research project. public policies for insertion of youth in the labor market

8/10/2019 Research Project. Public Policies for Insertion of Youth in the Labor Market

1/20

PUBL IC POLICIES FOR A BETTER INSERTION OF YOUTH

IN LABOR MARKET

=RESEARCH PROJECT=

Students:

Bitan Iuliana

Olteanu Roxana

Paun Andreea

Sandu Ionut

PUBLI C SECTOR MANAGEMENT Master program

II-nd year


2/20

2

CONTENTS

Introduction

1. Concept of public policies for labor market

2. Insertion of youth in labor market

3.

Case study on a public policy

4. Final remarks

5. References


3/20

3

Introduction

The internationalization of enterprises, the globalization of the markets, the worldwide expansion, the

rapid economic changes and the abolition of geographical and customs borders make the theory of human

capital devoid of any meaning. So the international labor market is constantly changing because of the new

emerging technologies and therefore because of the role of increasing importance of the human capital in an

economy increasingly based on knowledge. On the other hand, we live in an era which most of the social and

economic life is determined by global processes, where cultures, economies and national boundaries have

begun to disappear. The current crisis has once again confirmed that economies are interconnected and no

region of the world can be independent in a globalized world economy.1

New organizational models are beginning to emerge, calling for new skills such as flexibility, multiple

abilities, teamwork, creativity and autonomy. Given the social implications involved in the placement of the

youth in the labor market, this issue increasingly assumes primary importance to research and to reflectivethinking on the part of all those involved in the education/training of youth.

2

The present paper focuses on describing the general framework of labor market and the position of

youth in it both in Romania and in some EU countries. It is well known the fact that integrating youngsters in

the labor market represents a problem that many nations confront with, and it seems to be not something

temporary, but a real bargain over the years.

First chapter generally presents the concept ofpublic policy and present general assumptions regarding

the labor market; then, the case of inserting the youth in the labor market is more elaborated, describing

situation from various countries, positions of different institutions and companies. A real case of public

policy in the field is analyzed in the third chapter with connections of what should have been changed, and

the conclusions will present a summarization and also some best practices where this problem has been well

managed.

1Angelescu, Coralia, Cretu, Stefania, Aceleanu, Mirela Ionela, Labor market insertion of young people in Romania , 2010,

article available at: http://econpapers.repec.org/article/butanneas/v_3a4_3ay_3a2010_3ai_3a1_3ap_3a4-18.htm, accessed on

01.04.2014,p. 22Frazao, Lourenco, Oliveira, Teresa, Placement of Youth in the Labour Market, Paper Presented at the European

Conference on Educational Research, Lahti, Finland 22 - 25 September 1999, available at:

http://www.leeds.ac.uk/educol/documents/000001140.htm,accessed on 01.04.2014
http://econpapers.repec.org/article/butanneas/v_3a4_3ay_3a2010_3ai_3a1_3ap_3a4-18.htmhttp://econpapers.repec.org/article/butanneas/v_3a4_3ay_3a2010_3ai_3a1_3ap_3a4-18.htmhttp://www.leeds.ac.uk/educol/documents/000001140.htmhttp://www.leeds.ac.uk/educol/documents/000001140.htmhttp://www.leeds.ac.uk/educol/documents/000001140.htmhttp://econpapers.repec.org/article/butanneas/v_3a4_3ay_3a2010_3ai_3a1_3ap_3a4-18.htm


4/20

4

1. Concept of public policies for labor market

In order to be able to find solutions to the problem of youth employment, it is important to know how

this problem is related to the state. Issues that reflect the public, the citizens, social problems, translate into

the shape of public policies.

Public policy represents a set of measures taken by a legal responsible authority to improve the living

conditions of citizens or designing measures to stimulate economic growth. It provides, in general, a

consultation of the various actors and a correlation of the lessons learned from their institutional and personal

experiences. It can often take the form of regulations or incentives that determine the social and economic

environment3.

In brief, a public policy gathers all activities of the specialized central public administration in order

to solve the problems identified and to ensure policy developments needed in a specific area4.

In recent years, many countries have begun implementing new policies and programs for integrationof people in the labor market. The rationales and aims of the policies range from the simple desire to reduce

youth unemployment to improving the transition from school to stable work.

The European Council agreed at the 1997 Luxembourg Jobs Summit to adopt a set of employment

guidelines for Member states. One such guideline states that they must make efforts to improve

employability of youths. The most important implication is that governments must offer every young

unemployed person either training, retraining, work experience or another employability measure within the

six months of becoming unemployed. The guidelines also include orientations, e.g. member

governments must reduce the number of young people who leave the education system early, and they

must make sure that young people are able to adapt to technological and economic changes.5

Labor market policies can be described, according to the different levels and aims of intervention and

the different target groups they are addressed to, as policies6:

3

Institute of public policies (IPP), Manual of public policies, October 2009, pp 17, available at:http://www.ipp.ro/library/Manual%20Politici%20Publice%20IPP.pdf,accessed on 11.04.2014

4Resolution no. 870 of 28 June 2006 of the Government of Romania approving the Strategy for improving the

development, coordination and planning of public policies at the central public administration, published in Official Gazette no.

