The employment and unemployment crisis in Bulgaria and the impact of the economic crisis

Bayanalysis -This document, produced by the World Bank, reviews the design and
implementation of activation policies for social assistance recipients and other
highly disadvantaged groups in Bulgaria. The analysis is based on a review of
literature on socio-economic development and active labor market policy in

Bulgaria and in other OECD countries, as well as data provided by the Bulgarian
National Employment Agency and the Bulgarian Agency for Social Assistance. In
in addition, the report uses evidence collected during field visits to labor offices,
social assistance offices, and municipalities in various parts of the country, and
interviews at Ministry of Labor and Social Policy. Yordan Dimitrov and Nicola
Duell are the key authors of the report, which was initially drafted in mid-2013.
The current version incorporates revisions based on comments received from the
Ministry of Labor and Social Policy on the draft report.
Since the report's drafting in 2013, some changes in the activation policies have
taken place, including, inter alia , re-introduction of psychologists and
introduction of case managers in some labor offices. With this caveat, the overall
assessment of the activation policies and the proposed policy options remain
highly relevant.

This document, prepared by the World Bank, looks at the design and
the implementation of policies for activating the recipients of social
support and other disadvantaged people in Bulgaria. The analysis is
based on a review of the literature on social policy
economic development and activation of the labor market in Bulgaria and the countries
from the OECD, as well as data provided by the Employment Agency and the Agency
for social assistance. In addition, the report uses facts gathered under
time of visits to employment offices, social assistance offices and
municipalities in different parts of the country, as well as interviews with representatives of
Ministry of Labor and Social Policy. Yordan Dimitrov and Nikola
Duel are the main authors of the report, whose first project was presented in the middle
of 2013. This document includes revisions based on the comments
received from the MLSP on the draft report.
Since the initial compilation of the report in 2013, they have emerged
some changes in activation policies, including, inter alia,
the reintroduction of psychologists and the introduction of case managers in
employment offices. With this proviso, the overall assessment of policies for
activation and the proposed policy options remain exclusive
relevant.
Page 3
Executive Summary (Bulgarian)
Page 4
2
Summary of main results
The labor market in Bulgaria in the context of the economic crisis and the main
challenges
• The labor market in Bulgaria has been affected by the economic crisis, and
cyclical unemployment has become structural unemployment.
Prolonged unemployment and the refusal of active job search despite
the desire to work (discouraged workers) are the main ones
challenges to labor market policies. In addition to these
discouraged workers, (representing less than one - sixth of
inactive people - a very high share compared to other European countries),
other unemployed groups who are not looking for work and who indicate that they do not want to
work should be a serious concern.
• The level of inactivity in Bulgaria is among the highest in the EU . Wed.
the inactive working age population (including discouraged
workers and people indicating they don’t want to work) there are a lot of young people, people
over the age of 55 and people with disabilities. About 31% of all inactive
persons were in the field of education and training in 2013; this one
percentage was among the lowest in the EU. About 14% of inactive people are old
between 15-65 years (including discouraged workers), indicate that they are with
disabilities or have health problems, and another 18% are retired.
Inactivity can be a source of poverty. Moreover, the high level
of inactivity poses a threat to the financing of
social security. That is why inactivity in general (and not only
discouraged workers) should be a major concern. Some
of those who are not actively looking for work, are nevertheless registered
as unemployed in labor offices.
• The crisis in the labor market is exacerbated by demographic changes in
the country while the young and skilled workforce emigrates and
further aggravates the discrepancy between what is sought and offered
qualification. Many of the young people who stay in Bulgaria meet
difficulties in entering the labor market; youth unemployment and
inactivity among young people is the most serious cause for concern. From
medium and long - term perspective, the aging of the workforce in
Bulgaria can be an obstacle to the dynamic development of the economy.
• There are strong regional differences in the level of
unemployment in the country. According to administrative data of the EA, the level of
Unemployment at the end of 2012 in different municipalities varied between 1.8% and 63%.
Such variations are present both during the years of growth and in the period of
crisis. During the crisis, however, the differences widened.
Page 5
3
• “Vulnerable groups in the labor market” includes groups for which it is special
difficult to enter the labor market, keep their jobs and earn
enough in a formal labor market to sustain themselves.
Typical barriers to employment are mainly related to the mismatch of
skills, low qualifications, limited or missing work experience
(professional
experience),
healthy
problems
prejudice
and
discrimination on the grounds of age and ethnicity. The vulnerable
subgroups include the long-term unemployed, the recipients
monthly cash benefits, parts of the Roma population, young people - more
specifically those with low qualifications or graduates but without
work experience, people over the age of 55 without work and people with disabilities. IN
in the context of weak labor demand, these groups are being pushed out by
groups that are supposed to perform better.
Institutions
• Vulnerable groups are served by at least five different agencies, c
depending on the type of services required: (1) The Employment Agency
provides information on job vacancies and measures in force; and
programs, provides training and information on retraining, mobility to
workplace, work abroad, psychosocial support, professional
guidance, as well as inclusion in programs and measures. ( 2) The Social Agency
assistance pays social benefits (mainly monthly cash benefits,
family allowances for children, heating allowances and allowances for the disabled),
persons entitled to receive them provide services to the poorest, the
people with disabilities and others. (3) The National Social Security Institute
pays unemployment benefits. ( 4) The Ministry of Education
is responsible for literacy courses for adults with low education while
(5)
National / territorial
expert
medical
commission
certify the disabilities and the degree of working capacity.
• Fragmentation of agencies is the main challenge for
the provision of benefits and services for labor market integration for
the unemployed and inactive in Bulgaria. Cooperation between
Agencies can be stepped up, possibly if you focus around
the needs of the specific target groups. Creating units to
working with specific target groups can be extremely valuable for
dealing with their problems.
• The Employment Agency is an executive agency under the Minister of Labor and
the social policy for the implementation of the state policy for promotion
employment, labor market protection, vocational information and
counseling, professional and motivational training of the unemployed and employed
persons, as well as for the provision of employment services.
The last major structural reform took place in 2001, when
social assistance and unemployment benefits are separated from
The Employment Agency. Public employment services continue to
reform.
Page 6
4
• Cooperation between labor offices, social directorates
support and the municipalities are focused more on the administrative
issues and the application of the regulatory framework than to inclusion
the labor market and the promotion of employment. It takes place in
the conditions for applying the principle of mutual commitment, and
the implementation of job creation schemes. Therefore
cooperation could be improved.
• Private and non-governmental organizations are still weaker
represented in labor market services . The assignment of specific
services or work with certain target groups of external contractors (c
the sphere of services on the labor market), in Bulgaria is less developed in
compared to the EU-15. The presence of non-governmental
organizations (NGOs) in the labor market increases with the acceleration of the absorption of
the funds under the Operational Program “Human Resources Development” (OP HRD).
There are some successful NGO practices that work with Roma communities, but
in general, NGOs are not very active in the labor market.
• The outsourcing of employment services to disadvantaged groups
Outsourcing can be effective if it is good
organized and well executed. In other European countries there are
numerous examples of this. The main advantage is that specialized
organizations that partner with public employment services are
effective and efficient in providing specific services to certain
target groups. However, in order to implement this approach effectively,
the crucial thing is to introduce a well-functioning, results-oriented
quality management. One of the difficulties is to determine the expected
scores for different types of vulnerable groups and bet the relevant ones
incentives.
• Building the social economy sector can strengthen
the institutional capacity of public actors , while at the same time
contribute to tackling the above difficulties. Thus the sector of
the social economy can continue to develop and provide training
and implement employment programs for disadvantaged groups.
However, building institutional capacity will take some time.
• Employers advertise only about 30% of their vacancies in
employment offices , despite having access to various services provided by
I, according to the Employment Promotion Act. The general impression is that it is
labor offices have achieved good cooperation where they already are
established good relations, but find it difficult to reach new employers.
Improving contacts with employers is important not only to increase
the share of vacancies advertised in employment offices, but also to
private employment opportunities for vulnerable groups are being actively sought.
Page 7
5
Optimizing the organization of work in the Employment Agency
• In the Bulgarian Employment Agency has some major changes and they
include the introduction of the so-called "process model of work";
introduction of an individual approach to clients; profiling of
the unemployed; developing a profile / portrait of the job seeker;
accelerated use of modern electronic platforms for the organization of
operation and provision of electronic services; as well as the use of funds
from the EU as the main source of funding for employment services.
• The introduction of a “process model of work” started at the end of 2003 and is
completed in 2005. The main features of this model are
the breakdown and optimization of the service delivery process,
the differentiated individual approach, the profiling, the service of one
counter, proactive cooperation with employers and others. Although a lot of
these characteristics to have shown a positive effect, they need
additional tuning and rethinking.
• One-stop shop has been introduced and operates in most of
the country, while the so-called "Case management" is still being developed by
employment offices. At the end of 2012, "one-stop-shop service" was introduced in
46 of the 95 employment offices. In Bulgaria, the one-stop shop approach
brings together several services provided by the EA while in other countries
this includes effective integration between social assistance and services
on employment. In addition, in Bulgaria the one-stop shop provides more
less personalized support than in other countries. Unemployed people
they may meet with three or four different intermediaries in the former
three or four visits. Employees are also expected to work on each
question, which suggests that their specialization is gradually disappearing.
The advantage is that each case can be taken over by any free employee.
However, this also means that the introduction of "case management" in the offices
on labor as a way of working lags behind, at least as of February 2013. It is possible
the latest reforms have improved the situation, although it is to be assessed
their application requires further study. The current one
approach is not very effective for activating and tracking vulnerable groups.
In order to build trust, it is very important to introduce such a system
"Case management", which allows jobseekers suffering from
numerous barriers to the labor market to be served by the same
an employment agent who will also link the jobseeker to
necessity. with other services (psychological, medical, educational,
social, etc.) This system presupposes cooperation with the directorates for
social assistance to be developed far beyond just the transmission of
files. Data from other countries show that the employees leading the case are
much more proactive in activating jobseekers.
Page 8
6
• The creation of specialized units that work with specific targets
groups can be very important for their integration into the labor market.
These special units can work in the context of institutional reform
by merging the services of labor offices and social directorates
support, as in other countries (eg Finland, Norway, Germany) or
improving cooperation between services in difficult cases (as
done in some parts of Switzerland).
• Some employment offices successfully hire Roma mediators to work on
The National Program "Activation of inactive persons". The experience of Germany and
other parties confirms that if the intermediaries are from the same group (eg from
the same ethnic minority) as the unemployed, services can be
provided more effectively, as relationships of trust are crucial.
• The number of EA employees in the crisis has been drastically reduced, and
budgetary constraints, despite a significant increase in
unemployment rate have significantly worsened the conditions for implementation
of activation policies. The insufficient number of employees turns into
serious problem.
• The workload of the employees of the Employment Agency should be reduced as
first step towards quality improvement . Reducing work
workload (through a corresponding increase in staff) should be
accompanied by increased quality and attention to the difficult to arrange
work unemployed people. Continuing training of the staff of the EA and
Improving services will have an effect if the number and quality of management
of human resources increased.
• Labor offices are not yet equipped with electronic terminals for
self-service - for independent job search, independent
registration and monthly confirmation of the status of the unemployed and job seekers
work persons. Providing more electronic services for job seekers
people who are ready to get started would help save time
labor intermediaries. This time saved should be used for
consulting, orientation and contacts with private individuals
employers.
• In addition, the existing information system has some
weaknesses that need to be corrected, such as: (i) difficulties in
the provision of regional data (both municipal and district)
level) on the main variables on the labor market; (ii) difficulties in
providing data on the target groups (including vulnerable groups) of
national and district level; (iii) difficulties in securing
reliable data, broken down by type of activity, e.g. training costs,
subsidized employment, etc.
Page 9
7
• The decision-making process regarding the allocation of
funds for programs and the definition of target groups is rather
centralized rather than decentralized in practice, although there are
there are formal procedures that take into account the declared needs
at the decentralized level. However, steps have recently been taken towards
a greater bottom-up approach to planning
and setting budgets for employment programs. Labor offices and
the regional employment services provide information to the central office
managing their needs for individual programs. Planning and
decision-making may be more evidence-based,
taking into account the assessments carried out and the changing economic
development at regional level.
• The increased absorption of European funds recently,
has helped to overcome the reduction in funding for the active
labor market policies (ALMP) from the state budget.
The European Union co-financed Operational Program “Development of
human resources ”(OP HRD) can be used for program-oriented
capacity building (creation of information system, introduction of
new work model, etc.) rather than funding routine activities. For example,
hiring HR intermediaries under the HRD OP means that these employees will
work only for the duration of the program; their work will depend to a large extent
from the program cycle. Although the HRD OP can increase the capacity of the EA, it does not
solves the problem of staff shortages in the long run. It is therefore
it is advisable to increase national funding for the active
labor market policies, and the recruitment of sufficient staff
permanent contracts and EU funding to be used for further
increase institutional capacity and expand the volume of
active labor market programs.
• For the last ten years the staff of the Social Agency
assistance in Bulgaria is reduced relatively less compared to
that of the Employment Agency. Most of the administrative work
could be gradually replaced by communication, consulting, evaluation
needs and personal support of customers. Most of the time on
social workers is dedicated to document processing, including
general documentation, eligibility checks, on-the-spot checks, payment,
refusal and suspension of social benefits or family benefits for children and others
similar. If part of this administrative work is reduced and / or increased
the number of staff will have the opportunity to build on some of the strong
parties in their work, such as closer cooperation with labor offices and
the related close contact with the client.
Page 10
8
Unemployment benefits and social benefits
• Poverty is widespread in Bulgaria and the share of people who
living in conditions of severe material deprivation is the highest in the EU.
• The scope of unemployment benefits and monthly cash benefits is
too low, respectively 14% and 6% in 2012. The right to receive
monthly cash benefit is determined by an income test. Benefits for
unemployment and cash benefits may not be enough to prevent
poverty. Those who do not receive any benefits are at risk of becoming
discouraged people. Reaching discouraged people as well as groups of
inactive who could work but do not want to work (in particular
in the case of young people who are not employed, do not study and are not trained) represents
a major problem for the implementation of an effective social protection strategy and
activation.
• The level of monthly cash benefits is very low and has not increased in
compliance with the movement of the average and minimum wage. Everything
more people do not receive benefits. Many of them probably live in
poverty, and some have become inactive.
• In addition to an income test to be entitled to a monthly cash benefit,
the applicant must be registered with the labor office at least 6
months. Thus, applying for cash benefits involves a 6-month
waiting period if the person was unemployed before applying for
financial assistance. Although the waiting period has been reduced from the previous 9
months to 6 months, this requirement contradicts the logic of the social
assistance, namely to be a rescue network of last resort.
• The principle of mutual commitment when granting
the monthly cash benefit is applied quite strictly compared to the others
European countries: everyone who receives a monthly cash benefit pays
part-time community service (14 days, 4 hours per day).
This condition was aggravated in April 2010, when the number of working days was
increased from 5 to 14 days. There is no compensation for the participants. This happened on one
condition stimulates the employment of assisted persons in
working age and limits the risk of deepening dependence on
social benefits, but on the other hand it could reduce the incentive to
apply for cash benefits, assuming that people prefer to
work in the informal economy sector. Besides, there are very few
evidence that this condition improves employability.
It is advisable to reduce the number of days when you have to work without
payment in order to comply with the principle of mutual commitment.
• Monthly cash benefits must include tax-free income.
The existing minimum insurance threshold assumes a relatively high one
(marginal) tax-insurance burden for low-paid jobs,
which prevents the start of official work and encourages inclusion in
the informal economy.
Page 11
9
• A serious obstacle to the employment of those receiving monthly cash benefits is
illiteracy and low education. Binding the right to
receiving family benefits for children with regular school attendance
Classes can help prevent problems related to
literacy in the next generation. However, more needs to be done
efforts to effectively integrate vulnerable groups, such as Roma in
education system. Mixed classes, including children from Roma and from
non-Roma origin is likely to lead to better results in terms of
integration, although the application of this model would be difficult in practice.
• Compared to other European countries, in Bulgaria the net level of
Unemployment benefit replacement is in the bottom third.
In 2010, the level of unemployment benefit replacement was
approximately 30% of the average wage and 80% of
the minimum wage. The period of payment of benefits is
between 4 months minimum period (for the duration of the insurance
experience of 3 years) and 12 months (with at least 25 years of insurance experience). IN
compared to other European countries, the period of payment of benefits
unemployment is relatively short when it comes to the minimum
period and average when we talk about the maximum period.
• Compared to other countries, the conditions for payment of benefits for
unemployment are relatively severe. Between 2007 and 2010, the compensation for
long-term unemployment was paid for a period not exceeding 30 months.
This provision was repealed in 2011 due to the growing share of
long-term unemployed due to the economic crisis.
• The right to a disability pension is granted on the basis of medical
examination and is granted to persons with an established degree of reduction
efficiency 50 and over 50%. Disability is established through expertise
of permanent incapacity for work by expert medical commissions (TEMC and NEMC)
and includes recommendations on the type of work that the person can perform in
depending on the type and degree of damage (including the degree of
incapacity for work below 50%). This is a good prerequisite for activating
people with disabilities and employment agencies should use proactively
this information.
Organization and provision of social and employment services
• Unemployed persons must register with employment offices in order to have
the right to receive benefits and services. According to the changes in the law from
2011, registration must be done within seven days. This should speed up
the activation process and shorten the period of unemployment, at least for those who
are fit for employment and ready for the labor market. But like
take into account the large number of dismissed / laid off persons and the large number of employees
workload of employees in labor offices, this becomes formal
administrative procedure. Electronic registration would release
certain time of the employees of the EA for conducting interviews.
Page 12
10
• Applicants for monthly cash benefits must also
register with the employment offices in order to be entitled to the assistance . However, it is growing
the number of unemployed and discouraged persons who are not entitled to either
unemployment benefits or monthly benefits. They have no incentive to
registered in BT and there is a danger that the activation measures may not
reach some of them.
• According to the Employment Promotion Act, the EA must offer a broad
range of services for the unemployed: to provide information and advice to
jobseekers and employers; psychosocial counseling of
job seekers; targeting appropriate employment programs and measures;
orientation to professional and motivational training; and targeting and
support for starting a job, including working abroad.
• Bulgaria is among the countries that allocate the lowest percentage of GDP to
the provision of activation services (and administration), at least until 2010.
Countries that have turned their attention to an activation strategy set aside
much higher percentage of GDP for services - even countries with a lower level of
unemployment. According to data from an impact assessment study conducted by
Kotseva and Tsvetkov in 2010, the people with the highest barriers to employment (such as
older people with low education) have the greatest benefit of this type
services. The results of the study also show that the most vulnerable groups would
could receive more intensive services.
• A profiling system is applied in the EA. Profiling the unemployed
persons is made during the first registration visit on the basis of
a short questionnaire asking about their intentions and activities to search for
work, as well as the appropriate opportunities that may be available to them
offered. Jobseekers are divided into three phases, based on
the likelihood of being employed. This is an individual approach,
intended to provide the most appropriate assistance
with the needs of the respective unemployed person.
• In many countries, profiling is usually used for early
identifying those who have the greatest need for
intensive care and "expert" services, while jobseekers who
are willing to start work receive much less help, so
limited resources can be used in the most efficient way. The data
from other European and OECD countries suggest that the good
statistical profiling model is an effective way to target
jobseekers when it contains specific data on specific factors
such as (duration of unemployment, previous work experience and education),
but also for the so-called "Soft" factors (such as motivation, health
and social networks, as well as regional labor market conditions). Furthermore
for the quality of the model is crucial the presence of longitudinal administrative
data.
Page 13
11
• The introduction of individual action plans (IAPs) aims to
speed up the activation process and better target appropriate measures. IPD
are written documents signed by the EA and jobseekers who
based on an assessment of personal circumstances, abilities and professional
skills of the person, determine the type and scope of assistance required and
actions to be taken by both the EA and the EA
the unemployed. In some countries, the IPA for the unemployed person is drawn up after
a certain period of unemployment, while other countries use this
tool only for certain target groups such as young people and older people
workers. Unlike many other countries, it seems in Bulgaria
the individual action plan is not a formal and strategic plan,
developed by the employment agent and the jobseeker who designates
planned
activities,
a
looks like
more
on
observation
on
measures / interventions. In Bulgaria, the IPD is signed by all unemployed,
job seekers and labor mediators; the responsibility for implementation is
distributed between the two parties. In practice, the working visits were illuminating
how the time constraint of labor mediators seems to affect
the type of joint actions to be defined.
• The frequency of consultation with the employment agency and search interviews
at work is determined by the phase in which the unemployed person is placed. As
given the small number of employees, it would be useful to insist
individual interviews and job search monitoring to be conducted
mainly with vulnerable groups, while groups involving individuals who are ready for
labor market to make more use of electronic services.
• The success of the activation strategy depends on its timeliness and
the intensity of the follow-up work. It was found that early
intervention is an important factor and that is why many Member States are
shortened the timeframe in which the IPA should be developed. Data from other European
parties show that intensive follow-up with frequent individual
interviews, as well as follow-up work with young people with disabilities and others
disadvantaged groups, after getting a job, increases
the effectiveness of the activation strategy.
• In Bulgaria, the activation process does not focus on the more intensive one
targeting and follow-up work with disadvantaged groups.
On the contrary, it seems that the recipients of monthly cash benefits and others
vulnerable groups (who are often not entitled to any assistance) are forgotten by
in terms of activation, though, as will be shown in the next
section, one of the most important measures in the labor market to focus on
recipients of monthly benefits and the long-term unemployed.
• When planning an approach to activating people with disabilities, you should
some important issues are addressed. First, it is extremely important to
redefines the end goal of the activation process. The quest to seek
only permanent jobs may not be suitable for this target group.
Participants and employers could also be satisfied with temporary jobs
places or part - time work after the end of the program, or with
Page 14
12
training, social services or socialization. The second crucial point is that
it may be appropriate for disability programs to be run by
agencies that are better prepared to work with this group. A third consideration is that
almost 63% of people aged between 15 and 64 with at least one permanent
impairments are inactive. For this reason, it would be useful to focus on
the efforts of ALMPs not only to the unemployed with disabilities but also to the inactive
persons with disabilities.
Active labor market programs (ALMPs)
• Active labor market policies in recent years are
has undergone various changes in its strategic orientation . First,
in 2010 the government decided to reduce the national fixation for
active labor market policies almost three times and freeze the budget for
the following years. In addition, since the beginning of 2011 the official policy
of "activation" focuses on learning, at the expense of creating
work places. Finally, priority is given to European funds such as
financial instrument. At present, ALMPs to a very large extent
depend on the availability and absorption of EU funding.
• The ALMP budget as a percentage of GDP is among the smallest in the EU. As
given the funds set aside, activation is unlikely to be achieved
and avoiding long-term unemployment. In 2012, almost 40,000 people were
participated in national programs and measures to promote employment. From
Since 2005, the number of participants in national programs and measures significantly
decreased, with the sharpest decline between 2009 and 2010.
• In general, the programs and measures provided by the Bulgarians
active labor market policies are quite comprehensive and in theory are
well developed. Many of the existing tools, however, do not
apply or have only a few participants. One example of this is a program
which is aimed at people of pre-retirement age - National Program
"Retirement assistance", but 47 people took part in it in 2012. However,
this low level of implementation does not call into question the need for and
the quality of this program, but justifies the potential reduction in the number of
active labor market measures and programs implemented in
a certain period of time.
• Focusing on a smaller, well-chosen number of measures and programs can
to increase overall efficiency. The number of ALMPs seems too large,
while the number of participants in many of the programs is too small. This makes
programs ineffective from an administrative point of view. When programs
are too small, they do not change anything and the general opinion that AMPT are not
useful, is solidified.
Page 15
13
• Unlike all other European countries, Bulgaria has the largest
part of ALMPs financed from the national budget are schemes for
direct job creation (70% in 2011). In 2012, the measures for
trainings funded under the OP RHN have been increased. Measures to disclose
jobs are activities of public benefit and are usually
perform in the context of major structural weaknesses in the regional market of
labor (eg in Germany, after the transition) or for the integration of groups in
disadvantaged who have little chance of finding a job
the primary labor market. In Bulgaria, participants in these programs receive
employment contract and minimum wage. This turns out to be positive
effect on motivation and self-esteem,
therefore increases
employability and is more likely to help people to
overcome poverty.
• The main job creation scheme is the National Program
"From social benefits to employment", introduced in 2003.
This program aims to ensure employment and social integration of
unemployed persons who receive monthly cash benefits by disclosing
jobs for the implementation of public benefit activities. At least 70%
of the participants in the program must be persons who receive monthly
cash benefits. The persons included in the program conclude employment contracts and
receive a minimum wage, social and health insurance.
Both full-time and part-time work are provided
time. The program finances salaries and social security contributions until
the employer pays for materials and equipment. In addition, the program
pays scholarships, transportation costs, accommodation costs and fees for
relevant training or literacy courses. About two-thirds of
The activities carried out under the program in the last few years are from
the category of "urgent actions", such as road maintenance in winter.
This program is implemented by the EA in coordination with the directorates "Social
support ”(exchange of files) and employers in the public sector (often
municipalities). Most of the projects are implemented by the municipalities.
The training is organized by the labor offices, while the Ministry of
education is responsible for literacy courses.
• The evaluation of the program "From social benefits to employment"
shows mixed results, as was the case with similar programs in
other countries . The main disadvantages of the program are related to the fact that
subsidized jobs displace those jobs that would be
created without it. To avoid this, the program should be
included private employers as well as social enterprises. Furthermore,
the implementation of the program does not seem to be well targeted; in 2012 only
about 30% of the participants are long-term unemployed. Almost
half of the participants re-register with the employment offices after
completion of the measure and it can be assumed that many are involved in the measure
after re - registration (this may explain the low share of long - term
unemployed persons). The re-employment of the same persons must be
Page 16
14
avoided. Finally, since its introduction, the number of participants has been drastic
dropped.
• Some of the programs that provide subsidized employment require
employers who receive subsidies to continue to provide
work of the persons included in the program for a certain period after the end of
the program. This is important to avoid the effect of substitution and displacement.
Wage subsidies compensate for the temporary inconvenience of the low
productivity of people who are difficult to find a job. Therefore,
this measure is suitable for the integration of unemployed persons with (temporary)
barriers to employment.
• Incentives for employment can also be useful for overcoming
cyclical reduced labor demand. As APPT can be
introduce declining wage subsidies. Employers can
receive declining wage subsidies to [continue to] hire
participants in the programs and after their completion, for a limited period of
time.
• Private employers need to be more actively involved in programs
for employment. Proactive search for employers is a key strategy for
arranging the work of vulnerable groups, along with ready-to-hire groups
unemployed persons. It may be useful to draw up a guide for employers,
who employ very disadvantaged groups in the labor market.
• Support for the employment of people with disabilities needs to be strengthened.
In 1990, specialized enterprises employed 33,000 people in the village
disabilities. In September 2012, only 2,500 people with disabilities were employed in
specialized enterprises.
• In general, it is useful to combine training and work experience. For
it is preferable to conduct training in sectors and professions for which
demand is growing . Offering professional qualification courses
should be based on an analysis of the regional labor market. Must be
consult employers about their needs and they should
be invited to demonstrate their commitment by providing seats
for training related to permanent jobs.
• The Development Program is a successful example of combining training and
job creation aimed at people who have been laid off
as a result of the restructuring of the enterprise. The maximum
program duration is 12 months. Priority groups under the program
are the young unemployed up to the age of 29, the older workers and
the long-term unemployed. The number of persons included in the program is
increased tremendously in the period 2010 - 2012. The number of unemployed included
in training, has quadrupled and in 2012 reached 58,561 people.
About 95% of the training and employment combinations are related to jobs in
the public sector.
Page 17
15
• The national program for literacy and qualification of Roma is great
an example of a training program for disadvantaged people. IN
In the period 2007-2011, about 2,201 unemployed persons were trained. This is important
project, given the serious literacy problem; the number of persons involved,
however, it is still very low.
• The introduction of the voucher training system has been facilitated
administrative procedures and has accelerated the use of programs for
training. During the period 2009-2012, 78,636 unemployed persons passed
training programs and many have been hired. In 2010 and 2011 the share
of the long - term unemployed who have participated in training programs through
vouchers is 17.7% and 19.5% respectively. It is not known how many of the vouchers received
for training are persons who receive monthly cash benefits. It is debatable
to what extent the voucher system is suitable for the most vulnerable groups, as in
it assumes that the jobseeker is proactive. One very important thing
The advantage of the system is that it ensures that the training is certified.
• Conducting external evaluations of training programs and
literacy would be very useful to improve compliance
between the skills sought and offered.
• Although young people are the group most affected by the crisis in 2009,
their number in labor market programs and measures financed by
the state budget has shrunk. However, support for young people with
disability and social problems during the crisis has not decreased, and
the relevant target programs have received the planned funding from
the state budget.
• At the same time, in the context of the more limited budget for ALMPs, the fight against
youth unemployment has priority. This is reflected in the national
First Job Agreement between the Government of the Republic of Bulgaria and
representatives of employers' organizations and trade unions, signed in June
2012, in implementation of the national initiative "Work for young people in
Bulgaria ”, 2012-2013. This agreement aims to create new ones
opportunities for young people in the labor market and to facilitate the transition between
training and employment. In 2011 a National Program for
youth (2011-2015). It is expected that four projects will be implemented on it
subprograms: development of the network of youth information and counseling
centers, national youth initiatives and campaigns, youth
volunteering and participation in volunteer initiatives, development and recognition
of youth work.
Page 18
16
• The effectiveness of activation policies depends on the availability of and
the quality of the options that are offered to young people as they
they want to be convinced of the effectiveness of the planned activities. The experience of others
countries shows that vocational training should be sufficient
flexible to integrate disadvantaged and young people
people with more limited abilities without creating a separate system,
which risks stigmatizing them. In addition, experience from other countries shows
also that the success of activation strategies depends on the supply of
individual-oriented approach - for consulting, preparation of
individual action plans, mentoring and case management.
Young people need to be involved in finding a solution.
