The reasons for dropping out of school are different at various education levels.
The beginning of the school year is a good time to comment on one of the important problems of the Bulgarian education system - dropout rates, which until recently were rather outside the focus of the public debate on the sector's policy. Here we will look at several aspects of this problem - its territorial peculiarities by districts and municipalities, its distribution in different levels of school education and the possible reasons behind it.
NSI’s municipal level data on dropouts in the 2015/16 school year only refers to early dropouts and therefore covers only students who left school before the eighth grade. Thus the dropout rate presented on the map underestimates the real dimensions of the phenomenon by just under one third, but still allows comparisons between different parts of the country. The breakdown by municipalities shows that in most of them (101) the share of school leavers is less than 2%. There are, however, several "clusters" of municipalities where the the problem is significantly more severe - several small municipalities around Vidin and Vratsa, almost all municipalities in the Dobrich district, two municipalities south of Burgas and several near Ruse, Plovdiv and Stara Zagora, where the rate exceeds 7-8% of the students. Fewer separate municipalities - Tran, Letnitsa, Venetz, Hitrino, Kostinbrod are also among the worst performers.
It is worth noting that in almost all of South-West Bulgaria the dropout rate is very low. A visible factor that determines the share of school dropouts is the size of the municipality - large municipalities and district centers achieve better results than small municipalities. Curious exceptions to this rule are Pazardjik, where the share of early dropouts is 5.6%, as well as Nova Zagora, where in 2016 it reaches 7.3%. The best result is achieved by the Municipality of Madan, where the dropout rate is 0.1% and the worst performer is the municipality of Nikolaevo (13.9%).
Since presenting dynamics at the municipal level would be difficult, the chart above shows district level data. Despite commitments and policies aimed at reducing and eliminating early school leaving, there is no visible improvement in most districts. To the contrary – in most districts dropout rates have either been increasing, or have remained unchanged.
The distribution of dropouts between the three levels of school education allows us to determine the level of education in which the risk of dropping out is the highest. In 2015/16, most of them dropped out during the four years between the fifth and the eighth grade, which is also true for previous years. It is thus obvious that the lower secondary education level is the one in which the educational system achieves its biggest failure to keep the students. Primary and secondary education, on the other hand, have a relatively equal dropout rate.
The reasons for the large share of dropouts vary across the different educational stages. While in the early stages the main reason is “departure abroad”, "family reasons" and reluctance to attend school (which is virtually absent in primary education) are becoming more and more important during high school. The review of school dropout data does not paint a particularly positive picture. Although the problem has not become more severe in recent years, it can not be said that policies aimed at solving it have achieved any success.
A Look at "Thrace" and "Zagore" as Investment Destinations
Stara Zagora is already working on establishing its own industrial zone - "Zagore"
Stara Zagora is already working on the establishment of “Zagore” Industrial Zone. The latter is not a surprise, as it has been discussed intensely over the past year. Undoubtedly, this step is provoked by the positive development of Plovdiv, which is to a large extent the result of the positioning of “Thrace” Economic Zone as a leading investment destination in Bulgaria. The latter is particularly important – any efforts on the establishment of an industrial area should always be targeted at creating suitable conditions and positioning a settlement as an investment destination.
Plovdiv's positive experience in developing the “Thrace” Economic Zone has created expectations both for its expansion and the replication of this model in other regions. In terms of enlargement, for example, “Thrace” Economic Zone has already included the municipalities of Haskovo and Dimitrovgrad. Recently, in a presentation in the municipality of Haskovo, we answered the question why this was expected to happen. While Haskovo can hardly be positioned as a separate center (investment destination), it is relatively easy to include it in the portfolio of “Thrace” Economic Zone and to aquire certain investments that correspond to the profile of the local workforce.
Thus the first comprehensive attempt to replicate the model of Plovdiv will happen in Stara Zagora. The socio-economic profile of Stara Zagora virtually implies the decision to differentiate it as a separate investment destination and not simply as an "attachment" to the “Thrace” Economic Zone. Let's take a look at what these areas would look like, by presenting a general overview of the Plovdiv and Stara Zagora economic areas.
Our work on highlighting and analyzing the economic centers in Bulgaria allows us to separate the two economic areas by presenting the relevant center for the area and its periphery. Under “periphery”, we count these municipalities that daily “send” 10% of their workforce to the center.
The economic area of Plovdiv consists of the natural center (the municipality of Plovdiv) and its periphery includes the municipalities of Asenovgrad, Kaloyanovo, Krichim, Kuklen, Maritsa, Perushtitsa, Plovdiv, Rakovski, Rodopi, Sadovo, Saedinenie and Stamboliiski. Each of these municipalities sends daily more than 10% of its workers to the municipality of Plovdiv.
