OECD Reviews of Labour Market and Social Policies: Romania 2025

1. Main Assessment

1.1. The labour market and social situation in Romania

1.1.1. Remarkable progress in the labour market but regional disparities, low labour market participation and population ageing remain challenges

Despite the labour market booming in the years preceding the COVID‑19 crisis and employment increasing significantly, both employment and labour force participation in Romania remain low in OECD comparison. More recently, the pace of improvement in the labour market has slowed. The employment rate in Romania was 63% in 2023, lower than the average of 70% across OECD countries. Romania’s lower employment rate is a consequence of low labour market participation.

The working-age population in Romania is shrinking rapidly. This contraction is due to past low fertility rates and high levels of strong emigration. The shrinking of the working-age population has made more urgent for Romania to fully realise the employment potential of its existing population. As in other countries in the region, emigration has accelerated ageing pressures and added to labour shortages. Total net emigration since 2000 amounts to around 10% of the population and close to 20% of the Romanian-born working-age population resides outside Romania. Following Russia’s unprovoked war of aggression against Ukraine and the large flow of humanitarian migrants into Romania, net migration became positive in 2022. At the same time, the projected increase in the share of older people in Romania is much more modest than across OECD countries. The number of people who are 65 and older in Romania is projected to increase by 15% by 2040 in Romania – just half the 31% increase found on average among OECD countries. This is a consequence of relatively low longevity. Current life expectancy is 76.5 years in Romania, as compared to 80.3 years in OECD countries.

Regional disparities are exceptionally large in Romania. In particular, they reflect the large share of agricultural production that occurs in the northern and southern regions, and the fact that metropolitan centres are located in the middle of the country and that the western part of the country enjoys proximity to external markets. Low employment rates in rural areas and high shares of employment in agriculture result in low incomes and high poverty rates. Poverty rates vary substantially across regions, from 2% in Bucharest to more than 30% in the south-west and north-east regions.

1.1.2. Low employment of disadvantaged groups and substantial informality

Employment is particularly low among young people, older people, people with disabilities and those with low educational attainment. At 19%, the employment rate of young people in Romania amounted to half the OECD average of 41% in 2023. One in five people aged 15‑29 was not in employment or engaged in education or training (NEET) in Romania in 2023, the highest share among European OECD countries. Unlike most OECD countries, the share of NEETs among youth in Romania has not declined over the last decade. The employment rate of older workers stood at 51% in Romania compared to 66% in OECD countries on average. Only 46% of people with low education worked in Romania in 2023, compared with 60% on average across OECD countries. Furthermore, people with disabilities have limited access to the labour market in Romania. The employment gap for people with disabilities was 32 percentage points in 2022, while it was 21 percentage points on average across the EU. Belgium, Ireland, Lithuania and Norway are the only countries with a larger employment gap than Romania for people with disabilities.

The gender employment gap is exceptionally large in Romania, and has increased significantly over the last decades, from 11% to 17% between 2000 and 2023, because men’s employment has increased faster than women’s. Female employment is particularly low among mothers and women in rural areas in Romania. Large gender gaps are found in multiple areas. For example, Romania stands out from OECD countries in terms of few women participating in both public and private top management positions. In Romania, care activities are predominantly performed by women. Enrolment rates in early childhood education (0‑2 years) are very low, particularly among children in rural areas. This limits women’s ability to participate in the labour market. Broader access to part-time employment could make it easier for all individuals to combine work with care, particularly women. The regulation of part-time work can unnecessarily limit its use, as only 2% of both male and female workers work part-time in Romania, against 8% of men and 23% of women on average in OECD countries. Working overtime is prohibited for part‑time workers in Romania, while it is available to full-time workers. In addition, in 2022 the fiscal code increased the floor to the base of social security contributions, setting it at the minimum full-time wage. As a result, anyone earning less than this minimum due to working part-time has a higher effective contribution rate than full-time workers.

Employment outcomes of the large Roma minority group, particularly Roma women, are poor in Romania. The size of the Roma population is estimated to be between 3% and 10% of the total population, with census-based estimates at the bottom and expert assessments around the middle of this range. The employment rate for the Roma stood at 41% of those aged 20‑64 in 2021. This employment rate is substantially less than among the general population, whose rate is 71%. That said, this rate is similar to the 43% rate for Roma people living in 10 EU countries with large Roma minorities. Rates vary in these countries from 25% in Spain to 62% in Hungary. The employment rate of Roma women is substantially lower than for men, with Roma women being overwhelmingly responsible for care and domestic tasks.