Page 19
Executive Summary (English)
Page 20
1
Summary of main results
The Bulgarian labor market in the context of the economic crisis and key challenges
• The Bulgarian labor market has suffered from the economic crisis, and cyclical
unemployment has turned into structural unemployment.
Long-term
unemployment and the giving up of searching actively for a job despite the desire to
work (discouraged workersa) represent major challenges for labor market policies. In
addition to these discouraged workers (who represent less than one sixth of the
inactives - a very high share as compared to other European countries), other groups
out of work who are not searching for a job and who indicate that they don’t want to
work should give rise to major concern.
• The inactivity rate in Bulgaria is among the highest within the EU. Among the
inactive population in workable age (including discouraged workers and people
indicating that they don’t want to work) there are many young people, people above the
age of 55 years and people with disabilities. About 31% of all inactives were in
education and training in 2013; this rate was among the lowest in the EU. About 14% of
the inactives aged between 15-65 (including discouraged workers) indicate that they
are disabled or have health problems, and another 18% are retired. Inactivity can be a
source of poverty. Furthermore, a high level of inactivity poses a threat to the financing of
social security systems. Therefore, inactivity in general (and not only discouraged
workers) should be a major matter of concern. Some of those who are not active
looking for a job are nevertheless registered as unemployed with labor offices.
• The labor market crisis is amplified by demographic change as the young and
skilled labor force emigrates, aggravating a skills mismatch. Many of those young
people who stay in Bulgaria have difficulties entering the labor market; youth
unemployment and inactivity of young people are most worrying concerns. In a medium
and long-term view, the aging of the Bulgarian labor force may represent an obstacle
for dynamic economic development.
• There are strong regional disparities in unemployment rates across the country.
According to administrative data, the unemployment rate at the end of 2012, varied
between 1.8% and 63% in different municipalities. These variations were present
during growth, as well as during the crisis years. However, the differences have
increased during the crisis.
• “Vulnerable groups in the labor market” encompass those groups which face
particularly high barriers to enter the labor market and to remain employed and
earn sufficiently in the formal labor market to sustain their lives . Typical
employment barriers are linked mainly to skills mismatch, low skills level, limited or
lacking work experience, health problems, prejudices and discrimination against age
and ethnic groups. Vulnerable subgroups encompass long-term unemployed, General
Minimum Income (GMI) recipients, parts of the Roma population, young people - in
particularly with low skills or young graduates lacking work experience, people above the
age of 55 out of work and people with disabilities. In a context of weak labor demand
these groups are crowded-out by groups who are perceived to be better performing.
Page 21
2
Institutional setting
• Vulnerable groups are served by up to five different agencies, depending on the
type of services required : The (1) public employment service provides information
on vacancies and available measures and programs, delivers trainings, and information
on prequalification, commuting, working abroad, psychological support, professional
orientation, as well as placement in programs and measures. The (2) social assistance
agency pays benefits (mainly social assistance, family related, energy related and health
related benefits) to those eligible, provides services to the poorest, to people with
disabilities and others. The (3) National Security Institute pays unemployment
benefits. The (4) Ministry of Education is responsible for literacy courses for adults
with low education, while the (5) National / Territorial Expert Medical Commissions
certificates of disabilities and work abilities.
• Fragmentation of agencies is a major challenge for the delivery of benefits and
labor market integration services to Bulgaria's unemployed and inactive populations.
Agencies' collaboration could be enhanced, possibly around the needs of a specific target
groups . Setting up units working with specific target groups could be extremely valuable
to tackle the issues of these groups.
• The Bulgarian National Employment Agency is an executing agency to the Minister
of Labor and Social Policy for the implementation of state policy on employment
promotion, protection of the labor market, vocational information and consultation,
vocational and motivational training of unemployed and employed persons, as well as
for provision of job placement intermediation services. The last major structural reform
was fulfilled in 2001 when social assistance and insurance services were separated from
the Employment Agency. Public employment services are still under reform.
• Cooperation between the labor offices, the Social Assistance directorates and
municipalities is focused mainly on administrative functions and rule
enforcement, rather than on labor market inclusion and promotion. It takes place
in the context of implementing the mutual obligation principle and the implementation
of job creation schemes. Thus, cooperation could be improved.
• Private and non-governmental actors are still less represented in the labor
market . Outsourcing and subcontracting of specific services or target groups are
underdeveloped in the Bulgarian labor market service space, compared to EU-15
countries. The presence of non-governmental organizations (NGOs) in the labor market
is increasing with the acceleration of EU Operational Program for Human Resource
Development (OPHRDP) fund absorption. There are some successful practices of NGOs
working in Roma communities, but generally NGOs are not very active in the labor
market.
Page 22
3
• Outsourcing employment services for disadvantaged groups can be efficient if
well organized and well implemented. There are numerous examples in other
European countries. The main advantage is that specialized partnering organizations
with Public Employment Services (PES) are more effective and efficient in providing
specific services for certain target groups. However, in order to implement this
approach in an efficient way, it is crucial to introduce well working result-oriented
quality management. One difficulty involves determining the expected results for
different types of vulnerable groups and setting incentives accordingly.
• The building-up of a social economy sector could strengthen the institutional
capacity of public actors, while tackling the above mentioned difficulties. Thus, the
social enterprise sector could be developed further for implementation of training and
employment programs for disadvantaged groups. However, establishing institutional
capacity will take time.
• Employers announce only about 30 percent of vacant jobs to employment offices,
despite the fact that they have access to various services provided by public
employment services according to the Employment Promotion Act. The overall
impression is that labor offices are cooperating well in cases of already established
relationships, but are facing difficulties with outreaching new employers. Improving
contacts with employers is not only important in order to increase the share of
vacancies that are announced to the labor offices, but also in order to pro-actively
search for job opportunities in the private sector for vulnerable groups.
Optimizing work organization within the National Employment Agency
• Some major changes are occurring at the Bulgarian National Employment Agency
and they include the introduction of the so-called process model of work; the initiation
of the individual approach to clients; profiling for prioritisation of the unemployed;
development of jobseekers profile / portrait; accelerated use of modern electronic
platforms for work organization and provision of electronic services; and the utilization
of EU funds as a main source of funding for employment services.
• The introduction of the “process model of work” began in late 2003 and was
completed in 2005. The main traits of this model are the breakdown and optimization
of servicing processes, differentiated individual approach, profiling, one-stop offices,
proactive cooperation with employers and others. Although many of these
characteristics have shown positive effects they need further tuning and
reconsideration.
• “One-stop shops” have been established and are operating across the country,
while case management is still under development in the Labor Offices. By the
end of 2012 one stop shops were operating in 46 of the 95 labor bureaus. In Bulgaria,
the “one-stop-shop” approach combines only services that are provided by the PES,
while in other countries it includes synergy between social assistance and employment
services. Furthermore, in Bulgaria, the one-stop office provides a less personalized
Page 23
4
support than in other countries. Unemployed people can meet three or four different
mediators during the first three to four meetings. Also, staff members are expected to
treat all issues, implying the dissolving of staff specializations. The advantage is that
each case can be taken over by any available staff member. However, this also implies
that case management in Labor Offices has been “underdeveloped”, at least until
February 2013. More recent reforms might have improved the situation although
further research would be necessary to assess their implementation. This approach is
not very effective in activating and following-up with vulnerable groups. In order to
build trust, it is critical to set up a case management system that allows jobseekers with
multiple employment barriers to be followed by the same employment office counselor,
who would also link the jobseeker to other services (psychological, medical, educational,
social, etc.), if needed. This system implies a cooperation with social assistance offices
that goes far beyond file-sharing. International evidence indicates that case workers
tend to be more pro-active in activating jobseekers.
• The setting-up of specialized units working with specific target groups could be
critical for their integration in the labor market . These special units could operate
in the context of an institutional reform by merging services of the labor offices and the
social assistance directorate, as done in other countries (eg Finland, Norway, Germany)
or by improving institutional cooperation for difficult cases (as has been done in some
regions in Switzerland).
• Some labor offices successfully employ Roma mediators , who are hired under the
National Program “Activate Inactive Persons”. Experience from Germany and other
countries confirm that if counselors belong to the same group (eg ethnic minority) as
the unemployed, the services can be delivered in a more effective way, as a trustful
relationship may be crucial.
• PES-Staff numbers were drastically reduced in the context of the crisis and
budgetary constraints despite a strong rise in unemployment , deteriorating
considerably the conditions for activation policies . Understaffing has become a serious
problem.
• Caseload of PES staff should be reduced in an initial step toward quality
improvement. A reduction in caseloads (through corresponding increase in staff) must
be accompanied by increased quality and attention to hard-to-place unemployed.
Further training of PES staff and improvements of services will only be effective if
number and management quality of human resources are improved.
• Labor offices are not yet equipped with electronic self-service terminals for job-
search, self-registration and monthly confirmation for the unemployed and jobseekers .
Supply of more e-services for ready-to-place jobseekers would help to save PES
counselors time. This saved time should be used for counseling, guidance and
contacting private employers.
Page 24
5
• Furthermore, the existing information system has some weaknesses that need to
be improved, such as: (i) difficulties in providing regional data
district level) on key labor market variables; (ii) difficulties in providing data for target
groups (including vulnerable groups) at the national and regional level and; (iii)
difficulties in providing reliable data broken down by type of activities eg training
expenses, subsidized employment, etc.
• The decision making process in program allocation and targeting is more
centralized than decentralized in the practice, although formal procedures taking
the declared needs of the decentralized level into account are in place However,
there have been some recent steps towards a more bottom-up approach to planning
and budgeting of the employment programs. Labor offices and Regional
Employment Services provide information to headquarters about their program
needs. Planning and decision making could be more evidence-based, by taking
evaluation studies and changing economic development at regional level into account.
• The recent high absorption of European Union (EU) funds has helped to overcome
cuts in the national budget for Active Labor Market Policies (ALMPs). The EU
funded Operational Program Human Resources Development (OPHRD) can be used
for program-oriented capacity building (creating information system, introduction of
new model of operations, etc.), but not to finance routine activities. For instance, hiring
labor brokers under OPHRD means that these staff will work only for the period of the
program; their employment is highly dependent on the program cycle. While the OPHRD
may increase PES capacity, it does not resolve understaffing issues in the longer-term. It
is therefore recommended to increase national budget for active labor market policies
as well as for employing sufficient staff on a permanent basis and to make use of EU
funding for further improving institutional capacity and extending the volume of active
labor market programs.
• The Social Assistance Agency in Bulgaria has suffered comparatively smaller staff
reduction over the last ten years compared to the Employment Agency . However,
the more administrative work could be gradually replaced by client communication,
consultation, needs assessments and personal support. Most of social workers' time is
spent processing paper work including general documents, eligibility verification, spot
checks, paying, refusing and terminating social benefits or child allowances, and the like.
If some of this administrative work is reduced and / or staff number increased, there will be
be an opportunity to build on some of their strengths such as closer cooperation with
Labor Offices and the related close contact to the client.
Page 25
6
Unemployment and social benefits
• Poverty is widespread in Bulgaria and the share of people living in severe
material deprivation is the highest in the EU .
• Coverage of unemployment benefits and General Minimum Income (GMI) is quite
low , with 14% and 6% respectively in 2012. Eligibility to GMI is income-tested.
Unemployment and social assistance benefits may be insufficient to prevent poverty.
Those not receiving any benefits are at risk of becoming discouraged workers. Reaching-
out to the discouraged people as well as those groups of inactives who could work but
do not want to work (in particular in the case of young people not in employment,
education and training) represents a major problem for implementing an effective social
protection and activation strategy.
• The benefit level of the GMI is very low and has not been increased in line with
average wage and minimum wage development . An increasing number of people do
not receive benefits. Many of these individuals are likely to live in poverty and some
have become inactive.
• In addition to income testing to be eligible for GMI, the claimant needs to be
registered with the Labor Office for at least 6 months . Thus, a person claiming GMI
has a waiting period of 6 months if unemployed prior to claiming the benefit. While the
waiting period has been reduced from a previous 9 months to 6 months, the
requirement contradicts the logic of social assistance acting as a safety net of last resort.
• Enforcement of the mutual obligation principle for the GMI is rather strict
compared to other European countries: all GMI beneficiaries participate in small
community work on a part-time basis (14 days for 4 hours a day). The conditionality was
tightened in April 2010, when the numbers of workdays were increased from 5 to 14
days. There is no compensation for participants. On one side this conditionality
stimulates the labor activity of assisted persons in workable age and restricts the risk of
deepening the dependence on social benefits but on the other side it could reduce the
incentive for claiming GMI, assuming that people prefer to work in the informal
economy. Furthermore, there is little evidence that this conditionality improves
employability. It would be advisable to reduce the number of days that need to be
worked without remuneration to comply with the mutual obligation requirement.
• The GMI benefit should include an earnings disregard . The existing minimum social
security threshold implies comparatively high (marginal) tax burden for low-paid
jobs, prevents take up of paid work and promotes activity in the informal economy.
• An important employment barrier for GMI recipients is illiteracy and low
education levels. Linking eligibility of child protection benefits to school attendance
could contribute to prevent problems of illiteracy for the next generation. However,
more needs to be done to effectively integrate vulnerable populations such as Roma in
the schooling system. Mixing classes of Roma and non-Roma children would probably
lead to better integration results, although enforcing this model will be difficult in
practice.
Page 26
7
• Compared to other European countries, net replacement rates of unemployment
benefits in Bulgaria ranged in the lower third. In 2010, the unemployment benefit
replacement rate was roughly 30 percent of average wages and 80 percent of minimum
wages. The duration of the unemployment benefit varies between a minimum of four
months (in the case of three years of insurance contributions) and 12 months
case of at least 25 years of insurance contributions). Compared with other European
countries, the duration of unemployment benefit is relatively low in the case of
minimum duration and average in the case of maximum duration.
• By international comparison, Bulgaria's entitlement conditions are relatively
strict. Between 2007 and 2010, entitlement to long-term unemployment benefits was
subject to a maximum benefit period of 30 months. This provision was revoked in 2011,
as the share of long-term unemployed increased as a result of the crisis.
• Eligibility to disability benefits depends on a medical assessment and is granted
for disabilities above 50 percent. The assessment is provided by a medical expert
commission and includes advice with respect to the type of employment that can be
carried out given the type and degree of disability (including for disability below 50
percent). This is a good pre-condition for activating people with disabilities and jobs
brokers should pro-actively use this information.
Organization and delivering of social and labor market related services
• Individuals who become unemployed need to register with labor offices in order
to be eligible for benefits and services of the labor offices . According to changes in
law in 2011, registration must be made within seven days. This should speed up the
activation process and shorten unemployment spells, at least for those who are
employable and ready for the labor market. However, given the large numbers of
dismissals, this is resulting in a very formal administrative procedure, given the high
caseload of labor offices' staff. Thus, there are doubts about the efficacy of this rule in
speeding up registration. Electronic registration would free some time of PES staff for
interviews.
• GMI claimants also need to register with labor offices in order to be eligible for
benefits . However, there is a growing number of unemployed and discouraged people
who are neither eligible for unemployment benefits nor for GMI. Those individuals do
not have incentives for registering in the labor offices and there is the danger that
some cannot be reached with activation measures.
• According to the Employment Promotion Act, the PES should offer a wide range of
services to the unemployed : provide information and consultation to job seekers and
employers; psychological counseling of job seekers; referral to appropriate
employment programs and measures; referral to vocational or motivational training;
and guidance and support for starting work, including working abroad.
Page 27
8
• Bulgaria is among those countries that spent the lowest share of GDP on the
provision of activation services (and administration), at least until 2010. Countries
focusing on activation strategy spend much larger shares of GDP on services, even with
lower unemployment rates. According to an impact evaluation carried out by Kotzeva
and Zvetkov in 2010, people with higher employment barriers (such as older persons
and people with a low educational background) tend to benefit most from these types of
services. The survey results also indicate that the most vulnerable group could have
been serviced more intensely.
• Social and labor market integration of highly vulnerable groups calls for setting
a stronger focus on social services, psychological advice, and social-pedagogical
guidance. However, currently the task of social workers consists of detecting fraud and
misbehavior while PES counselors are busy with many administrative tasks. This
leaves little time for tackling the multiple employment barriers that GMI recipients
generally face.
• A profiling system is in place at the PES. The phasing of the unemployed is performed
during the first registration of unemployed based on a short questionnaire about their
stated purposes and job search activity, as well as on the adequate opportunities they
could be offered. Job-seekers are grouped into three different phases, based on the
probability of being placed. The phasing is a tailor-made approach aimed at applying
the most precise assistance to the needs of the unemployed.
• Profiling is usually used in a wide range of countries to identify early who is in
need of intensified help and “expert” services , while ready-to-work jobseekers are
getting much less assistance, so that the scarce resources can be used in a most efficient
way. Evidence from other European and OECD countries suggest that a good statistical
profiling model is an efficient way of phasing jobseekers when it not only contains hard
factors (such as length of unemployment, prior work experience and formal
qualifications), but also “soft” factors (such as motivational aspects, health and social
networks, as well as the regional labor market conditions). Furthermore, it is crucial
for the quality of the model that longitudinal administrative data are available.
• The introduction of Individual Action Plans (IAPs) intends to speed-up the
activation process and to better focus activation measures . IAPs are generally
written documents signed by the PES and the jobseeker which, based on evaluation of
personal circumstances, abilities and the professional skills of the individual, determine
the type and scope of assistance required by PES and actions to be taken by both the PES
and the unemployed. In some countries IAPs are drawn-up for all unemployed after a
defined length of unemployment, while other countries use this instrument only for
specific target groups such as youth and older workers. In Bulgaria the IAP is signed by
all unemployed jobseekers and the labor mediators; the responsibility for
implementation is distributed between the two. In practice, field visits highlighted how
the time limitation of labor mediators seem to have consequences on the type of joint
actions that are defined.
Page 28
9
• The frequency of consultations with the employment officer and the job-search
interviews is determined by the phase of unemployment. Given the low number of
staff, it would be useful to insist on individual interviews and job-search monitoring
mainly for vulnerable groups, while groups who are ready for the labor market could
make more use of e-services.
• The success of activation strongly depends on timing and intensive follow-up .
Early intervention has been identified as an important factor, and many Member States
have therefore shortened the periods in which an IAP has to be drawn-up. Evidence
from other European countries indicate that an intensive follow-up with frequent
individual interviews, as well as a follow-up with disadvantaged young people and others
disadvantaged groups once they receive a job increase the effectiveness of the activation
strategy.
• In Bulgaria, the activation process does not focus on more intensive guidance and
follow-up of disadvantaged groups. In contrast, it seems that GMI recipients and others
vulnerable groups (who are often not entitled to any benefit) are left behind in terms of
activation, although, as will be shown in the next section, one of the most important
labor market measures targets GMI recipients and long-term unemployed.
• Important issues should be considered when planning an activation approach for
disabled people . First, it is critical to redefine the ultimate goals of activation
process. Striving only to obtain a permanent job might be inappropriate for this target
group. Participants and employers might be satisfied with temporary or part-time
employment after the program ends or with trainings, social services or socialization.
The second crucial point is that programs for people with disabilities might be
appropriate to be implemented by agencies better equipped to deal with this group. A
third consideration is that almost 63 percent of people aged 15 to 64 years with at least
one permanent difficulty in their daily activities are inactive. Thus, focusing ALMP
efforts toward inactive disabled in addition to unemployed disabled would be useful.
Active labor market programs (ALMP)
• Active labor market policies have undergone some different strategic
orientations in the recent past. First, in 2010, the Government decided to reduce the
national funding for active labor market policies by almost three times and to freeze
the budget over the following years. In addition, since the beginning of 2011, the official
“Activation” policy focused on training, at the expense of job creation. And finally,
European funds were given priority as a financial instrument. At the moment, ALMPs are
strongly dependent on EU financing availability and absorption.
• The ALMP budget as a percentage of GDP is amongst the lowest in the EU. Given
allocated funds, it is unlikely that activation and avoidance of long-term unemployment
can be achieved. In 2012, nearly 40,000 people participated in national programs
and measures to promote employment. Since 2005, the number of participants in
national programs and measures has decreased significantly, with a particularly
steep fall between 2009 and 2010.
Page 29
10
• In principle, programs and measures available through Bulgarian active labor
market policies is rather encompassing and theoretically well designed . However,
many of the existing instruments are not implemented or only have a few participants.
One example is a program that targets people at preretirement age called a National
program “Assistance to retirement”, but 47 people participated in 2012. However,
this low level of implementation does not doubt the need and the quality of this program
but it justifies potential reduction of the number of active labor market measures and
programs being implemented in a certain period of time.
• Focusing on a smaller, well selected number of measures and programs could
increase overall efficiency. The number of ALMPs seems to be too large and the
number of participants in many programs very small. This makes the program
administration inefficient. When programs are too small they make no difference and
the general opinion that ALMPs are not useful is confirmed.
• In contrast to all other European countries, the bulk of ALMPs funded by the
national budget goes to direct job creation schemes (70 percent in 2011). In 2012,
training measures funded by ESF-OPHRD increased. Job creation measures refer to
activities with a social utility and are usually implemented in the context of great
structural weaknesses in the regional labor market (eg in Germany, after the
transition) or to integrate disadvantaged groups who have few chances to find
employment in the regular labor market. In Bulgaria, participants get an employment
contract and are remunerated at the level of the minimum wage. This positively affects
motivation and self-esteem, and thus employability is higher and is more likely to help
people out of poverty.
• The main job creation scheme is the national program, “From Social Assistance
to Employment ”, introduced in 2003 . This program aims to ensure employment
and social integration of the unemployed who receive monthly GMI by generating jobs in
public profit activities. At least 70 percent of participants should be GMI recipients.
Participants sign an employment contract and receive the minimum wage and social
insurance. Full-time or part-time employment can be provided. The program pays
wages and social security contributions while the employer pays for material and
equipment. Furthermore, the program pays for fellowships, transportation costs,
accommodation costs and course fees for respective training or literacy courses. About
two-thirds of activities carried out under this program in the last few years were
under the category of “emergency activities,” such as maintaining roads during the
winter. This program is implemented by the Labor Agency in coordination with
social assistance offices (file sharing) and employers in general public sector bodies
(often municipalities). The bulk of these projects is implemented by municipalities.
Training is organized by the labor offices, while the Ministry of Education is
responsible for the literacy courses.
Page 30
11
• Evaluations of the program “From social assistance to employment” show mixed
results , as it is the case for similar programs in other countries. The main
shortcomings relate to the fact that subsidized jobs crowd out jobs that would have been
created anyway. In order to avoid that, private employers as well as social enterprises
should be included in program implementation. Additionally, it seems that the
implementation of the program has not been well-targeted: in 2012, only about 30
percent of participants were long-term unemployed. Almost half of participants re-
registered with the Labor Office after termination of the measure and it can be
assumed many are taking part in the measure after re-registration (this could explain
the low share of long-term unemployed). Repeated employment of the same persons
should be avoided. Finally, since its introduction, the number of participants has fallen
dramatically.
• Some employment incentive programs require that employers who receive
wage subsidies employ program participants for a defined period of time after
termination of the program . This is important in order to avoid substitution and
displacement effects. The wage subsidy compensates for a temporary disadvantage in
lower productivity of the hard to place unemployed. Therefore, this measure is suited
for integrating unemployed with (temporary) employment barriers.
• Employment incentives may also be useful to overcome a cyclical lack of demand.
Decreasing wage subsidies could be introduced as an ALMP. Employers could get a
decreasing wage subsidy to employ program participants after termination of the
program for a limited period of time.
• Private employers should be more actively involved in employment programs .
Pro-active outreach to employers is a key strategy for placing vulnerable groups
alongside ready-to-work unemployment groups. Guidance to employers employing
highly disadvantaged groups could be helpful.
• There is a need to strengthen support to employment for people with disabilities .
In 1990, specialized enterprises gave employment to 33,000 persons with disability. In
September 2012, only 2,500 persons with disability received employment from
specialized enterprises.
• Combining training and work experience is generally useful. However, training
should preferably occur in growing sectors and occupations.
The supply of
training courses should be based on an analysis of the regional labor market.
Employers should be consulted regarding their needs and should be asked to
demonstrate their commitment by providing places for linked training and long-term
placement.
Page 31
12
• The “Development” program is a successful example of combined training and
job creation directed at persons dismissed as part of industrial restructuring . The
program has a maximum duration of 12 months. Young unemployed below the age
of 29, older workers and long-term unemployed are prioritized groups. The number of
participants in this program increased tremendously between 2010 and 2012. The
number of unemployed in training quadrupled and reached 58,561 in 2012. About 95
percent of combined training and employment relates to jobs in the public sector.
• The National Program for Literacy and Qualification of Roma is a great
example of training programs for disadvantaged groups . Between 2007 and
2011, about 2,201 unemployed were trained. It is an important project, given the
serious problem of illiteracy; however, participant numbers are still very low.
• The introduction of the vouchers system eased administrative procedures and
accelerated the use of training programs. During the period 2009-2012 78,636
unemployed passed through training programs and many received employment. In
2010 and 2011, the proportion of long-term unemployed participating in training that
received vouchers was respectively 17.7 percent and 19.5. It unknown how many
participants were GMI recipients. It is questionable whether a voucher system is
appropriate for the most vulnerable groups, as it presumes that the jobseeker is pro-
active. One key advantage is that it ensures that training is certified.
• Carrying out external evaluations of training and literacy programs would be
useful in order to improve matching skills demand and supply.
• Although young people were the most affected group by the crisis in 2009, their
number in labor market programs and measures financed by State Budget
decreased. Nevertheless, support for young people with disabilities and with social
problems has not been reduced during the crisis and the respective targeted
programs have received the planned financing from the State Budget.
• Meanwhile, in the context of the tighter ALMP budget, combating youth
unemployment is a priority . This is reflected in the First Job National Agreement,
signed in June 2012 by Ministers and representatives of employers' associations and
trade unions and is part of a national initiative called Jobs for Young People in Bulgaria
2012–2013. The agreement aims to create new opportunities for young people in the
labor market and to ease the transition between training and the labor market. A
The National Youth Program (2011−2015) was elaborated and adopted in 2011. It is
expected to implement projects for youth under four sub-programs: development of
the network of youth information and consultative centers, national youth initiatives
and campaigns, youth volunteering and development and recognition of youth's work.
Page 32
13
• The effectiveness of activation policies depends on the availability and the quality
of options offered to youth , as they need to be convinced of the efficiency of actions
planned. Experience from other countries shows that vocational training should be
sufficiently flexible to integrate the disadvantaged and less capable among young people
without creating a separate system that risks stigmatizing. Furthermore, experience
from other countries indicates that the success of the activation strategies depends on
offering person-centered approaches to counseling, the setting-up of individual action
plans, mentoring, and case management. Young people need to be involved in the
solution.
