How Effective Was the Romanian Labour Market After 2008?

Abstract

The efficient operation of the labour market is a matter of high stake for every state, considering that it reflects the balance between supply and demand. The extent to which such balance is achieved is highlighted by the Beveridge curve. This paper examines the efficient operation of the Romanian labour market, as measured by the relevant indicators of labour demand and supply. In order to capture the evolution of these indicators across the three target sub-periods (the crisis, the rebound and the resumption of an upward trend), the timeline subject to survey was 2008Q2-2016Q3. The survey conducted for this purpose revealed fluctuations in the number and rate of job vacancies, respectively in the unemployment rate. However, in the last part of the surveyed period, the trend of such indicators was downward for the unemployment rate and upward for the number and rate of job vacancies. Even so, these indicators failed to match the levels recorded before the outbreak of the economic crisis. Due to such evolutions, the Beveridge curve presented shifts of direction specific to the three sub-periods. Throughout the last part of the surveyed period, the curve seemed to recover slightly towards the top-left direction at national level. However, regionally, the evolutions of labour supply and demand varied, and the Beveridge curves varied accordingly. Surprisingly, it was not Bucharest-Ilfov, considered the best economically developed area in Romania, which reported the best correlation between labour supply and demand, but the Central region.