MONOGRAPHS CANDIDATE COUNTRIES VOCATIONAL … · Mihaela Jigau, Magda Balica, Ciprian Fartusnic, Irina Horga (Romanian National Observatory) Special thanks to Haralabos Fragoulis

MONOGRAPHSCANDIDATE COUNTRIESVOCATIONAL EDUCATION ANDTRAINING AND EMPLOYMENTSERVICES IN ROMANIA

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THE EUROPEAN TRAINING FOUNDATION IS THEEUROPEAN UNION’S CENTRE OF EXPERTISESUPPORTING VOCATIONAL EDUCATION AND TRAININGREFORM IN THIRD COUNTRIES IN THE CONTEXT OFTHE EU EXTERNAL RELATIONS PROGRAMMES

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VOCATIONAL EDUCATION ANDTRAINING AND EMPLOYMENTSERVICES IN ROMANIA

Prepared by: Arjen Deij and Mircea Bãdescu (European Training Foundation)

With contributions by:

Adrian Ciobanu (Euro-in Consulting, Romania)

Reinald Neubauer (International Expert)

Mihaela Jigau, Magda Balica, Ciprian Fartusnic, Irina Horga (Romanian National Observatory)

Special thanks to Haralabos Fragoulis (ETF) for providing comments during the whole exercise, and

to Franci Kluzer and Jean-Raymond Masson (ETF) for participation in the field visits

A great deal of additional information on the

European Union is available on the Internet.

It can be accessed through the Europa server

(http://europa.eu.int).

Cataloguing data can be found at the end of

this publication.

Luxembourg: Office for Official Publications of

the European Communities, 2004.

ISBN 92-9157-299-3

Reproduction is authorised, provided the

source is acknowledged.

Printed in Italy

TABLE OF CONTENTS

PREFACE 5

EXECUTIVE SUMMARY 7

1. INTRODUCTION 29

2. VOCATIONAL EDUCATION AND TRAINING AND LIFELONG LEARNING

IN THE CONTEXT OF THE NATIONAL EMPLOYMENT POLICY 35

2.1 Overview of the education and training system 35

2.2 Responsiveness of the education and training system to the needsof the labour market and the individual 53

2.3 Contribution of the education and training system to promotingsocial and labour market inclusion 64

2.4 Contribution of the education and training system to promotingentrepreneurship 67

2.5 Contribution of the education and training system to promotingequal opportunities for males and females 68

3. CAPACITY OF PUBLIC AND PRIVATE EMPLOYMENT SERVICES TO SUPPORT

THE AIMS OF NATIONAL EMPLOYMENT POLICIES 71

3.1 Organisational structure 71

3.2 Resource allocation to public employment services 75

3.3 Coverage of public employment services 83

3.4 Range and quality of services 84

3.5 Role of private employment services 86

3.6 Reform of public employment services 87

3.7 Support for implementing the European Employment Strategy 88

4. CONCLUSIONS 89

REFERENCES 93

LIST OF ACRONYMS 95

3

PREFACE

The country monograph on vocationaleducation and training and employmentservices provides a baseline for assessingthe progress of implementing the prioritiesidentified in the Joint Assessment Paper onEmployment Policy (JAP) agreed betweenthe government of Romania and theEuropean Commission. Current EUpolicies based on the Lisbon conclusions,such as the lifelong learning initiative, andthe European Employment Policy, set theframework for the analysis.

Similar studies have been prepared for theother acceding and candidate countries.The Romanian monograph was preparedin 2003 using, where possible,internationally verifiable data (fromEurostat, OECD). The latest availableadministrative data have been used whenthere were no internationally verifiable dataavailable. Two field visits took place inNovember and December 2002 toinstitutions in Bucharest and the countiesof Argeº, Vãlcea, Braºov, Prahova,Dãmbovita, and Cãlãraºi to discuss andobserve practices.

The analysis not only focuses on recentdevelopments in Romania but also uses aframework comparable to other accedingcountries, candidate countries and EUMember States. Although considerableprogress has been made in the area ofvocational education and training andemployment services, much remains to bedone to achieve the Lisbon objectives.

Therefore, the analysis focuses mainly onthe challenges that need to be addressedrather than recent achievements. Duringthe process of preparation an activeexchange of information and discussionson the findings took place withcontributions from Romanian institutions, inparticular the Ministry of Education andResearch (MoER), the National Centre forthe Development of Vocational Educationand Training, the Ministry of Labour, SocialSolidarity and Family (MoLSSF), and theNational Agency for Employment (NAE).The authors are very grateful for theircontributions.

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EXECUTIVE SUMMARY

1. THE CONTEXT

1.1 ECONOMICDEVELOPMENT

Romania is a late starter, with key reformsonly beginning as late as 1997. Since thenmost of the legal framework for a marketeconomy has been established, andRomania has continued to make progresstowards a functioning market economy.This is a condition for accession necessaryto deal with the competitive pressures ofEuropean Union membership.Restructuring is still incomplete, despiteconsiderable progress in some sectors1.

Romania experienced negative growthbetween 1997 and 2000 (the sharpestdecrease was in 1997 with a GDP annualpercentage change of -6.1%). However, inthe last two years the economy has beenexpanding at rates faster than the EUaverage and even faster than many of the

better-performing EU Member States andfuture Member States (FMS). In 2001economic performance improved with 5.7%GDP growth, and inflation showing adeclining trend. The GDP growth figuresare encouraging, but in order to achievesustainable growth, investment isnecessary to raise productivity – includingmaintaining and upgrading the country’shuman capital. In 2002, GDP per capitawas estimated at almost 5,900 PPS Euro,which represents only 25% of the EU-15average and 33% of the FMS average.Regional income disparities are sizeableand are increasing (in Bucharest the percapita income was more than double thenational average and nearly three timesabove that of the poorest regions).

The economy of Romania is still to a largeextent unbalanced in terms of thecontributions of different sectors to GDP.The proportion changed between 1996 and2001 in favour of services, at the expenseof industry and agriculture.

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Table 1: Gross domestic product for the period 1996 to 2004

1996 1997 1998 1999 2000 2001 2002 2003 [f] 2004 [f]

GDP at constant prices(annual % change)

4.0 -6.1 -4.8 -1.2 2.2 5.7 4.9 4.7 4.7

GDP per capita (PPSEuro)

6,110 5,980 6,030 5,050 5,290 5,620 5,890 [f] 6,210 6,660

GDP per capita as % ofEU-15 (PPS Euro)

33.0 31.0 30.0 24.0 23.0 24.0 25.0 [f] 26.0 26.0

Gross value added by sector

Services (NACE g to p) 37.0 41.2 49.3 51.8 51.7 48.7 49.4 m m

Industry (NACE c,d,e) 35.5 33.5 29.1 27.7 30.5 31.2 32.1 m m

Agriculture (NACE a,b) 20.6 19.6 16.0 14.9 12.4 14.7 13.0 m m

Construction (NACE f) 6.9 5.7 5.6 5.6 5.5 5.4 5.5 m m

Source: Eurostat, New Cronos database (October 2003)

[f]: Forecast; [m]: Missing data

1 European Commission, Regular report on Romania’s progress toward accession, 2002.

Agriculture’s share in total employment hasincreased in the past few years, accountingfor almost 35.2% in 2002 – the highestproportion among the FMS and well abovethe average levels of both the EU (4.0%)and the average of the 10 FMS (13.0%).By contrast, its share in GDP decreasedsubstantially to only 13% in 2002.

1.2 KEY EMPLOYMENT ANDLABOUR MARKETDEVELOPMENTS

Labour market developments in Romaniahave been quite different than in otherFMS. In 2002 the labour force participationrate of the population aged 15-64 was58.6% overall, but with sizeable differencesin gender: women – 52.8%, men – 64.5%.This latter figure was close to the averageof the 10 FMS (61.9%). The employmentrate has been falling by about 1% everyyear since 1997. The decline in urbanemployment has been reflected in the jobgrowth in agriculture. Unemployment hasnot risen sharply. However, in 2002 more

than 35% of employed people worked inagriculture2 (with 31% in industry andconstruction, and 34% in services).

The slightly higher employment rate inRomania compared to the average in theFMS is linked with the high employmentrate in agriculture, much of it based onsubsistence agriculture. The employed inthis sector include many unpaid familymembers and almost 40% of thoseemployed are females. The unemploymentrate was estimated at 8.1% in 2002, one ofthe lowest rates among the FMS. This isslightly higher then the EU average (7.6%)and far below the average for the 10 futureMember States (14.8%). However, despitethe industrial restructuring, hiddenunemployment in less productive activitiescontinues to be significant. The long-termunemployment rate in 2002 (3.8%) wasclose to the EU average (3.0%). The youthunemployment rate was 22.2%, above theEU average3. The figure is a matter ofconcern, especially if it is viewed in thecontext of the low participation rate ineducation for the same age group (41.9%).

