Romania’s unemployment remains at past decades’ low

Romania’s unemployment remains at past decades’ low
By bne IntelliNews June 5, 2019

The registered unemployment rate in Romania dropped by 0.6pp y/y and by 0.2pp on a monthly basis to 3.0% at the end of April, the labour office, ANOFM, announced.

Under the alternative seasonally-adjusted ILO measurement reported by the statistics office INS, it edged up marginally to 4% in the same month. But under both metrics, the unemployment rate in Romania remains close to the lowest level in past decades. 

After the 2008-2009 recession, industry made significant numbers of employees redundant to respond to reduced activity, the need for higher productivity and investments in technology. Before Romania’s accession to the European Union in 2007, the workforce did not have the option of seeking employment abroad — an alternative that explains to a large extent the low unemployment seen these days and the tight labour market.

The number of registered unemployed persons decreased by 16% y/y to 261,909. Out of them, only 49,929 (13% fewer than one year earlier) were recipients of unemployment benefits, according to ANOFM.

Compared to the ANOFM registered unemployment, not only is the ILO figure seasonally adjusted, but it also reflects something different: the share of the active population actively seeking a job (with or without ANOFM’s support). The number of unemployed people under the ILO definition was 353,855 in April, 10% lower than one year earlier. The ILO unemployment rate and the jobless population count are, as well, the lowest in the past decades — except for the month of March 2019. 

The slight increase in April indicates the active labour force’s interest in finding a job as the circumstances on the labour market improve (wages are rising). More of the active population have so far preferred to work for their households are now considering the option of formal employment. Bringing to the labour market the part of active population not interested in a formal job (particularly in rural areas) is an important resource for the labour market that lacks workforce at this moment.