OECD Reviews of Labour Market and Social Policies: Bulgaria 2025

2. The labour market and social situation in Bulgaria

2.1. The Bulgarian labour market has made significant progress, but demographic trends pose significant long-term challenges

2.1.1. The Bulgarian labour market has improved markedly over the last decade despite temporary headwinds from the COVID‑19 pandemic

The Bulgarian labour market has made significant progress over the last 10 years (Figure 2.1). In the years after 2008, Bulgaria’s economy suffered greatly from the repercussions of the Global Financial Crisis and the European Debt Crisis, with dwindling economic growth, plummeting foreign investment and a quickly deteriorating labour market (OECD, 2021[1]). While Bulgaria was not the hardest-hit country in the region, the economic and social consequences for the Bulgarian population were severe, and it took several years before a sustained recovery started to pave the way for economic improvement.

After reaching a trough around 2011/12, employment levels started to rise at increasing pace, with the employment rate growing from below 60% in the early 2010s to 70.1% just before the COVID‑19 pandemic. The outbreak of the pandemic interrupted this positive trend abruptly in early 2020 as the spread of the virus and the necessary confinement measures led to immediate knock-on effects on the Bulgarian labour market, particularly affecting young people and people working in sectors requiring face‑to-face interactions, such as the hospitality sector (OECD, 2022[2]). However, once the strictest physical-distancing measures were eased, labour market indicators recovered quickly. Emergency measures, notably a salary support scheme covering 60% of the salaries and social contributions of furloughed workers, facilitated this swift rebound.

Within two years, the labour market fully recovered and continued its positive long-term trend, catching up with OECD countries. In 2023, the employment rate reached 70.7%, exceeding its previous high of 2019, and further climbed to 71% in the second quarter of 2024. Similarly, the unemployment rate fell to a low of 4% in 2022 and 2023, its lowest level since Bulgaria’s transition to a market economy. The labour force participation rate climbed to 74% (Figure 2.1). Today, Bulgaria performs in line with the OECD average in employment, unemployment and labour force participation. Only few OECD countries experienced equally strong labour market improvements over the last decade (OECD, 2024[3]).

Figure 2.1. Employment and labour force participation have increased, catching up with OECD countries

Employment, unemployment and labour force participation rates, working-age population (15‑64), 2008‑23

Note: OECD is a weighted average.

Source: OECD Data Explorer • Employment and unemployment by five‑year age group and sex - indicators.

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2.1.2. Rapid population ageing and a shrinking population confront the Bulgarian labour market with challenges

Despite its improvements over the last years, the Bulgarian labour market, and economy more generally, face major challenges, including very rapid population ageing. As of 2024, 22% of the population is over 65 years, and this share is set to rise to 29% over the next 20 years and to 34% by 2060 (United Nations, 2023[4]). The financing of the health and social protection risk coming under stress. What is more, in addition to ageing rapidly, the Bulgarian population is predicted to shrink markedly, especially the working-age population, with major implications for the labour market. According to the most up-to-date projections, the number of 15‑64 year‑olds will fall by almost one‑third between today and 2060 (Figure 2.2). Such a sharp decrease risks exacerbating labour and skill shortages, which already exist today in some sectors, and undermining the innovative potential of the Bulgarian economy. Especially attracting skilled workers is already a problem today. Employer survey results suggest that the ability to hire skilled workers is much lower in Bulgaria than in most OECD countries (OECD, 2023[5]).

Figure 2.2. Bulgaria is projected to lose one‑third of its working-age population by 2060

Projected change in the total population and working-age population, 2023‑60

Note: OECD is a weighted average.

Source: OECD Data Explorer • Population projections.

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2.2. Large disparities in the Bulgarian labour market and informality persist

2.2.1. Major regional disparities characterise the Bulgarian labour market

Pronounced regional disparities across the country are a challenge for the Bulgarian labour market. While the labour market situation is good in Sofia and other economically prosperous parts of the country, remote and poor regions fare far less well. In Sofia, the employment rate stood at 75% among 15‑64 year‑olds in 2022, comparing to 51% in Vidin in Bulgaria’s North-West, 50% in Silistra in the North-East, and 47% in Kardzhali in Bulgaria’s far south (Figure 2.3). The pronounced regional divide also affects wages, with wage levels in Sofia almost twice as high as in the poorest regions (National Statistical Institute, 2023[6]). Many of the rural and poor parts of the country are confronted with an exodus of young people, who move to Sofia, other big cities or abroad, seeking better labour market opportunities and higher salaries. This trend exacerbates the economic fragility of these regions, leading to a cycle of depopulation, accelerated ageing, and a dwindling labour force, which in turn further entrenches regional disparities.