Page 33
Activating and Increasing
Employability of Specific
Vulnerable Groups in Bulgaria:
A diagnostics of institutional
capacity
Page 34
14
Content
Introduction ................................................. .................................................. ......................................... 18
1. Labor Market Trends, Economic Crisis and Labor Market Policies ................................... 19
1.1
Labor market latest development .............................................. .......................................... 19
1.2
Vulnerable groups ................................................ .................................................. ................ 20
1.2.1
Unemployment by age ............................................... .................................................. ...... 21
1.2.2
Unemployment by level of education, skills and qualification ......................................... ... 22
1.2.3
Long-term unemployed .............................................. .................................................. ...... 23
1.2.4
Inactive people and discouraged workers ............................................. ............................ 23
1.2.5
General Minimum Income Recipients .............................................. .................................. 23
1.2.6
People with disabilities ............................................... .................................................. ...... 23
1.2.7
Regional disparities in unemployment .............................................. ................................. 24
1.3
Activating vulnerable groups and increasing their employability - a framework ................... 24
1.4
Social safety nets and active labor market programs and services for unemployed in
Bulgaria - an overview .............................................. .................................................. ....................... 25
2. Institutional Set-Up ............................................ .................................................. ....................... 28
2.1
Introduction: Overview of main actors ............................................ ....................................... 28
2.2
The institutional framework of the Public Employment Service .......................................... .. 28
2.2.1
Organizational structure ................................................ .................................................. .. 29
2.2.2
Staffing and workload ............................................... .................................................. ....... 31
2.2.3
Work organization ................................................ .................................................. ............ 34
2.2.4
Electronic services ................................................ .................................................. ........... 35
2.3
Decision making in programs allocation and targeting ........................................... .......... 36
2.3.1
Regional labor market developments and ALMP spending ........................................... 36
2.3.2
Development of the situation of specific vulnerable groups vs. ALMP targeting at regional
level 38
2.3.3
Evidence based decision making .............................................. ........................................ 41
2.4
The impact of EU funds ............................................. .................................................. .......... 42
2.5
Cooperation of the labor offices with other stakeholders .......................................... .......... 43
2.6
Institutional capacity and role of the Social Assistance Agency ......................................... ... 44
2.7
Private and Non-governmental sector service providers .......................................... ............ 46
2.8
Employers ................................................. .................................................. ........................... 48
3. Benefits, Activation Process and Services Provided to GMI Recipients and
Disadvantaged Groups ................................................ .................................................. ................... 50
3.1
The design of the social benefit schemes ........................................... .................................. 50
3.2
The design of the Guaranteed Minimum Income Scheme and activation ............................. 51
3.2.1
Level of Guaranteed Minimum Income, poverty avoidance and work incentives ............. 51
3.2.2
Earning disregards for social assistance and in-work benefit ........................................ ... 52
3.2.3
Structure of beneficiaries ............................................... .................................................. .. 53
Page 35
15
3.2.4
The role of the Social Assistance Agency and means-testing ....................................... ... 53
3.2.5
Job-search requirement for GMI recipients ........................................... ............................ 54
3.2.6
Mutual obligation for GMI recipients ............................................. ..................................... 54
3.3
Eligibility and conditionality for Child Protection Allowances ........................................... ...... 55
3.4
Access to other out-of work benefits for people in working age ..................................... ....... 56
3.4.1
Unemployment benefits ................................................ .................................................. ... 56
3.4.2
Disability benefits ................................................ .................................................. ............. 59
4. The activation process ............................................. .................................................. ............... 60
4.1
Registration and Coverage of Unemployed with the Employment Offices ........................... 60
4.1.1
Registration with the Labor Office ............................................. ...................................... 60
4.1.2
Coverage of unemployed through the labor offices: number of ILO unemployed and
number of registered unemployed .............................................. .................................................. 60
4.2
Services provided by the Employment Offices to the unemployed ....................................... 65
4.2.1
Roma mediators ................................................ .................................................. .............. 68
4.2.2
Individualized approach and case management ............................................. .................. 68
4.3
Profiling and individual action plans ............................................. ......................................... 68
4.3.1
Job-search requirement .............................................. .................................................. ..... 71
4.3.2
Incentives for rapid job search of social assistance beneficiaries ..................................... 72
4.4
Activation of specific disadvantaged groups ............................................. ............................ 73
4.4.1
Roma ................................................. .................................................. .............................. 73
4.4.2
Young people ................................................ .................................................. ................... 73
4.4.3
Unemployed with disabilities ............................................... .............................................. 75
4.4.4
Older unemployed ................................................ .................................................. ........... 75
5. Active Labor Market Programs ............................................ ........................................... 76
5.1
Budget spent on Active Labor Market Programs (ALMP) ........................................ ...... 76
5.2
Focus of ALMP spending by type of program .......................................... ........................ 77
5.2.1
Training measures ................................................ .................................................. ........... 78
5.2.2
Employment incentives ................................................ .................................................. .... 79
5.2.3
Job creation programs ............................................... .................................................. 79
5.3
Organization and funding of ALMPs ............................................. ......................................... 79
5.3.1
Employment encouraging measures according to the Employment Promotion Law ........ 79
5.3.2
National programs and measures .............................................. .................................. 81
5.3.3
ESF-funded ALMPS: the Operational Program Human Resource Development
Program (OPHRD) .............................................. .................................................. .................... 82
5.4
Targeting ALMPs to disadvantaged groups ............................................. ............................. 85
5.4.1
GMI recipients ................................................ .................................................. .................. 85
5.4.2
Inactive unemployed ................................................ .................................................. ........ 87
5.4.3
Long-term unemployed .............................................. .................................................. ...... 87
5.4.4
Youth Programs ................................................ .................................................. .......... 88
5.4.5
Sheltered employment for people with disabilities ............................................ ................ 90
Page 36
16
5.5
Implementation conditions and institutional capacity ............................................. ............... 90
5.6
Monitoring and evaluation ............................................... .................................................. .... 91
Page 37
17
Abbreviation
ALMP: Active Labor Market Programs
APD: Agency for People with Disabilities
ASA Agency for Social Assistance
BGN: Bulgarian Leva (currency unit)
CC: Cooperation Councils
CSO: Civil Society Organization
DDC: District Development Councils
EA: Employment Agency
ESF: European Social Fund
EU: European Union
EWP: Extended Work Places (a type of PES office)
GMI: Guaranteed Minimum Income
LFS: Labor Force Survey
MLSP: Ministry of Labor and Social Policy
NAVET: National Agency for Vocational Education and Training
NEAP: National Employment Action Plan
NEET: Not in Education Employment or Training
NEPB: National Employment Promotion Board
NGO: Non-governmental organizations
NSI: National Statistical Office
NSSI: National Social Security Institute
OPHRD: Operational Program Human Resources Development
PES: Public Employment Service
REC: Regional Employment Commission
RES: Regional Employment Service
VET: Vocational Education and Training
Page 38
18
Introduction
This report reviews the design and implementation of activation policies for social assistance
recipients and other highly disadvantaged groups in Bulgaria. The report starts by providing an
overview of recent labor market trends, including the impact of the economic crisis on the
labor market, in general, and on vulnerable groups, in particular. Chapter 2 describes and
analyzes the institutional setting for the design and implementation of Bulgaria's activation
strategy and policies, as well as institutional capacity and cooperation between institutions.
Chapter 3 analyzes the impact of the benefit system on activation. Chapter 4 reviews the
activation process and the implementation of the mutual obligation principle and the targeting
of services provided to disadvantaged groups. Chapter 5 reviews active labor market programs
and investigates to what extent these programs are targeted towards disadvantaged groups,
which types of programs are prioritized, as well as reviewing the development of funding for
active measures and programs.
This report was elaborated by reviewing the literature on socio-economic development and active
labor market policy in Bulgaria and in other OECD countries and analyzing data provided by
the Bulgarian Labor Agency and the Bulgarian Social Assistance Agency. In addition, a World
Bank team consisting of Ramya Sundaram, Boryana Gotcheva, Nicola Duell and Yordan Dimitrov
carried out fieldwork in February 2013, visiting labor offices, social assistance offices and
municipalities in various parts of the country, as well as the Ministry of Labor and Social Policy.
Yordan Dimitrov and Nicola Duell are the key authors of the report, which was initially drafted
in mid-2013 and benefitted from inputs from Ulrich Hoerning, Boryana Gotcheva, Alessandra
Marini and Ramya Sundaram and from peer reviewers Maria Laura Sanchez Puerta and Lucian
Pop of the World Bank. The report also benefitted from valuable comments from the Ministry of
Labor and Social Policy. The report was prepared under the World Bank Activation and Skills
Programmatic Knowledge Service under the guidance of Ramya Sundaram until September
2013, and of Alessandra Marini after that date.
Page 39
19
1. Labor Market Trends, Economic Crisis and Labor
Market Policies
1.1
Labor market latest development
Significant deterioration of the Bulgarian labor market has occurred since the start of
the crisis in 2009. Between 2008 and 2012, the number of people employed decreased by
almost 427,000, representing one of the worst results in the EU. The employment rate dropped
from 50.8 percent in 2008 to 46.6 percent in 2012. While at the beginning of the cyclic crisis
factors accounted for the employment downturn, at the end of 2012, many structural frictions
were dominant.
Manufacturing and construction contributed for almost 90 percent of the employment
drop in the first three to four years of the crisis with 16.4 percent of job losses between 2008
and 2011, and with 41 percent fewer jobs, respectively. Most of the labor market gains during
the pre-crisis decade were wiped out in less than 2 years, with no signs of improvements even
though by 2011 economic development reversed the negative tendency towards weak recovery.
There are currently no economic sectors strong enough to compensate for the construction and
manufacturing losses.
In addition to macroeconomic factors, an important reason for the stagnant labor
market is the comparatively significant decline in the working age population
(approximately 216,000 people) due to emigration, aging population and other demographic
weaknesses. Children born in the early 90s are supposed to enter the labor market, but these
were years of few births. Many others emigrated in the last decade. The baby boomers of the late
40s and 50s are retiring. The rapid aging of the Bulgarian population will remain one of the
major challenges for the country. The lack of skilled and highly-skilled young labor force
hampers economic development.
A key characteristic of the Bulgarian labor market is that employers prefer to cut jobs,
rather than wages (EC 2013). The average nominal wage went up by almost 12 percent from
2008 to 2012, while 9.1 percent of jobs were lost. A nominal wage increase goes hand in hand
with a rise in productivity, which is nominally about 50 percent for the same period. However,
the nominal productivity raise might be considered statistical due to significant fall in
employment. Another similar argument is that most people who were dismissed in that period
were low-skilled, low-educated, lower-productive and with lower salaries. For instance, in 2009
when the first significant unemployment surge was reported, 51 percent of the newly registered
unemployed were without specialty and profession according to PES administrative data.
Another structural issue of the Bulgarian labor market is the mismatch between skills
supply and demand . Many of the currently unemployed do not possess adequate skills and
qualifications for employers. At the end of 2012 (Public Employment Services -PES- data),
almost 47 percent of the unemployed had a low educational level and 55 percent were without a
profession and specialty. Many of these people are gradually turning into long-term unemployed
as long as they constitute approximately 70% of those who are without job for more than one
year. In addition to the traditional mismatch skills, there is another reason for long-term
unemployment. The existing minimum social security threshold implies a comparatively high tax
burden for low-paid / skills jobs. In fact, a regressive taxation promotes the growth of a shadow
economy (EC, 2013).
Page 40
20
1.2
Vulnerable groups
Vulnerable groups in the labor market encompass those groups which face particularly
high barriers to enter the labor market and to remain employed and earn sufficiently to
sustain their lives . Typical employment barriers are linked to skills mismatch, low skills level,
limited work experience, health problems, prejudices and discrimination against age and ethnicity
groups. Subgroups encompass General Minimum Income (GMI) recipients, parts of the Roma
population, young people - in particular if they have a low skills level or young graduates lacking
work experience, people above the age of 55 years out of work, long-term unemployed,
discouraged people and, people with health problems.
In addition to these discouraged workers (who represent less than one sixth of the inactive - a
very high share as compared to other European countries), other groups out of work who are
not searching for a job and who indicate that they don’t want to work should give rise to major
concern. The inactivity rate in Bulgaria is among the highest within the EU. Among the
inactive population in workable age (including discouraged workers and people indicating that
they don't want to work) there are many young people, people above the age of 55 and
people with disabilities. About 31% of all inactive were in education and training in 2013; this
rate was among the lowest in the EU. About 14% of the inactive aged between 15-65 years
(including discouraged workers) is disabled or has health problems, and another 18% is retired
(European Labor Force Survey). Inactivity can be a source of poverty. Furthermore, a high level
of inactivity puts a threat to the financing of social security systems. Therefore, inactivity in
general (and not only discouraged workers) should be a major matter of concern. Some of those
who are not actively looking for a job are nevertheless registered as unemployed with labor
offices.
In a context of weak labor demand these groups are crowded-out by groups who are perceived
to be better performing. These subgroups are partly overlapping, and those who face multiple
employment barriers are among the most vulnerable. This paper will address the specific
situation of some of these subgroups into more detail. However, it is not possible to analyze in
depth the situation of some sub-groups such as people with disabilities and Roma and the wide
range of policies addressed to them in the context of this paper. The following Figure gives an
overview of recent developments of some of these sub-groups showing a steady increase in the
number of registered unemployed and long term unemployed.
Figure 1.1 Unemployed groups, by type of joblessness, 2008-2012
Page 41
21
Discouraged
workers are a major subgroup of the respondents wanting to work, but being inactive.
Source: Bulgarian Employment Agency, Social Assistance Agency and National Statistics Institute.
1.2.1 Unemployment by age
The youth employment rate is 50 percent lower than the EU average . The youth (15-24)
labor market participation rate amounted to 27.1 percent compared to an EU average of 40
percent. Moreover, Bulgaria had youth unemployment rates (15-24) of about 28 percent at the
end of 2012 (close to the EU average) and topped the EU's infamous ranking for having 23
percent of inactive among young people at the end of 2011. Youth inactivity and unemployment
problems existed in growth years as well but were exacerbated during the crisis. The cyclic
explanation is that due to lack of jobs and labor demand, youth stay at home longer or go back
to school; live more often with their parents, etc. On the other hand many structural reasons
such as lack of skills, education, experience, as well as the full-time work tradition in Bulgarian
society play a role. For instance, the share of youth (19-24) working part-time was only four
percent (Eurostat data) in Bulgaria, with no signs of steady growth, while 75 percent of youth in
the Netherlands and 40 percent in Slovenia work part-time (Dimitrov, 2012). In some countries
part-time employment of young people is high, because they combine work and studies. In
Bulgaria, the share of part-time employment is low compared to many other European
countries.
Figure 1.2 Youth labor market participation, employment, unemployment and NEET
Page 42
22
Source: NSI, LFS data
According to LFS data 1 , unemployment is particularly high among young people . In 2013,
the unemployment rate of young people below the age of 25 years amounted to 28.4% as
compared to 11.8% for the age group 25-74. .
According to PES data, the unemployed youth up to 24 years of age represented about 10
percent of all registered unemployed in December 2012, while the adults aged 55+ represented
21.7 percent of all registered unemployed. The relatively low share of registered youth could be
explained by the fact that most of the adults older than 55 are aware of the benefits of
registration while youth are often unaware of these benefits and tend to register less at
employment offices.
1.2.2 Unemployment by level of education, skills and qualification
In the last quarter of 2012, almost three-fourths of the unemployed had primary, basic
and lower educational attainment (LFS data). People with higher education represented 5.8
percent of the unemployed, confirming that low levels of education, qualification and skills are
highly correlated with unemployment risk (Table 1.1). According to LFS data, the unemployment
rate of people with primary or low education increased from 25 percent in 2008 to 52 percent in
2012. The increase is smaller for people with higher educational level (Table1.1). In addition,
PES data indicate an unemployment share of 47 percent for people with primary, basic and
lower education 2 .
Table 1.1 Unemployment rates by level of education according to LFS, 2008-2012
Education level
2008 2009 2010 2011 2012
Higher
2.3
2.9
4.4
5.1
5.8
Secondary general
4.5
6.2
9.7 10.5 11.7
Incl. Secondary with professional qualification
4.3
6.1
9.4 10.3 11.1
1 Based on the ILO definition of unemployment.
2 Primary education refers to schooling up to the 4 th grade, basic education is up to 8 th grade.
Page 43
23
Basic
12.7 13.6 19.6 23.2 24.0
Primary and lower
24.9 27.8 43.1 49.0 51.7
Source: LFS, NSI
1.2.3 Long-term unemployed
While at the beginning of the crisis the main problem was increasing unemployment,
today the real problem is long term-unemployment . LFS data show that 55 percent of
unemployed people are without a job for more than 12 months, while PES data show a
significantly lower share (32.6 percent). In addition to methodological differences, it is possible
that many of the long term unemployed do not register at labor offices. This behavior could be
linked to the heavy administrative burden of being unemployed. Men are more likely than
women to be long term unemployed according to LFS, while PES data show the opposite. Men
seem to be less willing to stick to the registration rules and are probably more often working in
the informal economy. According to Koettel and Weber (2012) the informality rates for
Bulgarian men are 19.5 percent compared to 12.9 percent for women.
1.2.4 Inactive people and discouraged workers
Discouraged workers are a very significant group among people in working age . They are
almost half as numerous as the unemployed and represent an important reserve for
employment increases in the coming years. At the end of 2012, the number of discouraged
workers amounted to 212,000 (LFS data), a slight decline compared to the previous year when this
number was about 224,000.
The Bulgarian inactivity rate of men aged between 15 and 64 years was the highest of all
European countries in 2011 (European Commission, ESDE 2012). As could be expected, the
share of people with a high educational level among discouraged workers was low at
approximately seven percent, while those with secondary education and lower composed to
respectively 48 percent and 45 percent. The incidence of inactive young people in Bulgaria
represents a very serious problem. Furthermore, inactive adults aged 55+ are almost the same
number as the unemployed from the same group.
With low skills and low education, the majority of discouraged people have a similar
profile to long-term unemployed, and they are therefore at the same risks as others
vulnerable groups . The group of inactive people should be analyzed and treated according to
their characteristics and reasons for being in such situation.
1.2.5 General Minimum Income Recipients
The recipients of monthly social assistance, based on a Guaranteed Minimum Income
(GMI), constitute another important group with similar characteristics to the inactive,
long-term-unemployed, low-skilled and low-educated individuals . The number of GMI
recipients has grown less fast compared to other groups at the margin of the labor market
(Figure 1.3). The reasons are predominantly administrative, since the values ​​of the GMI has not
changed since 2009, while other income benchmarks such as minimum and average wages have
been slowly increasing. In addition, claimants for GMI have to comply with many administrative
and mutual obligation requirements (see Chapter 3 for more details).
1.2.6 People with disabilities
People with disabilities are among groups with low rates of employment and high inactivity.
According to the LFS, at the end of 2011 about 63 percent of people aged 15 - 64 years with at
Page 44
24
least one permanent difficulty in their daily activities were inactive, 31 percent were employed
and five to six percent were unemployed. Most of these people suffer typical structural issues
such as low skills and education, lack of experience, inaccessible physical environment, and
employers' unwillingness to hire and skepticism.
1.2.7 Regional disparities in unemployment
Strong regional disparities in unemployment rates exist across the country . The
unemployment rate at the end of 2012 varied between 1.8 percent in the municipality of
Botevgrad to 63 percent in municipality of Ruzhinci (PES data). These variations were present
during years of growth and crisis. However, during the crisis years the differences increased.
The long-term unemployment share varies across municipalities from one percent (Nessebar) to
above 60 percent (Yakoruda and Djebel). The fact that these variations persist in different
periods of the cycle hints that the causes are not only cyclical but structural. For instance,
according to 2011 census data almost 50 percent of the population in Yakoruda municipality had
basic and lower education. In Troyan municipality, where unemployment is less than the
country average (8.2 percent in December of 2012), this share is 25 percent.
1.3
Activating vulnerable groups and increasing their employability - a
framework
Employment barriers can be manifold and can be classified in a number of constraints on
the demand side : i) skills and experience constraints, ii) information constraints, iii) working
capital constraints, iv) mobility constraints, c) social constraints (Almeida et al., 2012). A weak
labor demand would represent a further key constraint. Measures and policies to tackle
employment barriers have to go beyond the implementation of active labor market
programs (ALMP). The concept of “activating” the unemployed has become more and more
widespread in OECD countries. It is about reviewing the effects of so-called passive measures,
and thus social benefits for people out-of-work and creating incentives for jobless people to
actively search for work. The objective of activation strategies is to encourage jobless people to
search actively for work and to increase their employability. According to the OECD (2007), they
encompass i) early intervention of the Public Employment Service, ii) follow-up of job seekers'
job search activities, iii) direct referrals of job seekers to vacancies, iv) establishing individual
action plans, v) refer jobseekers to ALMPs in order to prevent declining motivation and
increasing employability.
Different ALMPs and guidance, counseling and placement services are designed to tackle
the different types of unemployment: cyclical unemployment, structural unemployment and
skills mismatches, regional disparities, as well as person-related employment barriers of the
jobseekers (Duell 2012). ALMPs can be broadly classified in demand-side measures and supply-
side measures. Supply-sided measures focus on:
• The adaptation of the jobseekers' skills to labor demand
• Measures to promote his or her job search activities.
• Measures to improve information on vacancies and on job seekers, seeking to render
matching process between labor demand and labor supply more efficient,
• Measures to promote self-employment
Demand-side measures are designed to generate labor demand for disadvantaged groups and
encompass:
• Wage subsidies;
• Measures to increase labor demand through lowering labor costs and promote the
expansion of a low wage sector. These measures often include a combination of social
benefits and low wages;
Page 45
25
• Direct job creation measures which aim to create additional jobs for target groups who
are difficult to place (even in a favorable labor market context);
• Measures in the area of ​​supported employment and vocational rehabilitation for
jobseekers with health-related problems;
• Job creation through macro-economic and industrial policy measures 3 .
Active and passive measures need to be designed in a way that they stimulate job
seekers to actively search for work (incentive compatibility) and increase their
employability (Employability Support Programs). Implementation arrangements need
good administrative and IT capacities, sufficient financial resources, profiling of the target group
in order to provide the right services. Furthermore, good governance capacities are essential,
including coordination between different State services as well as private service providers.
Almeida et al. 2012 have developed the following framework, allowing an analysis of the
strategy towards activation and increasing employability (Figure 1.3).
Figure 1.3 Conceptual framework
Source: Almeida et al. 2012
1.4
Social safety nets and active labor market programs and services
for unemployed in Bulgaria - an overview
Registered unemployed may be eligible for unemployment benefits or for GMI . The share
of registered unemployed receiving unemployment benefits has declined somewhat between
2010 and 2012, while the share of GMI recipients slightly increased (Figure 1.4 Panel A). The
slight drop in unemployment benefit coverage is caused by the increasing share of long term
unemployed in the total unemployed population.
3 This area is out of the scope of this paper whose objective is to look at the institutional capacity and the tools
of PES.
Page 46
26
In the first years of the crisis, the number of unemployed referred to an ALMP decreased
drastically. However, in 2011 and 2012 their share rose thanks to the increased use of
ESF funding (see Part II and IV for details). In contrast, as a result of the crisis, the share of
registered unemployed that were placed in the primary labor market declined (Figure 1.4
Panel B). These results are calculated on the basis of the actual numbers of unemployed who
have passed through the labor offices during the year (unemployed at the end of the previous
year plus the total number of annual unemployed inflow).
Active labor market policies have undergone different strategic orientations . First, in
2010, the Government decided to reduce national funding for ALMPs by almost three times and
to freeze them in the following years. In addition, since the beginning of 2011, the official policy
focused on training, at the expense of job creation. And finally, European funds were given
priority as a financial instrument. At the moment, ALMPs are strongly dependent on the EU
financing availability and absorption.
Figure 1.3 Registered unemployed in passive and active labor market programs and
share of placement at the regular labor market, 2010-2012
Panel A. Recipients of unemployment benefits or GMI
Page 47
27
Panel B: Share of registered unemployed being placed by the PES in an active labor market
program / measure / OPHRD or at the primary labor market
Source: EA, ASA, NSSI, own calculations
The rest of the paper is organized as follows: in Chapter 2 the institutional set-up for providing
activation strategies is described and institutional capacities analyzed. Chapter 3 provides a
brief analysis of the out-of-work benefit system and its impact on setting the right incentives for
searching for work. Chapter 4 focuses on the activation process itself. Chapter 5 deals with the
active labor market programs and their impact on improving employability of jobseeker and
prospects for labor market integration.
Page 48
28
2. Institutional Set-Up
2.1
Introduction: Overview of main actors
This section considers the institutional set up of employment services in the context
of their work with some of the most vulnerable groups in the labor market, such as
monthly social assistance recipients, long-term unemployed, low-educated adults, people with
disabilities, and people older than 55 years and young people.
Different target groups are supposed to be served by different institutions depending on
the type of problems they face and the services they need . The public employment agency
delivers services such as provision of information, consultancies on vacancies, available
measures and programs, provisions of trainings, prequalification, commuting, working
abroad, psychological support, professional orientation, and placement in programs and
measures. The social assistance agency pays benefits (mainly social assistance, family related,
energy related and health related benefits) to those who are eligible, provides services to the
poorest, to people with disabilities and others. The National Security Institute pays
unemployment benefits. The Ministry of Education is responsible for literacy courses of low
educated adults. The National / Territorial Expert Medical Commissions certify disabilities and
work capabilities. The Ministries of Justice and / or of Interiors deals with people who have
problems with crimes, drugs, homelessness, etc. The separation of services described is a matter
of choice taken by Bulgarian authorities. It requires close cooperation and has proven to be
effective in some cases and not in others.
The services to the unemployed delivered by the National Social Security Institute - NSSI
(unemployment benefits payments) and Social Assistance Agency (working with long-
term disadvantaged unemployed) were taken out from PES 'responsibilities in the
context of large structural reforms that occurred in the late 90’s , which were considered a
success at the time. Other services such as unemployed literacy training were transferred to the
Ministry of Education more recently based on some functional separation. The effect of the latter
is still debatable.
Concerning the work with people at the margin of the labor market, this separation
starts leading to ineffectiveness and inefficiency, which is analyzed in this chapter .
Problems of vulnerable groups and their solutions should be treated in their complexity. For
instance, literacy training might be a pre-condition for the social and labor market integration
of highly disadvantaged groups. The Ministry of Education's mission is to provide education
while PES and / or ASA tasks are to integrate people at risk. In this respect, one of the important
messages in this paper points to the need for a stronger integration of services and overcoming
of the functional separation of services. As the labor market integration is deemed as the most
important factor for those who are at the margin of society, we are focusing on employment
services. Social assistance services will also be looked at in detail, as they should play a
significant supporting role for bringing marginalized people back to the labor market and
society. Finally, the role of private and non-governmental actors will also be analyzed.
2.2
The institutional framework of the Public Employment Service
The Bulgarian National Employment Agency is an executing agency to the Minister of
Labor and Social Policy for the implementation of state policy on employment promotion,
protection of the labor market, vocational information and consultation, vocational and
motivational training of unemployed and employed persons, as well as for provision of job
placement intermediation services.
Since the early 90s the public employment service has undergone a permanent process of
improvement, striving to improve performance and meeting labor market challenges.
Page 49
29
The last major structural reform was fulfilled in 2001 when social assistance and insurance
services were separated from the Employment Agency . Thus, employment service staff was
reduced from five to six thousand people to approximately three thousand employees.
Public employment services are still under reform . Some of the major changes that are
occurring include the introduction of the so-called process model of work mainly characterized
with optimization of service processes; one-stop shops,; the initiation of the individual approach
to clients; profiling, phasing for prioritisation of the unemployed; development of jobseekers
profile / portrait; accelerated use of modern electronic platforms for work organization and
provision of electronic services; and the penetration of EU funds as a main source of funding for
employment services. In addition to these innovations, the optimization continues towards staff
decreases, structural unit reductions, enhanced cooperation with key stakeholders, different
focus on targeting of services, clients, performance indicators, etc. Without underestimating all
constructive developments that are happening, the next sections will focus on some gaps and
challenges that might be key to better performance in terms of activating some of the most
disadvantage groups at the labor market.
2.2.1 Organizational structure
The recent reorganization of the PES has achieved to build less bureaucratic units and closer
work with clients . The general organizational chart is presented in Figure 2.1
Figure 2.1 Employment Agency Organizational Chart
Source: Employment Agency
http://www.az.government.bg/eng/internal_en.asp?CatID=11/01&WA=AboutUs/StructAZ_en.htm
Page 50
30
The major units directly dealing with clients within the Employment Agency structure are
the labor offices. Labor offices are organized in two types of subunits, branches and
extended work places, which are even closer to the clients. Labor offices include some
administrative management functions as well as “back” offices, which process mainly
documents. On the other side, branches and extended work places do not have administration
functions and their staff work mainly with clients. Extended work places are located in the heart
of specific target group communities (eg the Roma mediators, see Chapter 3). The tendency is
to decrease the number of labor offices and augment the number of branches and extended
work places (Figure 2.2). Coverage of extended work places increased significantly in ten years,
from 42 offices in 2002 to 455 at the end of 2012. The number of their staff was also increased in
order to better serve the jobless in remote areas and reduced geographical mobility. 4
Figure 2.2 Employment Agency structural units
Source: EA's Statuses and Yearbooks (no data for EWPs in 2006 and 2007)
Two issues are worth discussing regarding the structure of the Employment Agency: the lack of
specific units targeting disadvantaged groups and the comparatively underdeveloped
outsourcing and subcontracting of specific services or target groups.
Despite the fact that groups such as long-term unemployed, monthly social assistance
recipients, Roma and youth are declared priority groups, their employment barriers have
remained unresolved for many years and have turned into a permanent issue. A possible
solution is the establishment of specific units specialized in dealing with them. A step into that
direction is the hiring of mediators working with specific groups (Roma mediators, mediators
working with disabled people, etc.). According to one respondent, labor brokers are usually
hired to work with a specific group, but later the target group specialization becomes blurred.
According to the opinion of Labor Office staff, there are no systematic and purposeful efforts to
create mediator specialists in working with only one or two target groups of disadvantaged
unemployed. Thus, improvements could go in two directions: specialization of working people
with specific groups and / or establishment of specialized units providing integrated services
only to some of the most vulnerable groups.
4 In 2011, for this purpose 129 extended workplaces for 53 labor offices were opened (Loukanova 2012).
Page 51
31
The “process model of work” provides a good foundation for outsourcing services . That
to some extent the calls for proposals under the EU funded Operational Program Human
Resources Development (OPHRD) is transferring the responsibility to deal with specific groups
and services to outside economic agents. But the latest developments in OPHRD show that the
Employment Agency is trying to limit even these types of projects and to implement schemes
where the Employment Agency itself is a leading operator.
Outsourcing / subcontracting of services for disadvantaged groups would represent an
innovative approach in the Bulgarian context . This could mean for instance involving the
Agency for disabled people (eg the practice of Flandria), or specific private, public or quasi-
public organizations to deal with youths, etc. One of the basic arguments for such a proposal is
that one institution is unlikely to be equally good in dealing with such different target groups
and services. A key benefit of outsourced providers is their ability to work across target groups
and divisions that might be inherent in government structure, eg a social assistance care
provider moving into activation / labor market services for the hard-to-place unemployed (see
section 2.7. for more details). Nevertheless, different skill (and mind) sets are needed for social
work and activation. However, if such a solution was taken, it could be bounded in a well-
developed system for result oriented management and performance control, well developed
public-partnership rules of cooperation and communication piloted at the onset. Box 2.1
provides an example of a specialized agency and its approach to activating disadvantaged groups
in Slovakia.
Box 2.1 Example for activation of disadvantaged groups through specialized agencies
One good example is the Agency for Supported Employment in Slovakia: Somotor focuses on
integration of long-term unemployed with low qualifications and especially those unable to find
jobs in the open labor market without help. According to the agency, 90 percent of the program
participants are Roma. The agency adopted a complex and much individualized approach to
their treatment reflecting the complexity of the barriers that they face. Barriers can be both
objective or hard (low skills, poor housing situation, indebtedness, benefit dependency) and
subjective or soft (internal barriers, fear of unknown, misperception of the social assistance, or
fear of losing the income stability provided via social assistance). The agency provides complex
services, which include specialized personal psychological counseling and social work with the
person as well as his / her environment that leads to the preparation of individual integration
plan. Work with the wider surrounding community is a core element and includes close
communication with local mayor and employers that employ Agency's clients (World Bank
2011).
2.2.2 Staffing and workload
The number of employment services staff has been going down over the last ten years. At
the beginning of 2013, the number of PES's staff was almost one-quarter lower than in 2004.
Staff in central, regional and specialized administrations decreased between 24.8 percent and
29.5 percent. The general administration staff has been reduced by approximately 12 percent.
The biggest relative cuts occurred for the labor offices staff (31.5 percent reduction) and in
particularly for “staff dealing with clients” (down by 35.4 percent). Table 2.1 shows that in
contrast to other units, staff has increased in the EU funds related directorate. The main reason
is the significant increase of structural funds in the financing of the active labor market policies.