637 of 24 July 20065OECD's Education Committee, the Thematic Review, entitledFrom Initial Education to Working Life - Making

Transitions Work , Chapter 3 from the1998 Employment Outlook - Getting started, settling in: the transition from education to the

labor market,May 2000, p. 906Sava, Simona, Case Study Report Romania: Current practices and future needs for the labor market integration of

young people: Young in Occupations and Unemployment: Thinking of their better integration in the labor market, June 2008,

available at:http://ec.europa.eu/social/BlobServlet?docId=1704&langId=en,accessed on 12.04.2014, p. 205
http://www.ipp.ro/library/Manual%20Politici%20Publice%20IPP.pdfhttp://www.ipp.ro/library/Manual%20Politici%20Publice%20IPP.pdfhttp://www.oecd.org/scripts/publications/bookshop/redirect.asp?912000021P1http://www.oecd.org/scripts/publications/bookshop/redirect.asp?912000021P1http://www.oecd.org/scripts/publications/bookshop/redirect.asp?811998061E1http://ec.europa.eu/social/BlobServlet?docId=1704&langId=enhttp://ec.europa.eu/social/BlobServlet?docId=1704&langId=enhttp://www.oecd.org/scripts/publications/bookshop/redirect.asp?811998061E1http://www.oecd.org/scripts/publications/bookshop/redirect.asp?912000021P1http://www.oecd.org/scripts/publications/bookshop/redirect.asp?912000021P1http://www.ipp.ro/library/Manual%20Politici%20Publice%20IPP.pdf


5/20

5

1) to attract people to the labor market, where the focus is either on providing young people with an

adequate level of professional competence or helping them to find a job;

2) to foster the vocational and the continuing vocational development of young workers and their

adaptability, by stimulating and supporting both individuals and companies to invest in developing skills;

3) to promote the roles of different actors in a governance framework, that is vertical and horizontal

subsidiary;

4) to integrate various measures and public policies within a flexicurity framework that combines

flexible work arrangements, active labor market policies, lifelong learning systems and social security

systems.

Labor market policy aims at reintegrating the unemployed in the labor market and is represented by

the core (job mediation) activities of the public employment service as well as specific reintegration

measures such as training and subsidized labor. Traditionally, the latter activities, which are often targeted

towards disadvantaged groups, were also largely implemented by the public employment service. However,

recently governments are more and more inclined to outsource the implementation of specific active

measures to private agencies.

In the specific area of employment, European governments, including the European Union (EU), have

recently come to advocate the use of active labor market policies (ALMPs) to enhance the efficiency of labor

markets and to foster social cohesion.

A World Bank report describes them as7: ALMPs are used to reduce the risk of unemployment and to

increase the earnings capacity of workers. Particular interventions include employment services, training,

public works, wage and employment subsidies, and self-employment assistance. These programs are

implemented to enhance labor supply (e.g., training); increase labor demand (e.g., public works, subsidies);

and improve the functioning of the labor market (e.g., employment services). ALMPs are often targeted to

the long-term unemployed, workers in poor families, and particular groups with labor market disadvantages.

These programs have important social, as well as economic, objectives.

In many cases, policies result in conflicting measures and goals; their impact is very limited; and when

targets are established they deal with nominal objectives for reducing unemployment or creating a number of

training opportunities, rather than focusing on improving the quality of jobs and reducing vulnerabilities.

7Betcherman, Gordon, Olivas, Karina, and Amit, Dar, Impacts of active labor market programs: new evidence from

evaluations with particular attention to developing and transition countries, Social Protection Unit, World Bank, September 2003,

article available at: http://info.worldbank.org/etools/docs/library/74068/china/readings/oct28/betcherman28engl.pdf, accessed on

11.04.2014
http://info.worldbank.org/etools/docs/library/74068/china/readings/oct28/betcherman28engl.pdfhttp://info.worldbank.org/etools/docs/library/74068/china/readings/oct28/betcherman28engl.pdfhttp://info.worldbank.org/etools/docs/library/74068/china/readings/oct28/betcherman28engl.pdf


6/20

6

Although youth employment is a declared priority in policy agendas, it is seldom translated into a

comprehensive policy framework.8

The youths labor market, and especially insertion employment has a series of particularities defined

by aspects such as: flexibility, efficient employment, interest for career but also informal employment,

external mobility, including brain drain, segmentation, employment precariousness, income disadvantages,

etc. Therefore, also the labor market policy and particularly managing labor mobility especially through the

economic and social effects that might be triggered on the local labor market in the origin country, presents a

special importance under the conditions of the economic turnaround stage, by promoting new and sustainable

jobs, based on knowledge and competences. Suggestions are made for developing a balanced policy for

youths labor mobility to the benefit of the country of origin.9

2. Insertion of youth in labor market

The problem of insertion/reinsertion of young people on the current labor market is very important in

the current economic environment, who knows both increases in unemployment on a general and youth level.