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VOCATIONAL EDUCATION AND TRAINING AND EMPLOYMENT SERVICESIN ROMANIA

Table 2: Labour market indicators for 2002

Romania* EU-15 AC [1]

Employment rate (population aged 15-64) 58.6 64.2 56.1

Employment rate (population aged 55-64) 38.5 39.8 30.6

Employment rate, female 52.8 55.5 50.3

Unemployment rate, total (population aged 15+) 8.1 7.6 14.8

Unemployment rate, female 7.6 8.6 15.3

Unemployment rate by educational attainment [2] 6.7 6.7 m

� Lower secondary or below (ISCED 0-2) 5.0 9.5 m

� Upper secondary (ISCED 3 or 4) 6.8 6.4 m

� Tertiary (ISCED 5-6) 3.4 4.2 m

Long-term unemployment (% of labour force) 3.8 3.0 8.1

Youth unemployment rate 22.2 14.6 31.6

Youth unemployment ratio 8.3 6.9 11.9

Source: Eurostat, Statistics in Focus Theme 3 16/2003

* Data lacks comparability with previous years due to changes in definitions

[1] AC: Cyprus, Czech Rep., Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovenia, Slovak Rep.

[2]: Population aged 25-64

[m]: Missing data

2 Based on Labour Force Survey data. Note that the definition used in AMIGO (the Romanian LFS) foremployment in agriculture is based on at least 15 hours of employment in the four weeks before the survey,whereas the EU LFS definition uses one hour of employment as a basis. Thus employment in agriculturewould be even higher using the common EU definition.

3 The figures of LFS 2002 and the national census 2002 (which both point at a level of unemployment of over8%), as well as national registered data for 2002, are not fully comparable with previous years due tochanging definitions on employment in 2002 and the lack of comparability between census, LFS andregistered data (see also Regular Report 2003, p. 36). During 2002 registered data show a substantialdecrease of registered unemployed, while LFS data show a moderate increase.

As a large country, Romania alsoexperienced regional disparities in terms oflabour market performance. Regionalvariations in the unemployment rates aresizeable in Romania: 10.6% in theNorth-East region as opposed to 4.7% inIlfov-Bucharest region (2002 data). Theregions are highly heterogeneous incomposition. Therefore, regional data areonly an approximate indicator. NationalAgency for Employment’s (NAE) figures forunemployment show larger disparitiesacross the counties in 2002 (varying from15.9% in Vaslui to 3.9% in Bucharest)4.Administrative data from 2003 seem toindicate that the disparities are gettingsmaller.

1.3 DEMOGRAPHICDEVELOPMENT

The population of Romania is decreasing.The results of the 2002 census show adecrease of more than 1.13 million peopleover the last 10 years. Of the population of21.68 million people, about 20% are over60 years old. Based on the same data theactive population represents almost ninemillion people (40.7% of the totalpopulation, as opposed to 45.9% in 1992)5.

Romania’s child population is decreasingsharply, a common feature in many otherFMS. In 1992 there were almost 5.2 millionchildren aged 0-14; in 10 years the numberhas dropped by over 0.7 million. And thetrend continues as can be seen from thepopulation data. As a consequence, thedemographic pressure on schools isreducing rapidly. This creates opportunitiesto reallocate resources and make changesin terms of quality, optimisation of thenetwork and other adjustments to thesystem.

2. FOUNDATIONS FORLIFELONG LEARNING

The National Strategy for the Developmentof Pre-university Education6 in the period2001 to 2004 has strengthened policiesdirected towards networking schools withstakeholders from the wider world in orderto serve the needs of their communities. Itis also creating some preconditions forimproving assessment, transparency andquality assurance. With Law No 268/2003,from the school year 2003/04 compulsoryeducation has been extended from eight to10 years, and from the age of six (withparental consent) rather than seven.

9

Table 3: Main population statistics and indicators, 1992 and 2002

1992 2002

Total population 22,810,000 21,680,000

Female population (%) 50.8 51.2

Population aged 0-14 5,181,000 4,481,000

Population aged 6-24 (% of total population) 31.4 27.1

Population aged 65 and over (% of total population) 11.0 14.0

Population living in rural areas (%) 45.6 47.2

Population density (inhabitants/sqkm) 95.7 90.9

Active population (% of total population) 45.9 40.7

Persons in education (% of inactive population) 31.8 29.3

Persons on retirement (% of inactive population) 32.1 39.5

Population having attained tertiary education (% of total pop.) 4.2 6.3

Source: National Institute of Statistics, 2003

4 County data are based on the registered unemployed data (National Agency for Employment, Activity Report2002).

5 The National Institute for Statistics’ final results of the 2002 census.

6 The strategy is an official document of the MoER and was updated in 2002. It contains prospective planningtowards the year 2010.

School preparatory classes inkindergartens are generalised. Learningstandards common to all pupils will beintroduced. Core competenciesrecommended by the Memorandum onLifelong Learning and the Detailed WorkProgramme (computer literacy, technology,communication in widely used modernlanguages, active citizenship, criticalthinking, adaptability, teamwork, andpersonal development) will be incorporatedinto the national curriculum. The law alsointroduces a personal portfolio for allstudents. All changes should beimplemented before 2007.

The National Action Plan for Employment(NAPE) provides a set of policies to sustainlifelong learning. The NAPE emphasisesshort and medium-term measures toincrease employment, decreaseunemployment, to assist lifelong learning,and to increase labour marketeffectiveness. The goal is to adapt morerapidly to economic changes and to ensurebetter access to the labour market, whileavoiding discrimination and socialexclusion. These measures have beentranslated into legislation with the newEmployment Law No 76/2002, which wasapproved shortly before the NAPE7. Thelaw gives more importance to active labourmarket measures and strengthens theability of the Public Employment Service(PES) to use them effectively.

Although lifelong learning issues arementioned frequently, and there is even aspecial law on lifelong learning (Law No133/2000)8, policies mainly address currentproblems and needs. A broad nationalconcept of lifelong and life-wide learningand a joint vision of Romanian workforcedevelopment over the next five to 10 yearsare still lacking. The sphere of initialeducation is the domain of the Ministry ofEducation and Research (MoER). Withinthe MoER, the National Centre for theDevelopment of Vocational and TechnicalEducation (NCDVTE) deals with initialvocational training, and more precisely with

the follow-up of initial vocational trainingreform that was started with EU supportthrough the Phare VET Programme RO9405.

The Ministry of Labour, Social Solidarityand Family (MoLSSF) is responsible forpolicy issues concerning continuingvocational training (CVT). Training of theunemployed is funded from theUnemployment Fund9 and organised by theNational Agency for Employment (NAE),and is partially delivered through its owntraining centres. Although there has notbeen any formal system of accreditation,the NAE has assisted continuing trainingproviders with methodological assistance inorganising their programmes in line withlegal requirements. Thus it has performeda quality assurance function for thissegment of the training market. From 2004onwards this role is to be taken over by theNational Adult Training Board (NATB). Sofar the NATB has been functioning as atripartite policy advisory body on issues ofadult learning, but is now designated to bethe quality assurance body for all adultlearning. The NATB has recently absorbedthe Council for Occupational Standardsand Assessment (COSA). COSA was setup in the mid 1990s to supervise thedevelopment of occupational standardsand has also set up assessment centresthat can provide accreditation of priorlearning. The tasks of COSA have beenintegrated into the NATB.

Cooperation between public bodies as wellas between public bodies and socialpartners is slowly advancing at national,regional and local levels. In 2002 theMoER, MoLSSF and the NAE signed aprotocol to improve cooperation. Similaragreements have been signed between theMoER and the Ministry of Transport, andthe Ministry of Agriculture, in order toenhance the quality and relevance of initialtraining provision in these sectors.However, public bodies are driving theprocess rather than social partners.

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7 The law came into force on 1 March 2002, while the NAPE was adopted in July 2002 through GD 759.

8 The law modifies the GD 102/1998, which refers to the organisation of a system of lifelong learning throughthe educational institutions.

9 The Romanian term used translates as “Unemployment Insurance Budget”. To ensure consistency with theJAP, “Unemployment Fund” is used throughout this Monograph.

The Phare Programme has helped toestablish local and regional structures,involving social partners and assisting inthe development of employment relatedtraining and education. At the county (local)level, Local Development Committees(LDC) have been established with socialpartner involvement to advise on thedevelopment of initial training. The LDCsalso include representatives from localemployment services, and was expected toplay a role in the implementation of theAdult Training Law. However, separatetripartite evaluation bodies have beenestablished for this purpose. RegionalConsortia have been set up withrepresentatives from County SchoolInspectorates, County EmploymentAgencies, Regional Development Agenciesand social partners. The RegionalConsortia are responsible for developingRegional Education Action Plans and havea role in all human resource developmentactivities financed through the Phareprogrammes. The LDCs were set up beforethe Regional Consortia. The presidents ofthe LDCs are members of the RegionalConsortia and the link will be furtherenhanced once the Regional EducationAction Plans become the basis forplanning.

The NATB is tripartite, ensuring a voice forsocial partners in the development of adultlearning policies. But the NATB is notalways consulted in the early stages of newpolicy development, making a true tripartitedialogue difficult. Apart from the NATB, theNAE and the Social and Economic Councilare the most important tripartite bodies. Inaddition, there is a National Committee forEmployment, and both the Ministries ofEducation and Labour have tripartiteadvisory boards. Social partnership isinitiated more by government than bysocial partners themselves. Therefore, theagenda for dialogue tends to be driven bygovernment, and input from social partnersis often limited to providing a response topolicy proposals put forward by thegovernment. Bipartite dialogue is veryweak. As a rule, social partners try to lobbywith government in order to promote theirinterests.