The share of low-skill jobs in total employment increased by 3.6 percentage points in Romania between 2008 and 2019. Meanwhile, the share of high-skill jobs in employment increased by 1.7 percentage points in Romania, compared to 3.5 percentage points in the EU on average. Romania has experienced a substantial shift of employment out of agriculture and primarily into services, but the share of workers in the agricultural sector remains the largest in the EU. Romania’s share of workers in the agricultural sector was 10.8% in 2022, which was much higher than the average among EU countries of 3.5%.

Wages and labour productivity in Romania are both about one‑third lower than the OECD average. However, Romania has been catching up with higher-income OECD economies, as labour productivity increased by 60% in the country between 2007 and 2022. Wage growth accelerated substantially between 2015 and 2020 as well, and real wages increased by 43%. As in many countries, in 2021 and 2022, high inflation eroded real wages, but in 2023, robust growth of real wages returned.

The level of earnings dispersion is much greater in Romania than in most OECD countries. Large earnings inequalities reflect unequal educational opportunities across regions and social groups, a large shadow economy, few job opportunities in rural areas, and limited bargaining power of many workers. That said, Romania’s gender wage gap of 5.8% in 2021 was around half the average among OECD countries.

Undeclared work in the private sector was estimated at 27.1% of gross value added (GVA) in Romania in 2019, the highest value among EU countries and almost twice the EU average of 14.8%. Undeclared work has increased slightly in Romania from 26.2% in 2013, while it declined in the EU on average from 16.4% to 14.8% between 2013 and 2019. Many people in marginalised communities work informally as occasional workers, mostly in agriculture, construction and the care sector. While employees constitute 81% of undeclared workers, most self-employed workers and domestic family members work informally in Romania. Romania recently introduced a voucher scheme aimed at formalising outsourced household services. Additionally, the co‑operation between Labour Inspection and the National Agency for Fiscal Administration was improved in 2022 in order to better fight informal employment.

1.1.3. High rates of poverty and material deprivation

In Romania, household incomes are low, while income inequalities are average. After adjusting for price‑level differences across countries, the median disposable household income in Romania stood at 57% of the OECD average in 2021. Income inequality measured by the Gini coefficient of disposable income was 0.32 in Romania, which is similar to the OECD average.

At 16.2%, the income poverty rate was substantially higher in Romania than the OECD average of 10.9% in 2021. Compared to 2013, income poverty has decreased in Romania by 2 percentage points. This decline was strongest in households with children and adults younger than 25. This decline is linked to improvements in family benefits. Spending on family benefits increased from 1.2% to 1.9% of GDP in Romania between 2013 and 2021. Low average income and widespread income poverty lead to very high material deprivation in Romania, though levels of material deprivation have fallen significantly in recent years. Indeed, 15.2% of the population lived in severe material deprivation in Romania in 2020, versus 29.8% in 2013. The average rate in the EU was 5.9% in 2020.

The difference in poverty rates between rural areas and cities is extreme in Romania and is the largest in the European Union. In Romania, the income poverty rate in rural areas was 34% against 6% in cities, while the averages for the EU were 17.5% in rural areas and 16.3% in cities in 2022. Moreover, severe material deprivation stood at 24% in rural areas compared to only 4% in cities in Romania in 2020.

Romania’s large Roma community is particularly vulnerable and face a high risk of poverty. The income poverty rate among the Roma minority group was 78% in 2021, up from 70% in 2016. That said, Romania does not stand out compared to the other 10 EU countries with substantial Roma minority populations. Among these countries the poverty rate of the Roma population varies from 71% in Bulgaria to 98% in Italy and Spain. Spatial segregation is one of the challenges the Roma community faces, and many Roma people live in marginalised communities.

1.2. Lifting Romania’s workforce potential

In the context of a rapidly shrinking working-age population and low employment rates, particularly among young people and low-educated workers, policies to promote workforce training, upskilling and reskilling must be a policy priority for Romania, as Chapter 3 outlines. This includes ensuring that all young people – including those from rural areas and low-income communities, and those that are ethnic minorities – leave the education system with the basic skills and vocational skills they need to gain a foothold in the labour market. It also means providing adult workers – both employed and unemployed – with attractive training options that raise their productivity and wages and help them adapt to a changing labour market.

1.2.1. Boosting the skills of Romania’s workforce

Too many young people in Romania fail to acquire the basic skills and vocational skills they need to gain a foothold in the labour market. Romania has not yet achieved universal participation in primary education, and enrolment in lower-secondary education is also low. Net enrolment rates at both education levels amounted to around 84% in 2022. According to the 2022 PISA survey, approximately 49% of 15‑year‑olds in Romania did not achieve baseline levels of proficiency in mathematics. Furthermore, 42% did not achieve these baseline levels in reading, and 44% failed to achieve them in science. These figures are far higher than in the OECD on average. Inequalities in learning outcomes in the country are large. Romania also has the highest rate of early school leaving across EU countries, with 16.6% of Romanian 18‑24 year‑olds not having completed upper-secondary education in 2023. Among young Roma between the ages of 20 and 24, only 22% reported having completed upper-secondary education in 2021. Urban‑rural disparities in participation and learning outcomes are larger in Romania than in any other Central and Eastern European country.