On this economic background there are intensifying the efforts to search for solutions everywhere, appearing

a consensus of economically advanced countries, meaning that getting out of the crisis and resuming a

healthy growth can be achieved by stimulating both the investment in infrastructure, and especially by

developing the human capital through education, research and innovation.10

It is widely accepted the idea that young people into labor market play a decisive role in determining

the economic and social welfare in their further development. The labor market insertion of young people is

influenced by several factors, such as restructuring and economic developments, the proliferation of new

form of employment, unemployment among young people, extending the period of education, migration and

increased geographical mobility.

At age 15, nearly 100 % of the population in the European Union is still at school. The overlaps

between education and labor market participation correspond to a range of different situations. For some

young people, employment is subordinate to education, for instance, in the case of a student who works for

just a few hours a week. Others are employed and are only marginally in education, for instance someone

8International Labour Organization,The Youth Employment Crisis, summary of the 2012 ILC report titled The Youth

Employment Crisis: Time For Action, available at:

http://youthpractices.ucol.mx/documentos/youth%20employment%20crisis.pdf, accessed on 10.04.2014, p. 139Vasile, Valentina, Vasile, Liviu, Youths on labor market.Features.Particularities.Pro-mobility factors for graduates.

Elements of a balanced policy for labor migration, 2011, article available at: http://www.revecon.ro/articles/2011-1/2011-1-6.pdf ,

accessed on 10.04.2014, p. 9910Angelescu, Coralia, Cretu, Stefania, Aceleanu, Mirela Ionela,Labor market insertion of young people in Romania, 2010,

p. 2-3


7/20

7

who is employed but has occasional professional training, or who studies after work to qualify for a

diploma.11

There are significant structural differences among European countries in young people's participation

in the labor market. The reason is a combination of institutional factors (e.g. formal apprenticeship schemes),

cultural determinants, whether there is a job market for students, the role of professional training, etc.

Differences in the national systems of education and training also play a major role. Young people are a

priority for European Unions social vision, and the current crisiscompounds the need to sustain the young

human capital.

In November 2009, the Council of Youth Ministers adopted the EU Youth Strategy for 2010-2018

which has two overall objectives: to provide more and equal opportunities for young people in education and

in the labor market and to promote the active citizenship, social inclusion for all young people12

.

The focus on young people was even reinforced with the adoption in June 2010 of the Europe 2020 strategy

for smart, sustainable and inclusive growth which includes a number of concrete initiatives to support them

in getting jobs and dealing with related challenges during this crisis. Quality education and training,

successful labor market integration and more mobility of young people are the key to unleashing all young

people's potential and achieving the Europe 2020 objectives.13

The challenges that aim at the labor market in Romania are related to reaching the employment targets

set in the Lisbon European Council, to achieve an employment structure based on the increasing productivity,

reducing the youth unemployment, by adopting a model of economic growth based on the increasing

employment.

Noteworthy is the fact that the flexibility in recent years has been in the spotlight in terms of the

specific labor market policies. Thus, by flexibility it takes place a better adaptation to new, to change. Those

involves, among other things, a certain structure of the educational system, a structure of training systems at

work, a strong law, a labor market flexibility and mobility.

The Ministry of Education, Research and Youth (MERY) is mostly responsible for designing and

implementing professionalization policies. The main challenges are14

:

11Article Participation of young people in education and the labour market, 2009, available at:

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Participation_of_young_people_in_education_and_the_labour_mar

ket,accessed on 02.04.201412 Information found on the site of European Commission: ec.europa.eu/youth/policy/youth_strategy/index_en.htm,

accesed on 02.04.201413ArticleParticipation of young people in education and the labour market, mentioned before14Sava,Simona,Case Study Report Romania: Current practices and future needs for the labor market integration of

young people: Young in Occupations and Unemployment: Thinking of their better integration in the labor market, June 2008, p.