The current ideas to establish a singlesystem of national vocational qualifications

being elaborated with the assistance of thePhare TVET Reform project RO 0108 andthe Phare CVT Twinning project, may drawthe Ministries of Education and Labourcloser together, and focus cooperationmore on future skill needs and a moreflexible and adaptable provision of trainingand education. Improved cooperation iscomplicated by different views on thebreadth of qualifications. The proposedsystem also foresees the establishment ofsectoral committees for the development ofqualifications. The involvement of socialpartners from an early stage in thedevelopment of such a system of nationalvocational qualifications is extremelyimportant and should be ensured through amore proactive approach by social partnersthemselves.

2.1 PARTICIPATION INEDUCATION ANDEDUCATIONAL ATTAINMENT

The number of people in educationdropped in the last 10 years mainly due todemographic changes. The number ofstudents enrolled at upper secondary level(ISCED 3) dropped by more than 12%between 1996 and 2001, but provisionaldata for school years 2001/02 and 2002/03show a recovery of enrolment figures,mainly due to an increase in VET. At thetertiary level of education (ISCED 5-6)there has been a constant rise in thenumber of students.

The increased number of students inhigher education (ISCED levels 5-6) wasespecially strong in the early 1990s. Whenthe demographic peak was reached,student numbers stabilised in the period1995 to 1998, but recently studentnumbers have been growing despite ademographic downturn. The increasedparticipation in higher education has beenfacilitated by the increased number ofinstitutions, including private universities;currently one third of Romanian studentsare enrolled in private universities. Thegrowth of the institutions has come to a haltby strict accreditation procedures, and as aresult a number some private universitieshave been closed down. It is not clear towhat extent this will affect the capacity toraise participation in higher education.

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The distribution between general andvocational programmes has been ratherstable in the past few years. In the schoolyear 2000/01 almost 64% of students wereenrolled in vocational programmes (atISCED level 3) and the participation rate ofstudents aged 18 (at ISCED levels 1 to 6)was 57.5%, far below the EU-15 average(71.4%)10. The changes in enrolment byprofile are small.

Romanian students are leaving theeducation system rather earlier than inother FMS and EU Member States, as canbe seen in the Table 4. The participationrate of students aged 15-24 is less than

42%, which means that almost 60% ofstudents are not in education – one of thehighest levels in Europe.

Another indicator that depicts the trend isthe early school leaving rate. In Romania23.2 % of 18-24 year-olds with lowersecondary education or less were not ineducation or training in 2003 – the highestrate among FMS with the exception ofMalta. The rate has increasedprogressively since 1997. Although morestudents are going to university today,more young people than before break offtheir education prematurely.

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1990 1995 1998 1999 2000 20010

100

200

300

400

500

600

Theoretical Industrial/Technical Agriculture/Forestry Economic/Administrative

Figure 1: Number of students by profile (thousands)

Source: National Institute for Statistics, various years

Table 4: Early school leaving rate*

1997 1998 1999 2000 2001 2002 2003

Bulgaria m m m m 20.3 21.0 22.4

Romania 19.7 19.1 21.5 22.3 21.3 23.2 23.2

EU-15 20.8 m 20.7 19.6 19.3 18.8 18.1[b]

Source: Europa Website (Structural Indicators)

* Aged 18-24 with less than upper secondary education and not in education/training

[b]: Break in series

[m]: Missing data

10 Eurostat, Statistics in Focus, Theme 3 – 13/2003.

Participation in continuing training is verylow. Based on the CVTS2 data11 theparticipation rate is only 8% for employedpeople, and the latest report from the NAEshows that only 2.5% of the unemployedgraduated from its training courses in 2002.Access to CVT is very limited for peopleliving in rural areas, which is problematicgiven that the employment figures showthat over 35% of the employed are inagriculture. It is therefore important todevelop measures to raise participation in,and improve access to, CVT in order toprepare for shifts to other sectors and meetthe changing needs of the labour market.

The educational attainment rates of thepopulation aged 25-64 are similar to theFMS average in upper secondaryeducation, but are lagging behind at tertiarylevel. Based on the 2002 (spring quarter)LFS results, 61% of the population attainedat least upper secondary education (theaverage of 10 FMS is 66% and EUaverage is 43%), and only 10% attainedthe tertiary education (the average of 10FMS was 14% while EU average was22%)12.

2.2 FINANCIAL RESOURCES

There is an inadequacy of public andprivate contributions for vocational

education and training.

The education system remainsunder-financed. The Education Law sets atarget of a minimum 4% GDP for

education. According to nationaladministrative data from the MoER thistarget has been realised during the pasttwo years. At the time of completion of thisdocument, internationally comparable datawere not yet available to confirm this13.Investment in education remains very lowin relative and real terms. In 2000 only2.9% of GDP went to education (the lowestlevel among the FMS), down from 3.4% in1999. Provisional data for 2001 and 2002show that the policy target (4% of GDP) setout in the Education Law in 1995 was stillnot achieved. As a result, Romania willface difficult choices as how to match theexpected temporary increase inparticipation due to the extension ofcompulsory education with the limitedresources allocated to education. TheMoER has, in the meantime, announcedthat the government plans to raise thetarget from 4 to 4.5% in 2004.

In the school year 2001/02 the system offinancing public pre-university educationwas further decentralised and someresponsibilities were passed to localcouncils, such as: school budgeting, andorganising and controlling budgetaryexecution, as well as the administration ofall schools. The local councils now coverthe running costs and capital expenditure(including equipment) of education units.Most funds were allocated formaintenance, repairs and electricity andheating expenses. However, the MoER isstill responsible for the largest part of thebudget (that is, salaries, scholarships,teaching materials and books).

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Table 5: Participation rates in education

(15-24 years) 2001

EU-15 57.4

Spain 56.7

Hungary 51.6

Poland 63.4

Romania 41.9

Source: Eurostat, New Cronos database



13 Data used in this document are based on internationally comparable indicators.

More than 80% of the budget goes onsalaries. In 2003, the MoER announcedplans to further accelerate decentralisationof the management of the educationsystem to give school directors and boardsmore autonomy over the budget. Thecritical success factors for thedecentralisation process are related to: thebudget available at the local levels; themechanisms for (electronic) data collectionand reporting to ensure transparency andfacilitate monitoring; the ability to reallocatetransfers to the school level; and animproved management capacity at localand national levels.

The new Employment Law No 76/2002 hasled to a variety of labour market measures.At the same time, the PES has started anextensive process of modernisation. Moreresources are available ensuring theregular payment of unemployment benefits,and a shift took place, at least in theplanning process, towards active labourmarket measures. However, a gap remainsbetween policy document preparation andimplementation. Although measures toimprove the labour supply are highlightedin policy documents, at the momentmeasures to increase labour demandthrough subsidies and credits are preferredover other active labour market measures.From the budget allocated for activemeasures in 2002, 46.4% of the fundswere allocated for job subsidies andcredits, while actual expenses amounted to81.2% of the total expenses for activelabour market measures14. In spite of thefact that Employment Law No 76/2002

widens the access to beneficiaries otherthan those registered as unemployed, rigidrequirements regarding the reintegrationupon completion of training courses haveresulted in a reduced provision ofvocational training services to unemployedpeople15. Further, as a result of thesepolicies, the total number of unemployedpeople that graduated16 decreased from23,909 in 1999 to 19,250 in 2002, in spiteof the fact that the unemployed people whosuccessfully completed the courses in2002 also included 5,831 not receivingbenefits. In 2002 the funds allocated forvocational training amounted to 4.0% of thebudget for active labour market measureswhile actual expenses amounted to 2.6%17.At the time of the completion of thismonograph the 2003 NAE activity reporthad not been published, but NAE provideda figure of 23,961 unemployed people whograduated in 2003 showing a return to the1999 level of training. There are plans for amore substantial increase in 2004 and anadaptation of the employment law, whichwould widen free access to vocationaltraining for new target groups (rurallow-earners, women after maternity leave,men after military service and people afterthe termination of disability pensionsreturning to the labour market) as well asthe introduction of less rigid placementconditions for certain types of course.

The EU is the most important donor in thefield of active labour market measures. Anumber of major Phare programmes havebeen launched and financed over the pastfew years: RICOP and Human Resource

14


Table 6: Public expenditure on education, 1996 to 2001

1996 1997 1998 1999 2000 2001

% of GDP 3.6 3.2 4.4[b] 3.4 2.9 3.3

% of total public expenditure [1] 13.5 13.0 13.2 14.3 14.0 15.6


[1]: Source: Eurostat (data for 1996-99), ETF Key Indicators database (data for 2000-01)


14 The allocated budget in the unemployment fund for active labour market measures in 2002 was ROL 3,109billion (24% of the total unemployment budget allocated), of which ROL 1,556 billion was actually spent (14%of the total spent). According to updated figures provided by the NAE, the total amount spent on active labourmarket measures in 2003 was ROL 1,563 billion, of which 85% was spent on job subsidies and credits.

15 See also Regular Report 2003, European Commission, p. 78.

16 The numbers of graduates are given annually because enrolment data are complicated by coursesoverlapping subsequent calendar years.