Table 2.1 Employment Agency staff number developments
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Page 52
32
Total staff
3141
3 141 2823 2825 2551 2551 2396 2396 2401 2401
including:
General administration
117
101 120
103 103 103 103
Specialized administration
3019
2707 2668
2264 2264 2269 2270
Regional administration
2914 2914 2586 2564 2288 2289 2137 2137 2064 2055
Labor offices
2686 2686 2369 2311 2035 2036 1875 1875 1849 1839
EU funds related directorate
27
43
43
71
71
85
85 152 161
Share of staff dealing with
clients among all staff
84%
84% 84% 84% 71% 71% 71% 71%
Additional staff under OPHRD
(eg mediators)
250 *
800 **
Source: EA's Statuses, Yearbooks, author's calculations
* Appointed under the scheme “Improving the quality of services provided by the NEA to citizens and
businesses with a focus on vulnerable groups in the labor market - Succeeding together ”
** A number mentioned during a meeting at EA headquarter in February 2013
The operational program of the EU gives the opportunity to hire additional people,
mainly labor brokers, which is a way to offset the constant staff reductions. The only
disadvantage of this practice is its sustainability. If payments under the EU structural funds are
delayed, something that is not unexpected, then these additional staff positions become
unstable. We may witness several negative impacts: first, the Agency will lose the services
(capacity) of this staff for a certain period and second, human investments may be lost if
individuals have to leave their positions until financing is secured. In addition, the job
perspective of the labor mediators is temporary. And finally, the effectiveness of the active labor
market policy will depend on EU funds management instead of other important factors such as
unemployment, structural characteristics of the unemployed, and the like.
Page 53
33
Figure 2.3 Number of unemployed (left scale) and number of PES staff (right scale)
Source: EA and authors' calculations
Although the jobseekers numbers started to grow in 2008, PES staff including those
dealing with clients continued to decline (Figure 2.3) . This was largely due to the
Government's general policy towards administration cuts. It is important to distinguish some
nuances of state administrative shrinkage with PES administration:
• The trends in figure 2.3 have led to an almost 84 percent increase in caseload per
employment service staff between 2008 and 2012.
• In 2012, the workload per labor broker was approximately 200 jobseekers. These
numbers vary drastically between labor offices. While in some small labor offices, like
Mezdra, this number was a bit lower than the average - 188 in 2012, in some of the large
offices like Sliven, Bourgas, Serdica and others, the caseload varied between 500 and
700, which is very high compared to other European countries.
• Staff reductions were implemented in a context of steadily increasing unemployment as
well as a deteriorating situation for some vulnerable groups, such as youth and long-
term unemployed.
• Labor brokers should be considered in a different way than the general administration
given the fact that they work with clients and the supply is supposed to respond to the
higher services demand.
• The practice in other EU countries shows that an increase in the number of labor
brokers may lead to positive effects such as shorter unemployment duration (see below).
• Given that labor brokers tend to work more enthusiastically and intensively with
jobseekers from phases 1 and 2, who are the most ready to place (see section 2.2.4. and
Chapter 3 for more details), the high caseload aggravates poor servicing of
disadvantaged groups as their labor market chances may look even worse.
• Field work carried out by the World Bank team indicated that staff is overloaded with
administrative tasks.
In general terms, evidence from other countries suggests that a reasonable caseload is an
important factor for the effective delivery of services . A pilot project in German labor
Page 54
34
offices showed that an improvement of caseload (1:70 per case worker) has helped to reduce
unemployment duration. Similar results were observed in the case of the Netherlands (Konle-
Seidl 2011). Caseload is ideally lower for those caseworkers servicing hard-to-place jobseekers.
In Finland, the integrated social assistance and public employment services (LAFOS), which
serve long-term unemployed social assistance beneficiaries, employed 650 staff (full-time
equivalents) in 2007 and had on average 23,500 jobseeker clients (39 cases per staff) (Duell et
al. 2009). Comparing these results with Bulgaria, the caseload of 1: 200 (or higher) includes only
the employees of the labor offices and excludes the staff of other institutions such as social
assistance services, Ministry of Education, Agency of disabled people, and others that deal with
GMI recipients. However, this segmentation of services does not impact the ratio to a large
extent because only the Employment Agency and Agency for disabled people, to a lesser extent,
are in charge of labor market activation of disadvantage people.
According to the National Reform Program 2012, trainings for career development
and qualification refinement are envisaged for 1,550 labor mediators in the
Employment Agency system (Bulgarian Government, National Reform Plan). If overall
caseload is not significantly reduced, it is questionable whether training measures will show
high effectiveness as labor mediators have to devote much of their time to administrative tasks,
due to the increasing share of European funds in the overall ALMP (see section 2.4. for more
details).
Evidence from other countries show that jobseekers who are detached from the labor
market and who are marginalized need intensive guidance and follow-up. In the case of
Bulgaria, social assistance offices, as well as labor offices, have less capacity and time to provide
social services, including psychological services and social-pedagogical guidance to vulnerable
groups and guidance for employers who would hire vulnerable groups. Re-focusing work of
social workers, as well as increasing staff in both social assistance offices and employment
offices, would be a pre-condition for improving the situation. A further approach would be to
build capacity in the social economy sector. Good examples are present in the field of the
delegated social services. The State outsources some services to specific disadvantage groups to
external providers of which many are non-governmental and private organizations (see section
2.7. for more details). The main difference is that some service providers specialize in working
with specific vulnerable groups rather than in the services, themselves. If the State commits
certain financial resources in the long-term in this field, the number of employees dealing with
groups at the margin of the labor market will increase and be regulated on a market basis.
Generally, there is great potential for combating unemployment of vulnerable groups using
additional human resources no matter whether they join existing public institutions or
the non-governmental sector . Of course, staff increases should be accompanied by other
measures such as specialization, refocusing, trainings, restructuring, and others discussed
throughout this paper.
2.2.3 Work organization
The introduction of the “process model of work” began in late 2003 and was completed in
2005 and almost simultaneously the model was complemented by the establishment of
one-stop shops. One stop shops / offices were operating in 46 labor bureaus out of 95 by the
end of 2012. The one-stop approach has achieved easier access to services, faster, more accurate
and convenient treatment of the unemployed and on the other hand higher efficiency of work,
better coordination and interchangeability of the staff. Both the Labor Office staff and the
clients assess this change as positive according to a survey conducted by “Alfa Research” in
2008
Page 55
35
The one-stop approach in Bulgaria combines only services that are provided by the PES,
while in other countries it includes synergy between social and employment services .
Individuals in the most vulnerable groups may have complex problems such as low education,
low income, no job experience, bad living conditions, psychological, alcohol, drug problems, etc.
The one-stop offices treat only employment and qualification issues. For other personal
difficulties, individuals are expected to find support on their own.
The introduction of psychologists in labor offices was not satisfactory. The impact
evaluation of public employment services has shown that only 2.5 percent of the permanently
unemployed have used consultations with psychologists (Kotseva, Tsvetkov, 2010). According to
the Employment Agency, employees' psychological consultations have been crowded out by
motivation trainings. Almost 94.9 percent of the permanently unemployed have participated in
these trainings, but demonstrated little interest. Probably due to “no participation” and “no
interest ”factors, the combined net impact of psychologist consultancies and motivation
trainings was estimated to range at a level of 1.9 percent (although statistically insignificant).
Further evidence supporting the fact that the PES does not consider psychological advice as
useful is that the number of psychologists employed is decreasing steadily. Some labor offices
no longer employ psychologists. When “staff optimization” was imposed, the psychologists
together with technical assistants, drivers and other administrative staff were the first to be
sacrificed. Overall, psychological services have been treated formally and few attempts to
improve their quality have been made.
One possible improvement is the provision of integrated services covering different
problems of the most disadvantaged unemployed . It is crucial that these services are
developed according to high standards. Possible solutions are: (i) separate units merging
services provided from different institutions (eg PES and ASA) dealing with the most vulnerable
groups; (ii) additional staff for the labor offices providing provision of different types of services
beyond employment ones; (iii) establishment of a well-coordinated mechanism for provision of
joint services from different institutions coordinated by labor offices or a combination of the
three.
Another drawback of the existing one-stop model is the lack of personal engagement and
responsibility of the PES staff towards the unemployed person . On one side, the
unemployed are the focus (individual approach), but on the other side, the one-stop office
provides impersonalized support. It can happen that the unemployed person meets three or four
different mediators during the first three to four meetings, and therefore has to introduce
himself / herself every time. Labor mediators emphasize the tasks of the process (phasing,
personal plan / profile / portrait development, interviews, etc.), but are less focus on the
individual. This problem is exacerbated by the fact that the individual plans are a sequence of
steps, not a filed document in an electronic database (Chapter 3). In addition, labor mediators
do not personally engage with the disadvantaged unemployed much. Such an understanding
could be crucial when dealing with vulnerable people with multi-faceted employment barriers.
2.2.4 Electronic services
Labor offices are not yet equipped with electronic self-service terminals for job-search,
self-registration and monthly confirmation for the unemployed and jobseekers, as evident
during the field visits. An electronic labor exchange publishes ads for job vacancies uploaded by
employers or their intermediaries (Loukanova 2012). Supply of more e-services for ready-to-
place jobseekers would help to save PES counselors time. This saved time should be used for
counseling, guidance and contacting private employers. According to the National Reform
Program 2012, electronic terminals are planned in 108 contact points in the Employment
Offices in order to facilitate citizens and business' access to information about offered and
demanded jobs (planned total budget EUR 1.3 million).
Page 56
36
2.3
Decision making in allocation and targeting programs
Generally the decision making process in program allocation and targeting is
centralized although written procedures and rules establish explicit criteria to
incorporate local level needs . The annual National Employment Action Plan (NEAP) adopted
by the Council of Ministers defines employment policy. NEAP is elaborated annually by MLPS
acting jointly with other ministries and social partners. NEAP is drawn up in consultation with
the National Employment Promotion Board (NEPB) 5 . The national programs, as well as the
programs financed by OPHRD of the EU, which are the biggest part of the ALMP, are
developed and realized by the EA and MLSP. Some small regional and branch programs are
the responsibility of the social partners and Regional Employment Commissions to the District
Development Councils.
Nevertheless, there are some steps towards a bottom-up approach of employment
programs planning and budgeting. Labor offices and Regional Employment Services
provide information to headquarters about their program needs. According to the labor
office officials, the main determinants of these demand identification are contract obligations
from previous years, absolute numbers of beneficiaries and some forecasts for the next year.
However, the final decision is left to the upper levels of the employment policy bodies.
2.3.1 Regional labor market developments and ALMP spending
Table 2.3 shows the number of unemployed and ALMP spending by Regional Employment
Services (RES) . Based on the data in Table 2.3 we attempted to find the relationship between
the number of potential beneficiaries of the ALMP and spending during the years. We calculated
some correlation coefficients to express the analyzed relationships. Without considering the
coefficients in Table 2.4 as absolute, a couple of conclusions could be drawn. In five RES out of
nine, there is a negative correlation between the unemployed growth index during year X and
the ALMP spending growth index in the same year. In other regions, a weak correlation could be
found (<0.2). The latter could be interpreted in several ways:
• There is no clear direct relation between the current unemployment developments and
the respective ALMP spending. In other words, the decision making process is not
sufficiently determined by the number of potential beneficiaries, respective of needs, or
• RES (LOs) program requests are based on unreliable forecasts for regional labor
markets.
5 NEPB is established (according to art. 8 of Employment Promotion Act within the Minister of Labor and
Social Policy) as a standing body for cooperation and consultation in the development of employment policy.
The NEPB consists of an equal number of representatives designated by the Council of Ministers and the nationally
representative employers 'and workers' organizations.
Page 57
37
Table 2.3 Unemployed Vs. ALMP spending at regional level
2008
2010
2012
Registered unemployed
'000
% of the
total
'000
% of the
total
'000
% of the
total
Total
234
100%
350
100%
342
100%
RES Sofia
30
13%
44
12%
43
12%
RES Varna
27
12%
39
11%
39
11%
RES Bourgas
20
8%
33
9%
30
9%
RES Lovech
38
16%
56
16%
54
16%
RES Montana
29
12%
40
11%
40
12%
RES Plovdiv
19
8%
36
10%
37
11%
RES Rouse
31
13%
43
12%
44
13%
RES Blagoevgrad
18
8%
30
9%
24
7%
RES Haskovo
22
9%
30
9%
32
9%
Overall ALMP Spending (NAEP + OPHRD) in BGN
'000'000
% of the
total
'000'000
% of the
total
'000'000
% of the
total
RES Sofia
14
9%
8
12%
29
12%
RES Varna
19
12%
8
11%
23
9%
RES Bourgas
12
8%
6
9%
22
9%
RES Lovech
19
12%
8
11%
35
14%
RES Montana
28
17%
11
16%
32
13%
RES Plovdiv
22
14%
10
14%
37
15%
RES Rouse
21
13%
9
12%
31
13%
RES Blagoevgrad
12
8%
6
9%
17
7%
RES Haskovo
13
8%
5
7%
21
8%
Total
160
100%
70
100%
246
100%
Source: AE administrative data and author's calculations
Page 58
38
Table 2.4 Correlations between growth indexes of unemployed and ALMP
spending in the period 2007 to 2012
Unemployed vs. ALMP
spending in year X
Unemployed in year X-1 vs.
ALMP spending in year X
RES Sofia
+
++
RES Varna
-
+
RES Bourgas
-
++
RES Lovech
+
-
RES Montana
-
-
RES Plovdiv
-
++
RES Rouse
+
-
RES Blagoevgrad
-
++
RES Haskovo
+
++
Total
-
++
Source: AE administrative data and author's calculations. (The double sign means correlation higher than
+/- 0.2; single sign means correlation lower than +/- 0.2)
However, the comparison between the change in unemployment and the expected change in
ALMP expenditure (in the coming year) shows a different picture . While overall positive,
there are still important variations by regions. The latter means that data from previous years
are more likely to determine the decision making, although there is no clear pattern. The
positive correlation in six regions may indicate that the unemployed in the previous year
determine the ALMP resources of the current year. Based on that verification, it cannot be
pretended that a positive relationship exists between unemployment developments in the
regions and the level of expenditure on ALMPs.
2.3.2 Development of the situation of specific vulnerable groups vs. ALMP
targeting at regional level
A similar analysis can be made to assess whether targeting is determined by specific
target groups' developments at the regional and / or national level . We will take youth as
one of the most risky groups over the past three years. There seems to be a high level of
commitment to address youth unemployment, so it would be interesting to check whether in
practice, youth are a priority. Table 2.5 illustrates the number of youth unemployed and youth
participants in ALMPs by Regional Employment Services. Based on this data, we tried to find
some rough correlations between the number of potential youth beneficiaries of ALMP and their
real participation during the years. We calculated two groups of correlation coefficients to
express the analyzed relationships - with one-year lag and without. As stated above, without
considering the coefficients in Table 2.6 as the absolute truth, they may help us to describe some
worthy observations.
In five RES out of nine, there is a negative correlation between youth unemployment
growth rate during year X and the growth rate of youth participants in ALMP in the same
Page 59
39
year . At the national level, this relationship is positive mainly because the four regions with
positive correlations are the biggest in Bulgaria (Sofia, Varna, Plovdiv and Haskovo). The picture
differs when we search for correlation between youth unemployed and youth participants in
ALMPs in the coming year. In this case we have only two RES with weak negative correlations
and stronger national correlation.
Page 60
40
Panel A
Table 2.5 Youth unemployed (Panel A) youth participants in ALMP
(incl. OPHRD) (Panel B) programs and measures
2008
2010
2012
'000
% of the
total
'000
% of the
total
'000
% of the
total
Total
42
100%
64
100%
75
100%
RES Sofia
4
10%
7
12%
10
14%
RES Bourgas
4
10%
7
11%
9
11%
RES Varna
5
12%
7
12%
8
10%
RES Lovech
5
11%
7
11%
8
11%
RES Montana
4
11%
6
10%
7
10%
RES Plovdiv
7
18%
12
18%
13
17%
RES Rouse
4
10%
6
10%
6
8%
RES Blagoevgrad
3
7%
5
8%
6
8%
RES Haskovo
5
12%
6
10%
8
10%
Panel B
'000
% of the
total
'000
% of the
total
'000
% of the
total
Total
21
100%
18
100%
27
100%
RES Sofia
2
11%
2
11%
3
13%
RES Bourgas
2
10%
1
7%
3
10%
RES Varna
2
10%
3
17%
3
11%
RES Lovech
2
11%
1
6%
3
12%
RES Montana
3
14%
2
10%
3
12%
RES Plovdiv
3
15%
4
22%
4
15%
RES Rouse
2
10%
1
7%
2
9%
RES Blagoevgrad
1
7%
0.8
4%
2
9%
RES Haskovo
3
13%
3
14%
2
9%
Page 61
41
Table 2.6 Correlations between growth rates of unemployed youth and youth
participants in ALMP in the period 2007 to 2012
Youth unemployed vs.
Youth participants in
ALMP in year X
Youth unemployed in year X-1 vs.
Youth participants in ALMP in
year X
RES Sofia
+
+
RES Bourgas
-
+
RES Varna
++
+
RES Lovech
-
-
RES Montana
-
++
RES Plovdiv
++
++
RES Rouse
-
++
RES Blagoevgrad
-
-
RES Haskovo
++
++
Total
+
++
Source: AE administrative data and author's calculations. (The double sign means correlation higher than
+/- 0.2; single sign means correlation lower than +/- 0.2)
Based on the data and results in Table 2.5 and 2.6, the following tentative conclusions can be
drawn:
• The relationship with one-year lag is stronger, more often positive and is a hint for
evidence based planning.
• Negative correlations for one and the same year demonstrate that ALMP instruments are
not very flexible to react quickly on urgent situations in the labor market.
• Correlations in different regions vary, which could be considered as a lack of a unified
approach to decision making and planning.
Finally, it would be useful to also analyze targeting of other groups in the future, if data were
available. Over the last three years, youth undeniably have been a priority group with a lot of
funds and programs directed towards them, which may distort the results. The correlation
between the development of unemployment and labor market participation of other groups,
such as people with disabilities, long-term unemployed or adults above 55 could be worse.
2.3.3 Evidence based decision making
Another important issue is whether evidence-based decision making occurs. The
Employment Promotion Act sets up appropriate mechanisms. For instance, every quarter of
each financial year, the MLSP, after consultation with NEPB, may reallocate any unabsorbed
financial resources from one functional region and / or program and measure to another
Page 62
42
functional region and / or program and measures which can absorb additional resources (art.
4, para 3 of EPA). This opportunity is less flexible with OPHRD and should be taken into account
given the share of EU funds.
Resources reallocation or policy changes are mostly based on demand and absorption
capacity. 6 An example from the 2009 planning process showed contradicting practices. The plan
for 2009 did not take into consideration the results of a survey by Alfa Research in 2008 (ESC,
2009). However, during the actualization of the plan in September 2009, the assessment was
taken into account and measures showing lower effectiveness were discontinued or drastically
shrunk at the expense of better performing measures. However, it is important to recognize that
evaluation results are less reliable the more employment barriers prevail.
In addition, there is no strong evidence that net-impact assessments influence decision
making for future employment policies . For instance, according to the WYG International Net
Impact Evaluation (2007), one of the least performing programs, with negative net impact,
was the computer training of young people. However, these are the most popular training
programs under the voucher training system of OPHRD. Similar results are found with other
youth programs, such as “Start in Career,” apprenticeship programs and others that have a
slight positive net impact at the bottom of the ranking, but were revived in 2012 when youth
unemployment became a national priority. The setting-up of a transparent evidence-based
decision making process would contribute to increasing the overall efficiency of the PES
work
Generally, evidence based management relies more on absorption assessments, rather
than net impact evaluations . To summarize, some evidence-based policy exists, but it has some
weaknesses such as:
• Programs are being judged mainly on their demand and absorption capacity,
• Net impact assessments are taken into account to a smaller extent,
• Evidence-base policy is applied inconsistently,
• Evidence-based policy is applied more often at the national level and rarely at the
regional level.
2.4
The impact of EU funds
The increase in EU funds for ALMP financing has influenced organization and staff
decisions in several dimensions . One of the most visible effects is the increase in the
number of staff managing EU funds . The number of EU experts increased from 27 in 2004 to
160 in 2013. Some have substituted labor offices personnel. This shift in staff leads to higher
centralization and less free resources to work directly with clients. A possible positive effect is
higher (double) salaries for experts working with EU funds, but this is neutralized by the fact
that these experts work more with documents, rules and procedures than with clients' needs
and demands. Furthermore, EU programs brought different rules of work. Now one Labor
Office employee should simultaneously deal with varied rules, procedures, documents, etc.,
leaving less time for concentration on clients' problems and solutions.
Another important effect is the extension of documentary work . As long as almost half of
the current programs are financed through EU funds, Labor Office employees are processing
all documentary work, which is onerous. Thus, according to interviews with Labor Office staff,
6 The demand and absorption capacity is seen in terms of number of applicants (and their financial
requests) who desire to apply and manage projects, measures and subsidies under ALMP and OPHRD.
Page 63
43
staff numbers have declined while staff time for clients has decreased. 7
Some respondents
proposed outsourcing EU funds work, leaving EA staff to work with clients.
Additional staff appointment under OPHRD is also a consequence of EU funds availability .
As previously mentioned, in 2012-2013, about 800 people working for the PES were financed by
OPHRD. Financing PES staff through EU funds, which are based on programs and thus limited
in the time period, has significant risks, such as instability, lack of long-term development
perspective, and more bureaucracy in personnel management. PES management is attempting to
compensate for the downsizing of regular staff, but this solution appears temporary. It does not
mean that Employment Agency leadership should forego that opportunity. But since staff is
temporary, it should be appointed for time-limited tasks, pilot projects, experiments, etc.
Otherwise, the Employment Agency should ensure continuity of appointments, which currently
is not done.
EU structural funds are less flexible in re / directing resources on urgent targets . Relying
more and more on EU financing, the state restricts its capabilities to act adequately and timely to
address serious labor market issues. National programs and measures could reach the final
beneficiaries in less than six months from initiation of a new idea. Under OPHRD, this could take
two to four times longer.
2.5
Cooperation of the labor offices with other stakeholders
The PES is to coordinate its work with many actors who deal with people at the margin of
the labor market . One of the modern practices is complete integration between different
institutions, such as social assistance and labor offices, municipal services, etc. Some of these
institutions transform into single structures, some establish joint offices or their cooperation
covers information sharing, joint activities and services, etc. In the context of vulnerable groups
in the Bulgarian labor market, some of the most interlinked institutions with the Employment
Agency are the Agency for Social Assistance (ASA), Labor inspectorate, Agency for People with
Disabilities (APD), Ministry of Education, public and private employers, vocational and
education centers, private employment services and others.
Generally, the cooperation is limited to basic activities, such as information sharing and
participation in joint commissions like Regional Employment Commissions (REC) to the
District Development Councils (DDC), National Employment Promotion Board, cooperation
councils (CC) and others. In the implementation of some programs, such as “From Social
Assistance to Employment, ”Social / Personal Assistant, and others, a closer cooperation between
social assistance and labor offices is present in terms of project proposals or target groups'
assessments, control and monitoring activities, etc.
Cooperation can be bound by written agreements. This is the case for the programs and
measures for employment of people with disabilities (Audit of Programs for people with
disabilities, 2011). The employment agency (EA) had a written agreement with General Labor
Inspectorate including information sharing for the purposes of the program spending control.
EA also has Framework Agreements with ASA and APD to implement active labor market
policies (eg joint career day organized by APD and EA, etc.).
Other programs are not subject to written rules for cooperation (Audit of National
Program for Employment and Vocational Training of People with Disabilities, 2008). In such
programs, a case-by-case approach is used, not only in programs, but also in different
7 No quantitative measures for Employment Agency employee time management exist.
Page 64
44
regions. For instance, cooperation and coordination may depend on past relationships between
institutions and people, informal contacts, and local officials' individual efforts.
Operational details of existing collaborations are also important . According to the audit
report of the National Program, “Assistants to disabled people,” (2008) good coordination
and cooperation exist among the institutions participating in the program, based on
consistency of practices for methodological support and control. Experts of labor offices and
DSAs coordinate activities through field visits based on unified control checks. Also a five-phase
assessment process of employers' project applications is implemented where different
institutions are involved - LOs, RES, RECs to DDC, Cooperation councils, and DSAs. At the same
time, the collaboration between program implementers and key stakeholders, such as APD
and the national representative of non-governmental organization, is not sufficient due to the
lack of a well-functioning and consistent national database for people with disabilities (such was
developed at the beginning of 2013, but is still not operational).
Based on the interviews during field visits and some additional desk research, the following
main characteristics of inter-institutional / organizational cooperation and coordination can be
concluded:
• Coordination and cooperation appears to be functionally / activity based, rather than
problem and / or target group oriented. Many different players may be involved in one
program, but each focuses on an individual task (assessment, control, information
provision and the like). For instance, the Labor Inspectorate cares about labor
contracts control, but is not focused on controls for youth or the long-term unemployed.
Thus, the focus of the target group or problem is likely missed. No unified / joint body
within certain programs is thinking simultaneously for all aspects of the target
disadvantage group.
• There are some examples of cooperation between different actors in the labor market,
described in different Court of Auditors' reports, but cooperation appears rather partial
and serves partners themselves, not target groups.
• Cooperation and coordination is at times formalized (written rules, agreements, etc.) and
at times, not.
• Cooperation takes place at different levels - information sharing, joint control activities,
project proposals assessment, coordinated rules and procedures, planning activities, and
labor supply-demand relationships.
• A possible solution would be target group oriented management. Joint or highly
integrated units focusing on these disadvantage groups will more effectively address
these groups.
• Finally, details matter . While information sharing may exist, it might occur through hard
copy documentation, and not electronically. There could be joint control activities, but
they may additionally burden the implementation by verifying issues important for
social assistance, but not for the employment project, itself. Such examples are
numerous.
2.6
Institutional capacity and role of the Social Assistance Agency
Together with Public Employment Services, the Social Assistance Agency (ASA) is a key
actor in social integration. A number of long-term unemployed are social assistance recipients.
Usually, the beneficiaries move between PES and ASA safety nets in different periods of their
working life. The strength of social assistance services in Bulgaria are:
Page 65
45
• Its experience and know-how to provide social services to some groups most at risk.
• Application of some “case management” approach practices. In fact, social workers
(unlike labor mediators) have personal familiarity with many of the clients (which is
not typical for labor offices). They may know the home of their clients, what they
possess, eat, with whom they live, etc.
The Social Assistance Agency in Bulgaria has suffered comparatively smaller staff
reduction over the last ten years compared to the Employment Agency . The total number of
personnel has been reduced by almost 18 percent from 5,790 in 2003 to 4,736 in 2013. The staff
of the Social Assistance Directorates (the equivalent of labor offices) declined by approximately
15 percent compared to 31 percent in labor offices. In 2013, there were 147 social assistance
offices, almost half of its number (271) in 2003. However, 50 social assistance directorates
operate, more than labor offices and with slightly better regional coverage.
It is hard to analyze SA workload based on the clients served. Some programs have a
diminishing number of participants. For instance, the number of GMI recipients has dropped
by almost 65 percent from 143,500 (monthly average) in 2003 to 49,700 in 2012. The situation
is similar with the child allowances. In 2004, 760,700 families were assisted, while in 2012, only
545,300 families received assistance (almost 30 percent decline). Despite these declines, single
programs, such as assistance to earthquake victims, energy lump sums or a lot of new
European programs, create additional workloads.
In addition, social assistance programs often work with clients who are claimed
ineligible. For example, in 2012 there were 266,000 cases approved for energy benefits and
56,000 rejected. The latter also consumes ASA resources.
People working in the social assistance system have the feeling that their workload is
steadily increasing, mainly owing to a growing share of administrative work. Comparison
between clients and staff assumes that the workload might be declining, but the opposite was
stated during interviews conducted by the World Bank team. In theory, DSAs have the following
functions according to the Social Protection Law and ASA statute:
• Receive documents of individuals and families applying for social assistance, make spot
checks, examine records and collect information for the individuals and families.
• Perform overall activity of granting, paying, refusing and terminating of social benefits
and child allowances, as well as organize social rehabilitation and integration of people
with disabilities. Carry ongoing practical activities of child protection in the municipality,
make temporary accommodation and suspension of children placement in families of
relatives, foster care and in specialized institutions.
• Identify and implement specific measures to protect children and supervise them
implementation.
• Provide targeted financial assistance to support children and his / her family aiming at
prevention and reintegration, and rising of children with relatives and foster families.
• Examine municipal population needs of social services, carry out social work supporting
vulnerable groups to socially integrate in the community.
• Carry out activities of placement and removal from specialized institutions, consult and
work individually with clients for their adaptation and integration.
• Conduct inspections and prepare responses to received suggestions, complaints,
warnings and requests for social assistance and child protection.
Page 66
46
•
Meet with clients and advise on issues of social assistance, child protection and the rights
of people with disabilities.
•
Cooperate with local stakeholders in the field of social protection and vulnerable groups.
Much of social workers' time is spent processing paper work including general documents,
eligibility verification, on spot checks, granting, paying, refusing and terminating of social
benefits or child allowances, and the like (according to the interviews with DSA staff). Generally,
the formal work prevails over client communication, consultation, needs assessments and
personal support. If the administrative work is reduced, there will be an opportunity to build on
some of their strengths described in section 2.6 (being closer to the client, guidance, tackling the
multiple problems people face). Another option is to increase the staff capacity for this type of
non-administrative social work
2.7
Private and Non-governmental sector service providers
Disadvantaged groups are supported by various non-state actors in the labor market ,
including private labor offices, temporary employment agencies, employers, non-governmental
organizations (NGOs), vocational education and training centers (VET centers).
Private labor offices have been increasing in Bulgaria, fluctuating between 500 and 600.
Based on Employment Agency data, 40,000 to 50,000 people were served by private labor
offices in the first quarter of 2009. However, efficiency was relatively low as only 17,000 people
were placed in a job in 2008, corresponding to 30 to 40 people per private labor bureau per
year.