206-220
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Participation_of_young_people_in_education_and_the_labour_markethttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Participation_of_young_people_in_education_and_the_labour_markethttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Participation_of_young_people_in_education_and_the_labour_markethttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Participation_of_young_people_in_education_and_the_labour_markethttp://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Participation_of_young_people_in_education_and_the_labour_market


8/20

8

i- Preventing young people entering the labor market without (adequate/basic) skills and competences

for the profession they have trained for, or to prevent training for professions not demanded by the labor

market. In this respect, the entire TVET (Technical Vocational Education and Training) system was

restructured and the specializations offered in higher education were also revised.

The school reform processes also aimed at enhancing the labor market relevance of initial and

vocational education and training, offering a framework for linking schools with the labor world by giving

them increasing autonomy in defining curricula and in strengthening their links with the territory and with

local companies. After introducing the school based curriculum concept and enabling vocational schools to

set up partnerships with potential employers (either for practical training or for facilitating the transition from

school to work), the process of decentralizing the educational system is now continuing for the entire pre-

university level, the TVET schools being an example in this respect. Law 87/2006 (for approving

Government Ordinance 75/2005) set up agencies for assuring the quality of education, both at pre-university

and higher education level. Relevance is one of the criteria for evaluating the quality of qualifications

provided.

ii- creating new structur es for the trai ning system (special pathways, new system arrangements) to

address its weak points. The ongoing reform of the educational system meant experiencing different

structures, different pathways and different lengths of compulsory schooling. To compensate the transition

from one structure (e.g. compulsory schooling up to 9th grade and then to 10th grade) to the second cycle of

vocational high schools (and thus to facilitate the access to vocational pathways), young people can attend an

additional year.

For those leaving the education system without completing compulsory education (14-25 year olds),

the second chance for education enables them to obtain basic skills (meant to be acquired at the end of

compulsory education) through a special, 3 year curricular program in parallel with apprenticeship training.

Law 297/200515

covers apprenticeship training. 16-25 year olds can take up apprentice contracts for

not more than three years and for at least six months.

Beside apprenticeship contracts, these youngsters can attend an additional year (after obtaining the

compulsory school certificate) that will allow them to enroll in a vocational high school. This measure covers

not only learning policies but also flexible working arrangements and social aspects. It has tools forstimulating employment, such as apprenticeship subsidies that recognize the contract as a distinct type of

labor contract under which a person, who cannot be younger than 15 or older than 25 years of age, can be

hired and receive, while in employment, both practical and theoretical training. Apprentices wages are

15Law no. 297 from 2005 regarding the apprenticeship training republished in the Official Gazette no. 498 from 7 august

2013


9/20

9

eligible, at the employers request, for a subsidy calculated at 50% of the minimum statutory wage. Apart

from this, employers taking on apprentices receive an allowance covering expenses incurred by their

theoretical training. This allowance cannot be higher than 20% of the minimum statutory salary.

iii - providing incentives to remain in training through financial support for children of

disadvantaged families as a measure for reducing social exclusion and marginalization. To encourage the

return to training, the accreditation of prior education and learning experiences system was set up, Romania

being the first Eastern European country with a national strategy in this respect, after the Copenhagen

Declaration. The common Order of Education and Labor Minister n 4543/468 (2004) provides procedural

guidelines for the evaluation and certification of professional competences acquired in other contexts than the

formal one. At the request of the individual, these competences are evaluated by centers for professional

competences. The National Council for Adult Vocational Training authorizes and monitors the evaluation

centers for professional competences and certifies their evaluators. At present, 31 centers are functioning for

the evaluation and recognition of prior learning, assessing 61 occupations and qualifications (www.cnfpa.ro).

iv - encouraging companies to assume educational roles with regards to young people in training

and for the unemployed young in particular, also through government financing and various incentives.

According to Eurostat, employers pay 109 euro per employee for continuing vocational training; on

average, companies in Romania spent six times less per employee than the EU average (see Report on the

State of the Art of the Education System, Ministry of Education and Research, 2006: 104), despite the fact

that the Labor Code (2003) states that employers have to provide in-house continuing professional

development/training (CPT) for their employees, and since 2004 the state has been offering employers 50%

of professional training costs for up to 20% of their staff. The companies mainly rely on the qualified labor

force on the market, one explanation being that the majority of them are SMEs with limited capacity to invest

in training and with limited opportunities for this strategic investment.

The unemployed enjoy many rights and facilities for attending training(updated and extended by

Ministerial Order 171/2004), including the right to qualitative theoretical and practical training, travel

expenses to the vocational center, expenses for accommodation if they have to travel more than 50 km, tools

for training and learning, etc.

Helping graduates to find a job and facilitating their access to work means that the Ministry ofEducation and Ministry of Work have to jointly design and implement another set of policies, aiming at

reducing times and providing young people with transition pathways from education to work and from

training to work.
http://www.cnfpa.ro/http://www.cnfpa.ro/


10/20

10

For those who are already unemployed or registered as looking for a job, the first step is to provide a

counseling service. Since the staff of the employment offices found it difficult to cope with the large numbers

of applicants, accredited private specialized services have been set up.

