Resource information
This report studies the Bulgarian labor
market with a view to understand the interactions between
the performance of the Bulgarian economy and the functioning
of its labor market. The report assesses also the position
of Bulgaria vis-a-vis compliance with the "acquis
communautaire," and provides a set of key policy
recommendations that may enhance job creation potential in
years to come. In the aftermath of a steep adjustment
process, the Bulgarian labor market resembles a sclerotic
market, not dissimilar from the worst performing European
markets. Nevertheless, the existing labor market policies
and institutions, with the exception of excessively high
payroll taxes and a somewhat strict employment protection
legislation, are not necessarily synonymous of labor market
rigidity: unemployment support schemes are modest, the
minimum wage is not high, and industrial relations systems
do not appear to prevent an efficient wage dispersion across
sectors. Thus, the poor performance of Bulgaria is likely to
be the result of a chronic inability to restructure its old
sector and to tackle fundamental structural problems. In
terms of compliance with the "acquis
communautaire," Bulgaria's legislation appears
aligned with most of the European Union requirements in the
labor area. However, the standardization of working
conditions requires substantial investments and a
strengthening of administrative capacity to implement EU legislation.