Temporary Employment Agencies were legally set up at the end of 2011 . They represent a
new instrument in the Bulgarian labor market, and no evidence for their work exists yet. Their
legal framework is stipulated in the Employment Promotion Act (Chapter 8).
Vocational Training Centers are registered according to the law for vocational education
and training . They are registered in the National Agency for Vocational Training (NAVET). In
May 2013, there were about 867 VET centers with an active license. Many of these centers are
not very active, but a few are renowned to perform well. The Bulgarian-German VET centers are
such an example. With the help of German technical assistance, five well-equipped centers have
been established with qualified staff since the time of their establishment. Their operations are
integrated in PES 'process model of work. As described during the field visit, Bulgarian-German
VET centers send training programs and schedules to Los, which are announced before the
unemployed who may enrol in the offered training courses. However these Bulgarian – German
VET centers are integrated so closely with labor offices' tasks because they are state owned. He
contrary, the activities of most other VET centers are not as well integrated and coordinated
with LOs.
OPHRD aided in the development of VET centers. The huge increase in vocational training
financed under the operational program (including the voucher system) since 2010 has led to
better perspectives of these labor market players.
No reliable quality system is set up to guarantee that all trainings conducted achieve
positive results (eg external examination similar to the school system). No impact evaluations
are undertaken to reveal whether the trainees completing some courses acquire the intended
skills and knowledge. Strong doubts exist that the trainings are of high quality. Distrust in the
system is largely due to the following:
Page 67
47
• The trainings are supply driven, rather than demand driven, meaning that most trainings
occur because OPHRD provides funds for a specific task, not because employers or the
employees need and want that specific training.
• Although, more than 80,000 unemployed have been trained under OPHRD within the last
three years, and more than 100,000 employees attended training courses, the employers
still state that the workforce does not possess the skills and qualifications demanded.
This may be because employers do not know exactly what they need, many of the
trainings are of poor quality, or the trainings are not of sufficient breadth and / or depth.
• There is no reliable quality assurance system for adults' vocational training. Indirectly,
given the comparatively poor results of the Bulgarian education system (see PISA 2009
results), it is hard to believe that VET system produces trainees with significantly
improved knowledge.
The presence of non-governmental organizations (NGOs) in the labor market is
increasing with the acceleration of OPHRD fund absorption . The National Employment
Action Plan that finances the national programs and measures is largely directed at
employers as organizational counterparts. In contrast, OPHRD has a lot of programs where
NGOs are eligible as beneficiaries.
There are some good practices with NGOs working in Roma communities, but generally
NGOs are not very active in the labor market . Some of the major reasons are:
• The state is still not willing to delegate (outsource) some of its labor market functions
to NGOs.
• The PES acts as a rival, rather than a partner or a contractor to private and non-
governmental organizations.
NGOs themselves do not have enough capacity in terms of financing, material, human
resources, know-how, and experience . Moreover, according to three reports on the status of
civil society organizations (CSOs) in Bulgaria (Civil Society in Bulgaria: Citizen Actions Without
Engagement by Open Society Institute / OSI, Sofia, 2011; the USAID 2010 and 2011 NGO
Sustainability Index for Central and Eastern Europe and Eurasia, 14th and 15th edition, 2011
and 2012), the civil society sector has suffered an overall deterioration of its sustainability over
the last four years as a result of the economic crisis. This is particularly true for the labor market
NGOs.
Sustainability of NGOs in the labor market depends on project financing, which hampers
long-term planning and development. For instance, a combination between yearly-delegated
services / budgets and projects could ensure brighter perspectives for labor market NGOs.
Generally, a policy towards wider participation of NGOs and other private actors should
be encouraged . Good practices are available in the field of social services where many service
providers are non-profit or private. Their progress in the last ten years is based on processes of
decentralization, deinstitutionalization and community-based services. Their financial stability
is rooted in state-delegated services and budgets. Many of these social service providers focus on
the target groups rather than the services themselves. Some are sporadically trying to provide
employment services, but the main problem is an insufficient state policy to encourage such
activities. So if the Government decides to stimulate the labor market mediation among non-
governmental and private agents, the existing social service providers could be one of the first
entering this field together with the current labor market actors. In such an “open” labor
mediation market, integrated service providers targeting specific disadvantage groups would
naturally emerge on a market basis.
Page 68
48
Outsourcing employment services for disadvantaged groups can be efficient if well
organized and well implemented . There are numerous examples in other European countries.
The main advantage is that specialized organizations partnering with PES are more effective and
efficient in providing specific services for certain target groups. However, in order to implement
this approach in an efficient way, it is crucial to introduce well working result-oriented quality
management. One difficulty involves determining the expected results for different types of
vulnerable groups and setting incentives accordingly.
2.8
Employers
Employers have access to various services provided by public employment services
according to the Employment Promotion Act . They may receive information about job
seekers, programs and measures, procedures and rules for layoffs. They may take advantage
of brokerage services, such as availability of vacancies, offering of vacancies, selection of
personnel, referral of appropriate candidates, and feedback from the same process. Employers
could request trainings, people to hire, and labor force mobility support.
Employers' cooperation is voluntary (except for public employers) . However, if employers
work with labor offices, they are asked to inform the labor office about vacancies opened or
closed, and the application result of the unemployed referred by the Labor Office.
Employers announce about 30 percent of vacant jobs to employment offices (Bulgarian
Employment Agency, Peer PES Paper, 2012). About 45 percent of registered vacancies are
aimed at people with low qualifications, about 27 percent target secondary education level and
completed vocational training and about 23 percent of registered job openings target high-
skilled workers (Employment Agency 2012). The public sector is obliged to announce vacancies
to labor offices. In the context of the economic crisis the unemployment rate has been higher
than the vacancy rate as recorded by the Labor Force Survey (see Figure 2.4 and Figure 2.5).
Figure 2.4 Unemployment and vacancy rates in Bulgaria (%)
Source: Loukanova 2012 on the basis of Eurostat
The following figures show the Beveridge curve on the basis of national data of registered
unemployed and vacancies.
Page 69
49
Figure 2.5 Unemployment and vacancy rates in the period from the first quarter of 2005
to the first quarter of 2012 in Bulgaria
.
ob
v
ac
an
c
yes
ra
and
Unemployment rate
Source: Eurostat.
The JVR data for q3 / 2009 and q1 / 2012 are preliminary. Source: NSI, Bulgaria.
Source: Loukanova 2012
A survey performed by Alfa Research about the quality of labor mediation showed
employers' positive attitude towards cooperation with labor offices. Their overall
satisfaction is graded as 5.6 out 6. Almost all interviewed employers have stated that they will
continue to work with the labor offices. However, these positive results are biased, since 86.3
percent of employers working with labor offices have been doing so for more than three years.
This means that respondents preferring to cooperate with labor offices are overrepresented,
while employers who are not cooperating at all or not on a regular basis have not been surveyed.
Between 60 and 70 percent of respondents appreciate the labor offices' support to select an
employee, like the updated general information they receive or the info about job seekers, or the
way vacancy information is distributed among the unemployed. Another 12 percent of employers
worked for first time with labor offices. The majority of this group worked for a short time with
labor offices before discontinuing their cooperation. Employers who refused to work with
labor offices cited the slow response of labor offices to inquiries and the lack of suitable
candidates for vacancies advertised.
The overall impression is that labor offices are cooperating well with already
established relationships, but are having difficulties extending the number of new
employers . This situation might be changing with the acceleration of the OPHRD program, given its
scale, and some participation rules and thresholds imposed on European programs
beneficiaries who cannot be awarded twice in one program or cannot exceed the state aid de
minimis rule for three years.
Field visits of the World Bank team showed that, probably due to heavy caseload,
employment office counselors are not pro-active in outreach towards private employers.
Improving contacts with employers is not only important in order to increase the share of
vacancies that are announced to the labor offices, but also in order to pro-actively search for
job opportunities in the private sector for vulnerable groups. Furthermore, it would be useful to
have more private sector employers involved in active labor market programs (see Chapter
4).
Page 70
50
3. Benefits, Activation Process and Services Provided
to GMI Recipients and Disadvantaged Groups
3.1
The design of the social benefit schemes
Poverty is widespread in Bulgaria and the share of people living in severe material
deprivation is the highest in the EU (European Commission 2012). The relative poverty, as
measured by the 60 percent threshold in relation to the median income, amounted to 21.2
percent in 2012, 15.1 percent if considering the 50 percent threshold, and 10.1 percent in
relation to the 40 percent threshold. 8 The poverty rate relating to these three thresholds were all
largely above the EU average and the gap was particularly large (nearly double) for the 40
percent threshold. Expenditures on General Minimum Income (GMI) represented 0.07 percent of
GDP, and expenditures on child allowances 0.67 percent of GDP.
Mainly four types of cash benefits are provided by social assistance agencies : (i) General
Minimum Income (GMI); (ii) heating allowances in the winter season for families with low
income; (iii) child protection allowances and smaller programs for families under Law on
Family Allowances and the Child Protection Law (such as monthly benefits for families with
children, birth grants for uninsured households; World Bank 2009); and (iv) income
supplements for people with disabilities. Table Annex A1 gives details of people and households
receiving social benefits from the Social Assistance Agency. The social benefit system is highly
differentiated. The calculation of the benefit depends on the target group, rules for mean-testing
and defined income threshold.
The GMI is a means and income tested monthly social assistance scheme provided to
persons or families whose income is lower than a certain minimum income differential
and who are searching for employment. Social assistance may be granted to the unemployed
families, but there are also other groups. Currently, there is no time limit to receive the GMI.
Persons or families whose income for the previous month is lower than a certain minimum
income differential are entitled to monthly social assistance benefits. The basis for determining
the differentiated minimum income is the guaranteed minimum income (GMI), determined
yearly by the Council of Ministers. Differentiated minimum income is defined for different target
groups such as: elderly, disabled, youth, orphans, single parents, and pregnant women. The
differentiated minimum income ranges between 20 to 165 percent of GMI.
Several requirements must be met for eligible families to receive GMI. The monthly means-
tested GMI is granted if an individual or family meets certain conditions related to possession of
home, capital, deposits, shares, securities, movable and immobile properties and others.
Another requirement is registration with the labor offices for at least 6 months before
application for social assistance. Furthermore, claimants shall not have refused participation in
active labor market measures, programs and services. GMI beneficiaries also need to meet a
workfare requirement - to participate in public works offered by the Labor Office for a
minimum of 14 days per month. Beneficiaries may be families or individuals. The design of the
The GMI program, set up in 1992, was influenced by the Belgian Program “ Minimum
d'existence-Minimex ”and the French Program“ Revenu minimum d'insertion ”(RMI) (Shopov
2012), 9 but unlike these programs, the Bulgarian GMI does not exclude young people under
the age of 25.
8 http://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do
9 In 2009, the French system reformed the RMI into the broader “Revenu de Solidarité Active” (RSA)
program.
Page 71
51
The energy benefit is also a means tested safety net instrument for coping with the
increase in energy and heating prices . Individuals and families whose average monthly
income for the preceding six months before the month of application is less than or equal to a
differentiated minimum income and who meet criteria similar to GMI criteria, are eligible for
heating assistance. The differentiated minimum income differs for various target groups
depending on the type of household, age, ability of the beneficiary to work, disability status,
presence of children of varying ages, children with disabilities, etc. The monthly amount of
targeted assistance provided is based on the equivalent of 350 kWh of electricity (250 kWh daily
and 100 kWh night electricity), at the average retail price of electricity for residential consumers
at the beginning of the heating season.
Family or child allowance is income-tested monthly child assistance provided through the
completion of secondary education, up to 20 years of age. Beneficiaries with average
monthly income per family member for the previous 12 months that is less than or equal to the
income designated by law for the state budget of Bulgaria for the year, can claim the benefit. The
State Budget Act of the Republic of Bulgaria determines the amount (cash or social investment)
annually for the year, but it cannot be less than the previous year. Social Investments may
include full or partial payment of fees for a nursery or kindergarten; full or partial payment of
canteens; purchase of clothing, shoes, textbooks, etc.
The three social assistance measures use different income ceilings for the eligibility of the
benefit. Furthermore, in addition to income-tests, asset-tests are included as an eligibility
requirement for GMI, but not for the Child Protection Allowance.
3.2
The design of the Guaranteed Minimum Income Scheme and activation
3.2.1 Level of Guaranteed Minimum Income, poverty avoidance and work
incentives
In 2009, the basic level of GMI corresponded to BGN 65 for a single person. It could be
higher if the household consisted of two unemployed adults. Additionally, the number of
children plays a role in the health status (differentiated minimum income), but also other factors
than the number of family members play a role. While the GMI level increased to BGN 65 from
BGN 40 in 2001, it has not increased since January 2009. Moreover, the outcome thresholds
have not increased although minimum wages have. This is probably one reason why the number
of GMI recipients did not increase to the same degree as long-term unemployment. It could be
expected that the number of GMI recipients would increase as people were long-term
unemployed and increasingly spent their savings and as the previous unemployment benefit
scheme for long-term unemployed was abolished.
While minimum wages have caught-up with average wage development, the level of GMI
has remained low . Minimum wages have increased BGN 70 in two years, from BGN240 in 2010
to BGN 310 in 2012 (see table 3.4). Prior to this last enhancement of the minimum wage, the
increase in minimum wages was less than the average wage increase and this gap significantly
widened between 2006 and 2011 (Loukanova, 2011b). Average wages have grown because
employment of low-skilled and low-wage earners decreased (see Chapter 1). In 2012, minimum
wages were the lowest level among EU 27 countries (European Commission 2012).
Page 72
52
Table 3.1 Poverty line, minimum wages and average wages, 2007-2012
Relationship between minimum wage, poverty line and average wage, 2007–2012
2007 2008 2009 2010 2011 2012
Official poverty line (in BGN)
152 166
194
211 236
241
General Minimum Income GMI for a
single person (in BGN)
55
55
65
65
65
65
Minimum wage (in BGN)
180 220
240
240 250 283.33
Average wage (in BGN)
430 524 578 * 600 ** 686
766
GMI for a single person / average wage
(%)
12.8 10.5 11.2
11
0.9
8.5
Minimum wage / official poverty line (%) 118.4 132.5 123.7 113.7 105.93 117.56
Minimum wage / average wage (%)
41.9 42.0 41.5 40.0 36.44 36.99
Notes: € 1 = BGN 1.96. * For the first nine months of 2009. ** Estimates for the first nine months of 2010.
Source: European Foundation for the improvement of the living and Working Conditions,
http://www.eurofound.europa.eu/eiro/2009/12/articles/bg0912029i.htm Indicated source: Ministry of
Labor and Social Policy (Ministry of Labor and Social Policy, MLSP) and National
Statistical Institute ( NSI )
The actual level of social assistance benefit for a single person represented 11% of
average wages in 2010. This was relatively low as compared to other OECD countries
(Immervoll 2012). Countries with a comparatively low relative level of social assistance (for
people in working age) or unemployment assistance benefits include Estonia, Germany and the
UK. Other countries with means-tested unemployment assistance benefits have a higher relative
benefit level: eg, in 2010, benefits levels were 39 percent in Austria, 32 percent in Ireland, 23
percent in Sweden and between 16-18 percent in Finland, France and Australia. In most cases,
benefits are unlimited and tested against family income (except in Hungary, Sweden and Estonia,
where they are tested against individual income). In a number of countries unemployment
assistance or social assistance may be topped up by other benefits, such as housing allowances.
In addition to the income test, assets are tested in less than half of the countries. In some
countries, there are rules about earning disregards (eg Australia, France, Sweden, UK, Ireland).
3.2.2 Earning disregards for social assistance and in-work benefit
In the first half of the 1990s earning disregards were taken into account when calculating
the GMI. About 30 percent of labor income could be used for topping-up GMI. This
approach stimulated pro-active behavior, but was later abolished due to the high
administrative burden . It seems that the low level of institutional capacity in terms of number
of staff, as well as the focus set on controls, has prevented implementation of in-work benefit
schemes. The unemployment benefit system does allow for earning disregards in case of part-
time work. However, in a number of OECD countries, there are rules about earning disregards
(eg Australia, France, Sweden, UK, Ireland), (Immervoll 2012).
Page 73
53
3.2.3 Structure of beneficiaries
The number of single persons and families receiving GMI increased from roughly 44,000
to over 50,000 between 2010 and 2012, less than the increase in the number of long-term
unemployed . About 93 percent of all GMI recipient cases involved families where at least one
person was of working age. About 1.6 percent of the cases were individuals or all family
members were below working age, and in about 4.7 percent recipients were above working age,
most of whom were single (and in the remaining households both were above working age).
About five percent of the cases referred to two-parent families where the children, but not the
parents, were supported.
The majority of unemployed receiving GMI live in two parent families (Figure 3.1) . The
number of unemployed in GMI recipient families who lived in a two parent family or who were
single parents with children aged above 3 years increased by over 30 percent between 2010 and
2012
Figure 3.1 Number of unemployed in families receiving GMI with at least one household
member in working age, by family type, 2010-2012
Source: data provided by the Social Assistance Agency, own calculations
3.2.4 The role of the Social Assistance Agency and means-testing
Income and assets testing absorb a large part of social workers activities . Monthly on-site
visits are performed in order to check whether the person has other income sources (eg from
informal employment, a new household member). Social workers have a high level of discretion
in their assessment of the household income. Social assistance officers interviewed claimed that
control is crucial to detect informal employment, claimant women who are not married, and self-
declared single parents who actually live with a partner.
Although tracking misbehavior is acceptable in principle, the extent of controls and high
discretion of social workers to detect additional income may foster formal labor market
detachment . There is also no incentive to improve one's own living conditions, as this
improvement is likely to be sanctioned. Given poor living conditions, the right attempt to control
eligibility may have undesirable effects, such as fostering poor living conditions, which may lead
to poor health conditions. Marginality of GMI recipients seems to be quite high. It may be more
desirable to combat abuse from social assistance in a situation where severe poverty has already
been markedly reduced. The low level of benefit (see below) may set incentives for joining the
informal labor market.
Page 74
54
3.2.5 Job-search requirement for GMI recipients
In addition to income testing for GMI eligibility, the claimant must be registered with the
Labor Office for at least six months . Thus, a person claiming GMI has a waiting period of six
months if the person had not been unemployed prior to claiming the benefit. This waiting period
has been reduced from nine months. This requirement contradicts the logic of social assistance
being a safety net of last resort.
This waiting period does not apply to participants in labor market programs (Art. 10,
para 4, it.4 Social Assistance Act). This, in turn, tends to favor repeated participation in labor
market programs. However, recent amendments in the main program “From Social
assistance to employment ”have introduced de facto waiting periods for participation in this
specific measure (see Chapter IV).
3.2.6 Mutual obligation for GMI recipients
Enforcement of the mutual obligation principle is comparatively strict: all GMI
beneficiaries participate in small community work on a part-time basis (14 days for 4
hours a day) . There is no compensation for participants (eg in contrast to similar programs
in Australia, where participants can top-up their benefits - although compensation is not very
generous - see below).
The conditionality was tightened in April 2010, when the number of workdays was
increased from 5 to 14 days . The main objective of the Government has been to stimulate work
activity, to safeguard labor habits and to protect people from social benefits dependence. He
the other hand this might have reduced the incentive for claiming GMI, as people prefer to work
in the informal economy. Thus, the system might promote the informal economy. This is in
conflict with the objective of reducing informal employment and implies the above mentioned
on-site income test controls, which include avoiding working in the informal economy.
Therefore, it would be advisable to balance the number of days that need to be worked to
comply with the mutual obligation requirement. Table 3.2 shows the number of persons who
have been referred to “socially beneficial activities.” The share of GMI recipients who have not
carried out socially beneficial activities is quite low.
Table 3.2 Number of persons referred to socially beneficial activities in 2012
2012
Number of persons referred to socially beneficial activities
/ 1 + 2 + 3 + 4 + 5 /
39731
1. Number of persons who have performed socially beneficial activities
37 123
2. Number of persons not provided with jobs by the municipality
98
3. Number of persons who have not performed socially beneficial activities for good
reasons
1 163
4. Number of persons who have refused to perform socially beneficial activities in
relation to Art.12, Para 5 of RISAA 10
1 032
10 If a person refuses to participate in the 14-days community work, monthly assistance shall be
suspended for a period of two months from the first day of the month in which the refusal was made.
Page 75
55
5. Number of persons who have refused to perform socially beneficial activities in
relation to Art.12, Para.6 of RISAA 11
317
Source: information received by the Social Assistance Agency (ASA)
Activities for the community work are, in general, organized by the municipalities and
include cleaning and road maintenance in the winter . There is little reason to believe that
employability could be improved. As such, there seems to be a de-motivational effect from this
nearly part-time non-paid community work. This assessment would be confirmed by
experiences gained in other countries.
Box 3.1 Mutual obligation and job creation in Australia
Besides job creation measures for Indigenous Australians, Work for the Dole (WfD) had been the
most important job creation program for more than a decade. The latter program was
introduced in 1997 and aims at developing work habits. Means-tested income support recipients
receive AUD 20.80 per fortnight to assist with the costs of participation. The program has
been used as a key element of the benefit compliance system. Examples for WfD activities are
maintenance of vehicles and buildings, landscaping or gardening, decorating, metalworking
customer services, hospitality, helping members of the community such as the elderly, people
with disabilities or children . WfD activities are available with non-for-profit and community
organizations, or with local, State, Territory or Australian Government organizations and
agencies. The activities should be additional, so that no competition with other companies and
no displacement of workers may occur.
The Green Corps program is a small job creation program that should benefit Australia’s
natural environment and cultural heritage. At least 80% of the total activity time should be spent
on environmental tasks. It contains a training component and is therefore more expensive than
WfD .
Assessments of the effectiveness of Work-for-the Dole demonstrate mixed results. The nature of
low-skilled tasks carried out in the context of non-paid work, the lack of structured training, and
the poor prospects for acquiring useful skills for getting more stable employment on the regular
labor market was early on pointed out as the weaknesses of the program and stigmatization
effects of mutual obligation programs, such as WfD, are acclaimed.
Source: OECD 2012
3.3
Eligibility and conditionality for Child Protection Allowances
The Child Protection Allowance is means-tested. The income threshold is BGN 350, which
is higher than the GMI eligibility. In this way, it is possible to better cover children growing up
in poor families, as the GMI scheme is too small to provide an adequate coverage. Furthermore,
this higher income threshold helps to avoid disincentives for GMI beneficiaries to take up low
paid jobs, as they may still receive the Child Protection Allowance.
The receipt of this allowance is linked to a school attendance requirement. This is verified
on a monthly basis through confirmation with the school director, supplemented by on-the-spot
visits. Table 3.3 gives an overview of sanctions because of unexcused absences from school. The
refusal rate is below one percent.
11 If one refuses twice, monthly social assistance will be suspended for two years.
Page 76
56
Table 3.3 Monthly allowances for children and compliance with school attendance
2010
2011
2012
Families receiving monthly allowances for children
570 577 557 002 544 716
Number of children - total
839 698 823 188 807 917
Number of families sanctioned for 5 unexcused absences of
their children from school
3 837 3 104 3 614
Number of children with 5 or more unexcused absences
4 179 3 353 3 936
Source: Information provided by the Social Assistance Agency
An important employment barrier for GMI recipients is illiteracy. Linking eligibility of
child protection benefits seems to be the right approach to prevent problems of illiteracy
for the next generation. The controls of school-attendance, however, seem to have some
objective obstacles as schools have an incentive for false school attendance declarations. The
the latter may hamper the effectiveness of the school conditionality. On-the-spot visits only partly
solve the problem, as learning and literacy are not necessarily linked to school attendance.
Concentration of children from families with an illiterate background and whose mother tongue
is not Bulgarian is impeding learning. Furthermore, incentives seem to be wrong as regards
school attendance by school type (eg warm meals are provided in “special” schools). Mixing
classes of Roma and non-Roma children would probably lead to better integration results,
although enforcing this model will be difficult in practice.
3.4
Access to other out-of work benefits for people in working age
3.4.1 Unemployment benefits
The unemployment benefit level and duration depends on declared insurance income
and the length of insurance. Social security insurance for all types of risks is mandatory for
workers and civil servants who are employed for five or more days, or 40 hours, within a
calendar month (Loukanova 2011a). The Law on the Budget of the State Social Insurance
regulates the minimum and maximum of the unemployment benefit level.
In 2010, the unemployment benefit replacement rate was roughly 30 percent of the average
wages and 80 percent of minimum wages (see table 3.4). This replacement rate is
significantly higher than in the case of GMI receipt for a single person (see Table 3.1 above).
Table 3.4 Unemployment benefits / net replacement rates of insurance income and wages
2007
2008
2009
2010
UB, annual, on average, Euro
61.9
72.1
73.5
98.1
Replacement rate of:
- Average weight
28.2
25.9
23.6
29.7
- Minimum weight
67.4
64.3
60.0
80.1 *
Source: Loukanova 2011a
Page 77
57
As compared to other European countries, net replacement rates of unemployment
benefits in Bulgaria ranged in the lower third (see Figure 3.2 below).
Figure 3.2 Level of unemployment benefit / net replacement rates in Europe
Source: European Commission (ESDE 2012/13)
The duration of the unemployment benefit varies between a minimum of four months (in
the case of three years of insurance) and 12 months (in the case of at least 25 years of
insurance). Compared with other European countries, the unemployment benefit duration is
relatively low regarding the minimum duration and rather average regarding the maximum
duration (see Figure 3.3).
Figure 3.3 Minimum and maximum duration of unemployment benefit
Source: European Commission ESDE 2012/13
By international comparison, Bulgaria's entitlement conditions are relatively strict (see
Figure 3.4). However, Bulgaria does not belong to the group of countries with the strictest
requirements with regard to previous employment, contribution periods, or sanctions for
voluntary unemployment.
Page 78
58
Figure 3.4 Strictness of entitlement conditions, OECD countries
Source: Venn 2012
According to Venn (2012), Bulgaria belongs to the group of countries with less than a year
of employment and / or contribution as a condition of receiving the unemployment
benefit . Unemployed are eligible for a minimum period to unemployment benefits if they have
been insured with the State Social Security for at least nine months during the last 15 months.
Other countries in this group are Canada, Cyprus, Finland, France, Greece, Japan, Korea,
Luxembourg, the Netherlands, Norway, Slovenia, the US and the UK. Prior contribution
requirements are stricter in a number of countries, and were particularly tight in Slovakia (3
years of employment).
In the case of repeated unemployment spells, the unemployed needs to have a
contribution record for three years before being entitled to the unemployment benefit .
These unemployed will get the minimum unemployment benefit for a period of four months
(Loukanova 2011a). This sets disincentives to take up temporary jobs and thus, to shorten the
unemployment spell.
The unemployment benefit scheme allows for part-time work paid below the minimum
wage, in which case the amount of unemployment benefit is halved (Loukanova 2011a). Thus,
unemployment benefit recipients still have some incentive to accept low-paid part-time work as
their total income from work and unemployment benefit will be higher. However, it is doubtful
that the income disregard is very effective, as the Bulgarian economy is characterized by a low
part-time share. It would be advisable to use this part-time option more widely.
Between 2007 and 2010, entitlement to long-term unemployment benefits was capped at
a maximum benefit period of 30 months . This was revoked in 2011, as the share of long-term
unemployed increased as a result of the crisis (Loukanova 2011a). It was meant for the older
unemployed who do not yet receive a pension. Budget Law regulating the State Public Insurance
fixed the amount of the benefit yearly.
In general, the young unemployed have no access to the unemployment benefit
(Loukanova 2010). This might be problematic in times of high unemployment, as it is more
difficult to reach out to young people. It is, however of great importance that young people with
no or little work experience are rapidly activated (Düll, Vogler-Ludwig 2011).
Page 79
59
3.4.2 Disability benefits
Eligibility to disability benefits depends on the medical assessment and is granted for
disabilities above 50 percent . This assessment is provided by a medical expert commission
and contains advice for the type of employment that can be carried out given the type and
degree of disability (including for disability below 50 percent). This is a good pre-condition for
activating people with disabilities and job brokers should pro-actively use this information.
Given the low level of GMI, there might be an incentive for jobless people to obtain disabilities
above the 50 percent recognized. The average pension for disability is slightly above 200 BGN,
which is about 4 times higher than monthly social assistance.
Page 80
60
4. The activation process
4.1
Registration and Coverage of Unemployed with the Employment
Offices
4.1.1 Registration with the Labor Office
Individuals who become unemployed need to register with labor offices in order to be
eligible for benefits and services of the labor offices . According to changes in law in 2011,
registration must be made within seven days (Loukanova 2012). This should speed up the
activation process and shorten unemployment spells, at least for those who are employable and
ready for the labor market. However, in the case of larger numbers of dismissals, this may
result in a very formalistic administrative procedure, given the high caseload of labor offices'
staff. Thus, it can be doubted whether this rule speeds up a lot registration. Electronic
registration would free some time of PES staff for interviews.
A second group that needs to register with labor offices is GMI claimants (see above).
However, there is a growing number of unemployed people who are neither eligible for
unemployment benefits nor for GMI. If there is no incentive for registration there is the danger
that some cannot be reached with activation measures.
4.1.2 Coverage of unemployed through the labor offices: number of ILO
unemployed and number of registered unemployed
Between 2000 and 2010, the number of registered unemployed was slightly above the
number of unemployed measured by the European Labor Force Survey (LFS, ILO
definition). One reason could be that those who register with the labor offices are not active
looking for a job, but registration is a precondition for claiming GMI. Between 2010 and 2012,
the number of LFS unemployed was above the number of registered unemployed, indicating that
more people were jobless and actively searching for a job than actually registered with the
employment agencies. A tentative explanation could be that the conditions for GMI receipt were
tightened (see below), resulting in a lower number of persons who would be eligible for GMI
from the income-test side but did not want to work. While some of the passive (potential) GMI
recipients do not register with the labor offices anymore, probably also potential GMI
recipients and jobless whose unemployment benefit eligibility run out do not register, as they do
not expect that the labor offices can help them find a job.
