Youth Unemployment Trends in Bulgaria

This is a brief presentation of the latest developments of youth unemployment in Bulgaria. It aims to address whether or not the recent trends are a continuation of the impacts of the economic crisis on youth participation in labour markets. The only data used is from the Bulgarian National Statistics Institute Labor Force Survey (NSI LFS) and targets the 15-24 age group.

1. Youth unemployment overall developments

For the fourth consecutive year, youth unemployment has risen. In the first quarter of 2012, the youth unemployment rate (YUE Rate) reached its highest point since Q3 2008 when the crisis began and unemployment jumped to 30% – a peak that had not been reached since 2003. At present, about 74,8 thousand youths are unemployed. Youth unemployment continues to rise but economic developments have been made and show signs of weak growth in 2011. There is a general tendency for a faster rate of growth in youth unemployment than unemployment as a whole.

The chart below analyses the ratio of youth unemployment to adult unemployment. Over the last decade, youth unemployment has grown at a faster rate and, apart from in 2010, has been on a constantly upwards trend. 2011 saw another hike in the number of unemployed youths illustrating that the impact of the last recession may have some more long-term impacts for youth employment.

Figure 3 below illustrates the relation between youth labor market participation and the youth unemployment rate. The  correlation between the two is clearly negative. This means, a rise of youth unemployment goes along with a decrease of youth labor market participation rate, and vice versa. Our calculation for the correlation coefficient is -0,64375 – similar to most EU countries.

2. Youth unemployment by education 

The data below shows interesting information about how educated the unemployed are. Those who left the education system with an upper secondary degree (ISCED 3-4) were affected most by the economic crisis, totaling 70.6% of all youth unemployment in 2011. In contrast, those with higher education (ISCED 5-6) have seen low and relatively stable levels of unemployment. The crisis only led to 1300 more unemployed youths in this category. It also caused only 1400 more recorded cases of unemployment for those with primary and lower education (ISCED 0-2), indicating that the highly educated and least educated are most protected in times of crisis. It is those with secondary education that take the biggest hit.

3. Youth unemployment  by duration of unemployment

The latest data indicates a constant increase in long-term youth unemployment (more than 1 year without work) since 2009. Even in the first three quarters of 2011, when the economy was on track to recovery, youth unemployment continued to rise. At the end of 2011, more than 30% of all unemployed youths had been out of work for over a year, almost double the levels of 2008.

4. Unemployed youths and methods of searching a job

The LFS data illustrates that the majority of youths who are unemployed rely on relatives and friends to find a job. A large portion of the unemployed search for jobs through direct contact with employers and job advertisements in newspapers, magazines, etc. Just one out of five unemployed youths use assistance of the labour offices, half the amount compared to early 2003. This information may be used as a proxy to estimate that the financial resources available through the active labour market policies and human resources development programmes get to less than 20% of unemployed youths. Yet, one third of youths who are unemployed are registered in the labour offices, meaning that only 43% of those registered rely on labor office help.

Since 2008 more unemployed young people have used the labour offices, but not a significantly bigger number. The government needs to undertake measures to motivate unemployed youths to register with the labour office in order to make them eligible to use the available funds.

5. Unemployed youth by previous work and reasons for leaving the job

The graphic below is evidence that experience matters in Bulgaria’s youth labour market. In the wake of the economic crisis the numbers of unemployed soared, experienced or not, there were less jobs on offer. Yet in 2011 with some economic recovery the numbers of inexperienced youth unemployed continue to rise while those with previous employment experience began to find jobs.

6. Youths who do not want to work

During the last 3 years of recession there has only been a negligible shrinkage in those who do not want to work. Normally, in years of crisis, unemployed young people will look for further education opportunities to avoid being unemployed. The data below shows that this wasn’t the case for Bulgaria.

7. Not in employment, education, or training (NEETs)

Bulgaria has one of the highest rates of young people not in employment, education or training (NEETs) in Europe. Although the number of NEETs is growing at a slower rate, it has alarming significance. It is worth mentioning that Bulgaria has had always problems with this typical type of youth subgroup. Even on the zenith of the economic growth in 2007-2008 the number of NEETs was relatively high compared to other EU countries. The level of those unemployed in this category is not solely determined by the business cycle but has structural dimensions to be analyzed and respectively resolved.

8. Some main hypothesis for youth unemployment developments in Bulgaria

• The last recession has had specific impacts on youths in terms of unemployment, labour market participation and employment
• Higher education and qualification among youths are a guarantee for avoiding unemployment in times of crisis
• Part-time employment among youths is a key to increasing youth labour market participation and employment
• The NEET rate is not only determined by the business cycle but has more structural dimensions
• Active labour market policies and human resources development operational programmes could be much improved in terms of targeting, coverage and adequacy

This article is part of a project on youth unemployment in Europe run by the Friedrich-Ebert-Stiftung and Social Europe Journal