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3.4 Migration


Labor Markets and Migration

Unemployment in Romania differs considerable on the regional level. The coefficient of variation for average unemployment rates on county level between 2000 and 2005 amounted to .28. However, official unemployment underestimates the actual waste of labor resources, which is better captured by the evolution of the activity rate in Romania (cf. chapter 3.2.2.2 and Figure 3.6). The activity rate started from 82 % in 1990 and decreased continuously until 2003. In the subsequent years it fluctuated between 64 % and 65 %. The average activity rate on county level between 2000 and 2005 was about 67 % with few variations among the counties (coefficient of variation .08). Zaman (2007 b) reports that urban unemployment rates in Romania tend to be higher than rural unemployment rates as in the rural areas subsistence agriculture serves as a buffer. In general, Romania’s labor market is perceived as restrictive (cf. Mareș & Mocanu 2005) and social contributions are frequently criticized as being too high (cf. EC 2004, 2008 a).

Often mentioned in the business press are (local) shortages on the labor market in Romania and associated phenomena such as extensive and costly job-hopping, which might be partly reflected in Figure 3.27. Counterintuitively, extensive economic activities, FDI in particular, (cf. chapter 3.5 for details and further information on the chosen indicator) keep being concentrated on few economic centers, despite the excess demand for labor generated by this crowding.

Image 3.27: Unemployment Rates in Romania 2005 and Foreign Firms 2007

Unemployment rates in Romania foster migration

Source: INS 2008, ONRC 2008 c, own calculations, own graphic

Over 82 % of the labor resources have attended at least secondary education, over 12 % attended tertiary education, with a higher share (18.27 %) among the young (cf. Zaman 2007 b: 3). Nonetheless, especially qualified labor is predominantly affected by shortages.

A vivid migration potential and the still large size of the shadow economy might not only contribute to the low activity rates but also to the shortages on the labor markets.[1] Romania lost nearly 2 million inhabitants between 1991 and 2006 (INS 2008). Nevertheless, most of these population losses can be explained by a higher mortality rate than birth rate after the total fertility rate began turning low in the nineties (cf. footnote 32 on page 35) whereas the officially tracked net migration is rather modest.

Image 3.28: Adjusted Population Loss and Net Migration 1991 – 2005

Net Migration in Romania contributes to the Romanian Population Loss

Source: INS 2008, own calculations, own graphic

On the other hand, some differences between official net migration figures and mortality adjusted population shrinkage suggest that also informal long-term migration is at work. While the first gap (1992) might be explained well with statistical proceedings (cf. Heller 2006) the second gap (2002) coincides with the new introduced right for Romanians to visit the Schengen area twice a year without visa, each time for a maximal stay of 90 days. However, the total amount of migration flows is hard to track and further data is missing, yet.

Academic Research paper and Study of the Economy of Romania and Romanian Business

However, estimations frequently assume some 2 millions of Romanians working abroad (cf. e.g. Andrei & Păuna 2006; Dill et. al 2005 or Fuster 2008), often for – not necessarily formal – seasonal working. Main destinations are unchallenged Italy and Spain what affected especially the Romanian construction sector negatively. Attempts to retract the abroad working Romanians by special offers and assistance had very limited success so far. The respective job fairies initiated in Italy caught very little attention, yet (cf. e.g. Carbuneanu 2008) what is in line with rather similar experiences in Poland (cf. Fuster 2008).

Footnotes

[1] For a recent discussion on the size of Romania’s shadow economy cf. Albu 2007.