Page 81
61
Figure 4.1.5 Number of unemployed (Labor Force Survey), registered unemployed and
unemployment benefit recipients in 1000, yearly averages, 2000-2012
Source: Bulgarian Labor Agency, Eurostat
The average number of unemployment benefit recipients was largely below the number
of unemployed . The number only slightly increased at the beginning of the crisis and even
decreased between 2010 and 2011, although unemployed, as measured by LFS, increased. This
is linked to the rising number of long-term unemployed.
Young people are often not eligible for unemployment benefits and are therefore often
not registered with the employment office (Figure 3.6). Non-registration of young people is a
serious problem in light of the high share of young people who are neither in employment nor in
education and training (NEET) (see Chapter I).
Figure: 4.2 Unemployed youth and registered unemployed youth (15-24) in 1000, 2004-
2011
Source: Eurostat, European LFS, National data from the Labor Agency
Page 82
62
An increasing number of European countries apply an activation strategy, which sets
incentives for young people to participate in training or education, to actively search for a
job or to participate in an active labor market program. If young people have access to
unemployment and / or social benefits, an activation approach based on a mutual obligation
approach is easier to implement. The moderate use of sanctions and the obligation to participate
either in education, an active labor market policy measures or a job are key elements of such a
strategy. The access to benefits helps to reach out to young people, although additional outreach
activities are necessary to contact those who are the most disconnected from the labor market
(Düll, Vogler-Ludwig 2011).
Activating young people needs to be of the highest priority since the share of long-term
unemployed youth has dramatically risen in the context of the economic crisis (Figure
3.7). In order to avoid long-term unemployment and detachment from the labor market, young
people need to be activated early.
Figure 4.3 Youth unemployment by duration of unemployment
Source: Dimitrov 2012
For adults aged between 25 and 54, the reverse was true: there were slightly more
registered unemployed in PES than unemployed according to ELFS for the period 2004 to
2009 . This indicates that a (small) number of registered unemployed are passive and were not
actively looking for a job. A further explanation could be that they were participating in an active
labor market program and were therefore stating that they would not be available within
the next two weeks. During participation in subsidized employment programs registration is
suspended (Venn 2012). In 2010, the number of registered unemployed equaled the number of
LFS unemployed and in 2011 the situation was reversed. This might be linked to repeated
unemployment during the economic crisis, which does not or only briefly allows for eligibility to
benefits and may thus lower incentive to register with the employment office.
Page 83
63
Figure 4.4 Unemployed and registered unemployed (25-54 years old), 2004-2011
Source: Eurostat, European LFS, national data from the Labor Agency
Comparing the number of registered unemployed and numbers of LFS unemployed shows
that the number of unemployed with a duration of six to 12 months was quite similar in
2011 . However large differences existed for the long-term unemployed and in particular for the
very long-term unemployed. Many of those still looking for a job are not registered with the
labor offices (Figure 3.9). Field visits showed that some labor offices try to reach the non-
registered unemployed through providing information eg via Roma mediators (see Chapter 2).
Figure 4.5 Unemployment by duration, registered unemployed and LFS unemployed, in
1000, 2011
Source: Eurostat, European LFS, national data from the Bulgarian Labor Agency
As Immervoll states, “low and declining benefit coverage of the unemployed erodes the
capacity of the benefit system to fulfill its income protection function and its role in
facilitating a good match between jobseekers and vacancies ” . “As part of an employment-
oriented policy framework, benefits provide a principal instrument for linking unemployed
people to employment services and active labor market programs; those outside the scope
of benefits can find accessing these services significantly more difficult ”(Immervoll 2012).
Page 84
64
In the context of the Bulgarian labor market, the high inactivity rate is worrying, as
shown in Chapter 1. Inactivity rates are among the highest in the EU (Figure 3.10). An unknown
number of the inactive might be poor, but not eligible to GMI.
Figure 4.6 Unemployment and inactivity as a percentage of male and female
population, 2011, EU countries
Source: European Commission, ESDE 2012
Finally, the number of registered jobseekers aged 55 and more is significantly higher than
the number of LFS unemployed . This might be linked to the fact that many pensioners are
registered with the Labor Office (there are no LFS data for the age group 65 to 74). Another
explanation might be that there are many discouraged or just passive older registered
unemployed.
Figure 4.7 Older unemployed according to LFS and registered unemployed in
1000, 2004-2011
Source: Eurostat, European LFS, National data from the Bulgarian Labor Agency
Page 85
65
4.2
Services provided by the Employment Offices to the unemployed
According to the Employment Promotion Act, Article 26, the PES should offer the following
services to the unemployed:
(i)
Provide information and consultation to job seekers and employers;
(ii)
Psychological counseling of job seekers;
(iii)
Referral to appropriate employment programs and measures;
(iv)
Referral to vocational or motivational training; and
(v)
Guidance and support for starting work, including working abroad.
Bulgaria is among those countries that spent the lowest share of GDP on the provision of
activation services (and administration), at least until 2010 . Countries focusing on
activation strategy spend much larger shares of GDP on services, although unemployment rates
are lower. The UK, which does not spend much on active labor market measures and
programs, spends a comparable share of GDP on services as the Netherlands, Germany,
Denmark and France (between 0.3 and 0.4% of GDP) (see Figure 3.12).
Figure 4.8 Expenditures on labor market services (including
administration) as a share of GDP in%, 2010, EU countries
Source: Eurostat, LMP data basis; for the UK data refer to 2009
Only about 16 percent of surveyed unemployed who used the services of the Employment
Office in 2007found jobs through the direct assistance of the Labor Office, according to an
impact evaluation carried out by Kotzeva and Zvetkov in 2010. About 8.9 percent started work
under employment programs and measures. By the time the interviews were carried out,
nearly two-thirds of those who started work (not necessarily through referrals made by the
Employment Office) still had the same job, 11 percent changed their jobs, while 13.5 percent
were jobless again.
People with higher employment barriers (such as older persons and people with a low
educational background) tend to benefit most from these services offered by the
Employment Offices. The evaluation study showed that the net employment effect for those
who received information and guidance to job vacancies (in a limited definition) as compared to
the control group were highest among persons with primary or lower education (+39 percent)
Page 86
66
as well for persons aged 51 and more. Net employment effects were higher for women than for
men. Using an extended definition, net effects were lower for all groups. Overall, the evaluation
concludes that mediation services provided for vulnerable groups were more effective than for
people who were ready to place, although gross employment effects for vulnerable groups were
lower indicating their weaker labor market position. According to the survey results the
“… Most important positive changes to people who benefited from mediation services in
comparison with those from the control group occurred in terms of social contacts, knowledge
and skills and self-confidence. ” (Kotzeva, Tzvetkov 2010).
The survey revealed that the most vulnerable group could have been serviced more
intensely . Table 3.5 shows that most of the long-term unemployed were not consulted by a
psychologist (see also Chapter 2). About 70 percent stated that they were not advised to take
part in training or re-training courses and an even higher share did not receive advice on
changing occupation or career development. Nearly three-quarters of the long-term unemployed
stated that they were never offered a job. The survey results also indicate that most long-term
unemployed show no interest in motivational training, and 43 percent showed no interest in
getting information on job vacancies. Nevertheless, only a third could be regarded as inactive
(never searched for a job or looked for a job only once a year). The evaluators rightly
recommended improving psychological support as part of the service package aimed at
motivation and consulting.
Page 87
67
Table 4.1 Use of mediation services by permanently unemployed
Source: Kotzeva and Zvetkov in 2010
Page 88
68
4.2.1 Roma mediators
Some labor offices employ Roma mediators , who are hired under the National Program
“Activate Inactive Persons”, as already discussed in Chapter 2. In order to be effective, mediators
should be well trained (European Commission 2012, Country Specific Recommendations).
Experience from Germany and other countries confirm that if counselors belong to the same
group (eg ethnic minority) as the unemployed, the services can be delivered in a more effective
way, as a trustful relationship may be crucial.
4.2.2 Individualized approach and case management
The “one-stop-shop” concept is implemented in Bulgaria, as discussed in Chapter 2.
However, this did not involve integrating services between social assistance offices and labor
offices. The implementation of this concept apparently implies the dissolving of staff
specializations, as each staff member should be able to treat all issues. The advantage is that
each case could be taken over by an available staff member. Thus, the way the one-stop shop
model is implemented in Bulgaria, case management was not possible.
This approach is probably not effective with regard to activating and following-up with
vulnerable groups , even though it might increase efficiency in work organization. In order to
build trust, it is useful to further develop a case management system allowing to follow up a
jobseeker with multiple employment barriers with one employment office counselor, which
links the jobseeker to other services (psychological, educational, medical, social, etc.), if needed.
This implies a cooperation with social assistance offices that goes far beyond file-sharing (Duell
et al. 2010). International evidence indicates that case workers tend to be more pro-active
(Konle-Seidl 2012).
Research from other European countries confirms that for long-term unemployed with
multiple employment barriers integrated approaches are necessary (Lechner and Wetzel
2012). Case management is most useful in this respect and further activities such as outreach
activities are advisable.
4.3
Profiling and individual action plans
According to regulations, the first interview between the claimant and the labor office is
supposed to last 15 minutes . According to the field visits of the World Bank team, interviews
take longer if the person is illiterate. Thus, staff dedicate more time to hard-to-serve clients in
the first interview, but not because more counseling is provided. In order to fulfill an average of
minutes, this implies that the time spent on other interviews needs to be distinctively below 15
minutes. The time span of 15 minutes, as stipulated in the regulation, is not enough for
disadvantaged groups, even if they are literate. In the light of rising unemployment and
understaffing, there is an objective to reduce time spent on the first interview to five minutes.
The phasing of the unemployed is performed during the first registration of the unemployed
based on a short questionnaire about their stated purposes and job search activity, as well as
on the adequate opportunities they could be offered. However, the phases could be changed
later during the follow-up meetings .
Job-seekers are grouped into four different phases. The four phases (groups) defined as of
February 2013 are:
- First Phase: highly qualified, high length of service, active jobseekers who are expected to be
unemployed for three to six months.
Page 89
69
- Second Phase: jobseekers who are ready for the labor market and who are eligible to
participate in an active labor market measure under the Employment Promotion Law. They
can probably be placed within six to nine months.
- Third Phase: Jobseekers who are more difficult to place and who are eligible for national and
European programs. Again, they are expected to be placed within a six-nine month period
- Fourth Phase: Inactive jobseekers, with low chances at the primary labor market declaring
themselves as being unwilling to work who register themselves in order to use other types
of conditional benefits including monthly social assistance, unemployment benefits, etc.
(MLSP, 2010)
Evidence from other European and OECD countries suggest statistical profiling could be
effective in phasing the unemployed and targeting services to their needs. A good
statistical profiling model not only contains hard factors such as length of unemployment, prior
work experience and formal qualifications, but also “soft” factors such as motivational aspects,
health and social networks, as well as the regional labor market conditions. Furthermore, it is
crucial for the quality of the model that longitudinal administrative data are available (Konle-
Seidl, 2011). Profiling is usually used in a wide range of countries to identify early who is in
need of intensified help and “expert” services, while ready-to-work jobseekers are getting
much less assistance, so that the scarce resources can be used in a most efficient way. An
alternative way to allocate individuals to services and interventions consists of tracking the
outcomes of the services and to match them with the jobseekers characteristics in order to
figure out which services are likely to be the most efficient for jobseekers with specific
characteristics. Several countries have developed such targeting systems eg Canada, Germany,
some of the US states and to some measure Denmark (Konle-Seidl, 2011).
Box 3.2 Examples of profiling systems in other countries
Countries that have developed sophisticated profiling tools include Australia and Germany. In
Germany, the Four-Phases Model (4PM) includes a software-guided assessment on clients'
potentials underpinned by databases on personnel and social skills, although the German PES
currently applies six jobseeker categories, with a differentiation of long-term unemployed into
three groups (Konle-Seidl 2011). In Australia, a rather differentiated classification by target
groups is made in relation to the degree of disadvantage (OECD 2012). It needs to be added, that
across Europe statistical profiling is usually not the only tool for profiling jobseekers, but to a
varying extent also structured interviews and checklists are used by the caseworker.
International evidence (eg France and Germany) shows that profiling is used to determine the
nature, timing and level of intervention. In Germany, a specific software tool (VerBIS) is used to
help case workers structure time and remind them of the steps they need to take and thus, helps
to standardize, monitor and implicitly steer service delivery (Konle-Seidl, 2011).
The drawing-up of Individual Action Plans (IAP) intends to speed-up the activation
process and to better focus measures . Individual Action Plans (IAP) are generally written
documents signed by the PES and the jobseeker which, based on evaluation of personal
circumstances, abilities and the professional skills of the individual, determine the type and
scope of assistance required by PES and actions to be taken. In some countries IAPs are drawn-
up for all unemployed after a defined length of unemployment, while others use this instrument
only for specific target groups such as youth and older workers (Duell and Vogler-Ludwig, 2011,
Tubb 2012). In some countries intensive interviews to draw-up and follow-up IAPs are more
frequent for youth (eg in Belgium, Finland, OECD 2007). In general terms, there is a tendency to
shorten the length of the unemployment spell by implementing IAPs (Duell 2012).
Page 90
70
In Bulgaria IAP is a plan elaborated by the Labor Office counselor and the jobseeker to
define planned activities, but in practice the time limitation of counselors has
consequences on the type of joint actions defined . In Bulgaria, the unemployed needs to
provide only verbal information about job seeking activities outside the employment agency
such as internet, job announcements, etc. More evidence is asked for in case of a referral of the
Labor Office to a job (Venn 2012).
The frequency of consultations with the employment officer and the job-search
interviews is determined by the phase of unemployment. According to field visit evidence,
“Active unemployed” (phase 1 and 2) have to meet their labor mediator every month, long-
term unemployed in Phase 3 are met by the labor mediator every two months, or more often if
the person can be referred to a job or an ALMP. Inactive unemployed in revoked Phase 4 were
required to meet their labor mediator only once every 3 months.
Introducing e-services for confirming registration is being planned to speed up job-search
monitoring. Although this would increase the efficiency of the labor organization, the use of an e-
service by hard-to-place groups would mean giving-up opportunities for needed individual
guidance and follow-up. Therefore, given the low number of staff, it would be useful to insist on
individual interviews and job-search monitoring for vulnerable groups, while groups who are
ready for the labor market could make more use of e-services. Box 3.3 describes how in
countries implementing explicit activation strategies for disadvantaged groups, job search is
monitored more closely and interviews are more frequent.
Box 3.3 Frequency of interviews in selected OECD countries
In Australia, the unemployed are required to report online, by phone, in writing, or in person every
fortnight. Each job seeker is required to complete a minimum number of job contacts each
fortnight. The number of interviews is assessed on an individual basis, taking individual factors,
as well as general factors into account. The benchmark is generally set between six and ten jobs
per fortnight in metropolitan areas and four-six for non-metropolitan areas. In the Australian
case, unemployed usually claim means-tested unemployment assistance. Implementing such a
tight rule would probably not be relevant in Bulgaria given the markedly higher unemployment
rates in Bulgaria as compared to Australia.
In the case of France, the unemployed are required to meet with an employment counselor once
a month starting from the fourth month of unemployment. More frequent interviews can be
proposed for hard-to-place jobseekers, such as young people without qualifications, workers
dismissed for economic reasons or long-term unemployed.
In Germany, an integration agreement is signed between the unemployed and the employment
office specifying requirements for placement efforts of the employment office, the jobseekers
own efforts and make clear the specific activation strategy. This agreement is binding for both
sides.
The UK has been known for its intensive job-search monitoring and follow-up. In 2011,
unemployed had to participate in Fortnightly Research Reviews. This is an eligibility-test for
benefits. At the initial interview, jobseekers and employment officers have to establish job goals
and agree on steps to take. The follow-up interviews allow discussing these goals and
achievements of the steps taken with the unemployed.
Source: Venn 2012
The success of activation strongly depends on timing . Early intervention has been identified
as an important factor, and many Member States have therefore shortened the periods in which
Page 91
71
an IAP has to be drawn-up. An intensive follow-up with frequent individual interviews, as well
as a follow-up with disadvantaged young people and other disadvantaged groups once they
receive a job increase the effectiveness of the activation strategy (Düll, Vogler-Ludwig 2011).
4.3.1 Job-search requirement
The strictness of job search requirements may help to prevent long-term unemployment,
as it obliges jobseekers to accept jobs they would otherwise refuse in some cases . The
relevance of the strictness of job search requirements increases with the level of social
assistance or means-tested unemployment assistance benefit, the narrowing of the gap between
social benefits and minimum wages and the general labor market conditions.
Bulgaria belongs to the group of countries with the less strict job-search requirements.
The OECD has compared the strictness of job-search and availability requirements, which is not
an easy task as different regulations need to be translated into discrete scores. This might be
linked to the relatively low generosity of unemployment and social assistance benefits. In
contrast, countries with more generous systems and a well-developed activation strategy, such
as Northern European countries and Germany, have much stricter requirements with regard to
availability for a job during participation in active labor market programs, as well as with
regarding occupational mobility and to geographical mobility (see Figure 3.13 below).
Bulgaria is comparatively strict with regard to sanctions for refusing a job or
participation in an active labor market program or measure (see Figure 3.14). While a
job vacancy is only considered suitable if it matches the education and training of the
unemployed person, after 18 months of unemployment, this is no longer a valid reason for
refusing a job offer (according to responses of the Bulgarian authorities to an OECD
questionnaire, Venn 2012). However, there are no sanctions for the unemployed if they are not
ready to make serious changes in their career.
With regard to regional mobility, suitable jobs must be in the same location or within
30km of their residence, as long as there is adequate public transport . There are financial
incentives for unemployed persons who accept a job outside this range (Venn 2012) however,
the number of participants is low. Regional mobility is low in Bulgaria. The housing market
constitutes a strong restraint to mobility within the country and the public transportation
system might be another reason for low mobility. However, mobility across borders is high, as
high wage differentials are setting strong incentives for international labor migration.
Page 92
72
Figure 4.9 Strictness of job-search and availability requirements for unemployment
benefits in OECD countries
Source: Venn 2012
Figure 4.10 Strictness of sanctions in the unemployment benefit scheme, OECD countries
Source: Venn 2012
4.3.2 Incentives for rapid job search of social assistance beneficiaries
The Employment Promotion Act (Art. 42 a) foresees a bonus payment if vulnerable
unemployed find a job quickly . Vulnerable groups are mainly social assistance recipients and
permanently disabled. The implementation of this measure has been very low: in 2008 there
were 121 participants, and the years thereafter there were nearly no participants at all.
Incentives for rapid labor market integration are important in order to reduce inflow
into long-term unemployment. However, in times of crisis the effectiveness of the measure is
probably low, as vulnerable groups are exposed to fiercer competition at the labor market and
have less chances of getting a job. Its effectiveness is higher if it can be assumed that vulnerable
groups have low motivation for searching for a job. This type of scheme can be important when
the economy recovers (Immervoll 2012).
Page 93
73
Art. 43 of the same Law sets incentives for creating part-time jobs and for rapid
placement of jobseekers (below an unemployment spell of 12 months). Take-up of this
measure has initially been higher with 33,224 participants in 2008 and 23,241 participants in
2010, but was not implemented at all in 2011 and 2012.
The implementation of this measure in times of crisis would help to reduce the number of
unemployed, not by creating jobs, but by sharing job opportunities. The part-time share is
particularly low in Bulgaria, amounting to only 2.4 percent as compared with 20 percent on
EU27 average (2012, Eurostat LFS). However, with a view of avoiding poverty, part-time jobs
might not be the first choice, given the low level of wages. As has already been argued above, an
in-work benefit system would be appropriate to achieve both poverty reduction and activation.
4.4
Activation of specific disadvantaged groups
The activation process in Bulgaria does not focus on more intensive guidance and follow-
up of disadvantaged groups . In contrast, it seems that GMI recipients and other vulnerable
groups (who are often not entitled to any benefit) are left behind in terms of activation,
although, as will be shown in the next section, one of the most important labor market
measures targets GMI recipients and long-term unemployed.
Staff have no incentive to be more pro-active and to focus on integration of the difficult-
to-place , as already argued in Chapter 2. A benchmarking system between employment offices
could take integration results of phase 3 and revoked phase 4 unemployed in the local labor
market context explicitly into account.
4.4.1 Roma
Roma are among one of the most vulnerable groups in Bulgaria, and among the hardest to
place in the job market. According to the impact evaluation carried out by Kotzeva and
Tzvetkov in 2010 on the basis of unemployed registered in 2007, the following gross
employment effects for Roma were found: only 26 percent found a job and more than two-thirds
still had this job at the time of the survey in 2010. For comparison, gross employment rates of
Bulgarian ethnic groups composed to two-thirds (and 86 percent who found a job still had the
same job at the time of the interview in 2010). Gross employment effects also differed
significantly by educational level: amounting to 38 percent for persons with primary or lower
education, and approximately 70 percent for people with higher education or with secondary
education.
4.4.2 Young people
The impact of public employment services showed the highest positive employment
effects on young people (below 29 years of age) and for women in 2010. The use of
placement services of labor offices increased the chances for registered unemployed youth to
find a job by 13.7 percent. Compared to other groups, the provision of information and job
opportunities has been the most useful for young people, while advice on vocational training
was less important. The evaluation indicates that young people also appreciate e-services and
access to the EURES network (Kotzeva, Tzvetkov 2010).
Nevertheless, it seems that young people increasingly use other channels for job search or
are inactive . LFS data illustrate that the majority of young people who are unemployed rely on
relatives and friends to find a job. A large portion of the unemployed looks for jobs through
direct contact with employers and through job advertisements in newspapers and magazines.
Just one out of four unemployed youths uses labor offices, almost half the amount compared to
Page 94
74
early 2003 (Figure 3.15). Yet, one-third of youths who are unemployed are registered in the
labor offices, meaning that only 43 percent of those registered rely on labor office help
(Dimitrov 2012).
Figure 4.11 Rate of youth unemployment by methods of job search
Source: LFS and author's calculations
Public employment services could reach young inactive people much better. The level
of inactive NEETs among young people is most worrying. Experiences from other countries
indicate that the effectiveness of integration strategies for low-skilled youth is increased by
the implementation of individualized and person-centered approaches, departing not only
from an encompassing overview of the range of individual problems and labor market
barriers, but also from the identification of individual strengths.
Case management, the drawing-up of individual action plans and mentorship are
widely recognized as good practices in this context. A number of countries have
increased early and intensive activation of disadvantaged youth in order to increase the
effectiveness of activation. A close monitoring during participation in the labor market
programs and later follow-up once youth find employment are likely to improve the
sustainability of employment outcomes (Duell 2012). Furthermore, youth integration
programs of the PES need to be well targeted, as otherwise, there is the risk of 'creaming'
- meaning that weaker beneficiaries are displaced by stronger ones (Düll, Vogler-Ludwig
2012).
Partnerships with specialized private and public service providers can be useful in
order to better serve people with individual social or psychological problems, if
specialized staff is not available at the PES. For example, in the UK, long-term individuals or
those at risk of becoming long-term unemployed, such as the disabled, drug users and ex-
offenders, are referred to private or voluntary organizations (Tubb 2012). The difficulty
with outsourcing services for very disadvantaged groups is the definition of the desired
result and the basis of remuneration for the services provided. Furthermore, organizational
capacity to serve (highly) disadvantaged groups must be well established in the country.
Page 95
75
4.4.3 Unemployed with disabilities
The existing ex-post evaluations (WYG, 2006 and Court of Auditors 2011) confirm that
ALMP measures for disabled people show positive results , although these measures are less
effective than measures addressed to target groups with less severe employment barriers.
Employers prefer to employ people with lower levels of disabilities requiring no work place
adaptation. People with disabilities are likely to quit their job because of employer's decisions
with higher probability than other disadvantaged groups. There are objective obstacles for
people with disabilities to integrate into the labor market such as health problems, low
education and qualification, employers' disinformation, lower productivity, etc.
There are many positive results of activation measures for people with disabilities. About
69 percent of disabled participants think that participation in the programs has helped a lot
in general and to some extent to find a suitable job (WYG, 2006). Programs for people with
disabilities enjoy significant demand (Court of Auditors, 2011).
However, there are three important issues to be considered when planning an activation
approach for disabled people . The first is redefining the ultimate goals of the activation
process. Striving only to obtain a permanent job might be inappropriate for this target group.
The disabled program participants and even the employers might be satisfied with
temporary or part-time employment after the program ends or with trainings, social services
or socialization. The latter will influence the process of impact evaluations as well and might
lead to better results. The second crucial point is that programs for people with disabilities
might be appropriate to be taken over by agencies better equipped to deal with this group. It is
not enough to state that people with disabilities are a priority group. As for other disadvantaged
groups, the resources make the difference. And the third major concern is that almost 63
percent of people aged 15 to 64 years with at least one permanent difficulty in their daily
activities are inactive (NSI, LFS, 2011). Thus, focusing ALMP efforts toward inactive disabled in
addition to unemployed disabled would be useful.
4.4.4 Older unemployed
Little attention is paid to raising the employability of older workers (although they are
a target group of almost all programs, see Chapter 5). In the long-term, and in a more
favorable labor market environment, it will be crucial to better use the competencies of older
jobseekers, as the Bulgarian labor force is aging rapidly and will be declining. Evaluating
competencies of older jobseekers are among interesting practices implemented in some
countries. In Germany, local joint social assistance and PES services are cooperating in order
to improve employability and placement of older jobseekers on means-tested
unemployment assistance.
Page 96
76
5. Active Labor Market Programs
5.1
Budget spent on Active Labor Market Programs (ALMP)
The budget for ALMPs has been increasing steadily over the last few years, and mainly as
a result of ESF funding. In 2010, when the national budget was greatly cut, funding for ALMPs
amounted to about 50 million euros; in 2011 it increased to 65 million euro and in 2012 to
approximately 126 million euros. The large rise in spending between 2011 and 2012 is linked to
the increased use of ESF funds (Chapter 2). Prior to the more intense use of ESF funding,
spending on active labor market measures and programs as a share of GDP in Bulgaria was
particularly low as compared with other European countries (Figure 5.1). Even if most recent
increase in budget is taken into account, the share of spending on ALMPs in GDP remains
comparatively low (approximately 0.3 percent of GDP, comparable to many other New Member
States of the EU).
Figure 5.1 Unemployment rate and expenditures on ALMP (cat. 2-7) as a share of
GDP, 2010, in%
Source: Eurostat, LMP data base and LFS .
Page 97
77
5.2
Focus of ALMP spending by type of program
The palette of programs and measures available through Bulgarian ALMPs is rather
encompassing and theoretically well designed, however, many of the existing instruments
are not implemented nor only have a few participants . Many of these instruments are not
new.
In contrast to all other European countries, the bulk of ALMPs funded by the national
budget goes to direct job creation schemes , at least until 2011. In 2012, training measures
funded by ESF-OPHRD increased. It is difficult to state whether this can be regarded as a
sustainable restructuring of ALMPs.
The main job creation scheme is the national program, “From Social Assistance to
Employment ” . The share of direct job creation in total ALMP expenditure was 70 percent in
2011 (Eurostat, LFS). It decreased in the context of cutting ALMPs in the national budget. Only
Hungary and Latvia spent more than 40 percent of their ALMP budget on a job creation
program (although this was lower than in Bulgaria), all other countries spent even less than
40 percent of their ALMP budget for this type of program.
In contrast, training measures have not been a focus of Bulgarian ALMPs until 2012 ,
expenditures for training accounted for only 15 percent of the ALMP budget in 2011. Spending
on training measures as a share of GDP constantly declined between 2004 and 2010 and rose
between 2010 and 2012. Countries spending more than 40 percent of their ALMP budget on
training programs in 2010 include (in descending order): Austria, Portugal, Finland, Malta,
Ireland, Germany, Italy, Latvia, France, Norway and Estonia.
The share of employment incentives, such as wage subsidies, is also comparatively low
and declined between 2009 and 2011 . In contrast, 40 percent or more of ALMP budgets were
spent on employment incentives in the following countries (in descending order, 2010): Cyprus,
Luxembourg, Romania, Sweden, Greece, Belgium, Estonia and Slovakia. As can be seen from
Figure 5.2, expenditures, measured as a percentage of GDP, supporting employment and
rehabilitation measures were very low. As shown in Table A2 and A3 in the Annex this is
reflected in a very low number of participants.
Figure 4.2 Expenditures of selected ALMP (excluding OPHRD),% GDP, 2004-2011
Source: Eurostat, LMP data base
Page 98
78
Given the low volume of ALMP spending, the high number of implemented programs is
surprising. In some, only a very low number of persons participate, as can be seen from Table
A2 Annex and Table A3. Sometimes there are only single cases. This seems rather inefficient
because the programs need to be administered and the staff requires knowledge about each
of these very small programs.
It is astonishing that measures to promote self-employment do not figure among the main
ALMPs in Bulgaria . According to the Eurostat LMP database in 2011 about 150,000 euro were
spent by the PES on start-up incentives compared to 35.6 million euros for direct job creation
measures. Access to capital is among the employment barriers. Across European countries,
Public employment services encourage the unemployed to become self-employed by providing
start-up incentives measures. In the vast majority of countries this represented a rather small
measure. They can take the form of subsidized credit for business start-ups, unemployment
benefits can be capitalized, consist in an establishment allowance or subsidies, in a co-financing
of social security contributions during an initial period (Duell 2011). Self-employment is an
employment option for people with different skills levels, working in various sectors and is
therefore linked to highly diverse realities as to the quality of these jobs. From a world-wide
perspective, “factor-driven economies” tend to have higher self-employment rates than
“Efficiency-driven” or “innovation-driven” economies. 12 .
5.2.1 Training measures
There are different types of training courses, which vary in scope and target group : eg
training in relation with skills needed in a subsidized employment, support of apprenticeship
training, literacy training, further training and up-skilling. As a main change in the area of
training, a voucher system for training was introduced by using OPHRD funds.
The content of (vocational) training provided depends on the offer made by the private
training institutions . For disadvantaged groups, adaptation of the offer to the individual and
skills background of the unemployed would likely be necessary.