The economic area of Stara Zagora is a bit more complicated to differentiate. The reason is that there are several centers and fewer peripheral municipalities. As centers we can point out the municipalities of Stara Zagora, Kazanlak, Radnevo and Galabovo, while the municipalities of Opan, Maglizh, Pavel Banya and Nova Zagora are peripheral. It is interesting to note that Nova Zagora (because of daily labor migration to the municipality of Radnevo) is also entering this wide economic area, although it is part of another district (Sliven).
Map: The Economic Areas of Plovdiv and Stara Zagora
Source: IME * In this map the municipalities of Haskovo and Dimitrovgrad are not included in the economic area of Plovdiv.
Although it looks like the area of Stara Zagora is similar in size, the socio-economic indicators show that Plovdiv is almost twice as significant. The population in the Plovdiv area is 568 thousand people (of which 343 thousand in the municipality of Plovdiv), while in the wide area of Stara Zagora live 322 thousand people (158 thousand in the municipality of Stara Zagora).
Table: Comparing The Economic Areas of Plovdiv and Stara Zagora
(2015, billion BGN)
Investment in fixed tangible assets
(2015, million BGN)
FDI in non-financial enterprizes
(cumulative as of 31.12.2015, million BGN)
Average monthly gross salary
Source: IME * In this map the municipalities of Haskovo and Dimitrovgrad are not included in the economic area of Plovdiv.
The difference in output also corresponds to their scale - BGN 13.1 billion in the Plovdiv economic area and BGN 7.1 billion in Stara Zagora, the latter being relatively evenly distributed in the four centers of the zone (the municipalities of Stara Zagora, Kazanlak, Radnevo and Galabovo). Cummulative FDI amounted to BGN 1.4 billion in the Plovdiv area and BGN 1.1 billion in Stara Zagora. The relatively smaller difference in FDI compared to the scale of production is due to the accumulated foreign capital in Galabovo (BGN 756 million of the BGN 1.1 billion in question). The expenditures on FTA, which also account for local investments and are largely influenced by EU funds, reveal a difference similar to that in output - BGN 1.6 billion in the Plovdiv area compared to BGN 840 million in Stara Zagora.
A serious difference between the two areas is the greater employment in the mining industry in Stara Zagora – including over 5.5 thousand employed in the mining industry in the municipality of Radnevo. The employees in manufacturing are 61 thousand in the Plovdiv area (34 thousand in the municipality of Plovdiv) and 32 thousand in the Stara Zagora area (13.5 thousand in Stara Zagora). In terms of the ICT sector, the differences are even greater - 3 200 hired in the Plovdiv area compared to 650 in Stara Zagora.
Stara Zagora, however, does not give way to Plovdiv in terms of average wages. On the contrary, if the considerably higher salaries in the municipalities of Galabovo and Radnevo are taken into account, the average salary in Stara Zagora (BGN 786 per month) exceeds that in the Plovdiv area (BGN 771 per month). This should also be taken into account when positioning Stara Zagora as an investment destination, which at times may compete with Plovdiv to attract one or another foreign investor.
The main conclusions of this review are the following:
Stara Zagora can replicate the model of Plovdiv and has the conditions to impose the “Zagore” Industrial Zone as one of the main investment destinations in the country. For this purpose, however, it is necessary to think outside the municipality of Stara Zagora and to work with the other centers of the broad economic zone around it - Kazanlak, Radnevo and Galabovo;
The economic scale of the Stara Zagora area is about 50-60% of that of the Plovdiv area in terms of output, FTA investment and industrial employement. This, however, is more a reference to the population size of the area than any obstacle to its development. Stara Zagora is large enough to take in large investments, and this is the only important condition;
Stara Zagora is relatively evenly developed between the four main centers and the specific profile of the municipalities of Radnevo and Galabovo should be taken into account. The accumulated foreign investments in Galabovo are a good example to be used in promoting the area;
Stara Zagora has untapped potential to develop in the field of ICT and outsourcing, following the example of Plovdiv, which is important for the retention of highly qualified young people.
All that has been said so far only outlines the basic features of the two zones. In the coming months the IME will present an in-depth study of all economic zones in the country.
Employment and Population Density in Bulgaria and the EU
Bulgaria is the EU country where there is the largest employment gap between densely populated and sparsely populated areas.
Bulgaria is the country in the EU with the largest employment gap between densely populated and sparsely populated areas. Data from the EU-SILC annual survey show that 57.4% of the population in low-population areas (generally, villages and small towns) and 73.7% in densely populated areas (the larger cities) is employed. This difference of more than 16 percentage points is practically unique to the EU, with the main reason for it being low employment in the villages.