Figure 2.3. Significant regional disparities highlight socio‑economic divides

Average regional employment rates, 2022

Note: The regions shown in white text refer those with the four largest cities and in black text to the four regions with the lowest rates.

Source: The Bulgarian National Statistical Institute.

2.2.2. Young and low-educated people lag behind in Bulgaria’s labour market

The positive labour market trends hide marked disparities across different groups (Figure 2.4). Among prime‑aged and older people, employment rates are comparatively high, while they are strikingly low for young people. In 2023, only 19% of 15‑24 year‑olds were in work, less than half the OECD average (44%). These low employment levels are driven by inactivity rather than high enrolment in secondary and tertiary education. The share of young people not in employment, education or training (NEET) remains above the OECD average, although it has fallen from 26% to 14% between 2013 and 2023 (Figure 2.5).1 Many NEET young people belong to ethnic minorities and live in rural or remote areas, and a large share of them is out of reach for public institutions that could provide support. For example, in 2019, only 12% of young people who neither worked nor studied were registered with the Employment Agency, far less than in many other countries (OECD, 2022[2]).

There exists also a strong divide between people with different levels of educational attainment. People with upper secondary or tertiary education tend to be well integrated in the labour market, with employment levels of 81% and 90%, respectively, higher than on average in the OECD. In contrast, people with low educational attainment face substantial labour market challenges, and only half (51%) of them work, considerably less than in many other countries. The share of 25‑64 year‑olds with low educational attainment is slightly lower than on average in the OECD, at 16% against 20% in the OECD, but less than one‑third of Bulgarians have at least basic digital skills, well below the EU average of 54% (OECD, 2023[7]; European Commission, 2024[8]). Most people with low educational attainment who do not work are entirely out of the labour force, i.e. they do not look for employment (OECD, 2023[5]).

Employment rates among men are higher than among women, but the employment gender gap is smaller than in most OECD countries, at 6 percentage points in Bulgaria against 14 points in the OECD. The comparatively good position of women in the Bulgarian labour market also translates into a high share of women in senior and mid-management positions and a narrow gender wage gap of that was smaller than in any OECD country (see also Section 5.3) (OECD, 2023[5]).

Figure 2.4. Young and low-educated people have low employment rates

Note: Educational attainment based on ISCED 2011. Low: below upper secondary (Levels 0‑2); medium: upper-secondary or post-secondary non-tertiary (Levels 3‑4); and high: tertiary education (Levels 5‑8). OECD is a weighted average except for educational attainment.

Source: OECD Data Explorer • Employment and unemployment by five‑year age group and sex - indicators, OECD Data Explorer • Employment rates of adults, by educational attainment, age group and gender, Eurostat dataset: Employment rates by sex, age and educational attainment.

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Figure 2.5. The NEET rate has declined substantially but remains above the OECD average

Share of 15‑29 year‑olds not in employment, education or training (NEET), 2023 by activity status and 2013

Note: OECD is an unweighted average.

Source: OECD Data Explorer • Distribution of young adults’ education and work status, for a given level of educational attainment, age group and gender and Eurostat dataset: Young people neither in employment nor in education and training by sex, age and labour status (NEET rates), 2013 data for Croatia, Bulgaria, Lithuania, Romania and Switzerland.

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2.2.3. There is a stark divide between high and low earners

The divide between high and low earners is stark (Figure 2.6). The earnings of the highest 10% of earners are 4.8 times higher than those of the lowest 10%. This level of earnings dispersion is much higher than in most OECD countries, calling for additional targeted policies to address earnings inequality. The contrast in earnings is not just a reflection of different job roles or industries, but also points to deeper systemic issues such as unequal access to quality education, limited job opportunities and low wages in certain regions, and possibly low bargaining power of workers in certain occupations. In contrast to the wide gap between high and low earners, the gender pay gap remains lower than the OECD average, despite increases over the last years.