17 National Agency for Employment, Activity Report 2002, 2003.

Components of Phare 2000 and 2002sub-programmes for Social and EconomicCohesion. The RICOP programme waslaunched in 1999 with the aim ofsupporting the restructuring of state ownedloss-making companies. It has a budget of�9 million for employment promotionmeasures as part of a bigger package of�100 million including support foroutplacement, severance payments, publicworks, small business financing and socialresponse measures. The Phare HRD 2000programme (�18 million), which started in2002, and the Phare HRD 2002programme (�12 million) starting in 2004,provide grants to stimulate the training ofthe unemployed and employees in theregions18. Within the ‘LabourRedeployment Programme’ launched in1998, the World Bank financed variousactive employment measures as part of aloan of US$8.5 million. About US$7.7million from the loan has been disbursedfor this activity. A large part of the availablefunds (50%) were used for creatingtemporary jobs through financing publicworks, while only 7% have been allocatedto training. In 2001 the Romaniangovernment agreed (by the GO 111/2001)on a new Social Sector Developmentfinanced by the World Bank. This new loanproject (US$30 million) will specificallyfocus on the needs of poor ruralcommunities and disadvantaged groups,and use community developmentapproaches, including education andtraining (investment in social capital), as anintegrated measure.

According to CVTS2 results, in 1999Romanian enterprises invested on averageonly 0.5% of their labour costs incontinuing training courses, which is thelowest rate of all participating countries (theCzech Republic 1.9%, Hungary 1.2%; theaverage of participating countries being1.15%), as well as in EU participatingcountries (ranging from 1.2% in Portugal to3.0% in Denmark)19. Romania ranked atthe bottom of the scale regarding the totalexpenditure per employee on continuing

training courses in 1999, which amountedonly to 109 PPS Euro, compared toBulgaria (294 PPS Euro), Hungary (305PPS Euro), Germany (577 PPS Euro) andDenmark (1,169 PPS Euro)20.

There are no real financial incentives foremployers to increase their training efforts,apart from the financial support that can beobtained from the NAE for the training ofnew labour market entrants, and the PhareHRD scheme. Although the recentlypublished methodological norms of the newAdult Training Law21 mention that trainingexpenses are deductible in the calculationof taxable profit, and respectively of thetaxable revenue, in reality these norms donot seem to offer any additional benefits toemployers.

3. INITIAL VOCATIONALEDUCATION AND TRAINING

3.1 POLICY AND LEGALFRAMEWORK

Compulsory education has been extendedfrom eight to 10 years, as was already thecase before 1990. This is motivated by twoarguments: raising the attainment andparticipation levels and balancing the rapidreduction of student numbers, and aligningthe end of compulsory education with theminimum working age. The decision wastaken in spring 2003 and the extensiontook effect in September 2003. The startingage of compulsory education has changedfrom seven to six.

In 2001, the MoER adopted the Strategyfor Initial and Continuing Training ofEducators and Education Managers.Covering the period 2001 to 2004, the aimof the strategy is to give the teachingcareer a more professional status byestablishing a system of occupationalstandards based on teaching skills, and tomodernise the teacher training provision.

15

18 The contribution of the Romanian government to the Phare HRD programmes is �10.7 million.

19 The costs in the CVTS2 survey refer only to ‘courses’ as one type of continuing training, and only toenterprises providing some kind of training (11% of enterprises in Romania).


21 Government Decision 522, 8 May 2003, art. 38.

For the first time the job of educationmanager is recognised as a profession,requiring appropriate training. Modularperiodical in-service training programmeshave been developed. By GD 604/June2002 a National Training Centre forTeaching Staff in Pre-Tertiary Educationwas established as a development andquality assurance agency for teachertraining, merging two existing teachertraining centres. Since universities carryout teacher training, the training ofteachers will be affected further bychanges introduced through the Bolognaprocess. The strategy does not addresspersonnel management issues (such ascareer perspectives, motivation andremuneration) that could make theteaching profession more attractive.

3.2 RESOURCES

3.2.1 TEACHERS

Teaching is not considered a veryappealing profession given that the grosssalary level of experienced teachers isabout 20% below the national average.Nevertheless, the decline of the Romanianindustrial sector has led many engineersand foremen to opt for a teaching career. Inthe past 10 years the number of teachingstaff (teachers and foremen instructors)has grown at all levels of education (by30% in high school education and byalmost three times in post-high schooleducation). The proportion of vocationalteachers holding a teaching qualification ishigh (90%). In technical high schools it is92% and in vocational and apprenticeshipschools it is 80%.

During the last 10 years the educationsector offered stable prospects in terms ofemployment despite the decreasingnumber of students. Although the situationdiffers from school to school, in the schoolyear 2001/02 the student-teacher ratio

(based on full-time equivalents) for upperand post-secondary education was 14.9(students per teacher) for generalprogrammes and 15.2 for vocationalprogrammes22. These figures couldindicate staff surpluses in a number ofschools. Different class sizes exist betweenschools in rural and urban areas, andbetween schools with different profiles.School clustering has been a first step to amore effective use of teaching resources,but a further clustering of schools onregional rather than sectoral principlescould lead to more efficiency. The recenttrend has been to cluster schools that offera similar or identical profile. If vocationalschools that cover different relevantsectors were clustered, they would be ableto offer a wider portfolio that allows them toadapt more easily to changing labourmarket needs, as well as offering studentsa wider range of choices. This isparticularly important given the need for amuch more diversified labour force at thelocal level, following sectoral adjustment.

There is a clear divide in Romania betweenurban and rural schools. The quality of theprovision is poorer in rural schools. Thereare considerably fewer teachers with ateaching qualification in rural areas ascompared to urban areas. More than halfRomania’s young population is located inrural areas, and the total share of the ruralpopulation (currently 47%) is growing.However, far less than half of young peoplefrom rural areas enter upper secondaryeducation, and only 1% of students inhigher education come from secondaryschools in rural areas23. In order to addressthese problems the government hasadopted special measures to support ruraleducation with the aid of a World Bank loanthat will be used over the next six years24.The programme aims at improvingteaching in rural areas, the careerperspectives of rural teachers, andimproving basic education conditions. The2003 Phare VET programme will alsoinclude 50 rural schools.

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22 ETF Key Indicators 2002. However, it is difficult to obtain an exact figure as some teachers are registered asworking in both vocational and apprenticeship schools and in high schools and/or post high school units.

23 World Bank Project Appraisal Document (Rural Education Project 2003). According to MoER this figureconcerns only graduates from rural high schools (8% of all high schools).

24 The loan is US$60 million supported by an additional US$31 million from the Romanian government.

There is a need to reinforce the practicaltraining provided in enterprises in terms ofcontent, duration and the number ofplacements. Work and learning are not wellintegrated in the Romanian VET system25.Unlike most countries, practical training isusually performed in groups. Much, if notmost practical training is concentrated inschools. Instructors in technologicallaboratories, school workshops orcompanies supervise the practical trainingof students. Although they must havecompleted a post-high school education, interms of remuneration their status inschools is low and career prospects arelimited.

3.2.2 FACILITIES

Romania seems to be lagging seriouslybehind in information and communicationtechnology (ICT) equipment and Internetconnections in comparison with othercountries. This is indicative of the generalstate of equipment in schools, especiallysince ICT equipment is the first priority.Moreover, based on the MoER data, only21% of teaching staff had basic ICT skillsin 2002, only 10% of all teachers couldprove these competencies with certificates,and only 5% had in-depth ICT skills.Whereas 66.7% of existing schools inurban areas had at least one computer and30.5% were connected to Internet, thefigures for rural areas were 15.3% and only1.1% respectively.

Vocational schools are generally lacking inup-to-date equipment for practical training.Much of the equipment is out of date. Thesituation varies considerably betweenschools but has been aggravated due tothe general deterioration of links withenterprises, thus limiting the possibilitiesfor practical training outside schools.

In order to bridge the digital divide, thegovernment initiated an ambitiousprogramme for an ICT Aided EducationSystem in 2001, which promotes the use of

ICT on a large scale in the education andtraining system. After a pilot phase in2001/02, a project was launched inNovember 2002 to provide 1,100 uppersecondary schools with computer networksand to provide in-service training toteachers and administrative personnel. Thedevelopment of educational software isalso encouraged to promote the use of ICTin education, and existing materials arebeing centralised. A third phase is inpreparation that should provide the rest ofthe schools with IT solutions. Through thePhare TVET programmes (2001, 2002,2003) 172 schools will be provided withnew equipment.