At the same time, the comparison with EU average data over the period 2007-2016 shows that, except for a short period between 2011 and 2012, employment in densely populated settlements in Bulgaria is higher than the EU average. This is where the labor market recovery is most clearly visible - pre-crisis employment levels have almost been reached. Employment in densely populated areas in Bulgaria is higher than in countries such as France, Italy, Austria, Spain and Poland. In the sparsely populated areas, the improvement of the situation is only visible in the last two years, but the gap with the record employment of 2008 remains close to 10 percentage points.
From the graphs above, as well as from the attached maps, it is noticeable that in many EU countries the principle "more densely populated areas - higher employment" is far from valid. The average values for the Union actually show that there is almost no difference between employment in different areas (depending on their population density). Moreover, in countries such as Austria, Belgium, Greece, France, Germany and the Netherlands there is higher employment in smaller settlements than in cities.
The reasons for this may differ. The role of agriculture is undoubtedly important. Sparsely populated areas where it forms a larger share of the local economy and is characterized by higher labor intensity, have higher employment rates (Poland is a good example in this respect). Another factor is the willingness of the local population to travel to a workplace in a different region (and the remoteness of the workplace), which is most clearly seen in the intensity of daily labor migration. In many European countries people prefer to live outside big cities, although they actually travel every day and work in them. Infrastructure connectivity and the overall social environment in small settlements are also important - features that can prevent or promote lasting emigration. As far as Bulgaria is concerned, all these factors are most likely playing a negative role in the observed employment gap across densely and sparsely populated areas. Agriculture has a relatively small share in the economy, population mobility in large parts of the country is low, and in terms of infrastructure connectivity and the social environment of small settlements there is much to be desired.
As of June 30th, 2017 a total of BGN 8.77 billion have already been utilized.
As of June 30th 2017, the total sum of the money paid on the territory of Bulgarian municipalities under the operational programs of the EU has reached 8 769 197 329 leva, or 1230 leva per capita.
The district-level data show that the most funds have been absorbed by the largest districts – the capital (3 249 million leva), Plovdiv (663 million leva), Burgas (563 million leva), Varna (399 million leva), Stara Zagora (332 million leva). The lowest amount of EU funds has been absorbed by Pernik (55 million leva), Targovishte (75 million leva), Smolyan (84 million leva), Kyustendil (85 million leva), Vidin (94 million leva).
Compared to the population, the sum of EU money is again the larges in the capital – 2455 leva per capita, followed by Gabrovo – 2365 leva per capita and Burgas – 1364 leva per capita.
The data show that among the 265 municipalities in the country the largest amount of EU funds relative to the population has been absorbed in Rila municipality – over 6000 leva per capita. On the other end Kovatchevtsi - less than 30 leve per capita. There are ten municipalities with less than 100 leva per capita, and 13 with over 3000 leva per capita.
IMPORTANT NOTE: The data has been updated on July 11th 2017, due to a technical error in the publishing of the original table. The IME team offers its apologies.
Amounts of money paid to beneficiaries of operational programs as of June 30th 2017, BGN per capita
Such stark difference quite often has an impact on the long term development on the separate municipalities. The IME has already established that there is no statistically significant relationship between the improvement of the economic condition of municipalities and the EU funding absorbed by them. In other words, event hough most districts have been steadily moving towards the mean levels of real income in the EU, it cannot be claimed that the European funds are driving this process. In the same time the differences between the economic conditions of the separate districts are deepening. This is because the rates of improvement of their economies are very different – while some are barely growing, others (Sofia, Varna and Stara Zagora) are steaming ahead. It could be speculated that European funds are actually helping the deepening of economic differences, as the most developed regions also succeed in taking in the most funds.
The largest projects financed with EU money as of now are the subway system in Sofia, parts of highways and roads and water treatment plants in different parts of the country. In the same time thousands of projects of municipal administration are focused on the making of parks, improvement of municipal property and minor repairs of buildings and infrastructure. It is usually problematic that given the limited administrative capacity and the pursuit of short-term goals (till the next local elections) municipalities are often forced to choose whether they should apply for European projects or seek real investments. Finding investors is a long-term and hard process with unclear chances of success, but it brings real development to the local economy. It often involves municipal expenditures (infrastructure building, for instance) which do not bring much income in the municipal budget given the lack of fiscal decentralization. In the same time European projects lead directly to quick and visible to the citizens (therefore, the voters) results – a nice park, for instance – and provides opportunities for additional rewards for municipal workers.