Gilles Thirion
OECD Economic Surveys: Romania 2026
Abstract
Romania’s workforce is projected to age and shrink in the coming decades, weighing on economic growth and public finances. To mitigate these demographic pressures and prepare for an ageing society, there is scope to raise Romania’s still relatively low employment rate by bringing underrepresented groups into the workforce, extending working lives, and improving population health. Raising female employment requires improved access to affordable childcare and stronger work incentives after childbirth. Youth employment can be enhanced by reducing early school leaving and raising educational attainment, particularly in rural areas, and improving vocational education. Strengthening active labour market policies is essential. Extending working lives calls for stronger lifelong learning, more flexible work options, and better health outcomes. Health policies should prioritise preventive and primary care, improve access for vulnerable groups, and address medical staff shortages. Return migration could be fostered through more active diaspora engagement, while third-country immigration could be better aligned with labour market needs.
Romania is facing a sustained demographic contraction that will significantly affect its labour supply in the coming decades. Between 1990 and 2024, the population fell by over 4 million, from 23.2 to 19.1 million. The working-age population (ages 20-64) declined by 2.3 million over the same period (Figure 2.1, Panel A) – from 13.4 million in 1990 to 11.1 million in 2024 – and is projected to drop further to 8.5 million by 2050 (Figure 2.1, Panel B). Romania’s population is also ageing: the old-age dependency ratio rose from 20.4% in 1995 to 34.5% in 2024 – above the OECD average of 31.6% – and is projected to increase by a further 21 percentage points by 2050 (Figure 2.1, Panel C).
Note: OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia. In Panel D, the total fertility rate in a specific year is defined as the total number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates. In panel D, OECD and OECD CEEC are non-weighted averages.
Source: OECD population data and OECD population projections databases; Eurostat; and World Bank, World Development Indicators database.
Emigration has been the largest source of population decline since the 1990s. Outflows intensified after EU accession (Figure 2.2, Panel B) and Romania now is the seventh largest diaspora in OECD countries, with about 3.9 million Romanian emigrants above age-15 residing in OECD countries in 2020/2021. Since 2016, migration’s negative contribution has been lower, and since 2022 net migration has turned positive, driven by the arrival of Ukrainian refugees and third-country workers and returning Romanian migrants (Figure 2.2 Panel A). However, emigration remains substantial and continues to exert pressure on labour and skill availability. Natural population decline has recently accelerated (Figure 2.2, Panel B). Fertility is expected to remain below the replacement level despite being currently higher than the OECD average (1.6 versus 1.4 children per woman in 2023). Although broadly stable over the past 15 years, this rate has been insufficient to offset deaths. Natural population change has been increasingly negative since 1990 and became the main contributor to depopulation in recent years, a trend expected to continue in coming decades.
These demographic changes are expected to have a negative impact on potential growth while also increasing spending pressures (see Chapter 1). Sustaining GDP growth and income convergence in the context of a shrinking and ageing workforce will require decisive policy action to mobilise underutilised labour resources and promoting longer and healthier working lives. Close monitoring of emigration trends, along with efforts to retain and attract skilled workers, will also be necessary to prevent losses of productive labour.
Source: Eurostat.
Romania’s labour market has developed positively over the last decade. Despite progress, the overall employment rate (63.7% in 2024) remains below both the OECD (70.2%) and Central and Eastern European (CEE) averages (73.7%) (Figure 2.3). Employment gaps persist for women, youth, older workers, and Roma communities, while regional disparities limit labour supply and constrain inclusive growth (Figure 2.3). This section explores policy options to mobilise additional labour utilisation, focusing on opportunities for underrepresented groups.
2.2.1. Lowering the tax and contribution burden on low-income workers
The high tax wedge at the bottom of the income distribution (see Chapter 1) – largely due to social contributions – contributes to discouraging formal employment, including informality and false self-employment (see Box 2.1). This can in turn limit social protection coverage. Reducing this high tax wedge is likely to increase formal employment among low-skilled workers, especially if combined with increased tax enforcement efforts (see Chapter 1).
Tax reform to boost formal labour market participation of low-income workers could encompass an increase of the existing basic tax allowance or the implementation of an earned income tax credit. Either measure should ideally be designed to benefit exclusively the targeted low-income group, with support gradually phasing out above a defined income threshold. Given the limited fiscal space, such reforms could be designed to remain revenue-neutral, for example by raising the current personal income (PIT) flat rate, or in the medium- to long-term, this could be accompanied by greater overall progressivity in the PIT to strengthen the overall redistributive capacity of the tax system, which remains low in Romania (see Chapter 1).
Gradually raising PIT rates on higher incomes might help finance the suggested reduction in the tax wedge for lower incomes, as well as to enhance the tax system’s capacity to redistribute income. Several OECD countries have recently reintroduced progressive taxation, including the Czechia (2021), Latvia (2018), and Lithuania (2019). Recent studies find that introducing progressive PIT through higher rates at the top of the income distribution combined with an in-work tax credit could lower the tax wedge on low-income workers, significantly reducing inequality, while maintaining revenue neutrality. In the longer run, a broader reform involving also social contributions could further reduce the tax wedge by lowering or eliminating health contributions, shifting healthcare financing to general taxation, while maintaining pension contributions at their current levels, given their clear contributory nature. Romania could introduce a maximum ceiling on social contributions as part of such reform, as in most OECD countries having progressive PIT rates.
Undeclared work remains widespread in Romania, estimated at around 22% of private employment, well above the OECD average and most CEE countries (Franic, Horodnic and Williams, 2023[1]). Employees make up an estimated 81% of undeclared workers, with self-employed and family workers comprising the remainder (European Labour Authority, 2023[2]). Many self-employed are not covered by pension and by a complete health insurance package, as contributions are only compulsory if earnings equal or exceed the minimum wage. Underreporting of salary income is a common form of undeclared work (Franic, Horodnic and Williams, 2023[1]), often through ‘envelope payments’ which increase take-home pay but reduce social protection. This echoes a high concentration of earnings around the minimum wage (Robayo, Balaban and Wronski, 2024[3]), particularly among low-income earners in rural regions, in micro-enterprises, and in sectors such as construction, accommodation, food services, and transport.