3.3 STRUCTURE ANDORGANISATION

The Romanian initial training system isschool-based with two main pathways. The‘technological route’ offers generalsecondary education (and Matura) with alarge vocational component at technicalhigh schools providing a level 3qualification. More than half the students inupper secondary education study attechnical high schools – more than attheoretical high schools. Many high schoolgraduates pursue their studies in post-highschool and higher education. The‘vocational route’ prepares students for thelabour market or further study in Art andTrade Schools. The Art and Trade Schoolsare a product of a merger of the twoexisting school types: apprenticeshipschools (offering two-year VETprogrammes) and vocational schools(offering three-year vocational education).These have just been introduced with theextension of compulsory education. At theend of compulsory education (grade IX-X)graduates of Art and Trade Schools canobtain a level 1 qualification. Thisqualification enables the holder to performrelatively simple work. The level 2 and 3qualifications which are more in demand onthe labour market will still need one tothree years further study after compulsory

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25 Work and learning are perceived as different entities cf. Romanian National Observatory, Integration of Workand Learning, 2001.

education26. A level 2 qualification isawarded after grade XI, which representsat the same time the ‘classe de passage’towards level 3 for both routes (high schooland vocational). Grades XII-XIII provide alevel 3 qualification. The post high schoolsare a specialised two-year technologicalroute leading to qualifications at level 3.The foreman school is a ‘post high’ type ofschool aimed at preparing foremen forindustry and also leading to a level 3qualification. Foreman school courses areorganised at the request of companies anddo not have a steady intake every year.

The most common type of VET institutionsare cluster schools covering several schooltypes. Clustering school types with acommon sectoral focus has been a way ofoptimising the VET network. It is difficult toassess the exact extent of the clusteringprocess, given that statistics are influencedby a redefinition of independent units from1999, showing more integrated units thanin reality. The number of school units grewduring the 1990s to achieve a bettergeographical coverage. Based on datafrom the National Institute for Statistics, inthe school year 2002/03 the publicvocational school network consisted of 85independent vocational school units (GrupScolar), 814 sections (Sectii) and 665technical high-schools. In the school year2003/04 there were 79 independentvocational schools, 1,346 sections and 659technical high schools. The data sourcedby the MoER are different due to theapplication of a different definition.According to these data, in the school year2002/03 there were 844 vocational schoolsand the number has increased to 1,264school units in the school year 2003/04. In2003/04 the total number of vocationalschools has increased due to the fact thata number of gymnasia (lower secondaryeducation schools) decided to provide anadditional two-year programme followingthe extension of compulsory education.

In late autumn 2002 the planning for theinitial training system was based onsystematic extensive consultation withsocial partners, employers, representativesfrom local authorities, and the nationalemployment agency in order to respondbetter to local and regional developmentneeds. The consultation took place basedon an analysis of the socio-economiccontext in the Local DevelopmentCommittee that was set up in each county.It is not clear how this has affectedenrolment in 2003/04. It seemed thatstakeholders still had major difficultiesdistinguishing between short-term andmedium-term needs. Although planning isreceiving more attention, the impact onenrolment has been limited. Analysis ofstudent numbers and school units in themain profiles over the past five years (seeFigure 1) shows that planning adapts onlyvery slowly to changing labour marketrequirements, in spite of the changes in theimportance of different sectors. Therefore,so far planning appears to have servedmainly the interests of the existing schoolnetwork. The impact of current changes inplanning cannot yet be evaluated.

In the near future planning should bebased on Regional Education Action Plans,which are developed by the RegionalConsortia. The first Regional EducationAction Plans were being developed andfinalised in 2003 and should cover themedium-term needs until 2010. TheRegional Education Action Plans will berevised on an annual basis and shouldfeed into the work of the LDC and theplanning at school level. It could alsobecome a basis for planning continuingtraining.

With the definition of competence basedoccupational standards in the late 1990s,Romania has made an important step inlinking employment and learningspecifications. The occupational standards

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26 Romanian vocational qualifications are based on the European five-level framework as defined in CouncilDecision of 85/368/EEC. A level 1 qualification enables the holder to perform relatively simple work. A level 2qualification enables the holder to perform work which may be independent within limits of the relevanttechniques. A level 3 qualification enables the holder to perform mainly technical work which can beperformed independently and/or entail executive and coordination duties. A level 4 qualification covers ahigher level of knowledge and of capabilities (it does not generally require mastery of the scientific bases ofthe various areas concerned). Such capabilities and knowledge make it possible, in a generally autonomousor in an independent way, to assume design and/or management and/or administrative responsibilities.

have been used to define learningoutcomes (training standards) andcurricula. Assessment outcomes areintegrated in the training standards.Currently, quality assurance andassessment practices are under review inthe framework of the Phare TVET 2001programme.

The Phare RO 9405 VET reformprogramme has laid the basis for majorreforms in vocational education. This hasresulted in new curricula, fewer andbroader occupational profiles,postponement of specialisation, core skillsand new training methods. The curriculumreform process started before the standarddevelopment process, but curricula havebeen adapted to the new occupationalstandards, when these have becomeavailable. In 1999 the process of rolling outthese reforms to the initial training systemas a whole began, but given the hugedifferences between schools in terms ofresources and infrastructure, this processis far from complete. The Phare TVET2001, 2002, 2003 programmes aim todeepen the structural reforms and makethem more systemic.

Consultations on the establishment of asingle system of national vocationalqualifications to cover the provision offormal initial and continuing (vocational)education and training, and the recognitionof non-formal and informal learning, aregradually advancing. It is important that thediscussions involve a wide enough platformof stakeholders beyond the MoER andMoLSSF in order to build ownership,promote consistency, and avoid rivalry andduplication. The new system will implyfar-reaching changes in terms of qualityassurance and assessment practices, andwill affect the role of existing bodies. Therole of social partners needs to beenhanced with a stronger sectoral focus. Inorder to improve the links with general andtertiary education, that are not part of theframework, appropriate bridging andpatching arrangements should bedeveloped.

3.4 DELIVERY

As a result of the organic links betweenenterprises and schools having beenbroken, there is currently a lack ofsystematic/structured contact betweenthese entities (in terms of exchange ofinformation on skill needs, advice onadaptation of curricula, and so on).Practical placements in enterprises arenormally performed in groups under thesupervision of a teacher, and there istherefore no question of a real insertioninto the world of work. The growth of smallcompanies makes it more difficult to findplacements for students. Evidence from thefield suggests that the number of studentsfollowing practical training in enterpriseshas decreased substantially, with largediscrepancies between profiles. As analternative to practical placements someschools have developed training firms thatsimulate the experience of real enterprises.It is one of the main objectives of thecurrent VET reform process to makeschools more responsive to labour marketneeds and establish better links with localenterprises. Already 25% of the curriculumcan be determined by the schools(school-based curriculum) afterconsultation with local enterprises,students and other stakeholders. At countylevel the links with the employmentagencies have recently been improved forplanning and guidance and counsellingpurposes.

3.5 RESPONSIVENESS OFINITIAL TRAINING TO THENEEDS OF THE LABOURMARKET AND THE INDIVIDUAL

In the past, too many young people haveended up in institutions for special needseducation for physically and mentallydisadvantaged people, among whom manywere Roma who have ended up in theseplaces for social reasons. The Romaniangovernment has developed educationprogrammes for special needs anddisadvantaged groups, with particularattention to Roma. Romanian policy nowaims at integrating special needs anddisadvantaged groups in regular educationrather than separating them from the rest

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of society. Policies and specialprogrammes for this purpose started in2002. The policy principles are elaboratedand implemented with the assistance oftwo Phare programmes (RO-0104-02 andRO2002/000-586.03.01). The Phare TVETprogramme (RO-0108-01), as well as the2002 and 2003 programmes, supportregular schools in providing individualisedtraining to students from special needsgroups. The government is closing downobsolete institutions for disabled children orspecial needs that are in disrepair.

Disparities in the demand for learning arestrong. Roma youth are over-representedamong school dropouts from compulsoryeducation and underrepresented in tertiaryeducation. The government has developedseveral measures in dialogue with Romaorganisations to ensure a better integrationand participation of Roma children ineducation, as part of an integrated NationalStrategy for Improving the Conditions ofRoma. Minority coordinators in eachCounty Inspectorate monitor theparticipation of minorities in education.Poorly performing schools with manyRoma students receive additional support.Special quota for Roma students havebeen reserved in universities.

Parallel systems for guidance andcounselling have developed in theeducation system (centres for pedagogicassistance, inter-school pedagogicalassistance offices, information andguidance centres in universities) andemployment services (career informationand counselling centres), based on acommon set of 450 occupational profiles.The MoER tends to focus mostly oneducation information and the MoLSSF oncareer information, so the two spheres arerather separated. Coordination betweenthe existing bodies is unsatisfactory in spiteof joint development work in the frameworkof the World Bank financed Information andCareer Counselling programme. Provisionis growing fast and existing services arestill underused. The public is insufficientlyaware of existing counselling services, andthe initiative for using counselling servicesmust primarily come from the client.Therefore, policies currently aim atstimulating demand, keeping

trainer-counsellors up to date with lifelonglearning developments, integrating guidanceand counselling with initial and continuingeducation and training, as well as includingan inventory or appraisal of competencesin guidance and counselling provision.

4. CONTINUING VOCATIONALEDUCATION AND TRAINING

The Road Map for Romania (November2002) indicates that Romania shoulddevelop a structured vocational trainingsystem in the medium-term, in particular forcontinuing training. The issue of CVT isimportant to facilitate the transformation ofthe labour force and adapt to new andchanging needs. Economic restructuring isstill far from complete, and importantchanges in the labour market are expectedto occur during the next five to 10 years.Participation in CVT in Romania iscurrently very low. Access to CVT isparticularly restricted for people living in therural areas. More than 35% of theworkforce is employed in agriculture and itis therefore important to develop measuresto raise participation in, and improveaccess to, CVT. Through CVT theworkforce will be able to adapt to thechanging needs of the labour market.Therefore, shifts to other sectors will beeasier. There are already a range ofregulations and institutions existing inRomania that deal with CVT, but they havenot had much impact yet on participation inCVT. There is a need for: a general policyframework that could integrate the differentmeasures to promote better access;incentives for increased participation; andquality and prioritisation for thedevelopment of the CVT system. Acommon lifelong learning framework wouldlink the education system and informal andnon-formal learning.