Figure 2.6. There is a stark divide between high and low earners, but the gender pay gap is narrow

Note: The gender pay gap is defined as the difference between median earnings of men and women relative to median earnings of men. All earnings estimates refer to gross earnings of full-time wage and salary workers. Country-specific variations from this definition as well as national data sources and earnings concepts can be found in the metadata of the source below. Data refer to 2018 for Türkiye.

Source: OECD Data Explorer • Decile ratios of gross earnings and OECD Data Explorer • Gender wage gap.

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2.2.4. Informality and undeclared work are widespread, undermining Bulgaria’s labour market progress

Informality, and especially undeclared work, are widespread in Bulgaria, limiting workers’ access to social and employment protection, resulting in lower tax revenue for the government and impeding fair competition. (Figure 2.7). While the exact size of the informal economy is difficult to measure with precision, available indicators point to a high prevalence of informal activities and undeclared work compared to OECD member countries and other EU countries.

Informal activities were estimated to make up 19% of the Bulgarian economy in 2017, more than in any other European country for which data are available (Medina and Schneider, 2018[9]). Similarly, undeclared work accounted for 24% of Bulgaria’s Gross Value Added (GVA) in 2019 according to a recent study, well above the EU average of 11% (Figure 2.7). Eurobarometer survey results, too, point to a high prevalence of undeclared work, with 5% of survey respondents stating that they worked without a labour contract within the last year, almost twice as much as on average in the EU (European Commission, 2019[10]). In some sectors, undeclared work is particularly common, such as agriculture, the construction sector and accommodation and food services. One very common form of undeclared work in Bulgaria are “envelope wages”, with companies and workers declaring the minimum wage to tax authorities while the true wage is higher (OECD, 2023[5]).

There are different motivations for companies and workers to engage in informal activities and undeclared work in Bulgaria, including financial considerations and a lack of awareness of the consequences of informal activities. While the 10% flat-rate income tax leads to low marginal taxes, social contributions are comparatively high, including for low-income earners who do not benefit from a reduction in social contributions. This can make it attractive to under-declare earnings for workers seeking to increase their take‑home pay. In additional to financial considerations, there is a general lack of trust in authorities in Bulgaria. The risk of being caught by tax authorities is perceived as low and there is very limited awareness of the possible consequences of engaging in undeclared work (Molnar, Abendschein and Zhelyazkova, 2023[11]).

Most studies point to improvements over the last decade, with decreasing levels of informality and undeclared work, but there is no full consensus about the trend. The Bulgarian Industrial Capital Association estimates the size of the grey economy every year using a composite index, which fell from 37% in 2010 to 21% in 2022, pointing to major reduction of the grey economy. According to this index, improvements were very strong between 2015 and 2018 and the level of the grey economy has remained roughly stable since then (BICA, 2023[12]). Conversely, other estimates suggest that the frequency of undeclared work increased over time in Bulgaria, in stark contrast to most other EU countries (Figure 2.7).

Enhanced monitoring, incentives for formalisation for businesses and workers, a reduction of the bureaucratic burden especially for small and medium-sized enterprises can all play a key role in reducing undeclared work. Bulgaria has taken steps to address these issues, but continued and reinforced action is needed to tackle informality in the medium and long term (see Section 3.5).

Figure 2.7. Undeclared work is a serious problem in the Bulgarian labour market

Undeclared work in the private sector as a share of total gross value added, 2013 and 2019

Note: Estimates are based on the labour input method, which calculates the gap between self-reported labour supply in labour force surveys with official employment figures reported by businesses, e.g. in declarations to tax authorities, national statistical offices, or labour or social security authorities.

Source: Franic, J., I. Horodnic and C. Williams (2023[13]), Extent of undeclared work in the European Union, www.ela.europa.eu/sites/default/files/2023-03/Study-on-the-extent-of-undeclared-work-in-the-EU.pdf.

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2.2.5. Wages and labour productivity have been growing but remain low

Labour productivity remains low in Bulgaria. With a GDP per hour worked of USD 28.8 (in PPP), Bulgaria stands at the very end of EU countries and well below the OECD average of USD 55.7 (Figure 2.8). Despite improvements over the last years, strategies to improve skills, innovate in industries, and create a more conducive environment for higher productivity are needed. Real wages also lag far behind the levels of other OECD countries, with an annual full-time equivalent wage of USD 30 400 (PPP), against USD 55 500 on average in the OECD.