Beyond the tax wedge (see above), high labour costs in general can also fuel undeclared work. Differentiating the minimum wage by regional productivity, or to facilitate youth employment, could in theory reduce excessive labour costs in low-productivity areas, though this might also lead to risks of wage competition across jurisdictions and could pose equity issues.
Structural and institutional factors entrench undeclared work. In rural areas, formal employment opportunities are limited as most economic activities have very low productivity and subsistence farming is common. Weak actual and perceived enforcement capacity, high perceived corruption, low trust in public institutions, and social norms tolerating non-compliance further sustain informal work (Horodnic et al., 2022[4]; European Labour Authority, 2023[2]).
2.2.2. Addressing the high share of NEETs
Reducing youth inactivity is critical to raising overall workforce participation, as prolonged detachment from education or work in early life has lasting labour market impacts. In 2024, 20% of Romanians aged 15-29 were not in employment, education, or training (NEET), a figure higher than most OECD countries (Figure 2.5, Panel A). The challenge is driven by inactivity rather than unemployment, concentrated among low-educated and rural youth. The NEET rate among youth with low education is particularly high, at 34.4%.
Rural-urban disparities in education contribute to high NEET rates. These emerge early on and persist as students evolve through the education system (OECD, 2025[5]). Children in rural areas are significantly less likely to participate in early childhood education and more likely to drop out at primary and secondary levels. In 2023, early school leaving among 18-24-year-olds was 5% in cities but 26% in rural areas (Figure 2.5, Panel B), and regional variation is wide, from about 6% in Bucharest to over 25% in Sud-Est. Similarly, educational outcomes of students from disadvantaged, rural areas, and Roma backgrounds consistently perform below their peers in PISA tests (OECD, 2023[6]). High-quality early childhood education and care (ECEC) is critical for building foundational skills and reducing inequalities (see further below), with evidence that early investment yields high returns, particularly for children from disadvantaged backgrounds (OECD, 2025[7]).
Employment rates, 2024, % of the population in the sub-category
Note: OECD CEEC is a non-weighted average of Czechia, Hungary, Poland, Slovak Republic, and Slovenia. Data for OECD average by educational attainment refers to 2023. Urban employment rate is measured as the mean of the employment rates in cities and in town and suburbs.
Source: OECD Labour Force Statistics database; OECD Education at a Glance 2024 database; and Eurostat.
Note: OECD CEEC is a non-weighted average and covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Analytical database; and OECD Employment and unemployment by five-year age group and sex - indicators database.
Reducing school dropout rates
High dropout rates remain one of Romania’s most pressing challenges, constraining labour supply and weakening youth employment outcomes. Early school leaving heightens the risk of long-term exclusion in an increasingly knowledge-based economy (Kitchen et al., 2017[8]). Only 48% of 25-34-year-olds without an upper-secondary qualification are employed, compared with 79% among those with one (OECD, 2024[9]). In 2024, 17% of 18-24-year-olds left school before completing upper secondary education, nearly three times the CEEC average and well above the national target of 11.3% (Figure 2.5, Panel C).
Note: Panel A and C: OECD CEEC is a non-weighted average of Czechia, Hungary, Poland, Slovak Republic, and Slovenia. Panel B: data for Bulgaria and Lithuania in cities and in towns and suburbs are of low reliability.
Source: OECD Education at a Glance database; and Eurostat.
Early school leaving is influenced by the lack of adequate access to quality high school education, particularly in rural areas. Nearly half of high school-aged youth live in rural areas, but these host only 16% of high schools, which contributes to much lower enrolment (below 60%, versus 83.5% in urban areas) (Petre et al., 2025[10]). The 2023 Education Law revised school funding to direct more resources to small and rural schools and those enrolling disadvantaged students. Efforts to improve school access should continue, including by channelling additional resources, as planned, and be guided by evidence-based school network planning to ensure efficient resource use and coordination. OECD work offers practical guidance, drawing on lessons from countries that successfully reorganised their school networks (OECD, 2025[5]). The National Programme for Reducing School Dropout (PNRAS), launched in 2023 with EUR 543 million from the RRP, shows promising results (World Bank, 2025[11]). As a result, the programme will be extended to primary education in the next years, benefitting from EU funds. Additional measures include teacher training, remedial and after-school activities, counselling, Roma mediators, career guidance, parental education, integrated community centres, and investments in educational equipment and software. The Early Warning Mechanism in Education (MATE) supports schools with real-time data on at-risk students.
Socio-economic barriers such as low parental involvement, weak family support, and long travel distances also drive early school leaving (Petre et al., 2025[10]). About 32% of the high school-aged population must travel over 10 km to the nearest high school, heightening dropout risks during school transitions (OECD, 2020[12]). Scholarships, second-chance programmes, and transport subsidies, could be expanded while the authorities could further promote equitable access by raising parental awareness, expanding school mediation, and integrating parental education into social services. The strategy for parental education adopted in 2024 and the new integrated community centres can support community-based approaches in this area. OECD comparative analysis also offers useful guidance on effective strategies drawn from other countries (OECD, 2025[5]).
Improving the quality and labour market relevance of vocational education and training (VET) is key to tackle school dropouts. Dropout rates are especially high in VETs, where 57% of upper-secondary students were enrolled in 2022, and overrepresents socio-economically disadvantaged students (Cedefop, 2021[13]). Current projects aim at enhancing dual VET pathways through closer ties with the industry, integrating general skills into VET curricula, and improving mobility across pathways, including higher education (see Chapter 4).