In some ways complementary to the measure described are the job fairs, considered also as an active

measure to stimulate employment. Job fairs are one of ANOFMs, with its AJOFMs, most well-known active

employment measures and can be directed at all sorts of target groups. For instance, there have been job fairs

specifically aimed at recent graduates since 2003, taking place each year in September. Beside the general

job fairs (for all types of jobs), there are organized job fairs for increasing employment among the more

marginalized groups in society. Job fairs act as a link between companies/employers and job seekers (and

those with difficulties in finding a regular job through the existing channels).

Job fairs are organized for one day by AJOFMs with the support of interested companies. The

companies present themselves and the jobs they are offering and have the opportunity to meet potential

candidates.

Each company has a small stand which the unemployed can visit and have a chat about the possible

job. The unemployed leave their CVs at different stands, hoping they will be called for an interview.

Participation is free. The possible goals of such events are to provide employers and job seekers with

knowledge about each other: employers get to meet the unemployed whom they might otherwise never have

talked to.

The unemployed get new ideas and learn about new professions and companies which they might

otherwise never have heard about. They also have the chance to ask the company questions in person and to

learn about the challenges and skills involved.

The Labor Code (Law 53/2003) offers high employment protection in Romania, making it very

difficult for employers to dismiss a worker. Hence employers are cautious in offering employment on an

unlimited basis, as such a decision is difficult to reverse.

As solutions to the improve labor market insertion of young people, we suggest, on the one hand the

improvement of training, taking into account the labor market requirements and on the other hand the

improvement of labor market flexibility.

The instructive and educational training is a premise of insertion and professional reintegration in thelabor market. The role of education institutions is changing in a world where information is accessible

through modern informational and communicational systems. Education becomes an integral part of

globalization and a base economic resource that can sustain a long-term competitive advantage.

Today, the economic analysis of education is increasingly highlighting the link between the

investments in educational human capital and in economic growth. Education has long been perceived as a


11/20

11

system where young people came in order to be formed and return to society after a decade or two of

theoretical assimilation of information necessary for the productive work. So, the current economy needs

well-trained workforce, in terms of globalization and technological revolution, which requires the

development of skills, creativity, solid knowledge, a greater sense of responsibility.

The differences in living standards between countries are assigned according to the International Labor

Office specialists especially the disparities between the levels of training and quality employment.

The flexibility of labor market it is a way to improve youth labor market insertion. The increasing

adaptability of workers and enterprises to current conditions is a necessity, given the process of structural

change in the labor market in Romania. By providing an increased adaptability of the labor market it will

increase the capacity to anticipate and absorb the economic and social changes. The goal of developing a

modern and flexible labor market is in line with the EU priority to improve the quality and productivity, by

developing and upgrading the skills according to the modern technologies and to the value added sectors. The

workforce and businesses will have to adapt to the new technologies, being in the necessary position for a

permanent new approach.

Flexibility is the socio-economic and demographic process that means improving the economic,

educational and demographic conditions in terms of reducing the stiffness of labor supply and demand. This

concept describes on the one hand the changes carries out in the nature of work, targeting diverse forms of

employment, on the other hand, the changes made in the technology used.

One of the problems that Romania has is the law labor market flexibility. The main reasons are the

reduced flexibility of the educational system, the high levels of its contributions, and the wage rigidities of

the Labor Code, the lack of effectiveness and diversity of services regarding the quality of employments. All

the influence the integration of young people in the labor market, which can be improved by: qualification

programs and retraining of unemployed people, information and counseling to individuals seeking

employment, labor mediation through active involvement of the ANOFM concerning the placement of labor,

improving the labor code.

Supporting the training and obtaining the management support, can make from the entrepreneurship a

career option, this action having allocations in the European Social Funds in 2007-2013. It aims to encourage

the corporate responsibility by providing incentives for the employees, to develop companies and careers, butalso for the awareness of employers and employees on the need for continuous training.

From this point of view, the Public Employment Service (SPO) will provide grants of the financial

benefits for the employers to organize training programs for employers.

Simultaneously with the increase of the labor market flexibility, it is necessary to improve the level of

protection of employees, including by individual responsibility about their efforts to find a job. From this


12/20

12

perspective an important tool has the Public Employment Service who will refocus their active measures on

groups of unemployed people who are reluctant in engaging in programs of activation or who go through

difficulties in finding a job by: increase the attractiveness of jobs; the development of customized support

services for the unemployed persons, especially for the long-term unemployed persons, youth and vulnerable

groups; improvement of training services for older workers seeking employment; increase the quality of

services provided by Public Employment Service.16

The national labor market problems in Romania are generally caused by a reciprocal relationship with

economic growth level: the new jobs created are insufficient, the adaptability and mobility of the workforce

are maintained at low levels, which require strategic approaches to reduce the discrepancies between supply

and demand for professional qualifications of the labor market.17

The labor productivity growth is one of the most important solutions in developing a healthy economy;

it depends very much on the quality of labor. The employment policies and strategies should follow the

increase of investment in human resources, investment in training of young at the company level, providing

the access to all relevant information on education and training opportunities.