It is noteworthy that wages have been growing considerably faster than productivity over most of the last decade. While improving the standard of living and stimulating consumption, wage growth above productivity growth bears risks, such as reducing the competitiveness of Bulgarian companies, contributing to inflationary pressures and increasing the potential for unemployment. Going forward, aligning productivity and wage growth will be crucial to ensure long-term economic stability and the sustainability of wage increases.

Figure 2.8. Labour productivity and wages remain low, while wage growth has outpaced productivity growth

Note: Data are in USD constant prices at 2015 PPPs (Panel A) and USD 2022 constant prices at 2022 USD PPP (Panel B). Data refer to 2021 for Türkiye in Panel A.

Source: OECD Data Explorer • Average annual wages and OECD Data Explorer • Productivity levels (accessed 6 August 2024).

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Bulgaria has experienced little improvement in the skills composition of employment, limiting faster productivity and wage growth (Figure 2.9). In contrast to many other European countries, where the share of occupations requiring advanced technical, professional or managerial skills increased very markedly, this trend was far less pronounced in Bulgaria. Between 2013 and 2022, the share of high-skilled jobs in the economy rose by 3.3 percentage points in the EU, and up to 9.1 points in Sweden, against only by 1.3 percentage points in Bulgaria. Low-skilled jobs continue to play a bigger role in the Bulgarian economy than in many other countries: in 2022, 32% of jobs were low-skilled in Bulgaria and another 32% were high-skilled, against 24% and 43% on average in the EU, respectively. Over the next years, the demand for high-skilled jobs is expected to be higher than for low-skilled occupations, which should bring about productivity increases. By 2035, the share of high-skilled occupation among all jobs is predicted to rise to 39%, although it is likely that it will remain below the OECD average (CEDEFOP, 2023[14]).

Figure 2.9. The share of high-skilled employment in Bulgaria has risen only moderately

Percentage point change in the occupational distribution, 2013‑22

Note: Total employment refers to civilian employment excluding agricultural workers. High-skilled occupations include jobs classified under the ISCO‑88 major groups: legislators, senior officials, and managers (group 1), professionals (group 2), and technicians and associate professionals (group 3). Middle‑skilled occupations include clerks (group 4), craft and related trades workers (group 7), and plant and machine operators and assemblers (group 8). Low-skilled occupations include service workers and shop and market sales workers (group 5), and elementary occupations (group 9).

Source: OECD calculations based on the European Union Labour Force Survey (EULFS).

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2.3. The population is declining and ageing

2.3.1. The population is ageing rapidly

From 2024 to 2060, the share of the working age population (15‑64 year‑olds) is expected to decline from 64% to 54%; whereas the share of the population aged 65 and older is expected to increase from 22% to 32% (Figure 2.10, Panel A). Like Greece or Poland, Bulgaria’s population is ageing faster than the OECD average. By 2060, Bulgaria is expected to have an old-age dependency ratio of 66%, up from 37% in 2024. This would place Bulgaria in the top eighth highest old-age dependency ratios in 2060 in the OECD (Figure 2.10, Panel B).

A main factor driving population ageing in Bulgaria, as in most OECD countries, is the low average fertility rate. In Bulgaria, the fertility rate has been declining since the 1960s and has been below the replacement rate (2.1) since the early 1980s. After a steep decline in the 1990s, it picked up again and has hovered around 1.5‑1.6 in the past decade. In 2021, the average fertility rate in Bulgaria was at 1.58, the OECD average.

Figure 2.10. Bulgaria faces a rapidly declining working-age population and a rise in the old-age dependency ratio

Note: OECD is a weighted average. Old-age dependency is defined as the number of individuals aged 65 and over per 100 aged 20 to 64.

Source: OECD Data Explorer • Population projections

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2.3.2. High emigration has contributed to population decline and ageing

Bulgaria has traditionally been an emigration country. In 2015/16, over 1 million individuals born in Bulgaria were living in an OECD country. Bulgaria had an emigration rate of 15%,2 the highest, after Romania, among the main countries of origins of immigrants to the OECD, according to the OECD Database on Immigrants in OECD Countries (DIOC).