Generally, combining training and work experience is useful. In the context of combined
employment incentive and training, the training relates to occupations in sectors that use the
employment incentives. However, this can be problematic when a regional concentration on
sectors are in decline, eg in the construction sector, as the sustainability of training is
endangered.
Training should preferably occur in growing sectors and occupations . Thus, it is right to ask
employers for their needs. However, they might declare a need for subsidized employment and
not point to skills shortages. It would therefore be useful to carry out a thorough analysis and
some basic forecasting for regional labor markets. It would also be advisable to monitor closely
the profile of participants and the type of training provided.
12 The Global Enterprise Monitor (GEM) classifies the surveyed countries according to the World’s
Economic Forum classification in “factor-driven”, “efficiency-driven” and “innovation-driven” economies
(Kelly et al. 2010). Factor-driven economies are dominated by agricultural and extraction business,
efficiency-driven economies are marked by industrialization and increased reliance on economies of
scale. In innovative-driven economies businesses are more knowledge-intensive and the service
sector expands. Among the EU-countries participating in the GEM, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Slovenia, Spain and Sweden
are classified as “innovation-driven economies”. Among the EU-countries participating in the GEM,
Hungary, Latvia and Romania belong to the group of “efficiency-driven economies”.
Page 99
79
5.2.2 Employment incentives
Under some programs, employers who receive wage subsidies must employ the
participants for a defined period of time after termination of the program. This is
important in order to avoid substitution and displacement effects and thus, to avoid a company
behavior of employing only subsidized workforce without providing the opportunity to employ
the program participant. This perverse behavior would contradict the objective of wage
(cost) subsidies that is to compensate for a temporary disadvantage in productivity of the
unemployed. Therefore, this measure is suited for integrating the unemployed with (temporary)
employment barriers. It is important not to allow for a concentration of this measure in specific
sectors. Employment incentives may also be useful to overcome a cyclical lack of demand.
5.2.3 Job creation programs
This type of measure refers to activities with a social utility and is usually implemented in
the context of great structural weaknesses in the regional labor market (eg in Germany,
after the transition) or to integrate disadvantaged groups who have few chances to find
employment in the regular labor market. There are two different ways to implement a direct job
creation programs: either as in-work benefits or based on labor contracts.
In Bulgaria, participants get an employment contract and are remunerated at the level of
the minimum wage (see below “From Social Assistance to Employment program”). This
positively affects motivation and self-esteem, and thus employability is higher and is more likely
to help people out of poverty.
5.3
Organization and funding of ALMPs
The following distinction between the different programs needs to be made:
(i)
Measures and programs according to the Employment Promotion Act,
(ii)
National programs financed by the national budget, and
(iii)
Measures financed through the OPRHD of ESF.
5.3.1 Employment encouraging measures according to the Employment Promotion
Law
According to the employment promotion law, about 25 labor market measures exist ,
although not all were implemented in 2012, and even among those that were implemented, the
number of participants was very low in most of the programs (see Annex table A2 for details).
The law foresees the following measures by mainly making use of wage (cost) subsidy and other
monetary employment incentives as well as training measures:
(i)
For unemployed young people aged up to 29 years (Article 36, Para 1)
(ii)
For young people with lasting damages or war invalids, as well as from social
institutions (Art. 36, Para 2)
(iii)
For acquiring professional qualification and / or probation for unemployed aged
up to 29 years (Art. 41)
(iv)
Territorial mobility of unemployed persons (Art. 42)
(v)
For unemployed persons subject to monthly social assistance that have started
work without the intermediation of the EA (Art. 42a). There were between 100
Page 100
80
and 400 participants in 2007 and 2008, only single cases in 2011 and no
participants in 2012.
(vi)
For unemployed with compensation up to 5 months (Art. 43). There were no
participants in this measure in 2012.
(vii)
For maintaining and upgrading qualification of employed workers and employees
(Art. 44). There were no participants in this measure in 2012
(viii) For substitution during training (Art. 45)
(ix)
Encouraging employers to open jobs for probation (Art. 46 of the LEE)
(x)
For start-up of independent business (Art. 47, 48, 49b)
(xi)
For start-up of independent business as a micro-enterprise (Art. 49)
(xii)
For start-up of agricultural activity (Art. 49a). There were no participants in this
measure in 2012.
(xiii) For the first five opened job opportunities by employers-micro-enterprises (Art.
50)
(xiv) For part-time work (Art. 51)
(xv)
For persons with lasting damages, incl. war invalids (Art. 52, Para 1)
(xvi) For persons with lasting damages employed for temporary, seasonal or by the
hour work (Art. 52, Para 2). There were no participants in this measure in 2012.
(xvii) For single parents and / or mothers with children aged up to 3 years (Art. 53)
(xviii) For adoptive mothers with children from 3 to 5 years old (Art. 53a)
(xix) For persons that have serviced "Imprisonment" (Art. 55)
(xx)
For unemployed aged 50+ (Art. 55a)
(xxi) Encouraging employers to employ persons aged from 50 to 64 that have acquired
right of professional pension for early retirement (Art. 55b)
(xxii) For Long term unemployed (art. 55c)
(xxiii) For persons employed for apprenticeship (Art. 55d)
(xxiv) Encouraging employers to open "green jobs" (Art. 55e of LEE)
(xxv) Encouraging employers to provide daily transport of employed workers and
employees (Art. 57a of the LEE). There were no participants in this measure in
2012
In 2012, about 4,400 persons participated in these measures . There was a steep decrease
in the number of participants between 2005 and 2012 (Figure 4.3). The measure, “for
unemployed young people aged up to 29 years (Art. 36, Para 1), ”was the largest with 1,500
participants. All other measures had less than 500 participants, sometimes only one participant.
The number of participants of the measure “for unemployed young people aged up to 29
years (Art. 36, Para 1) ”was nearly three times higher in 2005 . Other larger measures
implemented in 2005 were measures “for acquiring professional qualification by probation
and / or apprenticeship (Art. 46) ”with 11,700 participants; “For acquiring professional
qualification and / or probation for unemployed aged up to 29 years (Art. 41) ”with 8,100
participants; “For maintaining and upgrading qualification of employed workers and employees
(Art. 44) ”with 1,400 participants; “For part-time work (Art. 51)” with 3,300 participants; “For
persons with lasting reduced work capacity (Art. 52, Para 1) ”with 1,300 participants; “For
Page 101
81
persons with lasting reduced work capacity employed for temporary, seasonal or by the hour
work (Art. 52, Para 2) ”with 1,100 participants; “For unemployed women aged 50+ and men aged
55+ (Art. 55a) ”with 1,900 participants; and “for long-term unemployed (Art. 37)” with 1,100
participants. It seems that some of the training measures, such as measures for persons with
disabilities and measures for older workers were substituted by programs and measures
financed through OPHRD (see below). Although it is in principle right to absorb ESF funding, it is
problematic when ESF funding is used to substitute national measures and programs.
Figure 5.3 Number of participants in employment encouraging measures per year
Source: data provided by the Labor Agency
Data refer to measures according to Art. 34 41 42 43 44 45 46 47 48 49 50 51 52 52 55 55 57
Employment Promotion Law
5.3.2 National programs and measures
Since 2005, the number of participants in national programs and measures has
decreased significantly, with a particularly steep fall between 2009 and 2010 (Figure 5.4) .
In 2012, nearly 40,000 people participated in national programs and measures to promote
employment. On average, there were 20,600 participants monthly, with an average duration of
approximately six months (see Annex Table A3). However, participation in most programs is
foreseen for a much longer period (see Annex Table A4).
Page 102
82
Figure 4.4 Number of participants in national programs and measures
Source: data provided by the Bulgarian Labor Agency
Slightly more than half of the participants were involved in the National Program “From
Social Assistance to Employment ” (for details see below). Another program that would
target GMI recipients or highly disadvantaged groups is the National program “Activating
inactive people on the labor market ”, but this program is not really implemented, as only 30
people participated in 2012.
The second largest program is the national program “Personal assistance to
disabled people ”with 4,300 participants annually . However, it is not likely that many GMI
recipients participate in this program. About ten percent of participants were long-term
unemployed. Nearly a quarter was 50 years old and older. In the light of an aging society and
poor labor market prospects of older workers, this program seems to be relevant
5.3.3 ESF-funded ALMPS: the Operational Program Human Resource
Development Program (OPHRD)
Active labor market programs financed by ESF through the OPHRD have gained
importance in 2011 and 2012 . This can be understood as a response to the steep decline in
budget and number of participants in the nationally funded measures and programs
described above.
Between 2007 and 2013, Bulgaria was allowed to receive 1.18 billion euro ESF Funds,
adding up to EURO 1.4 billion if national co-funding is taken into account . This budget is
shared between the “Human Resources Development” program (OPHRD) and the
“Administrative Capacity” program (European Union 2012). The contracted budget for the
following programs under OPRHD amounted to 528 million Euros as of 20 March 2012 (see
Table 4.1). About 30 percent of this budget is allocated to “Implementing active and preventive
measures for the labor market ”. About 13 percent is to be spent on “Pathways to integration
and re-entry into employment for disadvantaged people. ” A large part of the budget is
contracted for different training programs, which are not only targeted at unemployed. At the
end of 2012, the following programs are targeted at unemployed:
• Youth employment increase through their permanent labor market inclusion
• Support for starting your own business
• Back to work
Page 103
83
• Development
• Youth employment through internship opportunities
• First job
• Employment support
Since the start of these programs at the end of 2012, about 133 million BGN have been spent. Table
5.1 gives an overview of the numbers of participants.
Table 5.1 Participants / funding in OPHRD funded programs / measures in 2012
Reported cumulative results of OPHRD programs targeting unemployed
persons
Dec'2012
Unemployed participants
100,322 th most common
Long-Term Unemployed
14,701 th most common
Youths
28,808 th most common
People with disabilities
1,568 th most common
Included in training
78,636 th most common
Included in employment (monthly average from the project beginning)
74,741 th most common
Source: PES data
All listed programs are financed under priority axis one, “Promotion of economic
activity and development of an inclusive labor market . ” This axis targets only unemployed
people and is separated into two main interventions: integration of disadvantage groups in the
labor market and creation of employment through entrepreneurship.
As the programming period is ending soon, spending and delivery results is accelerated
under OPHRD. In 2008 and 2009, the program did not support any unemployed. In 2010, the
number of newly included was 15,400, while in 2011, 20,200 unemployed were included and in
2012, the number of newly included participants rose to 62,700. Expenditures under the
OPRHD increased between 2010 and 2012 by 25 times and the average number of newly
included participants increased by nearly four times (Table 5.2)
Page 104
84
Table 5.2 Participants in programs and measures financed by the OPHRD program,
2010-2012, in 1000 participants
2010
2011
2012
Newly included participants
56.7
122.1
220.1
of which, women:
33.6
71.9
122.6
Persons who have worked under the programs, monthly
average
0.5
8.3
29.3
Spending in BGN
7,225 th most common
65,297 th most common
185,208 th most common
Source: PES data
Training programs were quite successful. For the last three years 78,636 unemployed
passed through training programs and many received employment. The most powerful
accelerator was the introduction of the vouchers system that eased the administrative
procedures.
A program with crucial importance for the unemployed was the “Development”
program, which combines training and job creation for a maximum duration of 12
months. It is directed to persons who were dismissed in the context of industrial restructuring.
The number of participants in this program increased tremendously between 2010 and 2012.
Furthermore, young unemployed below the age of 29, older workers and long-term unemployed
are prioritized groups. The number of unemployed in training quadrupled and reached 58,561
in 2012. About 95 percent of combined training and employment relates to jobs in the public
sector.
Vouchers were also introduced and successfully used, although it is not clear whether
vulnerable people made great use of them. In 2010 and 2011, the number of long-term
unemployed that received vouchers was respectively 17.7 percent and 19.5 percent of
participants (Loukanova 2012). It is not known how many participants were GMI recipients. It is
questionable whether a voucher system is appropriate for the most vulnerable groups, as it
presumes that the jobseeker is pro-active. The training is certified, which is useful.
Page 105
85
Figure 5.5 Dynamic of spending and unemployed beneficiaries under Axis 1 of OPHRD
Source: Labor Agency
5.4
Targeting ALMPs to disadvantaged groups
5.4.1 GMI recipients
The main active labor market program targeting GMI recipients is the National
Program “From Social Assistance to Employment,” introduced in 2003 . This program
aims to ensure employment and social integration of the unemployed who receive monthly GMI
by generating jobs in public profit activities and in this way, increase employability. Participants
sign an employment contract and receive the minimum wage and social insurance.
This program was the largest active labor market program in terms of
participants and budget until 2011 (Loukanova 2012). However, since its introduction, the
number of participants has fallen dramatically (see Figure 4.6). At least 70 percent of
participants should be GMI recipients (Shopov 2012). Among them, priority should be given to
long-term unemployed, a member of a family where both parents are unemployed, unemployed
single parents who receive monthly social benefits and unemployed young people who receive
monthly social benefits. This program is implemented by the Labor Agency, but needs
coordination with social assistance offices (file sharing) and employers in general public sector
bodies (often municipalities).
Under this program full-time or part-time employment can be provided. The
program pays wages and social security contributions. The employer pays for material and
equipment. Furthermore, the program pays for fellowships, transportation costs,
accommodation costs and course fees for respective training or literacy courses.
Page 106
86
Figure 4.6 Participants in the national program “From Social assistance to
employment ”
Source: data provided by the Bulgarian Labor Agency
About two-thirds of activities carried out under this program in the last few years
were “emergency activities,” such as maintaining roads during the winter (evidence from
the field visits), although in principle a much wider range of activities can be implemented with
the aim of improving living standards, maintenance and protection of municipal and state
property, environmental protection, social services, preservation of cultural monuments and
actions for overcoming consequences from natural disorders. Private companies can also
employ people under this program for their main activity in the industry and construction
sector and for improving labor conditions in their own buildings (Shopov 2012). The bulk of
these projects is implemented by municipalities. It is not clear though whether these activities
create new jobs. The training is organized by the labor offices, while the Ministry of Education
is responsible for the literacy courses.
In 2012, only about 30 percent of all participants in this program were long-term
unemployed . 13
Almost half of participants re-registered with the Labor Office after
termination of the measure and it can be assumed many are taking part in the measure after re-
registration (this could explain the low share of long-term unemployed). Field visits confirmed
the assumption that repeated employment under this program is common. This means that
GMI beneficiaries with the highest employability receive employment opportunities under this
scheme in more or less regular spells, while other beneficiaries do not have the chance to enter
the program. Furthermore, it would be more desirable for the employer to offer the former
“Employable” participants a regular employment contract. According to the National Reform
Program 2012, an amendment to the requirements for participation was made so that at least
70 percent of participants should not have been in the program since the beginning of the
previous year (National Reform Program 2012). This new regulation should help to avoid
repeat participation.
Only a very low share of participants (0.1 percent) refused participation in this
program in 2012, either for medical reasons or because of misbehavior (according to
information provided by the Labor Agency). It can be assumed that interest in participating in
this program exceeds largely funded places.
13 For the period 2007-2011, 82,108 long-term unemployed were enrolled in the program,
corresponding to 34% of all its participants (Loukanova 2012]).
Page 107
87
An external evaluation of the program was carried out in 2005. The program
results were mixed . In some cases, employment in direct job creation helped with building
work habits and certain social and labor market skills, as has also been the experience in other
countries. Nevertheless, the net employment effects were unsatisfactory (Shopov 2012).
On the one hand, the program produced win-win effects for the unemployed and for
the community or municipality. On the other hand, the temporary nature and the
reduction of the program during the economic crisis were criticized 14 . It also seems that
employability was not increased. The jobs created were low-productivity jobs, remained low-
skilled and were not competitive in the regular labor market. This program needs to be
perceived in the context of social policies and benefits that it may yield. It seems that overtime
some municipalities have learned how to increase the efficiency of this measure and how to define
needed activities.
Other direct job creation programs exist, like the National Program “Assistance for
disabled people ”. This program pays unemployed persons a wage if they are taking care of a
disabled person or a heavily ill single person in a family environment. GMI recipients can take
part in this program as “personal assistance” (Shopov 2012). There are no data on how many
GMI recipients eventually took part in this program, but it can be assumed that their numbers
were not large. The number of participants decreased by two-thirds between 2008 and 2010.
5.4.2 Inactive unemployed
According to data provided by the Labor Agency, there were about 10,600 inactive
persons registered in 2012 . Among them, about 40 percent were below the age of 29 and 17
percent were 50 years and older. About 60 percent had less than a basic education. Nearly 300
persons were included in literacy training representing about four percent of the inactive with
lower than basic education. About 1,600 people, representing 15 percent of the inactive could be
employed in the context of an ALMP. As many inactive are not likely to be registered with the
Labor Agency, participation rate of this group is de facto lower.
5.4.3 Long-term unemployed
The long-term unemployed represent more than half of all unemployed according to
Labor Force Survey data . In principle, long-term unemployed persons have access to all
activation programs and measures, and as shown above, some measures and programs
specifically target disadvantaged groups. While the share of unemployed taking part in an ALMP
financed by the State budget decreased between 2007 and 2011, the share of long-term
unemployed participating increased between 2010 and 2011 (Loukanova 2012). Nevertheless,
the rate of ALMP participation remained below that of all unemployed.
The share of persons in employment encouraging measures that were unemployed for
more than one year was about 14 percent , but the number of long-term unemployed is not
known for all programs (it can be assumed that the long-term unemployed play no major role
in measures where they are not counted) (see details in Table A2 Annex). One employment
incentive measure (Art 37 Employment Law) is specifically designed for the long-term
unemployed, but in 2012 only about 595 people participated. Among the participants, 14
percent were above 50 years old and 28 percent were unemployed for more than two years.
About 60 percent were women.
14 Shopov's 2012 assessment was based on the evaluation report as well as on internal audits.
Page 108
88
In 2012, roughly 1,000 persons were included in measures for acquiring professional
qualification by probation and / or apprenticeship (Art. 46), representing one-sixth of all
participants in measures according to the employment promotion law. One-fifth of participants
in the measure for unemployed older jobseekers (Art. 55a) were long-term unemployed, but the
volume of participants was rather low (see Table Annex A2).
Long-term unemployed were also included in some wage subsidy measures (eg according to
to Art 55c of the Employment Promotion Law), the national program, “Assistance for people
with disabilities, ”and under the National Program,“ Beautiful Bulgaria. ” Between 2007 and
2011, the participation of long-term unemployed in these measures and programs was 35
percent, 35 percent and 24 percent respectively (Loukanova 2012 [LTU]).
Between 2007 and 2011, about 2,201 unemployed were trained under the National
Program for Literacy and Qualification of Roma. This seems to be an important project,
given the serious problem of illiteracy, however, participant numbers are low. At 51 percent, the
share of long-term unemployed among this group was higher than for other programs.
(Loukanova 2012). Observations from field visits bring into question how the measure is
implemented, as after months of training, illiteracy was not overcome. One reason could be the
quality of training, another could be the length of the measure. In 2012, a new project for the
enhancement of the quality of vocational training particularly directed towards the unemployed
with special needs (including discouraged workers) was launched (Loukanova 2012).
5.4.4 Youth Programs
Integrating young people into the labor market is critical to avoid long-term integration
problems and downward mobility . In this context, it is crucial to reduce early school
departure and to activate inactive young people.
Although young people were the most affected group by the crisis in 2009, their number
in labor market programs and in measures financed by State Budget decreased.
Nevertheless, support for young people with disabilities and with social problems has not been
reduced during the crisis and the respective targeted programs have received the planned
financing from the State Budget (Loukanova 2012).
According to Eurostat data, the largest number of supported youths (15-24) through
ALMPs was in 2006 (20,461), while in 2010 these numbers fell to 9,581 . Up to 2010, direct
job creation had the largest share in youth supporting measures, although involved participants
have been steadily decreasing since 2007 (Dimitrov, 2012).
Page 109
89
Figure 5.7 Number of youth participants in ALMP
Source: Eurostat
Meanwhile, in the context of the tighter ALMP budget, combating youth unemployment is
a priority . This was reflected in the First Job National Agreement, signed in June 2012 by
Ministers and representatives from employers' associations and trade unions and is part of a
national initiative called Jobs for Young People in Bulgaria 2012–2013. The agreement aims to
create new opportunities for young people in the labor market and to ease the transition
between training and the labor market. The Government promised to support this Agreement
by subsidizing jobs for young people and developing new initiatives to increase youth
employment using additional funding from the state budget and European funds. Furthermore,
the agreement includes a plan for eight programs and initiatives for young people to be
funded under the national action plan for employment and the OPRHD. These include the 'New
start '(an apprenticeship program),' First job ',' New job ',' Development ', and' Start of career '
programs, as well as subsidized schemes encouraging employers to hire the young
unemployed (Nadezhda Daskalova). 15 These schemes also include programs targeted at
young people with tertiary education, such as the “Start of career” programs.
The National Youth Program (2011−2015) was elaborated and adopted in 2011,
according to the National Reform Program 2012. It is planned to implement projects for
youth activities under four sub-programs: development of the network of youth information
and consultative centers, national youth initiatives and campaigns, youth volunteering and
development and recognition of youth's work. In addition, employment incentives for employing
young people has become more generous as of the beginning of 2012, apart from the
expenditures for social security contributions of employers, the payroll for the hired
unemployed young people is also subsidized by the state budget funds for ALMPs (National
Reform Program 2012).
Experience from other countries shows that vocational training should be sufficiently
flexible to be able to integrate the disadvantaged and less capable youth without creating a
separate system that risks stigmatizing them (Düll, Vogler-Ludwig 2011).
A few countries are implementing integrated programs that combine work experience
and the improvement of basic skills . A good example is the youth workshops in Finland that
15 http://www.eurofound.europa.eu/eiro/2012/06/articles/bg1206011i.htm
Page 110
90
have been set up for the integration of hard-to-place jobless people. A workshop is a community
in which work, training and guidance services are used to improve an individual's life-
management skills and readiness to seek education and employment. The workshops are mostly
run by the municipalities, but also by different kinds of NGOs. The most important buyers of this
service are the PES, the social welfare agencies and the disability insurance. These have shown
positive results (Duell et al. 2009 and Paparella 2008).
In some countries internships have become one of the most effective measures for young
peoples' access to work (Paparella et al., 2008). One good practice example for providing low-
skilled young people with work experience highlighted in the literature is the Flexjob scheme in
Denmark. These company internships are available for disadvantaged young people and also for
other unemployed or cash benefit recipients who have inadequate professional, linguistic or
social competencies. The internships last for four weeks and can be prolonged under certain
circumstances to 13 weeks. Monitoring data indicated that company internships led to higher
employment effects when they were combined with courses in connection with job training.
Statistical evidence shows that these internships were particularly successful as over half of the
participants found a future employer through a company internship.
Furthermore, experience from other countries indicates that the success of the activation
strategies depends on offering person-centered approaches to counseling, the setting-up
of individual action plans, mentoring, and case management. Young people need to be
involved in the solution. The effectiveness of activation policies depends on the availability and
the quality of options offered to youth, as they need to be convinced of the efficiency of actions
planned.
5.4.5 Sheltered employment for people with disabilities
In 1990, specialized enterprises gave employment to 33,000 persons with disability. In
September 2012, only 2,500 persons with disability received employment from
specialized enterprises. Currently, about 127 special enterprises operate in Bulgaria, and 40
are micro enterprises. Most are in dire economic straits, and have no capacity to create or even
safeguard jobs for disabled people (BILSP, 2013, unpublished text).
5.5
Implementation conditions and institutional capacity
Employment programs are mainly implemented by the public sector . The legal
requirements for using state subsidies appear difficult to implement in large firms with
significant staff turnover. Nevertheless, some socially engaged employers provide employment
for disadvantaged people - young people less than 29 years of age, unemployed, poorly qualified
and unskilled, people over 50, and disabled and discouraged persons (Employment Agency
2011).
In some cases, measures and programs are implemented by social enterprises. Social
enterprises in Bulgaria interact with various disadvantaged groups: people with disabilities
(physical and mental), ethnic minorities, children and families at risk, disadvantaged youth
(orphans), prisoners and offenders, women, victims of domestic violence, and seniors (Demirova
and Machevar 2012). 16 However, it seems that the institutional capacity for the social economy
sector is still weak.
16 Examples for the activities of social enterprises include: public laundries and cleaning services; training
and retraining; social counseling and training children; soup kitchens; a woodworking workshop; revival
and presentation of traditional crafts, customs and culture of ethnic minorities in Bulgaria; promotion of
traditional craftwork at home and abroad; enhancing the professionalism of artists from various ethnic
Page 111
91
Experts in Bulgaria have developed a “national concept for social economy ,” which they
have submitted for adoption to the National Council for Tripartite Cooperation. “The social
economy is seen both as part of the real economy and as part of civil society, in which
individuals, volunteer associations or other organized entities conduct business in the public
interest and reinvest profit to achieve social goals. It occupies a specific space between the state,
with its protection mechanisms, and the market, which is driven by economic efficiency and
profit. The social economy also serves as a tool for the development of social services, for
integrating vulnerable groups into the labor market, for improving the way in which the social
services system functions, for developing local economies and for combating poverty and social
exclusion ”(Lyuben Tomev). 17 Significant opportunities for financial support of social enterprises
exist under the government's operational programs for 'Human resource development' and
'Competitiveness' for the periods 2007–2013 and 2014–2020. The concept proposes how to
develop the sector further with the support of the Ministry of Labor.
5.6
Monitoring and evaluation
The monitoring system is based on the National Labor Market database introduced in all
regions in 2010 . It is a significant improvement compared to the old information system
consisting of the following:
• More data collected.
• Compatibility with ESF type of data.
• Establishment of a national database of national and regional labor market.
Nevertheless, the existing information system still has the following weaknesses:
• Difficulties in providing regional data (both municipal and district level) on key labor
market variables at the national level.
• Difficulties in providing data for the most important target groups (including vulnerable
ones) at the national and regional level. For instance, not every program and measure
could provide data for every disadvantaged group in terms of spending and physical
indicators.
• Difficulties in providing reliable data broken down by type of activities, eg, how much
has been spent for training, or subsidized employment, etc.
Evaluations of ESF funding are carried out . Furthermore, an independent evaluation of the
national “From social assistance and employment program” was carried out in 2005 and a net
impact assessment of active labor market programs was performed in 2006 by external
evaluators. As discussed in Chapter 3, an independent evaluation of the activation services was
also conducted. In addition, the Court of Auditors performs audits depending on its annual
program. More than 12 audits have been implemented in the last 5 years covering single or
groups of programs. Each of these audits contains effectiveness and efficiency assessments.
communities, dealing with distinctive crafts; integration of ethnic minorities in the Bulgarian society
through the development of the spiritual culture, traditional human virtues, customs and traditional crafts
(Demirova and Machevar 2012).
17 http://www.eurofound.europa.eu/eiro/2011/07/ articles / en1107021i.htm
Page 112
92
The OPRHD 2007-2010 was evaluated by an external institute in 2011 which found
several implementation issues (the International Foundation for the Public Policies and
Administration of Ibero-America FIIAPP) 18 . The evaluation was based on structured interviews.
According to the executive summary, the main problems found related to: “a high percentage of
beneficiaries agree [ing] that it will be necessary to receive clear and simple instructions and
guidance from the intermediate bodies and that the communication with the Intermediate
bodies is not satisfactory. The high percentage of staff fluctuation and difficulty in replacing
the vacant positions leads to confusion and delays in the procedures. Delays in evaluation of
project proposals, verification of expenditures and payments are also among the problems
found. ”
Fields visits of the World Bank team confirmed that the administrative burden to
implement OPRHD programs was much larger than for national programs (see also
Chapter 2). Reducing the administrative burden should be a priority. Another problem is linked
to the limited period of each program. As a number of tasks are permanent (such as
supported employment and vocational rehabilitation measures), there is the danger of low
sustainability in the implementation of the measures.
The net assessment of active labor market programs, elaborated by WYG
International in 2006, showed relatively good results for the net impact of ALMPs
targeted at the long-term unemployed as compared to other programs . Moreover, long-
term unemployment programs “… show a higher net impact for those in the 45 to 54 age
group and for those with longer duration of unemployment and with lower educational
attainments (YMG International 2006).
The evaluation of the “From Social Assistance to Employment” program showed
insignificant or even negative employment impacts , as mentioned above, despite the fact
that these programs have improved work discipline, habits and qualifications (Kuddo 2009).
Moreover, employers reported that productivity was low and additional investments in
monitoring and firm-level supervision were necessary. However, the mentioned positive effects
are of great value, in particular if considering the difficulties to integrate highly disadvantaged
groups into the labor market.
Evaluation evidence on job creation programs in a range of countries shows mixed
results, in particular with regard to large-scale job creation measures (eg relief work in
Sweden, community work programs in the UK in the 1980s, and past large-scale wage-
subsidy based job creation measures in Germany and similar experiences in France; see Meager
and Evans 1998). Other problems are also often recorded, such as low prestige of work (Kuddo
2012).
On the positive side, evaluations indicate that public works can help more disadvantaged
groups as a poverty or safety net program (Kuddo 2009). Also, previous evaluation
studies carried out in Austria, Ireland and the Netherlands record significant positive impacts of
this kind (Meager and Evans, 1998).
Despite the contradictory evaluation results, a few issues emerge, which are likely to increase
the effectiveness of job creation measures (Meager and Evans, 1998):
• A working environment close to that of the regular labor market;
• Combinations of job creation schemes with periods of training for the participants;
18 http://ophrd.government.bg/view_doc.php/5460
Page 113
93
• Integrated approaches, dealing with other social and family problems the jobseeker
might face;
• Smaller scale schemes tend to be more effective with regard to the quality of the job
offered and displacement effects. However, it could be argued that in times of crisis, job
creation measures have the advantage of representing a sort of job rotation, giving
employment opportunities, although for a limited time, for a higher number of persons
and may help to reduce inflow into long-term unemployment;
• Furthermore, job creation programs that are carried out in combination with training
programs in the context of “intermediate labor markets” and / or are implemented in
the third sector may yield positive results (Walther and Pohl 2005 referring to Austria,
Denmark and Italy; Meager and Evans 1998, European Employment Observatory 2012
for Austria).