It must be also imposed the increase on long-term adaptability of the workforce according to the market

demand, which can be achieved by investing in human resources development, according to some strategies

based on continuous learning, as well as flexible labor market.

3.

Case study on a public policy

In order to sustain the theory regarding youngsters integration in the work field, and to prove how

the European directives apply in our country, we will present next a public policy in the field, implemented

by the Ministry of Labour, Social Protection and Family (from Moldavia).

First phase of the public policy proposal which is the description of the problem, has been already

discussed in detail in the previous chapter, so the analysis will be made on the rest of the steps of the

policy18

:

16Angelescu, Coralia, Cretu, Stefania, Aceleanu, Mirela Ionela,Labor market insertion of young people in Romania, 2010,

p. 1517Idem18 Information taken and forward analyzed from the site of Ministry of Labour, Social Protection and Family of

Moldavia:http://www.mpsfc.gov.md/file/tratate/Stimulare.pdf,accessed on 13.04.2014

Ti tle of policy: A better insertion of youth in labor market
http://www.mpsfc.gov.md/file/tratate/Stimulare.pdfhttp://www.mpsfc.gov.md/file/tratate/Stimulare.pdfhttp://www.mpsfc.gov.md/file/tratate/Stimulare.pdfhttp://www.mpsfc.gov.md/file/tratate/Stimulare.pdf


13/20

13

A first observation that we can do is that the general objective, although it has to be clearly stated, issomehow vague, it doesnt state important details that would presume realistic secondary objectives. Also,

the purpose should be redirected to helping young people and also the countrys economy, not only to

prevent a crisis.

Reflecting on the specific objective, the public policy should have focused not only on a single one, but

create at least two or three so that the policy would be regarded as efficient to solve various problems in this

field.

Purpose: Avoiding social crisis caused by youth unemployment, given that with the joining of

the European Union, the possibility of work should diversify (even if they will impose certain

conditions).

General objectives: Increase the number of young workers employed.

Specif ic objectives: - Increasing the number of graduates employed, in the first year after

graduation by at least 10 percentage points (or about 1,300 young people) for one year.

Benefi ciari es: -Graduates of the three forms of education (vocational schools, colleges and

universities) who will gain as soon as the public policy is implemented, and on the long-term

they will gain more work experience;

- The companies that will get facilities and will minimize the cost of employment

of workers and will gain a more qualitative workforce;

- Today's adult population will benefit when young employees will substantial

contribute to the national budget;

- The National Agency for Employment (ANOFM), as the agency that will

implement the program will become more popular among youngsters, and probably will make

them use other services of the agency;

- The countrys economy and the state will gain from the fact that more and more

young talented people will choose to work in the country instead of going abroad.


14/20

14

This part of the public policy reflects possible options to actually solve the problem mentioned, so the

case of noninterference is absolutely for no use at all; it simply states one more time the effect brought if the

problem is not solve, so it cant be named a solution.

This option, although designed as a noble cause, must not necessarily be implemented for the case of

employing young people, but this kind of amenities should be put into practice for many other categories,

since the rate of unemployment is still a problem many countries face nowadays.

Options to solve the problem: Option 1 Status quo, the noninterference:

This option involves retaining the current youth employment incentive scheme or, in other

words, to provide assistance to young people who face difficulties in employment through

existing programs. As a result, few young people have positive result and the administrative

burden was considerably high. Hiring graduates through ANOFM will continue to occur at a

slow pace for a limited number of beneficiaries. Disinterest of young people to work will

remain at the same level in the absence of additional incentives. On the other hand,

perceptions of young people on the support of the Government in this regard will remain

negative.

Option 2: Ameni ties for the payment of social secur ity contr ibutions for employers

This form of granting amenities for the employment of young graduates provides economic

agents exemption for payment of social security contributions for each young employee in the

first year after graduation for one year. Thus, the operator will not pay social insurance

contributions for the young employee for a period of one year.

Impact: Economical Impact

This option is looking for an instrument to stimulate the employment of young graduates.

Unemployment among young graduates will be lowered. This option also has indirect effects

on the economy. There could be new initiatives to support youth employment and ANOFM

could record an increase in the number of young people who use its services. Cost-effectiveness analysis shows that this option is more expensive than the status quo.