The Adult Training Law No 375/2002confirms the GD 129/2000 on thevocational training of adults. Although theopening articles refer to lifelong learningissues, all the issues that would make

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lifelong learning forward-looking are eitherpostponed or avoided. The law refers tolifelong learning measures specific to CVT,such as guarantees of access to CVT forall employees by including a right to CVT incollective labour agreements. This wouldencourage employers to invest in humanresources, and to evaluate and recognisethe competencies acquired by non-formaland informal learning. But the statementsin the law are of a general nature. TheAdult Training Law focuses primarily on thequality of adult learning provision. The lawis only specific about the requirements forthe accreditation of adult learningproviders, this being the operational andlongest part of the law. Learning providersare to be accredited for each course mainlybased on input criteria, although referenceis made to occupational standards. Thedevelopment of a forward-looking lifelonglearning approach would require measuresto develop and stimulate an adult learningculture and adult learning opportunities inRomania, and would need to provide aframework for work-based learningapproaches, including apprenticeships andother forms of learning outside theinstitutional context, as well as clearprinciples for progression and links with theinitial education and training system. Theseissues are partially addressed in otherdocuments (for example, the Labour Code)or are in preparation, but have not yetreached an operational stage. They couldbe strengthened by bringing them into amore comprehensive framework and byensuring synergies between the differentregulations, institutions and measures.

Following the Adult Training Law, theNATB – originally set up as a tripartiteadvisory body for adult learning policies –will now focus more on regulating theprovision of CVT. The methodologicalnorms for the law were adopted in May2003 (GD 522/2003) and currently countyauthorisation committees are being set up,with representatives from MoLSSF, MoERand social partners. The NATB isdeveloping operational guidelines for theaccreditation of training providers for each

type of training course, based on nationallyrecognised occupational standards. COSAhas been integrated into the NATB (Law253/2003), bringing the standarddevelopment and assessment tasks undera common umbrella. Currently, discussionsare taking place to extend NATBresponsibilities further and give theorganisation a central role as the qualityassurance agency for all vocationaleducation and training.

The new Labour Code (Law No 53/2003)also pays special attention to training inenterprises. The new Labour Codeincludes an article stating that employersare obliged to provide employees withregular access to vocational training27.Employers need to agree on training planswith employee representatives and/or tradeunions. The sanctions that employersundergo if they fail to implement theseobligations are not clear.

An HRD strategy has been included in theNational Development Plan (NDP) for 2004to 200628. It is the outcome of an unclearprocess of consultation that did not providesufficient opportunities for a dialogue withthe private sector, social partners and theregions. However, the strategy provides aclear set of medium-term priorities for initialand continuing training. The strategy isfocusing mainly on improving access toinitial education, especially in rural areas. Itaddresses the provision of adult learning,with special attention to public provision. Itargues that raising participation in adultlearning is not opportune in a situationwhere the direction of sectoral adjustmentis still unclear. The need for strongersectoral diversification and labourproductivity gains are not addressed. Thelinks between initial education and adultlearning are limited, but the initiatives for acommon vocational qualification frameworkand register are mentioned. The Phareprogramming document for 2004 to 2006does not reflect the priorities set out in thestrategy, but demonstrates that MoER andMoLSSF still pursue their own agendas.

21

27 New Labour Code Article 190. Note that this obligation was already mentioned in Law No 2/1971, 30 yearsago.

28 Second draft NDP 2004-06, January 2004. Approved by the Romanian government through Memorandum1704/18-12-2003.

The Phare 2002 Twinning project on CVTwith the MoLSSF is expected to start earlyin 2004 and will review current adultlearning policies. Policy recommendationsshould be available during the summer of2004.

Continuing training in enterprises isunderdeveloped. According to Eurostat’ssecond Continuing Vocational TrainingSurvey (CVTS2)29 in which Romaniaparticipated in 1999, 11% of all companiesprovided CVT for their employees, laggingbehind all other participating countries30.The Romanian participation rate issubstantially less than the Czech Republic(69%), Slovenia (48%) or Hungary (37%).The Member States reported 70% or moreenterprises offering CVT, except Spain(36%) and Portugal (22%). Theparticipation rate in enterprises providingcourses31 was only 20% (for both malesand females); below the average ofparticipating countries (30%) let alone theaverage of the Member States. Thesituation is worrying, since it means thatthe skills gap between the workforce inRomania and the rest of Europe iswidening. Another indicator for participationin CVT is the Labour Force Survey, whichindicates the share of the working age

population who have been trained or werein education during the three-month surveyperiod. Again the figures for Romania arevery low. The latest report from the NAEshowed that only 2.5% of the unemployedgraduated from training in 2002.

According to several surveys analysing thesystem of continuing vocational training,supported by GTZ in 1998, and in 2001 bythe NATB and GOPA consultants32, thetraining market is not very developed.Individuals are the main customers, andmost CVT providers are not specialised ina certain domain and only the immediateneeds of the labour market appear to beserved by the subjects on offer. Concernsabout the quality of the service providerswas one of the main reasons for a new lawon adult training, but there has beeninsufficient analysis as to why (private)providers are acting this way. The answersare probably linked to the demandstructure for CVT. The NATB studies showthat the main customers are individualsand the demand from companies is stillvery modest, with the exception offoreign-owned companies and jointventures. A very recent NationalObservatory survey33 shows thatRomanian enterprises are experiencing

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Table 7: Participation rates in education or training (population aged 25-64)

1997 1998 1999 2000 2001 2002 2003

UK m m 19.2 21.1 21.7 22.3 21.3

EU-15 5.8 m 8.2 8.5 8.4 8.5 9.6[b]

Spain 4.5 4.3 5.1 5.1 4.9 5 5.8

Poland m m m m 4.8 4.3 5.0[p]

Hungary 2.9 3.3 2.9 3.1 3.0 3.3 6.0[b]

Romania 0.9 1.0 0.8 0.9 1.1 1.1 1.3


[m]: Missing data


[p]: Provisional data


30 CVTS2 results: CZ 69%, EE 63%, LV 53%, SI 48%, LT 43%, PL 39%, HU 37%, BG 28%, RO 11% and DK96%, SE 91%, NL 88%, FI 82%, IE 79%, DE 75%, AT 72%, LU 71%, BE 70%, EL 36%, PT 22%.

31 Training courses are defined as events designed solely for providing (vocational) training, which take placeaway from the place of work (that is, a training centre or classroom) during which the trainees receiveinstruction from trainers/tutors/lecturers. The main providers of CVT in Romania are enterprises (classified bysize). Note that the average number of hours per participant (42 hours) was the highest of all surveyedcountries.

32 National Adult Training Board, Adult Vocational Training in Romania – Explorative Study, 2001.

33 Romanian National Observatory, Skills Audit Survey Romania, 2003. The survey took the form of in-depthinterviews with 100 companies (75 in North-East Region and 25 in Bucharest).

new skill needs and pressure forproductivity gains, but they tend to resort topassive strategies (laying off surpluslabour, solving skill gaps with existinginternal resources) rather than promotingthe active development of existing andrecruitment of new staff. This suggests thatcompanies and enterprises may havelimited confidence in the education andtraining system to supply the skills theyrequire in their workforce. This seems to beconfirmed by the high youth unemploymentrate. Accordingly, skill developmentdecisions may be playing no role in thebusiness decisions of Romanianenterprises. If this is the case, this couldlead to low skill equilibrium in the labourforce with serious long-term consequencesfor the competitiveness of the Romanianeconomy and structural adjustment.

There are currently few incentives forcontinuing training in Romania. The AdultTraining Law mentions a VAT exemptionfor authorised providers of vocationaltraining, but it cannot be implemented inreality, and only confirms the status quo.However, the government is ready toexplore other means of stimulation, suchas fiscal facilities. The NAE provides jobsubsidies for school graduates and trainingopportunities for new job entrants, as wellas training to the unemployed. The EUfunds are probably the most importantincentive. The Phare programme’s HRDscheme is helping to prepare Romania forESF-type projects to support the training ofthe employed and unemployed at regionallevel. The 1997 HRD ‘Progress’programme was a pre-phase to theESF-type projects of the 1998, 2000 and2002 schemes. Projects funded under the2002 scheme will start early in 2004.

5. PUBLIC AND PRIVATEEMPLOYMENT SERVICES


The first National Action Plan forEmployment (NAPE) was prepared in 2002under the coordination of the MoLSSF and

the NAE, in cooperation with otherministries and organisations, and it wasadopted through the GD 759/18 of July2002. The NAPE is a complex documentand identifies a series of measures thatRomania has to implement in the short andmedium-term, with a view to increasingemployment, reducing unemployment,supporting lifelong learning, and improvingthe efficiency and flexibility of the labourmarket. The policy objectives mentioned inthe NAPE are summarised below.