In the last decade, emigration from Bulgaria has continued on a significant scale. From 2015 to 2019, 33 000 individuals emigrated from Bulgaria per year on average. This represents approximately 0.48% of the 2021 population each year (Figure 2.11). And these estimates underestimate the full extent of emigration since they are based on individuals de‑registering from the population registers. In practice, people often do not de‑register before leaving the country – because they may consider their departure to be temporary or to keep entitlements to certain benefits or privileges. Inflows of Bulgarians recorded in OECD countries were in fact much larger in these years. According to the OECD International Migration Database, compiled based on data provided by destination countries, an average of 90 000 Bulgarians migrated to OECD countries per year in 2015‑19. Furthermore, Bulgaria’s accession to the EU has increased the share of temporary emigration, or circular migration, poorly captured in the statistics.

Emigrants tend to be prime working-age Bulgarians (25‑54 years-old), which makes emigration contribute to a hollowing out of the population age distribution and potentially to shortages in the labour market. Seventy percent of all emigrants from 2015‑22 were of prime‑working age, according to data from the Bulgarian National Statistical Institute.

Since 2020, the net migration rate has been positive in Bulgaria. The COVID‑19 pandemic led to a sharp decline in emigration and an increase in return migration. Although emigration picked up again in 2021, in 2022 and 2023, estimated emigration was lower than in any year since 2012, bar 2020. Most inflows to Bulgaria are returning Bulgarian emigrants, rather than immigrants. From 2015 to 2023, 49% of inflows were incoming Bulgarian citizens. And returns have increased significantly since 2019. From 2019 to 2023, there was an average inflow of 21 000 Bulgarian citizens, compared with an average of 12 000 from 2015 to 2018. Continuing this trend of re‑attracting Bulgarian emigrants is an objective of Bulgarian policy to counteract population decline and ageing (see Chapter 4).

Return migration and immigration partly offset emigration. Nevertheless, the net migration rate was negative until 2019. According to the Bulgarian Census, negative net migration accounted for approximately 40% of the population decline between 2011 and 2021.

Figure 2.11. Bulgaria has had negative net migration for most of the past decade

Annual inflows to and outflows from Bulgaria, and net migration rate, 2010‑23

Source: National Statistical Institute of Bulgaria, dataset International migration by age and sex and calculations based on Eurostat dataset: Population on 1January by age group and sex for the migration rate.

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2.3.3. Immigration to Bulgaria is increasing but remains low in international comparison

The share of immigrants in the population in Bulgaria is among the lowest in the OECD. In 2021, only 2.9% of the population in Bulgaria was foreign-born, compared with 10.8% of the OECD total population (OECD/European Commission, 2023[15]). Only four OECD countries had a lower share of immigrants than Bulgaria. This represents nevertheless an increase relative to 2011, when 1.1% of the population in Bulgaria was foreign-born, and 9.4% of the OECD population (Figure 2.12).

Figure 2.12. Foreign-born shares of populations

Share of foreign-born population, all ages, 2011 and 2021 or most recent year

Note: OECD is a weighted average and excludes Türkiye for which 2011 data are unavailable. Japan and Korea determine who is an immigrant based of nationality, not on the country of birth.

Source: OECD/European Commission (2023[15]), Indicators of Immigrant Integration 2023: Settling In, https://doi.org/10.1787/1d5020a6-en, Figure 2.1.

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Immigration flows have increased in the past decade. In 2022 inflow was almost 3 times that of 2012. Approximately half of this increase was due to Bulgarian immigrants, 34% due to the increase of inflows of third-country nationals, and the remainder due to inflows of immigrants from other EU countries.

In 2022, approximately 16 000 first residence permits were issued to third-country nationals in Bulgaria, two and a half times the number of first permits issued in 2012. Thirty-eight percent of these were issued to family migrants, 29% to labour migrants, 12% to international students and 25% to migrants coming to Bulgaria on other grounds, mainly migrants who choose to retire in Bulgaria and ethnic Bulgarians. The three top countries of origin of third country immigrants were Türkiye, Russia and Ukraine. Free movement inflows from other EU/EFTA countries have been modest, estimated at a yearly average of 2 400 in 2012‑22, but increased sharply in 2021 and 2022. In 2022, approximately 7 600 EU immigrants registered in Bulgaria. Part of this inflow are family members of returning Bulgarian emigrants.