Strengthening ALMPs and activating young NEETs
Participation in education and training is low, including among the youth, and particularly in rural areas and among the lower-skilled. The lack of training opportunities and low awareness contribute to a persistently high share of NEET (OECD, 2025[5]). Expanding adult learning and reskilling opportunities, especially for vulnerable groups, requires additional resources for active labour market policies (ALMPs) and public employment services (PES). Previous Surveys have highlighted the need for additional resources toward upskilling, counselling, and job-matching services to improve the long-term effectiveness of employment support (OECD, 2022[14]). Greater investment in ALMPs remains necessary, including personalised job-search support and training to help unemployed individuals acquire new skills and transition to better jobs. EU funding via the European Social Fund and Youth Guarantee provides resources, but absorption is constrained by weak administrative capacity and low-quality project preparation. A welcome initiative is the SMART PES project, funded by the EU until 2029, which aims to modernise and expand staff capacity of the PES so it can better support jobseekers and employers by offering more personalised, better-adapted services.
ALMPs and PES in Romania need strengthening. Most ALMPs focus on employment subsidies for low-skilled workers: in 2020, over 90% went to employment incentives (versus 25% on average in the OECD), while only 7% was devoted to training (versus an OECD average of 33%). Such subsidies primarily target inactivity among the low-educated (OECD, 2022[14]). These programmes should be evaluated to assess their cost-effectiveness, and on that basis, their design could be fined-tuned and potentially expanded. Evidence from a group of EU OECD countries showed that evaluation of existing ALMPs can be an effective way to improve alignment with national and local labour market needs and to improve the matching between employers and jobseekers (OECD/European Commission, 2025[15]).
Few jobseekers register with the National Agency for Employment (NAE). By strengthening outreach to inactive NEETs Romania could increase participation in training programmes and skills certification, particularly amongst marginalised groups, such as rural populations, NEET and Roma. The INTESPO project, conducted community outreach in 2017-2022 to increase participation of NEET youth in ALMPs, providing 180 000 youth with an individual activation plan. Romania should reiterate such initiative, scale it up and back it with sustained funding. In parallel, Romania could create a centralised digital platform listing all available training and support options to improve access and coordination (OECD, 2025[5]).
2.2.3. Supporting female employment
Low female employment is a key factor of Romania’s low overall labour market participation. Closing half of the employment gap between men and women of all ages would increase the labour force by around 7.2%. In 2024, only 55% of women were employed, well below the OECD (64%) and CEEC averages (69%) (Figure 2.6, Panel A). As of 2023, only 28% of women with primary education were employed. By contrast, the gender employment gap nearly disappears at higher education levels. Despite girls and women achieving equal or better educational outcomes than boys and men (OECD, 2024[9]), the gender gap is high by OECD standards, at 17 percentage points (or around 1.1 million people), reflecting structural and social barriers. The gap is widest in rural areas, particularly among less educated households, and among Roma communities. The gap is high among women of childbearing age (Figure 2.6, Panel B), particularly mothers of young children: only 60% of mothers with children aged 0-14 were employed in 2021, compared with an OECD average of 72%. A large gap also exists among women aged between 55 and 65, reflecting Romania’s lower female statutory pension age (62 in 2023), which reduces financial penalties to early retirement for women. Recent pension reform will raise women’s pension age towards that of men (65 in 2023) by 2035, which is likely to contribute to higher employment rates among older women.
Note: In panel A, OECD CEEC is the non-weighted average of Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Labour Force Statistics database.
Strengthening childcare provision and incentivising return to work after childbirth
Romania faces shortages of affordable high-quality childcare (OECD, 2025[16]). In 2023, less than 10% of children under three were enrolled in childcare, well below the OECD average of 29% (Figure 2.7, Panel B), with the largest gaps among low-income families, rural populations, and Roma communities (OECD, 2025[16]). Public early childhood education and care (ECEC) is free from two months, but shortages of facilities and trained staff restrict access, preventing many mothers from re-entering work after childbirth. Limited formal ECEC infrastructures for early development (ISCED 01) forces around half of Romanian children into informal care which constrains mothers’ employment and pressures older women to leave the labour market (OECD, 2024[17]). Enrolment in pre-school education remains relatively low too: in 2023, only 76% of children aged 3-5 were enrolled in pre-primary education, below the OECD average (85%) and most Central and Eastern European peers (Figure 2.7, Panel B).
Recent reform of ECEC includes promising steps, but to be effective it needs to be paired with concrete budget resources. Public expenditure on ECEC is close to the lowest levels in the OECD countries and well below other CEE peers (Figure 2.7, Panel A). The starting age of compulsory education to four and the establishment of a unified governance framework were introduced in 2021, and a standard cost per child for nurseries accompanied these changes in 2022. These steps provide a foundation for more coherent and sustainable ECEC provision (OECD, 2025[5]). OECD analysis recommends prioritising public spending toward early and primary education to strengthen equity and future skills (OECD, 2025[5]), though Romania’s whole education system also faces broad funding gaps (see Chapter 4).
Source: OECD (2025), Education at a Glance 2025: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/1c0d9c79-en.
Refocusing family benefits towards ECEC, rather than long parental leave, can reduce disincentives for maternal employment while also encouraging a fairer division of care. Romania currently provides up to two years of parental leave with an 85% income replacement rate, double the OECD average. This long parental leave results in long employment breaks (OECD, 2025[5]), despite some financial incentives to encourage return to work upon giving birth (through a return to work bonus) or to combine work with parental leave. Consequently, gradually shortening leave duration or tapering benefits, as in Hungary and Finland, could support earlier return to work (OECD, 2025[18]), with savings redirected to expand childcare. However, expanding ECEC capacity is an essential prerequisite for such reform to be effective, as it is necessary to enable more parents to work. Moreover, stronger incentives for fathers such as non-transferable leave entitlements, could promote more balanced care (Earle et al., 2025[19]). Despite a recent extension of parental leave reserved to fathers to two months, it is still below the OECD average of three months. Although almost all parental leave can be claimed by fathers, they still rarely take it up. Other OECD countries have introduced non-transferrable leave entitlements (e.g. Sweden) or bonuses for shared leave (e.g. Germany, Italy, Canada). Design considerations are key in driving father’s leave uptake (Box 2.2).