� Sustained growth and more jobs shouldbe assured by developing SMEs andstimulating the development ofsub-sectors with growth potential (suchas tourism and IT).

� Combating illicit work and initiatingmeasures to reduce non-salaryworkplaces costs.

� Applying an accelerating rate ofincrease for the minimum gross wagerelative to other wages, and reducingpoverty by correlating activeemployment policies with a policy ofincreasing earned income.

� Preventing and combatingunemployment among 15-24 year-olds.

� Identifying early alternative employmentfor redundant workers in the frameworkof restructuring.

� Implementing special programmes fordisadvantaged groups on the labourmarket: young people from placementcentres, people with disabilities, theRoma, former prisoners, and so on.

� Increasing the participation rate in thelabour market by prolonging the activelife of older people.

� Adapting initial and continuingeducation to a knowledge-basedsociety.

The NAPE had been finalised before thejoint work of the MoLSSF and theEuropean Commission on the JointAssessment Paper on employmentpriorities (JAP) completed in October 2002.The measures envisaged in the NAPEcould therefore not take full account of therecommendations in the JAP. The JAPprovides a set of concrete findings, whichare summarised below.

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� Access to second chance, uppersecondary and higher education shouldbe improved, especially in rural areas.

� Participation in adult learning should beraised both in companies and for theunemployed.

� Salaries should reflect more productivityand salary increases should berestrained.

� The share of taxes and contributions onlower wages should be reduced.

� The new unemployment and socialbenefit schemes should be monitored,and links with active labour marketmeasures should be ensured.

� Active labour market measures shouldbe increased to facilitate labourtransformations, as well as beingthoroughly tested and evaluated.

� Sufficient Public Employment Service(PES) staff should be made availablelocally to carry out the early jobseekerprogramme that is foreseen in PESreform.

� The established equal opportunitiespolicies should be implemented andmonitored.

� A more active role of social partnersshould be promoted, especially throughbipartite dialogue.

� ESF preparation needs to beaccelerated and a consistent HRD andemployment strategy developed.

Although the NAPE and JAP share muchcommon ground, there are importantdistinctions between them. While the NAPEpresents a mix of general policy objectivesand inputs, the JAP seems to provide amore focused agenda aimed at moreproactive education, training andemployment policies, while reducing publicinvolvement in wage policies to ensure thatincreases will not rise to fast.

The new Employment Law (No 76/2002)contains measures that are reflected in thepolicy objectives of the NAPE. The lawlimits the period that people can receiveunemployment benefits, and lays thefoundation for a more active labour marketpolicy. Existing active measures (such asvocational training, job subsidies for hiring

graduates and soft credits to employers)have been supplemented by business startups, financial incentives for jobseekers whofind a job well before the end of the periodin which they can receive unemploymentbenefit, public works, and job subsidies forhiring jobseekers who are over 45 or singleproviders of a family income. Moreover,importantly the law extends the entitlementto active measures to all unemployedpeople, even if they are not eligible forbenefits.

The new Employment Law replaced theLaw on Social Protection andRe-integration of the Unemployed (Law No1/1991). According to that law, theMoLSSF was responsible for elaborating,implementing and monitoring policies in thefield of employment, social insurance andoccupational health and safety, includingthe administration of the UnemploymentFund. The Ministry could (and still can) fallback on an extensive network of localcounty offices for implementing its policies.Law No 1/1991 has been elaboratedseveral times. The main additions were laiddown in GD 288/1991 (on Training of theUnemployed), EO 35/1997 (on StimulationMeasures for Integration of Graduates fromEducation Institutions), and various otherEO (13/1995, 9/1997, 22/1997, 98/1998).These measures dealt with regulatingoutplacement services, active measures,and in particular severance payments –mainly for the employees of large stateenterprises (in the sectors of the defenceindustry, mining, heavy industry, chemistryand wood processing industries) and theRégie autonome, for employees who wereinvolved in large scale redundancies.Severance payments have been aparticularly important and often criticisedinstrument for restructuring in Romania(see ‘Financial resources’ below).According to the NAE, the law on theMinimum Guaranteed Income (Law No416/2001) has caused a temporaryincrease34 in the unemployment rate, sincea large group of people had to register withthe PES as jobseekers in order to beeligible for associated social benefits.

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34 National Agency for Employment, Activity Report, 2002.

5.2 STRUCTURE ANDORGANISATION

The Directorate for Labour Force Policiesin the MoLSSF is the main policymakingbody in the field of employment policies. ANational Tripartite Committee forEmployment advises the government onemployment policies.

The National Agency for Employment(NAE) is the main body responsible for theprovision of public employment servicesand implementation of labour marketpolicies. The Agency was established byLaw No 145/1998, and was initially namedthe National Agency for Employment andVocational Training (NAEVT). The NAEwas set up on the basis of existingMoLSSF structures including its county andlocal PES offices. With the EO 294/2000and GD 260/2001, the NAEVT became theNAE. The NAE is a tripartite body. Itstripartite Administration Board at centrallevel consists of 15 members, of whichemployers and trade unions make up twothirds. The Administration Board isresponsible for the overall management ofthe agency. The president of the agencyfunctions simultaneously as president ofthe Administration Board. They areappointed by the MoLSSF and also holdthe position of Secretary of State within theministry. The NAE has an extensivenetwork of county agencies, local agenciesand ‘working points’ in the country.Tripartite Consultative Councils at countyagency level became operational in mid2002, following a three-year delay due to adispute between trade unions onrepresentation in the county councils.

5.3 FINANCIAL RESOURCES

From its inception, the NAE has beenresponsible for the payment ofunemployment benefits and for thecollection of contributions to the fund. From1 January 2004 onwards this last task wastaken over by the National Agency for TaxCollection. According to Law No 145/1998the costs related to operational expenditureof the NAE, including local staff, is limitedto a maximum of 5% of total expenditure

from the approved Unemployment Fund.The new employment promotion law hasnot changed this limit. The contributions tothe Unemployment Fund decreased in theyears before 2001 and this had a negativeimpact on the resources available fordeveloping PES and active employmentpolicies. There were two main reasons forthese deficits. First, employers, especiallyfrom state-owned companies, delayed oreven did not pay their contributions to thefund. Second, severance payments foremployees affected by mass lay-offs weresystematically used to facilitaterestructuring or privatisation of state-ownedcompanies. The amounts paid for thispurpose weighed heavily on the budget. InJanuary 2001 the agency faced seriousfinancial problems, even risking not beingable to meet its obligations for payingunemployment benefit. One of the mainpriorities of the new management of theNAE after 2000 has been improving thecollection of contributions, as well asreducing expenditure in order to avoid suchsituations re-occurring.

Special arrangements were made forcompanies to pay off their debts withoutsanctions. During 2001 the UnemploymentFund started to show a positive evolution,partially due to major cuts imposed onseverance payments. The monthly capacityto collect contributions also increased (fromROL 600 billion to over ROL 1,300 billion in2001). This provided the NAE with thebasis for increasing the share of fundsallocated to financing more activemeasures. Moreover, it became possible todecrease employers’ contributions to theUnemployment Fund by 1.5% (from 5% to3.5%) from January 2003, and by anadditional 0.5% in 2004. It should be notedthat the surplus in 2002 was higher thannormal due to the fact that many publicenterprises decided to pay off their debtsfrom previous years, and that expenditurewas also lower perhaps due to the fact thatthe conditions for an effective application ofsome labour market measures (such aslabour force mobility support and training)were not yet optimal. More information onthe resources allocated to active labourmarket measures is indicated above.

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5.4 PHYSICAL RESOURCES

The NAE has an extensive network of 42County Employment Agencies (one agencyin each of the 41 Romanian counties, plusthe Bucharest Municipal Agency). CountyEmployment Agencies are responsible fora number of countywide functions (forexample, labour market statistics andanalysis, vocational guidance, organisationof training, administration of employmentpromotion programmes, provision ofsubsidised credits to enterprises,administration of the Unemployment Fund,as well as all internal administration, auditand control functions). The regularemployment services for jobseekers andemployers are provided through a networkof 174 local agencies and 84 workingpoints coordinated by county agencies.The number of local agencies and workingpoints has recently been extended toimprove the geographical coverage of theNAE. The NAE plans to have offices thatcan be reached within 45 minutes by all itsclients.

Unlike public employment services in mostacceding countries, the NAE hasdeveloped a steadily growing network of itsown training centres. The centres havebeen established in areas where theexisting provision for adult learning needsto be enhanced. Fourteen county trainingcentres are coordinated by the respectivecounty agency, serving the labour forceand employers of the respective county.Five regional training centres have beenestablished with financial support from aWorld Bank loan and are operational (inCraiova, Cluj Napoca, Ramnicu Valcea,Turnu Magurele and Calarasi), deliveringservices to several counties. An additionalregional training centre is planned to beestablished in Brasov. Moreover, the NAEplans to establish at least six additionalcounty training centres in the period 2004to 2005, bringing the total to 26 trainingcentres under its direct coordination. Thetraining centres are manned by permanentstaff members of the employment servicewho act as administrators. The training iscarried out with external collaborators. The

centres are subject to the sameaccreditation criteria and tenderprocedures as other providers bidding forpublic funds. According to the NAE thecentres have to prove their efficiency in acompetition-based environment. Thisapproach should be consistentlyimplemented in order to avoid any non-costeffective operation of the centres in thefuture, taking into account that the centresthemselves are currently partially fundedfrom the Unemployment Fund.