Modernising the vocational education and training (VET) system would help Romania improve educational outcomes and smooth the school-to-work transition. More than half (57%) of upper‑secondary students in Romania were enrolled in vocational programmes in 2022. However, VET in Romania suffers from insufficient financial resources. In addition, access to education and training is unequal, and rates of early leaving are high, particularly in rural and poor communities. Within the first three years of graduation, 61% of young people with a vocational degree who were not in education or training were employed as of 2023. The employment rate of graduates with a general degree in Romania is slightly lower (60%) still, and both rates are among the lowest across EU countries.

Romania launched policy initiatives in various areas in recent years to improve young people’s educational outcomes and skills. These initiatives aim to better support young people with the school‑to‑work transition and reconnect those who are out of education and are not employed. These initiatives have included:

• Preventing drop-out: A National Programme to Reduce School Drop-out aims at reducing drop-out in lower-secondary schools with medium-to-high drop-out rates by at least 25%. The programme also aims to raise school completion rates and improve student performance. Its budget is EUR 543 million for 2021‑26.

• Reforming VET and monitoring the school-to-work transition: Romania has taken substantial steps to modernise its VET system. These steps include measures to improve quality and labour market relevance, broaden VET access, increase flexibility, and raise attractiveness and participation. One notable initiative to improve the provision of VET has been the innovative ReCONECT project, which introduces mechanisms for forecasting skill needs, tracking the career trajectories of all VET graduates, and monitoring and evaluating the effectiveness of public training policies. Romania is also introducing a new dual model of vocationally oriented tertiary degrees to provide a coherent pathway from upper-secondary vocational programmes to higher education.

• Providing outreach to NEETs: In a nationwide initiative Romania reached out to over 200 000 unregistered NEETs between the ages of 16 and 24 with the help of mobile teams. The initiative registered 190 000 of NEETs with the National Agency for Employment (NAE). The NAE provides financial incentives to young people who register as jobseekers after graduation.

Romania will also need to boost adult learning to address its large skill shortages and mismatches, promote workers’ employability and raise their productivity and earnings potential. Despite recent increases, participation rates in adult learning remain very low in Romania. In 2023, only 6.7% of 25‑64 year‑olds reported having participated in formal or non-formal education and training over the last four weeks, a lower share than in any EU OECD country except Greece. Low participation in adult learning reflects in part the lack of investment of many firms in the skill formation of their workers. While Romanian legislation requires all employers to ensure that their employees participate in training every two to three years, the requirement is too vague to effectively promote quality employer-provided training. Furthermore, the provision of training through employers is not systematically monitored. In addition, many workers do not see any professional or personal benefits to engaging in training.

Romania has been developing different strategic framework documents to guide policy efforts aimed at raising participation in adult learning, including the new Adult National Training Strategy and the National Strategy for Adult Continuing Education. Under the European Social Fund Plus (ESF+), Romania funds several initiatives that provide financial support for employer-provided training. Discussions are ongoing about introducing financial support for people who participate in adult learning activities. A pilot programme for a “French-style” individual learning account for workers in the construction sector is currently being developed.

1.2.2. Effective employment support to address skill shortages

Spending on active labour market programmes (ALMPs) is very low in Romania. In 2019, it accounted for only around 0.02% of GDP, one‑twentieth of the OECD average of approximately 0.4% of GDP. Consequently, Romania struggles to effectively provide support to all jobseekers, fight high inactivity and address employers’ growing skills needs. Only a small share of jobseekers registers with the NAE, as few are entitled to unemployment benefits, payment rates are low, and the available support is limited. Many out-of-work people, including many NEETs, are not actively looking for work. While employers are legally required to communicate their vacancies to the NAE, many fail to do so and recruit through other channels instead.

Given limited resources, the NAE has prioritised helping jobseekers find work through employment subsides rather than investing in upskilling and reskilling. Over 90% of ALMP spending in 2020 went to employment incentives, mainly in the form of wage subsidies for employers who hired registered jobseekers; only around 7% went to training.1 Romania’s strong reliance on employment incentives as the main instrument of employment support may be adequate given a pool of mostly low-skilled, disadvantaged jobseekers. However, it means that more qualified jobseekers and employers who seek to hire qualified workers often do not get in touch with the NAE for support. In this sense, employment support in Romania does little to address the country’s skill shortages.