International experience highlights that the design of parental leave play central role in driving father’s uptake of parental leave. Evidence shows that fathers are far less likely to take leave if it is unpaid or compensated only with a low-rate payment. However, financial support alone is insufficient: effective policies also require structural incentives, such as “father quotas” or bonus periods, to actively encourage participation. Germany provides an example. In 2007, the country replaced a low, means-tested flat-rate allowance with an earnings-related benefit covering ten months, and introduced an additional two “bonus” months if both parents each take at least two months of leave. This combination of adequate compensation and well-designed incentives substantially increased fathers’ use of parental leave, demonstrating how pay and policy design together shape take-up.
Source: (OECD, 2025[20])
Promoting flexible work arrangements
Flexible work options, such as part-time and remote work, can help reconcile work and family responsibilities. These remain uncommon, with only 2% of both men and women employed part-time. Labour regulations, including bans on overtime for part-time contracts and mandatory pension contributions based on full-time minimum wages, limit flexibility for low-wage workers (OECD, 2024[17]). Expanding teleworking and easing restrictions on part-time employment could improve labour market participation, particularly in rural areas with limited local employment opportunities, while supporting work-life balance. At the same time, more part-time work may also have some negative effects on the labour supply by incentivising some of the women who currently work full-time to move to part time work.
Addressing broader social and institutional barriers to women’s workforce participation
Uneven sharing of unpaid work constraints the labour market participation of women. Women spend more than twice as much time as men on childcare and are more often responsible for caring for elderly relatives (World Bank, 2023[21]). Traditional norms remain deeply rooted, with nearly 60% of Romanians believing a woman’s primary role is caring for home and family (Eurobarometer, 2024[22]). Public awareness campaigns and promotion of gender equality in education and career choice can influence traditional gender norms and encourage more balanced sharing of unpaid care responsibilities, particularly if paired with improvement in provision of care activities.
Tackling the low female labour force participation in Romania also requires addressing broader social and institutional barriers. Strengthening workplace anti-discrimination enforcement is essential to ensure equal access to jobs and career progression. Targeted active labour market policies – such as re-skilling and support for women returning to work – can also improve outcomes. While Romania’s has a relatively low gender wage gap, women remain underrepresented in leadership roles, with only 21% of board seats and 33% of manager positions (versus respectively 34% and 35% in the EU average), showing scope for further progress in this area (Eurostat, 2025[23]).
Strengthening formal long-term care could support female workforce participation
Limited access to formal long-term care (LTC) services can be a barrier to female employment. Evidence shows that, in the absence of formal care options, women disproportionately assume caregiving responsibilities, leading to lasting negative effects on their labour market participation (Schmitz and Westphal, 2017[24]). Romania’s 2023-2030 national strategy, supported by up to EUR 800 million from cohesion funds, started projects to develop facilities and train workforce. Romania should accelerate development of training to build the necessary workforce while also developing LTC facilities. Romania can also draw on international experience to facilitate the skill recognition of informal carers through certification pathways, as in France and Italy, or through support for informal carers such as paid care leave, respite care, and subsidised pension contributions, as in France, Germany, and Slovenia (Bruegel, 2025[25]). Useful lessons may be drawn from Croatia’s Make a Wish programme, which employs older unemployed women as public workers to provide basic care senior citizens and disadvantaged persons in rural areas (OECD, 2025[26]).
2.2.4. Enhancing the employability of older workers
Sustaining labour supply in Romania’s ageing population will increasingly depend on enabling people to work longer. Participation among those aged 55-64 has grown markedly over the past decade, from 33% in 2014 to 53.4% in 2024, but remains low by international standards - especially after age 60 (Figure 2.8) and among older women (43% versus 64.6% for men). The recently adopted pension reform encourages longer careers by aligning women’s retirement age with men’s, linking statutory retirement age to life expectancy, while tightening early retirement options and better rewarding longer careers. Yet, to effectively translate these reforms into longer careers, complementary policies are needed to support better health (see further below) and employability, ensuring older people can remain in good quality employment until retirement.
Low skill levels and poor access to training constrain longer and more productive careers. Many older workers lack basic and digital skills, which limits employability in an increasingly technology-driven labour market. Expanding adult learning and re-skilling opportunities – currently among the lowest in the EU – is fundamental, particularly for the low-skilled (see Chapter 4 for a further discussion). Strengthening incentives for firms to invest in older workers’ training and reinforcing ALMPs can help maintain labour market ties. Skill-building remains marginal in current ALMPs for older workers.
Policy efforts should increasingly focus on retaining older workers. The main policy instrument is a subsidy scheme, revised in 2022, providing RON 2 250 (about EUR 440) to employers hiring unemployed individuals over 45 for at least 12 months, if employment continues for 18 months. Participation is limited, partly due to administrative complexity and low awareness (OECD, 2018[27]). Evaluation could identify barriers and inform improvements, such as simplifying applications, linking subsidies to skill shortages, or adding training commitments. Well-designed schemes with post-subsidy employment requirements can improve older workers’ employment (Eurofound, 2025[28]). More flexible wage setting can support employment, especially where rigid seniority-based pay disconnects wages from productivity (OECD, 2025[29]).
Flexible work arrangements can help older employees manage health concerns, caregiving responsibilities, and the transition into retirement, thereby support longer workforce participation. International experience shows that part-time, phased retirement options, job-sharing, and adapted workloads can encourage older employees to remain active while accommodating changing capacities (OECD, 2025[29]), but such arrangements remain uncommon in Romania. Reforms in 2024 have extended flexible retirement pathways and strengthened incentives to prolong work. In 2023, only 2% of pension receipts remained in employment, the lowest in the EU (ESPAN, 2025[30]). Romania could promote firm-level age management to facilitate internal mobility, e.g., older managers taking mentoring or advisory roles and blue-collar workers moving to less physically demanding roles. Finally, support for displaced older workers should combine re-training, job-matching and incentives to hire older displaced workers.