15/20


16/20

16

This option, although well-intentioned, might present a risk if the employers will seek to take as much

advantage on it as they couldhiring a young person for 3 months, after that hire another one for 3 months,

and so on. This must be carefully stated so that no leaks would occur. In analyzing the impact of the option,

there shouldnt be made comparison with the options above, since its supposed to be an objective

presentation of possible solutions. The comparison place is in the final part of the public policy, where the

chosen solution is presented.

Social I mpact: Having a job, many young people will have the opportunity to assert

themselves, to earn their own income and become independent. Unlike Option 2, these

economic operators might be more inclined to take the risk to hire as many young, very low

wage costs. On the other hand, the young employee would be ensured for only 3 months and

not 12 as in the previous option. The enthusiasm and a change of attitudes in the society

because of a public policy to support young people could be higher in this option because of

the subsidizing by the state is visibly for the young employee beneficiaries. It is important to

note that other age groups could be adversely affected by the political policy because it

provides a direct way for creation of jobs.

Estimated budget: For this option the Government will allocate around 8.9 million for one

year of implementation. The efficiency of this option was calculated for two extreme cases -

when the young employee salary is the minimum wage and when the minimum wage is

preferred by a class of young employee and estimated in the European Training Foundation

analysis. Because of this public policy more young people will become actively looking for a

job and was estimated that the total beneficiaries of this option would be about 1,500 young

people. If new jobs are created, central government could record a surplus due to social

insurance contributions for health insurance and due to income tax.

Option 4: Train ing expenses reimbur sed

The economic operators that employ graduates must initially invest in training and

preparation for them to acquire the skills necessary to be productive. Therefore, training

expenses are economically motivated and companies could be compensated. The training costs

are reimbursed for the economic agent on the evidence proving that young people have

received training. Another form of rewarding economic agents for these expenses could be

through their deductibility for tax purposes.


17/20

17

As stated in the description of this last solving option, it will be quite hard to determine if the training

took place, in what way, or if the apprentice has accumulated enough knowledge. Also, there comes the

question what if after the paid training, the employers decides not to keep the new employee? Or if the

youngster decides he/she doesnt want to work there?

Again it appears the comparrison between options, which it shouldnt; also, the fact that the estimatedbudget its the same in all the cases, it means that there is no accuracy in predicting it, and it will also be

quite difficult for the decision-makers to chose depending on the budget of each of the options.

Much of the training takes place at the workplace not on internships which are often of low

quality. Thus, the public policy, to have a greater effect should compensate these internal

training efforts. In this case it is difficult to monitor the process and determine when the young

graduate training was conducted and when not.

Economical I mpact: Due to state and capping investments the number of graduates employed

could increase. This could reduce the unemployment rate among young people (15-24 years),

but it is unclear whether it will have an impact on unemployment in the country. However,

option 3 would be more attractive to the economic agent because it can achieve benefits in a

shorter period, only three months. For the same reason, the option 4 would be more attractive

than the option 2, the period is 6 months compared to 12 months. As with previous options, the

effect of this policy cannot be measured only by the number of young people who will directly

benefit from this policy.

Social Impact: Young people will be more likely to employ and learn new skills. This option

ensures a minimum of 6 months of employment and experience for young beneficiaries. This

would increase the chances of a young employee to keep work and after this facility ends.

Moreover, this option youth employee could negotiate higher wages, the employer being

certain to receive a refund of 50 % of these.

Estimated budget: As in the options above, the total cost to the state budget will be 8.9 million

each year in which the solution will be implemented, because there is no data on the average

salary of a young employee in the first year after graduation.


18/20

18

In the consultation process, there should have been stated more clearly the stakeholders: first of all,

from the high schools and universities, and also from the ministries should be stated who is going to

participate in the debate: the representatives, spokespersons, students associations, deans; schools definitely

are at the lower stage, so there is no need for them to participate. Also, an important actor which is missing is

the Minister of Education. There might also be present at the discussions some non-governmental

organizations dealing with the subject of the public policy, and also some representatives of important

companies willing to hire youngsters.

The consultation process

Organizations/ insti tuti ons to be consul ted:

- Schools/ High schools/ Universities;

- Inspectorates;

- Ministry of Development;

-

Ministry of Finance;

- ANOFM;

- Ministry of Labour, Family and Social Protections.

Outcome of the consul tation

- Creating jobs in as many sectors as can be;

- Specialization in detail of youth;

- Establish designated areas for employment;

-

Agreements with companies to not charge high price;

- Obtaining funds from the European Union for integration of youth in the labor market

through accessing different programs of such interest

Recommended option: Option no. 4

Terms expected to be achieved: 2014-2018

Estimated budget:It is not known how exactly costs training a young graduate to work. These

costs may vary by level of education, economic branch and skills of young new employees.

