Bulgaria’s labour market has experienced strong employment growth over the last decade. Employment rates are significantly higher today than before the Great Recession and the unemployment rate fell to 4.2% in 2019, reaching its lowest level in decades. Although the COVID-19 crisis has affected the Bulgarian economy, the country has so far been relatively successful in mitigating the labour market impact of the crisis. Despite the resilience of the Bulgarian labour market, challenges remain. In 2019, 27% of the working age population was inactive. This corresponds to more than 1 million individuals of working-age who were neither employed nor actively looking for employment. Some population groups are in particular risk of inactivity, including people living in rural areas, ethnic minorities, people with disabilities, and young people.
In order to facilitate the design and implementation of policies to improve the labour market integration of the inactive, Bulgaria requested technical support to the European Commission through the former Structural Reform Support Programme (now Technical Support Instrument – TSI). The OECD and the European Commission’s Directorate-General for Structural Reform Support (DG-Reform) have provided technical support to Bulgaria’s National Employment Agency (NEA), an executive agency of the Ministry of Labour and Social Policy, since July 2020 (under framework delegation agreement REFORM/IM2020/004).
The project aims to improve Bulgaria’s capacity for designing and implementing policies to increase activity rates in the country. One specific goal is that, as a result of the project, the Bulgarian authorities have a better understanding of who the inactive are and which barriers they face, and know how to strengthen policies and institutions to tackle inactivity and unemployment. Furthermore, the project aims to improve the understanding of the National Employment Agency of how innovative funding and delivery of active labour market policies can support its work. Such innovative approaches could include contracted-out services, social impact bonds, other types of public-private partnerships and new ways to reach out to employers. In addition, a further objective of the project is that Bulgaria’s National Employment Agency is in a position to develop an action plan with concrete implementation measures, thereby increasing its capacity to reach out and serve the inactive population.