Employment rates of older workers, 2024
Note: OECD CEEC is a non-weighted average and covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD, Employment and unemployment by five-year age group and sex - indicators dataset.
Combating age bias in recruitment and workplace practices is important, as stereotypes about lower productivity or adaptability can discourage employers from hiring or retaining older workers. While strong anti-discrimination laws exist, enforcement can be challenging due to financial and procedural hurdles when pursuing discrimination claims. Public awareness and shifts in media representation help combat negative attitudes (OECD, 2025[29]). In Romania, communication about ageism is almost non-existent (National Federation Omenia, 2023[31]). In other OECD countries, strategies combining public awareness campaigns, employer incentives, and age-inclusive human resource practices – such Finland’s longstanding active age-management programmes – have proven effective in shifting employer attitudes and improving retention. Addressing employment barriers related to discrimination and stereotypes faced by women and Roma people when accessing employment is also essential.
Health outcomes play a major role in influencing labour force participation and retirement decisions, especially as the workforce ages and people work longer. Poor health drives early labour market exit (Pinna Pintor, Fumagalli and Suhrcke, 2024[32]), leads to absenteeism, reduces productivity, and often exacerbates pre-existing inequalities (OECD/WHO, 2015[33]). Individuals in poor health also encounter barriers such as physical limitations and workplace discrimination, with detrimental effects on employment rates, which in the OECD are consistently lower for individuals with long-term illnesses (OECD, 2025[29]). In Romania, deteriorating health has been reported as a leading cause of early labour market exit among older workers, largely due to the high incidence of non-communicable diseases (Eurofound, 2025[28]). Hence, prolonging healthy lives is essential to support longer working lives.
Despite improvements, health outcomes in Romania remain below the OECD average. Life expectancy at birth reached 76.6 years in 2024, a marked increase from 71 in 2003. Yet, gender and education gaps remain significant: men live almost eight years less than women, and highly educated people seven years longer than the least educated. Preventable and treatable mortality rates are high (Figure 2.10), contributing to high levels of working-age deaths. As they remain for longer in the workforce, many older workers are increasingly vulnerable to poor health conditions. At age 50, Romanians have only 13.2 healthy life years, the second lowest in the EU.
2.3.1. Improving prevention and healthcare quality
Allocating more resources to prevention activities would be a cost-efficient way to improve health outcomes. Romania’s National Health Strategy 2022-2030 and Operational Health Programme 2021-2027 focus on prevention and primary care (see further below), but as of 2023 the share of total health spending linked to prevention (1.2%) and primary care (9%) remained well below OECD averages (5% and 13%), while hospital expenditure exceeds the OECD average (OECD, 2025[34]). Effective prevention requires shifting health budgets towards public health, improving health literacy, nudging behaviour through campaigns and regulation, and involving primary care providers in disease prevention. OECD analyses show the strong economic case for investing in prevention, with large positive economic returns (OECD, 2021[35]).
Improving workplace safety and working conditions
Physically demanding jobs contribute to poor health and early labour market exit in Romania (Eurofound, 2025[28]). A large share of workers is employed in manual sectors such as agriculture, construction, manufacturing, and mining, which are associated with higher rates of occupational accidents and chronic health problems, particularly among the lower-skilled workers (Mihail et al., 2023[36]). Although accident rates have declined, they remain well above the EU average. The prevalence of undeclared work in Romania also likely undermines occupational health and safety (OHS) standards, as informal workers are less likely to benefit from inspections, insurance, or protective equipment.
Strengthening occupational health and safety, improving working conditions, and fostering supportive workplaces can contribute to extend healthy working lives. Research on Romania highlights the need to change attitudes and behaviours of employers and employees to nurture an effective safety culture (Neag and Gaureanu, 2019[37]). Expanding preventive occupational health services, alongside information campaigns on occupational hazards, pollution, and harmful behaviours such as alcohol use and smoking, would help improve health at work (WHO, 2018[38]). Finally, tackling undeclared employment and reinforcing labour inspections would ensure compliance and protection for workers (see Chapter 1).
Encouraging healthier lifestyles and reducing risk behaviours
Behavioural risk factors - smoking, obesity, alcohol use, and unhealthy diets - account for nearly a third of all deaths recorded in Romania (OECD/WHO, 2025[39]). Tobacco and alcohol use are well above the OECD average (Figure 2.9), particularly among men. Adult overweight and obesity are high by OECD standards (OECD, 2025[34]). Poor dietary habits such as low fruit and vegetable consumption and high intake of sugary drinks are also widespread (OECD/WHO, 2023[40]).
Restrictions on tobacco and alcohol consumption should be strengthened and access to healthy foods could be further promoted. Addressing behavioural risk factors such as smoking, harmful alcohol use, and poor diet is essential for strengthening the prevention of non-communicable diseases (NCDs). In 2024, Romania has taken additional measures going in that direction, including a sales ban for tobacco for minors and limits on advertising and online sales, together with a ban on selling foods high in fat, salt, and sugar in schools and nearby premises. Further measures could be taken, such as plain cigarette packaging and tighter restrictions on regulation on advertising and point of sales of tobacco and alcohol, which are particularly important to limit consumption among adolescents (OECD, 2025[34]). Higher taxation can help reduce tobacco and alcohol consumption and promote healthier diets. Romania has recently taken steps to curb unhealthy behaviours, including a 2024 “sugar tax” on beverages with added sugars, and raised the VAT on sugary foods and alcoholic drinks. In August 2025, Romania increased excises on tobacco and alcohol and set a path for future hikes but taxes on these items will remain relatively low and should be raised gradually.
Risks factors over the population aged 15 and over, 2023 or latest available
Note: OECD CEEC is a non-weighted average and covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: (OECD, 2025[34])
Avoidable mortality rate, 2023 or latest available
Note: OECD, EU and OECD CEEC are non-weighted averages. OECD CEEC covers Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: OECD Health Statistics database.