No external evaluation report exists for the evaluation of training measures. It would be
very useful to evaluate the impact of the training vouchers and to assess the quality of the
training and its capacity to respond to skills mismatches. Overall, an improved monitoring and
evaluation regime can help to address many of the challenges identified in this report and
improve quality of service delivery and management capacity for the challenges facing the
Bulgarian Labor Market and its institutions.
Page 114
94
Bibliography
Alfa Research, Assessment of Employment agency proposals for employment promotion, 2008
Almeida, R., Arbelaez, J., Honorati, M., Kuddo, A., Lohmann, T., Ovadiya, M., Pop, L., Sanchez
Puerta, M., Weber, M. (2012), “Improving Access to Jobs and Earnings Opportunities”,
The World Bank, Social Protection & Labor Discussion Paper N0. 1204
Bulgarian Employment Agency administrative data
Bulgarian Agency for Social Assistance administrative data
Bulgarian Employment Agency Statuses 2003 - 2010
Bulgarian
Employment
Agency
Yearly
Books
2007-2011,
Internet:
http://www.az.government.bg/internal.asp?CatID=25/05&WA=AnaProSurv.asp
Bulgarian Employment Agency, Executive summary, Report on Labor Mediators' Work in Time
of Crisis, 2010. Internet: http://www.az.government.bg/internal.asp?CatID=25/
06 & WA = Analyzes / Researches / Research.htm
Bulgarian Court of Auditors, Report on the audit of the activities of the National Program
"Assistants for People with Disabilities" in the Ministry of Labor and Social Policy, the
Agency for Social Assistance and Employment Agency for the period from 01.01.2005 to
31.12.2007,
2009,
Internet:
http://www.bulnao.government.bg/index.php?p=search&highlight=
DOK_41_HPAXU_sled_zased & search = DOK_41_HPAXU_sled_zased & x = 15 & y = 9
Bulgarian Court of Auditors, Audit Report № 0600001010 audit trail of activities aimed at
increasing the employment of people with disabilities for the period from 01.01.2006 to
31.12.2009,
2011,
Internet:
http://www.bulnao.government.bg/index.php?p=search&highlight=
Doklad_Zaetost_hora_uvrejdania0311 & search = Doklad_Zaetost_hora_uvrejdania0311 & x =
10 & y = 7
Bulgarian Court of Auditors, Report on the audit of the activities under the National Program
"From Social Assistance to Employment" at the Ministry of Labor and Social Policy for
the
period
from
01.01.2004
to
31.12.2006,
2007,
Internet:
http://www.bulnao.government.bg/index.php?p=search&highlight=Doklad-Ot-SP-kam-
OZ-MTSP-310108 & search = Dok-SP-kam-OZ-MTSP-310108 & x = 13 & y = 8
Bulgarian Court of Auditors, Report on the results of the audit of the activities of the National
Program for Employment and Vocational Training of People with Disabilities,
Ministry of Labor and Social Policy and Employment Agency for the period from
01.01.2006 to 31.12.2006; 2007 Internet: http://www.bulnao.government.bg/
index.php? p = search & highlight = Doklad-UVREJDANIA-MTSP-AZ-120208 & search = Doklad
-UVREJDANIA-MTSP-AZ-120208 & x = 11 & y = 10
Bulgarian Council of Ministers, Report "Improving the quality of mediation services for
employment in Bulgaria ", 2010 Internet: http://www.ees-bg.uphero.com/pes/PES%
20Docald_1% 20clean.doc
Bulgarian Employment Promotion Act, 2013, Internet: http://www.az.government.bg/
internal.asp? CatID = 24 & BM = 0
Page 115
95
Bulgarian Social Assistance Law, Internet: http://www.asp.government.bg/ASP_Client/
ClientServlet? Cmd = add_content & lng = 1 & sectid = 13 & selid = 13
Bulgarian Law on family allowances, Internet: http://www.asp.government.bg/
ASP_Client / ClientServletcmd = add_content & lng = 1 & sectid = 13 & selid = 13
Bulgarian Employment Agency, Peer Pes Paper - Bulgaria. Peer Review “Effective Services for
Employers, Paris, January 2012
Card, D., Kluve, J. and A. Weber, 'Active Labor Market Policy Evaluations: A Meta-Analysis', The
Economic Journal No. 120, Issue 546, Royal Economic Society, St. Andrews, 2010, pp.
452-477.
Demirova and Machevar, Comment paper Bulgaria Peer Review on the social economy, France
2012
Dimitrov, Y., Youth unemployment in Bulgaria, Friedrich Ebert Stiftung, Study, 2012, Internet:
http://library.fes.de/pdf-files/id/09470.pdf
Duell, N., “ Can active Labor Market Programs reduce long-term unemployment?”, Thematic
Review Seminar on “Tackling Long-Term unemployment - effective strategies and tools
to address long-term unemployment ”, Brussels, 8 November 2012, Mutual Learning
Program,
Autumn
Seminar
2012,
http: //www.mutual-
learningemployment.net/uploads/ModuleXtender/
Trscontent / 64 / Nicola_Duell_Discussion_paper_Final.pdf
Duell, N., “ How to Promote Self-Employment of Young People in Europe”, Peer Review on
“Pathways to support young people into self-employment”, Analytical Report, Mutual
Learning Program of the European Commission, 2011.
Duell, N., Vetter, T., EEO Review: 'Long-term Unemployment. Germany ', European Employment
Observatory, 2012, Internet: www.eu-employment-observatory.net.
Düll, N. and K. Vogler-Ludwig, The role of Public Employment Services in Youth Integration. A
review of Good Practice, Analytical Paper, Pes to Pes dialogue, The European
Commission Mutual Learning Program for Public Employment Services, DG
Employment, Social Affairs and Inclusion, April, 2011.
Duell, N., Grubb, D. and S. Singh, Activation Policies in Finland, OECD Social, Employment and
Migration Working Papers No. 98, 2009, Internet:www.oecd.org/els/ workingpapers.
Economic and Social Council (2009), Analysis of programs, projects, measures for active labor
market policy in National Plan for employment promotion 2009. Internet
www.esc.bg/bg/documents/category/3?download=6
European commission, In-depth review for BULGARIA, Commission staff working document,
Brussels,
2013,
Internet:
http://ec.europa.eu/economy_finance/publications/occasional_paper
/2013/pdf/ocp132_en.pdf
European Commission, Employment and Social Development report ESDE 2012/13
European Commission, Employment and Social Development report ESDE 2011/12
116
96
European Employment Observatory, Long-term unemployment. Executive summary, European
Employment Observatory Autumn Review, prepared by ICF GHK, 2012.
European Union, Bulgaria and the European Social Fund, 2012
Eurostat, Labor Force Survey data, National Statistical Institute, Internet:
http://www.nsi.bg/otrasal.php?otr=26
Eurostat, Labor market policy statistics Qualitative report. Bulgaria 2011
Immervoll, H., “Reforms of the benefit system to make work pay: Options and priorities in a
weak labor market ”, Thematic Review Seminar on“ Tackling Long-Term unemployment
- effective strategies and tools to address long-term unemployment ”, Brussels, 8
November 2012, Mutual Learning Program, Autumn Seminar 2012
Junankar, R., The Global Economic Crisis: Long-Term Unemployment in the OECD, IZA
Discussion Paper No. 6057, Bonn, 2012.
Kotseva, M., Tsvetkov, A. 2010. “Main Results from the Net Impact Evaluation of Public
Employment
Services ”;
available
at:
http: // ees-
bg.uphero.com/pes/analitichen_doklad_Eng_ new.pdf
Kluve, J., The Effectiveness of European Active Labor Market Policy, IZA Discussion Paper No.
2018, Bonn, 2006.
Konle-Seidl, R., Activation and integration: working with individual actiona plans. Monitoring
and follow-up of IAPs and their outcomes in selected European countries, Pest p Pes
dialogue program of the European Commission, Brussels 2012
Konle-Seidl, R., Profiling systems for effective labor market integration. Use of profiling for
resource allocation, action planning and matching, Pes to Pes dialogue, The European
Commission Mutual Learning Program for Public Employment Services, DG
Employment, Social Affairs and Inclusion, May, 2011.
Kuddo, A., Employment Services and Active Labor Market Programs in Eastern European
and Central Asian Countries, World Bank. World Bank SP Discussion Paper No. 0918,
Washington DC, 2009.
Lechner, F., Wetzel, P., EEO Review: Long-term Unemployment. Austria, European Employment
Observatory, 2012, Internet: www.eu-employment-observatory.net.
Loukanova, P., “EEO Review: Long-term unemployment. Bulgaria ”, European Employment
Observatory, 2012, Internet: www.eu-employment-observatory.net.
Loukanova, P., “EEO Review: Adapting unemployment benefit systems to the economic cycle”,
European Employment Observatory, 2011, Internet: www.eu-employment-
observatory.net
Loukanova, P., Tzanov, V., “Wages in Bulgaria”, EEO ad hoc request, April 2011
Loukanova, P, “EEO Review: Youth employment measures. Bulgaria ”, European Employment
Observatory, 2010, Internet: www.eu-employment-observatory.net
Page 117
97
Martin, JP, What Works Among Active Labor Market Policies: Evidence from OECD Countries
Experiences, OECD Economic Studies , 30, pp 79-113, 2000.
Martin, JP and D. Grubb, What Works and for Whom? A Review of OECD Countries' Experiences
with Active Labor Market Policies, Swedish Economic Policy Review , Vol. 8, no. 2,
Stockholm, 2001, pp. 9-56, Internet: www.regeringen.se/content/1/c6/09
/52/63/e9a4be51.pdf.
Martyn, T., Training for work is more effective than Working for the Dole ”, Joint research on the
application of mutual obligation in welfare and development assistance, Uniya Social
Justice Center and Jesuit Social Services, 2007.
Meager, N. and C. Evans, “The evaluation of active labor market measures for the long-term
unemployed ”, Employment and Training Department, International Labor Office
Geneva, Employment and Training Papers 16, Geneva, 1998.
Nadezhda Daskalova European Foundation for the Improvement of Living and Working
Conditions http://www.eurofound.europa.eu/eiro/2012/06/articles/bg1206011i.htm
OECD, Employment Outlook, OECD Publishing, Paris, 2005.
OECD, Employment Outlook, OECD Publishing, Paris, 2007.
OECD, Employment Outlook, OECD Publishing, Paris, 2009.
OECD, Maintaining the Activation Stance during the Crisis, OECD Labor and Employment
Ministerial Meeting TACKLING THE JOBS CRISIS, The Labor Market and Social Policy
Response, Paris, 28-29 September 2009b.
OECD, Off to a Good Start? Jobs for Youth, OECD Publishing, Paris, 2010.
Paparella, D. and L. Savino (eds.), Pathways to work: “Current practices and future needs for the
labor market integration of young people. YOUTH: Young People in Occupations and
Unemployment: Thinking of their Better Integration in the Labor Market ”. Final Report,
Report for the European Commission prepared by a consortium led by ISFOL, 2008
h ttp: //ec.europa.eu/social/main.jsp? langId = en & catId = 89 & newsId = 448 & furtherNews = yes
Rules of the Law for social assistance, Internet: http://www.asp.government.bg/
ASP_Client / ClientServlet? Cmd = add_content & lng = 1 & sectid = 13 & selid = 13
Shopov, G., “Implementing Activation and Graduation Measures for Social Assistance
Beneficiaries. Bulgaria: A review of Experiences, 2012, unpublished
Tomev, L., “The Bulgarian Case: Employment Policies under Budget Austerity in Times of Crisis”,
in: Employment and M. Meinardus (Eds), Employment Policies in South-East Europe.
Common Challenges and Different Scenarios, Friedrich-Ebert Foundation, 2012
Tomev, L. http://www.eurofound.europa.eu/eiro/2011/07/articles/bg1107021i. htm
Tubb, H., Activation and Integration: Working with Individual Action Plans. Toolkit for Public
Employment Services, The European Commission Mutual Learning Program for
Public Employment Services, DG Employment, Social Affairs and Inclusion, 2012.
Page 118
98
Walther, A. and A. Pohl, “Thematic Study on Policy Measures concerning Disadvantaged Youth:
Final Report, Volume 2 - Annexes II-VI (National Reports, Compendium of Good Practice,
Validation), European Commission, DG Employment and Social Affairs and Institute for
Regional Innovation and Social Research (IRIS), Tuebingen, 2005, Internet:
ec.europa.eu/employment_social/spsi/docs/social_inclusion/youth_study_annex_en.pdf
Weber, T., Profiling Systems for Effective Labor Market Integration, Thematic Synthesis Paper,
2011.
OECD, Activating Jobseekers. How Australia does it. OECD Publishing, Paris,. 2012
Venn, D., “Eligibility Criteria for Unemployment Benefits: Quantitative Indicators for OECD and
EU Countries ”, OECD Social, Employment and Migration Working Papers , No. 131, OECD
Publishing, http://dx.doi.org/10.1787/5k9h43kgkvr4-en, 2012
World Bank, Implementing the Benefit in Material Need in the Slovak Republic. Institutional
arrangements and coordination of cash transfers with the provision of employment and
social services. Social Safety Net Assessment and Poverty Mapping, 2012,
http://www.employment.gov.sk/en.html
WYG International, “Net Impact Assessment of Active Labor Market Programs - Final
Report ”, prepared for the Bulgarian Ministry of Labor and Social Policy, 2007
Page 119
99
Annex
Table A1. Social benefits of the Social Assistance Agency
A Indicators under the Family Allowances
for
Children Act (FACA)
Average
monthly
number
2010
in 1000
Average
monthly
number
2011
in 1000
Average
monthly
number
2012
in 1000
TOTAL
608,089
611,651
600,757 th most common
TOTAL PAYMENTS DISBURSED UNDER FACA in
million BGN
467.5
489.8
490.1
Total number of children
907.6
850.8
835.7
One-off pregnancy allowance - a total - Art. 5a
1.5
1.5
1.5
- socially uninsured
1.4
1.4
1.4
- socially insured
63
58
57
One-off birth allowance - a total (1 + 2)
6.0
5.7
5.6
Number of children - a total (1 + 2)
6.0
5.8
5.7
- including twin children (sum)
0.1
0.1
0.1
1. One-off birth allowance - A TOTAL - Art. 6,
Para.1 & 2
5.9
5.7
5.6
- for first child
3 .1
3.0
2.9
- for second child
2.2
2 .1
2.1
- for third and every subsequent child
0.6
0.6
0.6
Number of children (Art.6, Para. 1 & 2)
6.0
5.8
5.6
- including twin children
0.2
0.1
0.2
2. Supplementary one-off allowance for
children with disabilities
0.04
0.04
0.04
Number of children / Art. 6, Para. 6 /
0.04
0.04
0.04
- including twin children
0
- 0
0
One-off allowance for raising twins up to the age
of 1, Art. 6a
0.09
0.08
0.08
Number of twin children
0.2
0.2
0.2
Monthly allowances for children - a total
(1 + 2 + 3)
570.6
557 .0
544.7
- including in the form of social investments
0.3
0.3
0.4
Number of children - a total (1 + 2 + 3)
839.7
823.2
807.9
Page 120
100
- including twin children
17.3
18.0
18.3
1. Monthly allowances for children until the age
of 20
547.2
532.3
518.6
Number of children (Art. 7, Para. 1)
814.6
796.4
779.5
- including twin children
16.6
17.2
17.5
2. Monthly allowances for children until the
age of 20, raised in a family of relatives or kins,
or a foster family
3.9
4.2
4.5
Number of children (Art. 7, Para. 2)
4.9
5.4
5.8
- including twin children
0.8
0.9
0.1
3. Monthly allowances for children with
permanent
disabilities until the age of 20
19.5
20.5
21.6
Number of children (Art. 7, Para. 8)
20.2
21.4
22.6
- including twin children
0.6
0.7
0.7
Monthly allowance for child raising - a total
(1 + 2 + 3 + 4)
23.2
21.6
21.8
- including in the form of social investments
0.6
0
0
Number of children - a total (1 + 2 + 3 + 4)
23.3
21.7
21.8
1. Monthly allowance for raising a child up
to the age of 1, Art.8, Para.1
22.4
20.8
21.1
Number of children (Art. 8, Para. 1)
22.5
20.9
21.1
2. Monthly allowance for raising a child with
permanent disabilities up to the age of 2, Art.8,
Para.Z
0.1
0.1
0.1
Number of children (Art. 8, Para. 3)
0.1
0.1
0.1
3. Monthly allowance for raising a
child until the age of 1 - socially insured
mother
0.7
0.6
0.6
Number of children (Art. 8, Para. 5)
0.7
0.6
0.6
4. Monthly allowance for raising a child up to
the age of 1 - foster families
0
0
0
Number of children (Art. 8, Para. 7)
0
0
0
Page 121
101
One-off allowance for raising a child up to the
age of 1 by a mother (adoptive mother) who is
university student, Art.8c
0.2
0.2
0.3
Number of children
0.2
0.2
0.3
Monthly allowance for children with permanent
disabilities
20.6
21.9
1. To parents / adoptive parents /
20.4
21.6
- Number of children
21.0
22.2
2. To families with children placed under the
provisions of Child Protection Act, Art. 26
0.3
0.3
- Number of children
0.3
0.4
Free travel for mothers of many children
1.2
1.2
1.2
Number of free travel certificates issued to
mothers of many children
1 .3
0.7
One-off targeted allowance - for first graders - a
total
3.5
3.7
3.7
Number of children - a total
3.5
3.8
3.8
- including in the form of social investments -
number of children / amount
0.3
0
0
- including twin children
0.7
0
0
- including children with permanent disabilities
0.1
- including children with one parent alive
0
- including children placed with families under
the provisions of the Child Protection Act, Art.26
0
B Indicators under Art 9 of the Rules for
Implementation of the Social Assistance
Act (RISAA)
Average
monthly
number
2010
in 1000
Average
monthly
number
2011
in 1000
Average
monthly
number
2012
in 1000
Persons and families supported - a total
44.3
47.8
49.7
FUNDS DISBURSED UNDER RISAA, ART. 9 (in
Mio BGN)
47.8
51.3
53.8 045
Page 122
102
1. Persons below working age - a total
0.8
0.9
0.8
a. children supported on independent legal
grounds
0.4
0.4
0.4
b. families with one parent / parents under working
age
0.5
0.5
0.4
2. Persons in working age - a total:
41.4
44.8
46.5
Total number of unemployed
38.8
45.7
49.6
a. persons
11.4
11.9
12.6
- including number of unemployed persons
9.2
9.9
10.8
b. two-parent families
15.4
18.0
19.3
- number of unemployed persons
23.7
28.7
31.2
c. single-parent families with a
child / children above the age of 3
5.2
5.9
6.4
- number of unemployed persons
4.1
4.8
5.4
d. single-parent families with a child / children
under the age of 3
6.2
6.0
5.6
- number of unemployed persons
2.3
2.3
2.3
e. families with children, where only the
children are supported
3.2
3.0
2.6
- Number of children
5.2
4.4
4.0
Z. Persons above working age - a total:
2.1
2.1
2.4
a. persons aged up to 65 years, living alone
0.9
1.0
1 .1
b. persons aged between 65 and 75 years, living
alone
0.6
0.5
0.6
c. persons aged above 75 years, living alone
0.2
0
0
d. families aged up to 70 years
0.4
0.4
0.5
e. families with a member / members aged above
the age of 70
0
0
0
Supported families of persons with disabilities - a
total
2.9
3.0
3.0
Persons with permanently reduced working
capacity
1.7
3.0
3.0
- including children with disabilities
0.5
0.4
0.4
C Indicators under the Integration of
Persons with Disabilities Act (IPDA)
Average
monthly
number
2010
in 1000
Average
monthly
number
2011
in 1000
Average
monthly
number
2012
in 1000
Page 123
103
Actual number of persons with disabilities
477.8
480.5
493.4
TOTAL FUNDS DISBURSED UNDER IPDA (in mio
BGN)
178.3
159.2
158.9
Total monthly supplements for social integration
(sum of 1 through 7)
960.8
1,030.1
1,066.5
1. Monthly social integration supplement for
transport services - a total
413.5
465.1
485.1
2. Monthly social integration supplement for IT
services - a total
104.9
102.3
99.8
3. Monthly social integration supplement for
training - a total
0.4
0.3
0.3
4. Monthly supplements for dietary nutrition and
medicines - a total
361.0
368.2
375 .7
5. Monthly supplements for access to information
80 .1
93.3
103.8
6. Monthly supplement - rent for municipal
lodging
1.0
1.0
1.0
7. Supplement for balneotherapy - a total
0.8
0.8
0.8
-including children with
DEMAC / CEMAC / TEMC / NEMC certificate
0
0
0
Monthly supplement for children with
permanent disabilities - Art. 43 - a total / 1 + 2 /
19.7
Total number of children
20 .1
1. To adoptive parents
19.4
Number of children
19.9
2. To families with children placed under the
provisions of SAA Art. 26
0.2
Number of children
0.2
Page 124
104
D Indicators for funds under the Child
Protection Act (CPA)
Average
monthly
number
2010
Average
monthly
number
2011
Average
monthly
number
2012
Total number
4 304
4 784
5 382
DISBURSED FUNDS in million BGN
7.8
8.7
1.3 622
- including for children placed with relatives and
kins
3.9
4.0
4.3
- including for children placed with foster families
0.3
0.6
0.9
Source: data provided by the Social Assistance Agency
Page 125
105
Table A2. Participants in employment encouraging measures by type of
measure / program, gender, age and length of unemployment, 2012
Participants in employment encouraging measures,
up to 31.12.2012
Included persons - employed in the context of an
employment incentive and included in training, total
over the year
4358
Persons that have worked, monthly average
3693
I. For unemployed young people aged up to 29 years
(Article 36, Para 1)
Employed persons / participants, total over the year
1492
of them: women
755
with tertiary education
129
long time unemployed
48
Persons that have worked, monthly average
917
II. For young people with lasting damages or war invalids,
as well as from social institutions / Art. 36, Para 2 /
Employed persons - total over the year
114
of them: women
48
long time unemployed
5
with tertiary education
7
- Employed young people with lasting damages
108
- Employed war invalids
0
- Employed young people from social institutions
6
Persons that have worked, monthly average
112
III. For acquiring professional qualification and / or
probation for unemployed aged up to 29 years / Art. 41 /
Persons included in probation - total over the year
9
of them: women
6
long time unemployed
0
Persons that have worked, monthly average
180
IV. Territorial mobility of unemployed persons / Art. 42 /
Included persons - total over the year
120
of them: women
87
aged up to 29 years
49
aged 50+
19
Page 126
106
long time unemployed
6
with lasting damages
2
- Persons that have received lump sum for work in
another settlement
0
- Persons that have concluded contracts for daily
transport expenses
119
- Persons that have received sums for presenting in
front of employer for first time
0
- Persons that have received sums for daily transport
expenses
149
- Persons that have received sums for presenting in
front of employer
2
IX. Encouraging employers to open jobs for probation / Art.
46 of the LEE /
Included persons, total over the year
45
women
31
aged up to 29 years
18
long time unemployed
2
Persons that have worked, monthly average
29
X. For start-up of independent business / Art. 47, 48, 49b /
Persons that have concluded contracts / Art. 47, Para
1 / total over the year
133
of them: women
72
with tertiary education
84
aged up to 29 years
4
aged 50+
34
Concluded contracts for start-up of independent
business according to the subject of the main business
133
including: in agricultural sector
20
in industry
6
in services
107
XI. For start-up of independent business as a micro-
enterprise / Art. 49 /
Persons that have concluded contracts under Art.
49, Para 1, total over the year
81
including: in agricultural sector
0
in industry
1
in services
80
Page 127
107
of them: women
with tertiary education
26
aged up to 29 years
25
aged 50+
13
XIII. For the first five opened job opportunities by
employers-micro-enterprises / Art. 50 /
Employed persons, total over the year
153
of them: women
93
aged up to 29 years
18
aged 50+
22
long time unemployed
14
Persons that have worked, monthly average
148
XIV. For part-time work / Art. 51 /
Employed persons total over the year
283
of them: women
174
aged up to 29 years
35
aged 50+
44
long time unemployed
17
Persons that have worked
256
XV. For persons with lasting damages, incl. war invalids
/ Art. 52, Para 1 /
Employed persons, total over the year
405
of them: women
209
aged up to 29 years
13
aged 50+
178
long time unemployed
60
war invalids
0
with tertiary education
36
Persons that have worked, monthly average
366
XVI. For persons with lasting damages employed for
temporary, seasonal or by the hour work / Art. 52, Para 2 /
Employed persons, total over the year
224
of them: women
132
aged up to 29 years
20
aged 50+
113
Page 128
108
long time unemployed
31
with tertiary education
18
Persons that have worked, monthly average
188
XVII. For single parents and / or mothers with children
aged up to 3 years / Art. 53 /
Employed persons, total over the year
168
of them: women
161
aged up to 29 years
70
aged 50+
0
long time unemployed
3
with tertiary education
33
- single parents
15
- mothers with children aged up to 3 years
153
Persons that have worked, monthly average
271
- single parents
26
- mothers with children aged up to 3 years
245
XVIII. For adoptive mothers with children from 3 to 5
years old / Art. 53a /
Employed persons, total over the year
186
of them: aged up to 29 years
62
aged 50+
0
long time unemployed
19
with tertiary education
41
Included in training
1
Persons that have worked, monthly average
247
XVII. For persons that have serviced "Imprisonment" / Art.
55 /
Employed persons, total over the year
4
of them: women
aged up to 29 years
2
aged 50+
1
Included in training
0
Persons that have worked, monthly average
5
XX .For unemployed aged 50+ / Art. 55a /
Employed persons, total over the year
345
of them: women
183
long time unemployed
53
Page 129
109
with tertiary education
15
Persons that have worked, monthly average
521
XXIV. For persons employed for apprenticeship / Art. 55d /
Employed persons, total over the year
167
of them: women
83
aged up to 29 years
53
aged 50+
22
long time unemployed
4
Persons that have worked, monthly average
133
XXIV N. Encouraging employers to open "green jobs" (Art.
55e of LEE)
Employed persons, total over the year
376
of them: women
174
aged up to 29 years
49
aged 50+
75
long time unemployed
67
Persons that have worked, monthly average
241
Source: Data provided by the Bulgarian Labor Agency
Page 130
110
Table A3. Participants in National programs and measures
2012
Number of newly included
participants sum over the
whole year
Number of
participants monthly
average
Programs and measures to promote
employment - total
39,398 th most common
20,600 th most common
Programs
35,040 th most common
16,907 th most common
National Program “From Social
Assistance to Employment ”
21,437 th most common
8,277 th most common
National program "Personal assistants
to disable people "
4,253 th most common
3,337 th most common
National program "Assistance for
retirement "
47
37
Career start program
730
770
National program for employment and
vocational training of permanently
disabled people
413
1,748 th most common
National program "Melpomena"
104
87
Program "No interest loans for
disabled people "
69
Regional and branch programs for
employment and training
2,097 th most common
1,105 th most common
Project for school drop-outs
National program for motherhood
support
National program "Activating inactive
people on the labor market "
30
68
"Esculap" program
National program "New employment
opportunities "
574
537
Program "Beautiful Bulgaria"
267
61
Other programs of the labor offices
168
529
Project "This is my chance to find myself"
0
0
Page 131
111
Project "Chance to work"
952
328
Project "Realization"
1,831 th most common
Project "New perspective"
284
21
Project "Increase of employability of the
unemployed through quality vocational
training "
1,784 th most common
Measures
4,358 th most common
3,693 th most common
Measure targeting unemployed youths up
to 29
1,492 th most common
917
Measure targeting youth disables, war
disables and youths in institutions
114
112
Measure for youths up to 29 to acquire
qualification or to have apprenticeship
9
180
Measure stimulating territorial mobility of
unemployed
120
Measure for unemployed receiving
monthly social assistance and getting a job
without the help of PES
0
0
Measure for unemployed to get
apprenticeship
45
29
Measure for starting up own business
133
Micro firms start up
81
Incentives for the first 5 job places
created by micro firms
153
148
Measure for part time employment
283
256
Measure for persons whose work-ability
is in permanent deterioration incl. war
veterans
405
366
Measure for permanently disabled people
to be employed on part-time, temporary
or seasonal work
224
188
Measure for single parents or mothers
with children up to 3
168
271
Project for mothers (adopters) with
children 3-5 years old
186
247
132
112
Measure for unemployed who have
served their term of imprisonment
4
5
Measure for unemployed women above
50 and men above 55
345
521
Measures for people aged 50-64 with
professional pension for earlier
retirement
0
2
Measure for long-term unemployed
53
77
Measures for persons hired for
apprenticeships
167
133
Incentives for the employers to open
green jobs (art. 55e EPA
376
241
Source: data provided by the Bulgarian Labor Agency
Page 133
113
Table A4. Foreseen participation period in employment programs
№
Programs
Years
2005 2006 2007 2008 2009 2010 2011 2012
Participation period in employment programs, in months
1 National Program “From
Social Assistance to
Employment ”
12
12
12
12
12
12
12
12
2 National program
"Personal assistants to
disable people "
12
12
12
12
12
12
12
12
3 National program for
employment and
vocational training of
permanently disabled
people
24
24
24
24
24
24
24
24
4 National program
"Assistance for
retirement "
60
60
30
30
30
24
12
24
5 Career start program
9
9
9
9
9
9
9
9
6 National program "New
employment
opportunities "
12
6
6
6
6
7 National program
"Melpomena"
12
12
12
12
12
12
12
12
8 Regional employment
programs
6
6
6
6
6
6
6
6
9 National program "Social
services in family
environment "
12
12
10 Project for school drop-
outs
6
12
6
11 National program for
motherhood support
child up
to 2
years
old
child up
to 3
years
old
child up
to 3
years
old
child up
to 3
years
old
child up
to 3
years
old
Source: Bulgarian Labor Agency