The number of third countries’ labour migrants has increased significantly in the last decade. The number of resident permits for employment purposes increased more than tenfold in the last ten years: from approximately 300 per year in 2012‑14 to a record number of 4 600 in 2022. An additional 6 000 temporary labour migrants entered Bulgaria in 2022 as seasonal migrants or posted workers for a duration under 90 days. While most labour migrants have traditionally come from Türkiye, Russia and Ukraine, more labour migrants are coming from Uzbekistan and Kirgizstan. In 2022, immigrants from these two countries accounted for 24% of all residence permits for employment, compared with 4% in 2019.

Bulgaria’s situation on the Balkan route to the EU is the main migratory challenge to the country in terms of border security and managing what is for the most part transit migration. In the last years, the number of asylum requests in Bulgaria, as country of first entry into the EU, has increased almost ten‑fold: from approximately 2000 first asylum applications in 2019 to 23 000 in 2023 (see Chapter 4 and Box 4.1). The number of beneficiaries of international protection has also risen. From 2013 to 2022, approximately 26 000 asylum seekers received international protection in Bulgaria, according to Eurostat data.

Furthermore, following Russia’s unprovoked war of aggression against Ukraine, a significant number of Ukrainian refugees have fled to Bulgaria. As of December 2023, 51 860 refugees from Ukraine were recorded in the country. A much larger number, 174 700, have applied for asylum, temporary protection, or other forms of protection, since February 2022, according to UNHCR statistics, indicating significant onwards movements (see Chapter 4 and Box 4.2).

2.4. Despite progress, poverty remains very widespread

2.4.1. Incomes have increased, but poverty remains a significant challenge

Incomes have increased in Bulgaria but remain low in comparison to most OECD countries. In 2021, the annual median income stood at the equivalent of USD 15 900 (USD PPP), almost two times lower than on average in the OECD (Figure 2.13). At the same time, inequality is elevated. Using the Gini at disposable income as a measure of inequality, income inequality in Bulgaria is higher than in 90% of OECD countries, highlighting that the Bulgarian population is not benefiting equally from economic growth as disparities in access to resources, opportunities, and overall living standards persist.

Figure 2.13. The median household income is low while income inequality is high

Annual median equivalised disposable income in US dollars at PPP rates and Gini at disposable income, in 2021

Note: Household incomes are after taxes and transfers and equivalised using the square root of the household size. Data refer to 2019 (Denmark), 2020 (Australia, Germany, New Zealand, Switzerland) and 2022 (Chile, Mexico).

Source: OECD calculations based on OECD Data Explorer • Income distribution database.

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As a result of comparatively low income and high inequality, large parts of the Bulgarian population lag behind and face poverty and material deprivation (Figure 2.14). Severe material deprivation in Bulgaria is highest among EU members, concerning 19% of the population, three times more than on average in the EU (6%). While this level remains high, it is nevertheless much lower than in the past. In 2013, the share of people facing severe material deprivation stood at 43%, more than twice as much as in 2020. Similarly, poverty rates have decreased but remain high compared to most OECD countries. Recent increases in the minimum wage and minimum benefits and pensions may have led to a reduction in poverty that is not fully reflected in the data yet.

Figure 2.14. Despite progress, material deprivation and poverty remain major challenges in Bulgaria

Note: Severe material deprivation is defined as the enforced inability (rather than choice) to afford at least four of the following nine items: to pay their rent, mortgage or utility bills; to keep their home adequately warm; to face unexpected expenses; to eat meat or proteins regularly; to go on holiday; a television set; a washing machine; a car; a telephone. Data refer to 2018 for Iceland and the United Kingdom. Poverty rates are the share of people living on less than 50% of median equivalised household income.

Source: Eurostat dataset: Severe material deprivation rate by age and sex and OECD Data Explorer • Income distribution database.

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2.4.2. Poverty and social exclusion disproportionately impact old people, minorities and people living in rural areas

Poverty and social exclusion are not equally spread throughout the population but concern some population groups much more than others. Older Bulgarians are particularly vulnerable, with a poverty rate of 41% among people aged 76 and over (Figure 2.14, Panel B), although high rates of homeownership provide some economic relief. Young people, too, face relatively high poverty rates (18% among young people under 18), while they are lower for prime‑aged people (11% for 26‑65 year‑olds). In fact, poverty levels among prime‑aged people in Bulgaria are close to the OECD average whereas they are far above the cross-country average for young and older people.