5.5 ACTIVE LABOUR MARKETMEASURES AND TRAINING

In accordance with Law No 76/2002, theNAE is allocating more resources to activelabour market measures than haspreviously been the case. This is in linewith the objective of a more activeemployment policy. Although the resourcesfor active labour market measures haveincreased, participation in training has not,and remains at a very low level. The totalnumber of unemployed that graduated fromtraining courses organised by the NAEdecreased from 23,909 in 1999 to 19,250in 2002, representing only 2.5% of theunemployed35. Provisional data for 2003show 21,753 unemployed graduates. Atthis moment the NAE prefers job subsidiesand credits to training as a reintegrationmeasure. Rigid requirements regardingreintegration upon completion of trainingcourses have resulted in a reducedprovision of vocational training services tothe unemployed. At present more than75% of the training activities is reserved forthe unemployed with placementguarantees (100% reintegration). Less than25% of training activities can be used forgroups that are more difficult to integrate. A60% reintegration rate is still required forthis type of course. The NAE foresees theintroduction of courses with a 30%integration rate for certain target groups in2004. It plans to increase training provisionto 40,000 unemployed people. The JAPconcluded that the funding arrangements,level of funding, and the different activelabour market measures should be

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35 Annual numbers of graduates are given because enrolment data are complicated by courses overlappingsubsequent calendar years. According to the NAPE (Pillar I), p. 71, the number of unemployed that receivedtraining was 28,178 in 2000 and 23,737 in 2001.

reviewed in order to substantially increasethe provision of training and achieve abetter balance between subsidisedemployment and other measures. Itemphasised the need to monitor theimplementation of the new framework foractive policies36. An important instrument toassess the effectiveness of active labourmarket measures is a net impactevaluation. There have been two separatenet impact evaluations on a pilot basis37

funded by the World Bank and GTZ thatshow quite a positive role of existing(re)training activities as an integrationmeasure. These types of evaluation needto be more systematically used to monitorthe effectiveness of active labour marketmeasures.

There are 50 private employment servicesregistered in Romania38. They are mainlyactive in Bucharest and offer job mediationand headhunting for better paid jobs,mediation for jobs abroad, guidance andcounselling services, and HRD consultancyor web-based job mediation. According toofficial statistics from the NAE they

provided job mediation to 6,275 peopleover the first nine months of 2003, of whom841 were placed in employment. A total of2,428 people received guidance andcounselling services from accreditedproviders of which 179 were placed inemployment. That suggests that the shareof the private employment services is stillvery small and they are not very effective.The market share of the NAE in terms ofvacancies or market penetration andplacements is however difficult todetermine. This is the result of the practiceof retroactive registration. Employers areobliged to register any vacancy with theNAE, and jobseekers also have to register.Otherwise labour contracts cannot beissued. Official statistics include jobseekerswho found employment without theimmediate assistance of the NAE in theplacement figures, and vacancies that werenever open to jobseekers from the register.Moreover, the practice of retroactiveregistration is taking up scarce staffresources that could have been allocateddirectly to clients.

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36 Joint Assessment Paper p. 37.

37 GTZ, Oneasca I., Analiza efectului net al cursurilor de formare a somerilor in Romania, 2002, Benus, J.,Impact of ALMP in Romania, The World Bank, Labour Market Policy course, Washington, March 2003.

38 The number refers only to PRES registered with the NAE; in practice there are many more private providers.

1. INTRODUCTION

The country monograph on vocationaleducation and training and employmentservices provides a baseline for theassessment of progress in implementingthe priorities identified in the JointAssessment Paper on employment policy(JAP) agreed between the government ofRomania and the European Commission.Current EU policies based on the Lisbonconclusions, such as the lifelong learninginitiative and the European EmploymentPolicy, set the framework for the analysis.Romania’s short-term employment andlabour market policy priorities aredetermined by the following challengesidentified in the JAP:

� restructuring, still far from beingfinalised, will continue to have anegative impact on employment;

� some areas/regions will be moreaffected by high and increasingemployment in agriculture;

� negative trends in labour marketparticipation and employment ingeneral, and in industry especially;

� insignificant job creation in services;� insufficient development and

contribution of the private sector toemployment;

� unemployment mainly in urban areas;� high long-term unemployment (half of

total unemployment) and youthunemployment rates, especially for lowqualified people.

Other issues presented in the documentare: low participation and high dropoutrates in upper secondary andpost-secondary level education (especiallyfor the population living in rural areas andRoma), and a wage policy which obstructsjob creation and drives people into theinformal labour market due to high socialcontributions and taxes.

Romania is a democracy with solidinstitutions, democratic laws and amarket-oriented economy. The process ofchange began against a differentbackground than in the other candidatecountries, and the country can beconsidered as a ‘late starter’ with keyreforms only beginning as late as 1997.Since then most of the legal framework fora market economy has been establishedand Romania has continued to makeprogress towards a functioning marketeconomy. The point of no return seems tohave passed some time ago. However, it

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1

takes time before national reforms takeeffect at the grass roots level, and some ofthe fundamental reforms that have beenintroduced take longer than others.Implementing new policies is much moredifficult than developing new laws andpolicies. Therefore, the EuropeanCommission stressed that the country canbe considered as a functioning marketeconomy once the good progress madecontinues decisively. A vigorous andsustained implementation of its structuralreform programme is required39.

In the last two years the economy hasbeen expanding at rates faster than the EUaverage, and even faster than many of thebetter-performing EU Member States. In2002 the economy grew by 4.9% (for thefourth year in a row) and inflation showed adeclining trend. The GDP growth figuresare encouraging, but in order to achievesustainable growth investment isnecessary to raise productivity, includingmaintaining and upgrading the country’shuman capital.

The labour market participation rate (forthose aged 15-64) reached 69.9% in 1997but has been slowly declining since to67.3% in 200140, below the EU average of69.2%. At 73.6% in 2001 the male activityrate was 3% lower in than in 1997 and wellbelow (almost 5%) the EU average of78.3%. In the same period (1997 to 2001),

the female activity rate declined from63.5% to 61.1% (EU average 60.2%). In2002 it was almost 14% below that of men.The decline in participation was particularlystrong for the younger age group (15-24)whose activity rate fell from around 45.6%to 40.0% between 1997 and 2001. Thedecline was particularly marked for the55-64 age group (from 52.5% to 48.7%). In2002 these rates were 37.4% and 37.9%,respectively41. A feature of participation inRomania is the high activity rate amongthose aged 65 and over. The participationof this age group strongly diverges from theoverall pattern with an increase in theiractivity rate, a phenomenon that can beexplained by the prominent place ofagriculture in the Romanian economy.

In 1997 the unemployment rate declinedand stabilised at around 5.3%. The riseobserved thereafter was systematic, with ahalt in 2001 (6.6%)42. In 2002 theunemployment rate was 8.1% (7.6% maleand 8.6% female)43. Unemployment isconcentrated in urban areas. In 1996 theunemployment rate was twice as high inurban areas (8.4%) compared to ruralareas (3.6%). The gap has widened since,and in 2000 the urban unemployment ratewas 11.7% compared to 2.4% in ruralareas. Unemployment rates remainrelatively low for those with the lowereducational attainments (in 2001 the ratewas 5.0% for people with lower secondary

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Table 8: Background indicators, 2002

Romania EU-15

GDP (annual % change) 4.9 1.0

GDP per capita (PPS Euro) 6,050 [f] 24,060 [f]

Inflation rate (average annual % change HICP*) 22.5 2.1

Unemployment rate (%) 8.1 7.6

Internet users per 100 inhabitants 4.5 31.4

Passenger cars per 100 inhabitants 14 50

Source: Europa Website (Structural Indicators), Eurostat (New Cronos database)

* HICP: Harmonised index of consumer prices

[f]: Forecast

39 European Commission, Regular Report on Romania’s progress toward accession, 2003.

40 European Commission, Employment in Europe, 2003. LFS results for 2002 lack comparability with previousyears due to changes in definitions.

41 Ibid.

42 Ibid.

43 Ibid.

education or below compared with 3.5% forthose with tertiary education). As in othercountries, youth unemployment is higherthan adult unemployment. In 2001unemployment among those aged 15-24stood at 17.6% compared to 5.7% for thoseaged 25-64. Long-term unemploymentremains high. In 2001, 48.6% (or 3.2% ofthe labour force aged 15 and over) hadbeen out of work for a year or more, ofwhich nearly 50% had been out of work fortwo years and more. The long-termunemployment rate, as well as the youthunemployment rate in 2002 (3.8% and18.5%, respectively), were close to the EUaverages (3.0% and 15.1%, respectively)44.Unemployment is expected to increasewhen the restructuring of the economyintensifies. Recent

MONOGRAPHS CANDIDATE COUNTRIES VOCATIONAL … · Mihaela Jigau, Magda Balica, Ciprian Fartusnic, Irina Horga (Romanian National Observatory) Special thanks to Haralabos Fragoulis

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