Ways and terms of moni tori ng / evaluation: Monitoringcontinuous after implementation of

measure.

Perf ormance Indicators: The increased number of unemployed youth who has succeeds in

being hired.An indicator that training took place will be considered the time worked for the

young graduate employee in the organization.


19/20

19

Once again, in the final remarks, the estimated budget hasnt been approximated, so the public policy

cannot be well taken into account.

All in all, we can say that the public policy covers all the necessary steps for the problem in question.

Yet, there are also points that need to be reconsidered so that it will become a valid public proposal. The EU

public policies in the field could be taken into account when creating such a frame, all being adapted, of

course, to the national environment and legislation.

4.

Final remarks

In conclusion, we consider that an effective combination of measures and, more generally, a policy co-

ordination on youth employment issues needs to be based on solid data on the current situation (from both a

quantitative and qualitative point of view for greater insight into youth employment issues). There should

also be a better understanding of the effects of policies and measures in place. An improved system of data

collection and monitoring of implementation processes needs to be set up, providing reliable data for

decision makers (for instance, it is not at all clear how many people are migrating, how long they stay

abroad, what their working and living situations are there, etc.). Many measures have been set up quite

recently and their effects need to be properly measured to improve our knowledge of them. For instance, in

the transition process from education to the labor market, besides employment as such, it is also interesting to

see and analyze how long young people remain in their jobs, and to find out if they have a migrant

background.

In the current economic crisis, exacerbated by the organizational and macroeconomic failure, Romania

must pursue the modernization of the labor market, to adapt the educational system to the market

requirements, to revive the scientific research and innovation, with emphasis on the relevance of the

economic practice, to pursue the flexibility of labor market and assuring the conditions necessary for the

development of an optimal competitive climate.19

As in most countries of the UE, youth unemployment remains a social issue with important

implications for the whole society, thus, facilitating the transition from school to work must become a

national priority.

19Yifu, Lin, JustinSenior Vice President and Chief Economist of The World Bank: The impact of the financial

crisis on the developing countries, 2010, available at: http://crisistalk.worldbank.org/files/Oct_31_JustinLin_KDI_remarks.pdf,

accessed on 31.03.2014
http://crisistalk.worldbank.org/files/Oct_31_JustinLin_KDI_remarks.pdfhttp://crisistalk.worldbank.org/files/Oct_31_JustinLin_KDI_remarks.pdfhttp://crisistalk.worldbank.org/files/Oct_31_JustinLin_KDI_remarks.pdf


20/20

20

5. References

Articles:

Angelescu, Coralia, Cretu, Stefania, Aceleanu, Mirela Ionela, Labor market insertion of young people

in Romania, 2010;

ArticleParticipation of young people in education and the labour market, 2009;

Betcherman, Gordon, Olivas, Karina, and Amit, Dar, Impacts of active labor market programs: new

evidence from evaluations with particular attention to developing and transition countries, Social Protection

Unit, World Bank, September 2003;

Frazao, Lourenco, Oliveira, Teresa,Placement of Youth in the Labour Market, Paper Presented at the

European Conference on Educational Research, Lahti, Finland 22 - 25 September 1999;

Institute of public policies (IPP),Manual of public policies,October 2009;

International Labour Organization,The Youth Employment Crisis, 2012;

Sava,Simona,Case Study Report Romania: Current practices and future needs for the labor market

integration of young people: Young in Occupations and Unemployment: Thinking of their better integration

in the labor market, June 2008;

Vasile, Valentina, Vasile, Liviu, Youths on labor market. Features. Particularities. Pro-mobility

factors for graduates. Elements of a balanced policy for labor migration, 2011;

Yifu, Lin, JustinSenior Vice President and Chief Economist of The World Bank: The impact of the

financial crisis on the developing countries, 2010;

Legislation:

Law no. 297 from 2005 regarding the apprenticeship training republished in the Official Gazette

no. 498 from 7 august 2013;

Resolution no. 870 of 28 June 2006 of the Government of Romania approving the Strategy for

improving the development, coordination and planning of public policies at the central public administration,

published in Official Gazette no. 637 of 24 July 2006

Websites:

European Commission:http://ec.europa.eu/

European statistics by European Commission:http://epp.eurostat.ec.europa.eu/

Online Economic journal:http://econpapers.repec.org/

World Bank:http://www.worldbank.org/
http://ec.europa.eu/http://epp.eurostat.ec.europa.eu/http://econpapers.repec.org/http://www.worldbank.org/http://www.worldbank.org/http://econpapers.repec.org/http://epp.eurostat.ec.europa.eu/http://ec.europa.eu/

research project. public policies for insertion of youth in the labor market

Documents