Reforming the Existing and Designing of New Measures for Activating Inactive Persons and Their Inclusion in the Labour Market in Bulgaria

 

Context and Objectives

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.

 

Outputs

Report with recommendations on activating the inactive (also available in Bulgarian)	Briefing notes and international workshop on public-private-partnerships and delivery of ALMPs	Outputs to strengthen capacity in Bulgaria (capacity-building)
Presentation of the main findings Analysis of the profile of the inactive in Bulgaria on the basis of administrative and survey data Assessing the institutional framework and current policies for inactive persons Developing a reform strategy for re-designing Bulgaria's activation strategy Developing recommendations to strengthen outreach to the inactive and improve the design and delivery of ALMPs and their organisational set-up.	Research notes / workshops on innovative ways of funding and delivering ALMPs : May 2021: Contracted out payment-by-result employment services, social impact bonds;  and September 2021: joint ventures; new ways to reach out to employers Note on New Ways to Reach Employers Note on Social Impact Bonds Note on Public-Private-Partnerships Study visit to an EU country with innovative approaches: background note Workshop (Oct. 2021) on public-private partnerships with several European experts Exploring options for innovative design of ALMPs in Bulgaria	Developing an  Action Plan for the National Employment Agency to activate the inactive. Designing an in-person training course as well as an online course for Employment Agency staff working with inactive persons Developing a pilot and implementation plan to promote innovative solutions to the labour market integration of the inactive in Bulgaria

 

Activities supporting the work

The work has been/will be supported by:

1. Consultations with NEA staff, Ministry staff, national and international experts as well as other stakeholders. In addition, the work benefits from dedicated interviews with the different parties involved in the activation of the inactive in selected regions.
2. Analysis of NEA individual-level data and survey data to map the profile of the inactive and NEA clients.
3. International workshop and virtual study visit to another OECD country to examine innovative ways of delivering ALMPs.
4. Workshop with NEA to prepare the pilot proposal and implementation plan to promote innovative solutions for the labour market integration of the inactive.

 

Relevance for other countries

This type of support could be relevant for other countries wishing to design better policies for the activation of the inactive. Three specific issues addressed within the project could be of interest: (i) developing tailored solutions to target the inactive, including in vulnerable population groups; (ii) using innovative approaches to fund and design ALMPs for the labour market integration of the inactive; (iii) designing training for PES counsellors working with inactive people.  While much of the project focuses on providing specific policy advice, it is also part of broader effort by the OECD and the EU to help countries improve their use of administrative data to develop evidence-based policies.

 

Contact: Activation@oecd.org