Poverty and social exclusion levels among vulnerable groups are alarming. In 2022, 63% of the Roma population were at risk of poverty, far more than among the Turkish community (24%) and ethnic Bulgarians (17%). What is more, even having a job does not protect vulnerable groups against poverty risks. A striking 69% of employees with only primary or no formal education were at risk of poverty despite having a job, while in-work poverty risks are much lower for groups with higher educational attainment (National Statistical Institute, 2023[16]).

There is a strong geographic dimension to social condition. In Severozapaden in Bulgaria’s North-West, 41% of the population were at risk of poverty or social exclusion in 2022, twice more than in Yugozapaden, the region around Sofia (22%) (Eurostat, 2023[17]). These large differences reflect demographic differences of the population, i.e. in terms of age structure, but are also driven but local conditions, most notably local labour markets and access to higher education.

2.5. Minorities lag behind in the labour market and face social challenges

Minorities in Bulgaria encounter social stigma, affecting their participation in both social life and the labour market (see Box 3.1 on the labour market and social situation of Roma people and Box 5.1 on the need to fight discrimination against LGBTQI individuals). Tolerance, especially towards sexual and ethnic minorities, is lower than in other EU countries. According to survey data, almost half (49%) of the Bulgarian population would feel uncomfortable working with a homosexual or bisexual colleague, multiple times more than on average in the EU (12%); and almost one‑third (31%) would feel uneasy working with a colleague from the Roma community, twice as much as on average in the EU (16%) Figure 2.15). Similar patterns hold for other aspects of public and private life, with Bulgarians reporting the lowest levels of openness towards sexual and ethnic minorities, e.g. in politics, among all EU countries (European Commission, 2019[18]).

Labour market outcomes for minorities for whom data are available are generally poor. Only 22% of the working-age Roma population are employed, against 44% of the Turkish community and 67% of ethnic Bulgarians (National Statistical Institute, 2021[19]). What is more, many of those from ethnic minorities who do work are employed in elementary manual occupation, especially in the case of the Roma community (OECD, 2023[5]). The poor labour market outcomes of Roma and, to a lesser extent the Turkish community, are closely linked with low educational attainment. More than 80% of Roma and almost half of the Turkish have no more than lower-secondary education, against 12% ethnic Bulgarians (National Statistical Institute, 2021[19]).

Limited access to the labour market also extends to other vulnerable groups, notably people with disabilities. In 2022, the disability employment gap stood at 29.5 percentage points in Bulgaria, representing a wider gap than in most other EU countries, comparing to an EU average of 21.4 percentage points (Eurostat, 2024[20]). Bulgaria has implemented national and EU-funded measures to tackle the issue, including employment subsidies, and introduced quotas for companies with at least 50 employees to hire people with disabilities, but significant employment barriers for this group persist (European Commission, 2023[21]). Insufficient labour market integration of minorities is a main driver of their higher risks of poverty and social inclusion (see Section 2.4.2).

Figure 2.15. Minorities experience high levels of exclusion

Share of respondents who would feel “uncomfortable” if a colleague at work with whom they are in daily contact, belonged to the following groups, in Bulgaria and EU27, 2023

Note: Results are based on answers to the question “Regardless of whether you are actually working or not, please tell me how comfortable you would feel, if a colleague at work with whom you are in daily contact, belonged to each of the following groups?‘

Source: Standard Eurobarometer 99 - Spring 2023.

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2.6. Life satisfaction is very low compared to OECD countries

Life satisfaction is very low in Bulgaria (Figure 2.16). Bulgaria systematically ranks last among all EU countries in terms of overall life satisfaction, and there is no component of life satisfaction where Bulgaria ranks well compared to other countries. The dissatisfaction spans across multiple domains, including financial stability, housing quality, personal relationships, and professional fulfilment (Eurostat, 2023[22]).

At all ages, self-reported levels of life satisfaction are well below the OECD average, but the gap is particularly large for older people (Figure 2.16). High poverty rates among older Bulgarians and poor health outcomes among the elderly, coupled with limited access to adequate healthcare likely contribute to concerning low levels of well-being in Bulgaria. There are differences in well-being across population groups, with highly educated people faring much better than their low-educated peers (Eurostat, 2023[22]).

Figure 2.16. Life satisfaction is low in Bulgaria, particularly for seniors

Average life satisfaction, 2022

Note: OECD is an unweighted average and excludes Colombia, Costa Rica, Türkiye and the United States. Years vary for the average: 2018 (Iceland), 2020 (Australia) and 2021 (Israel, Mexico, New Zealand, the United Kingdom).

