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11.11.2022Census ’21: Serious Unemployment Problems in North East

After focusing on the educational structure of the population based on the latest census data last week, today we will look at the main findings regarding labor market conditions. Since the standard issue by the National Statistical Institute (NSI) does not include detailed data for municipalities, we will concentrate on the details for the regions and the differences between age groups.

  • In line with the overall negative demographic trends, the labor force (employed and unemployed) contracted in 2021 to 2,954 thousand people, a decrease of over 350 thousand compared to a decade ago. Economically, this poses serious challenges to long-term growth and emphasizes the need for a transformation towards high-value-added production and services, given the increasing expected labor shortages.
  • Both genders show divergent dynamics. While there is a decrease of 0.4 percentage points among men to 48.5% in terms of labor force participation, there is an increase of 0.6 percentage points among women to 42.3% within the decade. This mainly reflects the changing labor market structure and the growth of employment in services. With both genders, but especially among men, the activity level is significantly below the levels of previous censuses, assuming that data from the country's socialist period is accurate. In terms of regional analysis, the highest activity is in Sofia (79%), while the lowest is in Kardzhali (54%).
  • The employment structure of the population aged 15-64 is similar, with the capital city (75%) leading, followed by Gabrovo (68%) and Varna (65%). The significant discrepancies with the estimates from the Labor Force Survey (LFS) for some regions are striking. According to the LFS, the employment rate in Veliko Tarnovo was 72% for 2021, while the census reports it as 62%, a difference of 10 percentage points. This confirms that the census significantly improves the quality of data and enhances understanding of labor market processes.
  • The manufacturing industry continues to be the main source of employment, with 474 thousand employed individuals during the census period. However, trade is catching up with 418 thousand individuals.
  • The census registers an unemployment rate of 10.1% for the population aged 15-64. These data cast doubt on the registered unemployment rates reported by the Employment Agency and the NSI's own Labor Force Survey, which indicate nearly half the rate. This difference is most likely a result of underreporting unemployment among young people aged 15-24, who have the highest share of unemployment according to the census, as well as specific questionnaire characteristics.
  • The data reaffirm that secondary education is crucial for labor market integration, as the unemployment rate among individuals with secondary education is three times lower than that among those with primary education, and four times lower than that among those with no education or only elementary education. Regionally, there is some reshuffling among the areas with the most serious unemployment problems, with Vidin remaining the leader at just over 20%, followed by Silistra and Targovishte at around 18%. This points to serious issues with qualifications and skills in Northeastern Bulgaria.

Overall, the presented data on the economic status of the population and labor force participation in the census reshuffle some commonly held perceptions. However, even more beneficial would be the breakdown at the municipal level, which would allow for the identification of local economic centers and employment magnets.

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