Improving health literacy is essential to promote healthier behaviours and greater use of preventive services. The National Public Health Strategy (Ministry of Health, 2022[41]) rightly prioritises health education in schools to build awareness from an early age, while stronger communication campaigns through traditional and social media could further promote behavioural change. Moreover, Romania has implemented community-based initiatives to facilitate access of vulnerable groups to basic health services, including through outreach by community nurses and health mediators recruited from Roma communities. This can strengthen trust and awareness in disadvantaged areas, supporting healthier behaviours and indirectly labour force participation by reducing preventable illness (OECD, 2025[34]).
Shifting focus towards primary care and prevention
Weaknesses in primary care contribute to low screening rates, poor chronic disease management and avoidable hospitalisations (OECD, 2025[34]). Expanding the role of general practitioners (GPs) in early detection, care coordination and information sharing would improve outcomes, but reforms must also address an ageing GP workforce and declining interest in family medicine (OECD, 2025[34]).
Recent reforms aim to strengthen prevention and NCD management in primary care, for instance authorising them to prescribe certain antidiabetic drugs and shifting non-complex diabetes cases to primary care. However, administrative burden and limited equipment hinder effective screening and risk stratification (Pillars of Health, 2022[42]). Annual preventive consultations and risk-based screening through the “riskogramme” are increasingly incentivised. Some fee-for-service payments exist (e.g. for vaccinations or monitoring chronic diseases) and a new pay-for-performance mechanism increased these (Zapata et al., 2025[43]), but practitioners are still significantly paid through capitation (i.e. a fixed sum per registered patient), at about 40% on average, which can discourage preventive services. Expanding performance-based fees and reducing the associated administrative burden could strengthen screening and follow-up. Patients also often bypass GPs for specialists or emergency care for non-urgent needs, diminishing their role as coordinator.
Improving digital health systems is essential to delivering integrated, efficient care, including better coordination between primary care and other providers. Romania lags EU peers in the use of electronic health records (European Commission, 2025[44]). Health data is fragmented and lacks interoperability (OECD, 2025[34]). The forthcoming National digital health strategy and the new National Agency for Digital Health, support by EUR 442 million from RRP funds aim to integrate eHealth records across care providers, create national cancer and diabetes registries, and expand telemedicine (European Commission, 2023[45]).
Swift implementation of the National Cancer Plan is essential. National cancer screening programmes are largely lacking, except for cervical cancer (OECD/European Commission, 2025[46]), and current programmes lack coordination and consistent implementation. Insufficient screening equipment also affects cancer care quality. New mobile units financed under the Recovery and Resilience Plan (RRP) to provide breast and cervical cancer screening in underserved areas, and pilot projects using health mediators to encourage Roma populations to participate in screening are positive initiatives.
Stronger emphasis on primary care would enhance efficiency by shifting care to more appropriate, less resource-intensive settings. Efficiency gains could also be achieved by curbing hospital spending, for instance by reallocating underused beds identified by Regional Health Services Masterplans to day care or long-term care, or reducing excess capacity (OECD, 2025[34]). The National Health Strategy 2022-2030 and the Operational Health Programme 2021-2027 support this transition, is backed by NRRP funding but additional resources will be needed to ensure its full implementation.
2.3.2. Addressing gaps in access to healthcare
Unmet medical needs remain high, particularly for vulnerable groups
Rural healthcare access remains limited, with over 40% of Romanians, including many Roma populations, living in rural areas where access to healthcare remains a persistent challenge due to concentration of health facilities and staff in urban centres. Poor transport networks exacerbate disparities. As of 2022, more than 90% of doctors and over 95% nurses with higher education were based in urban areas (National Institute of Statistics, 2024[47]). Unmet medical needs in Romania are among the highest in the OECD (Figure 2.11). Unmet needs are nine times lower among those with tertiary education than among those with lower secondary education or less (Figure 2.11). High out-of-pocket costs drive unmet medical needs (i.e. treatment or examination), particularly among vulnerable groups. In 2023, 22.7% of outpatient medicine costs were borne by patients, above the EU average of 15.5%. Social safety nets partially mitigate this, but expanding publicly covered services, revisiting cost-sharing arrangements, and promoting cost-effective prescribing could reduce unmet needs and protect households from catastrophic spending.
Share of people aged 16 years and over reporting unmet needs for medical examination or treatment due to being too expensive, too far to travel or waiting lists, by level of education, 2023
Note: OECD CEEC is the non-weighted average of Czechia, Hungary, Poland, Slovak Republic, and Slovenia.
Source: Eurostat.
Gaps in insurance coverage exacerbate care affordability challenges. Access to the comprehensive basic benefits package is tied to contribution payments (with some exceptions), excluding many informal workers and unregistered individuals – including many Roma populations, and some self-employed workers. The recent removal of free coverage through spouse’s co-insurance could further increase the uninsured share, which was around 11% of the population in 2024, over five times the OECD average (OECD, 2025[34]). Uninsured individuals receive a state-funded minimal package, expanded in 2023, which covers services such as emergency care, pregnancy, primary care, and screening recommended by GP. However, uninsured patients still pay out-of-pocket for outpatient medicines, other laboratory tests and imaging services, while informal payments continue to undermine access to care.
Addressing health workforce shortages
Persistent shortages of doctors and nurses, especially in rural areas, continue to constrain access to care. Romania’s doctor’s density has increased and is now close to the OECD average, but nurse density remains lower, emigration continues, and rural shortages persist. While outflows of medical staff have moderated, 60% of doctors under 35 still consider migrating due to poor infrastructure and working conditions (Ministry of Health, 2024[48]). While the demographic profile of Romania's medical workforce is young, with 63% of physicians other than family medicine being under 45 years old, the ageing profile of family doctors is concerning (Zapata et al., 2025[43]): only 2.2% of GPs are under 35 and nearly half are aged 61 or older (OECD, 2025[34]). Thus, a key challenge is to train and incentivise enough new doctors to pursue career paths in family medicine. Declining numbers of practising GPs over the past few years (Ministry of Health, 2022[41]) reflect lower perceived career opportunities and emigration among young doctors (OECD Health Review 2024). This puts primary care under additional pressure.
