NSI labour force survey data is that the lower the level of education, the higher the flexibility. The share of people with higher education who are self-employed is 6.8%, while for people with only primary education it is 21.6%, and for those with only basic and lower education 26.2%. Unpaid family workers are also over-represented in the groups with only primary or basic education. Higher education increases the likelihood of people being employed in the public sector or becoming an employer. The data indicate that in Bulgaria employment status flexibility does not generally take the form of highly qualified freelancers but rather of low qualified self-employed people in low-technology businesses.
| Status | Employers | Self-employed | Employed in public sector | Employed in private sector | Unpaid family workers |
| Highest educational level | |||||
| Total | 3.9 | 10 | 30.5 | 53.2 | 2.2 |
| Higher | 6.0 | 6.8 | 49.0 | 37.5 | 0.6 |
| Secondary | 4.0 | 7.1 | 24.6 | 62.6 | 1.6 |
| Primary | 1.3 | 21.6 | 21.6 | 49.4 | 5.4 |
| Basic and lower | 0.2 | 26.2 | 31.7 | 33.5 | 7.5 |
Source: Employment and unemployment, NSI, 2004
Both categories of workers with a 'flexible' status - self-employed and unpaid family workers - are four times more common in rural areas than in towns. This is indirect evidence that flexible employment status in Bulgaria is more common in traditional activities such as agriculture than in information technologies, for example.
Flexibility in contracts
NSI's labour market monitoring provides data on the type of contract, using categories such as employment contracts, 'civil contracts' (ie contracts for services), 'other' contracts and no contract. Flexible terms may be expected in all types of contract, even employment contracts, which can be for a fixed term, temporary, seasonal, etc. The terms of civil contracts and the other types of contracts are traditionally flexible. Flexibility regarding legal terms is highest for those working with no contract. Table 5 below shows that less than 10% of the workforce has an 'atypical' contract - ie a contract other than an employment contract. This share is significantly higher than that of part-time workers and almost equal to the share of the workforce made up by the self-employed.
| Type of contract | Total | Men | Women |
| Employment contract or civil service contract | 93.6 | 92.1 | 95.1 |
| Civil contract | 2.1 | 2.4 | 1.7 |
| Other contract | 0.5 | 0.6 | 0.4 |
| No contract | 3.8 | 4.9 | 2.7 |
| Private enterprises | |||
| Employment contract | 90.7 | 88.8 | 92.9 |
| Civil contract | 2.8 | 3.2 | 2.4 |
| Other contract | 0.7 | 0.8 | 0.5 |
| No contract | 5.8 | 7.2 | 4.2 |
| Enterprises in public sector | |||
| Employment contract or civil service contract | 98.6 | 98.7 | 98.5 |
| Civil contract | 0.7 | 0.7 | 0.7 |
| Other contract | 0.2 | 0.2 | 0.3 |
| No contract | 0.4 | 0.4 | 0.4 |
Source: Employment and unemployment, NSI, 2004
Other factors contributing to significant differences in types of contracts are age, educational level, rural/urban location and economic activity: With regard to age, workers' likelihood of working on the basis of employment contract increases until they reach the 45-54 age group, but declines rapidly afterwards - see table 6 below. The trend is opposite for civil contracts, other contracts and work on no contract - the percentage is highest for the youngest age groups, declines with age until the 45-54 age group and increases thereafter. In the oldest age group, half of employed people have an employment contract and one fifth work without a contract. In the private sector, only one third of private sector workers have an employment contract. The rest are almost evenly distributed among the workers without contracts and workers with service contracts. The public sector employs workers aged 65 and over on the basis of a civil contract 10 times more frequently than workers in the 45-54 age groups. Overall, in terms of the various legal types of contract, workers in the the two youngest and the two oldest age groups are the most flexible.
| Type of contract | 15-24 years | 25-34 years | 35-44 years | 45-54 years | 55-64 years | 65 years |
| Employment contract or civil service contract | 87.0 | 93.2 | 95.1 | 95.6 | 92.3 | 53.2 |
| Civil contract | 4.7 | 2.2 | 1.5 | 0.9 | 3.5 | 21.0 |
| Other contract | 0.8 | 0.3 | 0.3 | 0.7 | 0.6 | 4.0 |
| No contract | 7.9 | 4.2 | 3.1 | 2.8 | 3.7 | 21.8 |
| Private enterprises | ||||||
| Employment contract | 85.0 | 91.3 | 92.2 | 92.8 | 88.3 | 44.3 |
| Civil contract | 5.1 | 2.7 | 2.4 | 1.3 | 4.4 | 22.7 |
| Other contract | 0.7 | 0.4 | 0.4 | 1.1 | 0.9 | 5.7 |
| No contract | 9.2 | 5.6 | 4.9 | 4.8 | 6.5 | 26.1 |
| Enterprises in the public sector | ||||||
| Employment contract or civil service contract | 96.7 | 98.3 | 99.4 | 99.2 | 96.9 | 72.2 |
| Civil contract | 0.7 | 0.9 | 0.2 | 0.3 | 2.4 | 16.7 |
| Other contract | 1.6 | 0.2 | 0.1 | 0.2 | 0.3 | 0.1 |
| No contract | 0.9 | 0.6 | 0.4 | 0.2 | 0.3 | 11.0 |
Source: Employment and unemployment, NSI, 2004
Educational level also influences the flexibility of contractual relations. The likelihood of having an employment contract grows in line with the level of educational attainment, while the likelihood of having a civil, other or no contract decreases. While only 2% of graduates work without a contract, 19% of the group with the lowest educational attainment do so. It appears that the people with highest education are the least flexible workers.
The type of work is another indicator of labour market flexibility. Temporary work is a common form of flexible employment in the more developed European countries. In Bulgaria, it is less common, affecting about 8% of workers. It is more frequent among men than women and in the public sector than the private sector. This type of labour market flexibility is again generally forced on workers rather than an expression of their own preferences. Their main motivation given for accepting work under such conditions is the 'impossibility to find a permanent job', which is cited twice as often as the reasons 'undergoing training', 'probation period' and 'unwilling to work in a permanent job' combined.
Commentary
The above data show that the private sector is the strongest generator of flexible employment in Bulgaria. Labour flexibility is also high in agriculture and rural areas. Hence, two contradictory trends will determine the development of flexible employment in the course of the country's economic and social transformation. The various types of flexible employment will grow together with the expansion of the private sector, while the expected decrease of employment in agriculture will lead to reduced flexible employment in agriculture. Unlike the developed market economies, in Bulgaria labour market flexibility is mainly focused in the area of low-technology businesses and not in the sector of professional services and information technologies.
In Bulgaria, as in the EU Member States, women are more likely than men to be flexible workers, though the difference is relatively little. On the one hand, women work part time and on temporary contracts more often than men and predominate among the most underprivileged group - unpaid family workers. On the other hand, they are seldom self-employed or employed under flexible conditions on the basis of a civil contract or without any contract. The oldest age groups most often work under flexible conditions, followed by the youngest groups. People with low educational attainment also have a relatively high degree of flexibility on the labour market. The higher the level education, the better are the chances of finding a secure job in the public sector or of becoming an employer oneself.
The general lack of flexibility is also related to the withdrawal from the labour market of certain groups, such as women from families with dependent members. Quite a large proportion of Bulgarian women of active age are excluded from the official workforce. The 'shadow' economy provides more flexibility, employment opportunities and income for many women. (Ivan Neykov and Milcho Dimitrov, Balkan Institute for Labour and Social Policy)
Eurofound recommends citing this publication in the following way.
Eurofound (2005), Labour market flexibility trends examined, article.
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