Source: OECD Data Explorer • Current well-being by age.

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References

[12] BICA (2023), Икономика на светло, https://bica-bg.org/en/118/2022.htm.

[14] CEDEFOP (2023), 2023 skills forecast Bulgaria, https://www.cedefop.europa.eu/files/skills_forecast_2023_bulgaria.pdf.

[8] European Commission (2024), Shaping Europe’s digital future, https://digital-decade-desi.digital-strategy.ec.europa.eu/datasets/desi/charts/desi-indicators?indicator=desi_1a2&breakdown=ind_total&period=desi_2023&unit=pc_ind&country=AT,BE,BG,HR,CY,CZ,DK,EE,EU,FI,FR,DE,EL,HU,IE,IT,LV,LT,LU,MT,NL,PL,PT,RO,SK,SI,ES,SE.

[21] European Commission (2023), European Semester 2022-2023 country fiche on disability equality - Bulgaria, https://ec.europa.eu/social/BlobServlet?docId=27045&langId=en.

[18] European Commission (2019), Discrimination in the European Union, https://europa.eu/eurobarometer/surveys/detail/2251.

[10] European Commission (2019), Undeclared work in the European Union - Special Eurobarometer 498.

[20] Eurostat (2024), Disability employment gap by level of activity limitation and sex, https://ec.europa.eu/eurostat/databrowser/view/tepsr_sp200/default/table?lang=en.

[22] Eurostat (2023), EU SILC - Personal Wellbeing Indicators, https://ec.europa.eu/eurostat/databrowser/view/ilc_pw01__custom_9762903/default/table?lang=en.

[17] Eurostat (2023), Population and social conditions dataset, https://ec.europa.eu/eurostat/databrowser/view/tgs00107/default/table?lang=en.

[13] Franic, J., I. Horodnic and C. Williams (2023), Extent of undeclared work in the European Union, European Labour Authority, https://www.ela.europa.eu/sites/default/files/2023-03/Study-on-the-extent-of-undeclared-work-in-the-EU.pdf.

[9] Medina, L. and F. Schneider (2018), Shadow Economies Around the World: What Did We Learn Over the Last 20 Years?.

[11] Molnar, M., M. Abendschein and Z. Zhelyazkova (2023), “Better jobs and incomes in Bulgaria”, OECD Economics Department Working Papers, No. 1759, OECD Publishing, Paris, https://doi.org/10.1787/38d07f99-en.

[6] National Statistical Institute (2023), Average gross monthly wages and salaries of the employees under labour contract by statistical regions and districts in 2023, https://www.nsi.bg/en/content/3930/statistical-regions-district.

[16] National Statistical Institute (2023), Poverty and social inclusion indicators in 2022, https://www.nsi.bg/sites/default/files/files/pressreleases/SILC2022_en_4UPGZS4.pdf.

[19] National Statistical Institute (2021), Population Census.

[3] OECD (2024), OECD Employment Database, https://stats.oecd.org/Index.aspx?QueryId=118627.

[7] OECD (2023), Education at a Glance 2023: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/e13bef63-en.

[5] OECD (2023), OECD Economic Surveys: Bulgaria 2023, OECD Publishing, Paris, https://doi.org/10.1787/5ca812a4-en.

[2] OECD (2022), Reaching Out and Activating Inactive and Unemployed Persons in Bulgaria, Connecting People with Jobs, OECD Publishing, Paris, https://doi.org/10.1787/7b91154a-en.

[1] OECD (2021), OECD Economic Surveys: Bulgaria 2021: Economic Assessment, OECD Publishing, Paris, https://doi.org/10.1787/1fe2940d-en.

[15] OECD/European Commission (2023), Indicators of Immigrant Integration 2023: Settling In, OECD Publishing, Paris, https://doi.org/10.1787/1d5020a6-en.

[4] United Nations (2023), UN Population Division Data Portal, https://population.un.org/dataportal/home.

Notes

← 1.  Bulgaria’s NEET rate in 2022 is 1.3 percentage points higher in OECD data than in Eurostat data. This reflects methodological differences in the NEET definition, including that Eurostat does not consider young people who are in informal education as NEETs.

← 2.  A country’s emigration rate is defined as the number of persons born in the country and residing abroad, divided by the total number of persons born in the country, wherever they reside.