The Multi‑Annual Strategy for Human Resources in Health 2022‑2030 (Ministry of Health, 2022[41]) provides a solid framework to improve education, recruitment, and retention of the health workforce while reducing imbalances, including those across urban and rural areas. It promotes improved workforce planning through a new National Registry of Healthcare Professionals aimed to better anticipate future needs (James et al., 2025[49]). Although the strategy is well detailed, with assigned responsibilities and monitoring and evaluation indicators, it needs to be backed by a dedicated budget to effectively address workforce challenges.
Enhancing access to care in underserved areas
The on-going expansion of community care centres under the RRP is a positive step toward strengthening primary and preventive care for vulnerable populations, including in rural areas in the Roma community. Romania aims to expand community health centres, giving greater responsibility and coverage. It aims to establish or upgrade 54 integrated community centres in rural and underserved regions (European Commission, 2024[50]), by enhancing logistics and equipment such as laboratories for basic diagnostics, dental offices, and specialty medical equipment. By integrating primary healthcare, health mediation, and social work, these centres can create new jobs and deliver comprehensive and coordinated primary care, while also allowing for coordinated recruitments and actions of GPs, specialists, and nurses. Successful operation of community centres critically depends on training and attracting health professionals.
The Multi Annual Strategy for Human Resources in Health provides guidance to local authorities on recruiting and retaining health professionals in underserved areas. Romania offers strong financial incentives for family doctors - including pay rises in remote areas and lump-sum relocation payments - but recruitment and retention remain difficult. Effective implementation requires strong local mobilisation, as hospitals are locally governed, and independent family practitioners are contracted by district health insurance funds. Collaboration with local governments to improve housing, education, and digital administrative support for new practices can be an effective strategy to support local recruitment (OECD, 2025[34]). Continued investment in healthcare facilities and growing private sector involvement can also support retention by improving working conditions, though the development of private healthcare requires attention to avoid exacerbating inequities in access to care. Targeting students from rural backgrounds and promoting rural clinical placements in primary care could strengthen recruitment and retention in underserved areas (OECD, 2025[34]). There is also scope for improving the pay and working conditions of community nurses to incentivise more to follow such career path and to stay in rural areas.
Mobile medical units and telemedicine can facilitate access in underserved areas. Recent legislation allows doctors and health workers to provide check-ups, preventive screenings and treatments in mobile units even if employed elsewhere (OECD, 2025[34]). Ten RRP-financed mobile caravans now provide cervical and breast cancer screening in underserved areas. Telemedicine could also help address access gaps, particularly in rural areas, while also improving efficiency. Regulatory changes during COVID-19 facilitated teleconsultations, but telemedicine is still not supported by a secure, centralised platform and remains limited. A national digital health strategy is under development, backed by the RRP, including the creation of a National Agency for Digital Health to oversee integration and telemedicine expansion.
2.4.1. Facilitating the return of Romania’s diaspora and their re-integration
Encouraging and facilitating return migration can help support Romania’s workforce. Nearly one in five working-age Romanian-born individual resides abroad. This makes Romania’s diaspora the seventh largest diaspora living in OECD countries, with about 3.9 million Romanian emigrants above age-15 residing in OECD countries in 2020/2021, up from 3.4 million in 2015/2016. On average younger and more educated than the resident population (OECD, 2019[51]), this diaspora represents a sizeable pool of potential workforce. Plus, returnees’ integration is facilitated by cultural ties, language skills, and familiarity with the country. Return migration has increased since the mid-2010s (Figure 2.12). However, emigration remains high, albeit stable.
Progress towards convergence with European living standards represents the main pathway to reversing net emigration and retaining Romanian workers (OECD, 2025[16]). This requires better job opportunities, higher wages and improved public services, which are ultimately the most effective levers to curb emigration and encourage return migration. Accordingly, the policies discussed in Chapter 4 to strengthen competitiveness and raise labour productivity are critical. Also important is the provision of social services, particularly affordable childcare, high-quality healthcare and education, adequate social protection, and good-quality housing (OECD, 2019[51]).
Romania has introduced some financial incentives to encourage the return of Romanian migrants and retention. Some efforts to improve working conditions in key sectors, such as rising public-sector salaries since 2017, particularly in health, have encouraged retention and return. Other financial incentives include several labour market support measures for returnees registering to PES, such as an instalment premium for those resettling after at least three years abroad and access to the Start-Up Nation programme which aims to support returning entrepreneurs. However, to ensure sustainable wage growth, Romania’s retention policies must maintain a balanced approach towards fiscal sustainability and competitiveness considerations.
Romania could benefit from a more proactive engagement towards its diaspora as regards return and employment opportunities. Broader information on job and business opportunities could be made available to Romanians abroad, including through more effective outreach by embassies, though this would require a better registry of Romanians abroad. The lack of reliable data when it comes to the diaspora is an important shortcoming. A comprehensive research programme on both actual and prospective migrants could inform future policies, by integrating inputs from stakeholders such as local authorities, host countries, and universities that are undertaking studies on migration. A more comprehensive strategy could also better involve businesses (OECD, 2025[16]). The National Agency for Employment (NAE), as a member of the European Employment Services (EURES), currently provides information about job opportunities at home for long-term Romanian emigrants, coordinating with labour attachés in the embassies of the main diaspora destinations, who promote job opportunities and NAE services. However, these efforts to encourage return migration are nevertheless constrained by limited support from destination-country institutions and by the relatively low engagement of Romanian employers in recruiting workers back from abroad (OECD, 2025[16]).
Integration policies for returnees remain underdeveloped and lack coordination. Prime-age men and highly educated returnees fare worse than their non-migrant peers (OECD, 2019[51]). The National Strategy for Romanians Abroad 2023-2026 makes reintegration a priority (Government of Romania, 2022[52]), but implementation gaps persist. Registered returnees (and migrants) have access to labour market activation measures, but these are weakly targeted and poorly aligned with labour market needs; as for other population groups, improving ALMP is necessary.
Stronger and better coordinated integration support would facilitate labour market re-integration of Romania’s diaspora. Support for job search and administrative procedure could be provided through an integrated return portal managed by the Department for Romanians Abroad (OECD, 2025[16]). Such a portal could consolidate currently scattered guidance – covering employment, recognition of foreign qualifications and experience, relocation, housing, pension rights, and general administrative services to ease the reintegration of returning migrants. International experience, such as Returning to Ireland, shows that such portal can be effective in expanding the reach of diaspora engagement. Integration services could be further enhanced by complementing available information on recognition and equivalence of diplomas, progressional experience, and qualifications with individualised guidance and through personalised support to ease access to social services and schooling to returning families. Language courses for second-generation returnees and training in high-demand sectors could improve outcomes too.
2.4.2. Improving the management of labour immigration
While the share of foreign-born residents in Romania’s total population is low, it has nearly tripled in a decade: from 1.1% in 2014 to 3.6% (or 691 000 people) in 2025 (Eurostat, 2025[53]), driven by inflows of people fleeing Ukraine and third-country workers from South Asia (Figure 2.12, Panel B). Most are young men employed in minimum-wage jobs in retail, manufacturing, hospitality, and construction, and come from Nepal, Sri Lanka and India (Romanian Centre for Comparative Migration Studies, 2025[54]). In contrast, labour migration from EU countries is limited. While businesses report difficulties filling vacancies, evidence points to shortages mainly in skilled occupations with substantial untapped labour potential among the non-skilled, suggesting that foreign recruitment responds to labour market mismatches, such as specific localised needs or mobility barriers, rather than broad-based national shortages (see also Chapter 4).
Recent policy changes have eased access for non-EU migrants. Procedures were simplified, the quota for work permits increased from 22 000 in 2018 to 100 000 in 2022 (Figure 2.12, Panel A), and a single quota system was introduced. Romania’s framework is now more open than in many OECD countries (OECD, 2025[16]). Work permits last two years, renewable as long as the employment contract remains valid. Quotas overstate actual inflows as they reflect authorisations granted, not visas issued. In 2023, only one in three permits led to actual entry. The system of annual quota should be based on actual visa issuance. This gap is partly due to administrative bottlenecks, notably delays in processing permits due to understaffing. Staff increases at the General Inspectorate for Immigration in late 2023 were positive, but further improvements are needed – including to digitalise procedures – to reduce waiting times.
Note: In Panel A, for some years, this is the sum of multiple decrees which have adjusted the numbers upwards.
Source: (OECD, 2025[16]); and Eurostat.
The current quota-setting system would benefit from stronger evidence and consultation with labour market stakeholders. Current reliance on reported job vacancies may not accurately reflect real shortages as Public Employment Services data is incomplete. The labour market test is also weak. Vacancies must be advertised for only five days, and listings rarely attract applicants. Moreover, placement agencies employ many labour migrants and dispatch them or find them work via platforms. This is unusual in OECD countries and undermines the labour market testing principle. Such practices warrant closer scrutiny, and platform-based work should not justify work permit issuance (OECD, 2024[55]). Better statistical monitoring of migration flows and labour market outcomes is increasingly necessary. Romania should improve statistical capacity to align with OECD standards and map immigration more systematically (OECD, 2025[16]). This would strengthen policy evaluation and allow more refined indicators to guide quota-setting. Overall, Romania would benefit from embedding immigration management into a long-term strategic vision. The absence of qualification or skill thresholds limits the ability of migration policy to target quotas in a way that addresses labour shortages.
Retention of third country immigrants is relatively low. A mismatch between the skills of the migrants and businesses’ needs is a potential cause and compounded by low language skills. Stronger integration services are needed. A new format of language courses was introduced in 2022, but these are fee based for those not benefiting from international protection and lack work relevance. Linking language learning with vocational training and mandating participation could improve integration. Access to social services could also be improved by issuing Romanian Identification numbers upon their arrival (Romanian Centre for Comparative Migration Studies, 2025[54]). The creation of a one-stop-shop, coordinating social and labour market services would facilitate worker’s integration. Romania’s accession to the Schengen Area in April 2024 may have led to outflows of third-country nationals seeking better paid opportunities in other EU countries.
Weak oversight of intermediaries and employers expose migrants to abuse. Regulations tying work permits to a single employer in the first year of stay restrict job mobility and should be removed. Recruitment agencies should be more tightly regulated, and cooperation with origin countries strengthened to reduce excessive fees and improve pre-departure information (OECD, 2025[16]). Labour law enforcement should be reinforced through stronger inspection capacity and better channels for reporting violations (Romanian Centre for Comparative Migration Studies, 2025[54]).
Romania plans to introduce an Emergency Ordinance to tighten the regulation of agencies placing foreign workers, strengthen worker protection, and modernise the admission system for third-country labour migrants by introducing a shortage occupation list. If well designed, this could potentially improve the targeting of migrant selection, particularly if the list is based on a robust, empirically grounded methodology (see above). Work is also under way to establish WorkinRomania.gov.ro, a unified digital platform for procedures relevant to third-country workers. If implemented effectively, these measures could potentially represent progress, though regular monitoring will be needed assess its effectiveness.
Fostering the immigration of skilled workers could help address shortages in high-skilled occupations, such as ICT and health care, but this would require stronger targeting of the immigration system. Highly qualified migrants made up only 1% of third-country employment authorisations in 2023 and 2024 (OECD, 2025[16]). EU schemes such as Blue Cards, Researcher permits, and Intra-Corporate Transfers remain underused. In 2024, Romania launched a grant scheme to attract highly-skilled talent under the RRP, including expatriates, in R&D and innovation (European Commission, 2025[44]). Simplified temporary work permit procedures for doctors from European Economic Area countries were introduced in 2024 to ease health sector shortages. International student enrolment has grown, accounting for 5-6% of the students in higher education but retention is low. Facilitating access to free language courses and lifting restrictions in regulated professions would improve prospects.
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