Romania has begun a number of ongoing policy initiatives to modernise the NAE structures and services, increase capacity, and improve employment service provision, particularly for vulnerable jobseekers. These include initiatives to: digitalise service provision both on the employer and jobseekers’ side; investments in the analysis and forecasting of skill needs, and in the monitoring and evaluation of employment support policies through the ReCONECT project; and investments in the training of NAE staff. The NAE has also started a project to build capacity to better tailor employment services to jobseekers and improve the visibility and public perception of the NAE.

1.2.3. Promoting good social dialogue and strengthening collective bargaining

Romania has a solid institutional framework in place to sustain social dialogue, but social dialogue remains weak and ineffective in practice. This reflects the fragmentation, low representativeness and limited capacity of social partners, as well as a lack of trust and the history of limited social dialogue in the country. In its recent country assessments, the European Commission characterised social dialogue in Romania as “formalistic”. It concluded that the established institutional framework of dialogue and consultations in Romania has been used insufficiently to engage with social partners in a meaningful way and involve them in policy design and implementation. Meanwhile, social partners show little interest in engaging in a voluntary dialogue with each other to improve labour market conditions. During the OECD review mission, social partners expressed their discontent with the workings of Romania’s two key national tripartite bodies, the Economic and Social Council and the National Tripartite Council for Social Dialogue. In particular, social partners feel that they are given insufficient time to prepare their reactions to draft legislation. Furthermore, they criticised a lack of discussion of key policy issues, and the insufficient frequency of meetings of the National Tripartite Council for Social Dialogue.

Collective bargaining coverage is low in Romania, but the new Social Dialogue Act introduced in December 2022 has lifted major restrictions on social dialogue. In 2011, a far-reaching and controversial reform of the Social Dialogue Act had suspended existing collective agreements, decentralised collective bargaining and raised hurdles to worker representation. Collective bargaining coverage plunged from 98% in 2008 to around 35% in the years following 2011. The most recent OECD data, which are for 2017, give an even lower adjusted bargaining coverage rate of 15% – a figure below the OECD average but broadly in line with the coverage rates in some Central and Eastern European OECD countries. In the context of EU-level efforts to strengthen social dialogue, Romania passed a new Social Dialogue Act in December 2022 that reversed parts of the controversial 2011 reform. This act substantially lowered hurdles to collective bargaining, reinstated certain collective bargaining rights, reduced the previously high thresholds for strike activity, and broadened workers’ information and consultation rights. While the new legislation has not yet fully taken effect, Romania is in the process of drafting an action plan for promoting collective bargaining under the EU 2022 Directive on Adequate Minimum Wages.

Romania has a statutory national-level minimum wage in place. The government determines the minimum wage after non-binding consultations with social partners. Independent experts are not informally involved or consulted, and there is no specific formula to calculate the minimum wage. Since 2019, a separate higher minimum wage has existed for the construction sector. In addition, Romania introduced a differentiated minimum wage for workers in agriculture and food processing in response to the cost‑of‑living crisis in 2022; employees in construction, agriculture and food processing are exempt under certain conditions from personal income taxes and benefit from reduced social security contributions. Since 2022, the minimum wage may be paid to employees for a maximum of 24 months, after which they are entitled to a salary increase. The magnitude of this increase is not regulated, however.

Romania’s minimum wage has been rising over the last decade at a rate above productivity growth and inflation. In the decade leading up to 2023, the net minimum wage more than tripled in nominal terms, while consumer prices rose by a cumulative 43%. Since July 2024, the gross minimum wage stands at around EUR 740 (EUR 920 for workers in the construction sector). Approximately 30% of all employees in Romania earned the minimum wage in 2020 according to estimates. Romania’s minimum wage is also relatively high in international comparison. It amounted to about 56% of the national median wage in 2023 – a figure in line with the OECD average, but higher than in most peer countries. Nonetheless, in-work poverty remains widespread, partly because a large share of the in‑work-poor live in rural areas where salaried employment is rare. Under its National Reform and Resilience Plan, Romania has committed to introducing, by November 2024, a new mechanism for setting the minimum wage that is based on objective criteria consistent with job creation and competitiveness. A corresponding government decision is being prepared currently.

1.3. Increasing return and improving management of labour migration

1.3.1. Shifting diaspora engagement towards return and employment

A longstanding challenge in Romania is the fact that it has a higher emigration rate of the working age population than most OECD countries. Close to 20% of the working-age population lives abroad. In the context of a shrinking working-age population and declining youth cohorts, emigrants should be encouraged to return.

Romania’s current diaspora engagement framework is oriented mostly towards cultural identity and social assistance. There is no strategy in place to encourage the productive return of Romanians abroad, nor to increase their economic engagement – though small one‑off initiatives are in place, and the PES perform a statutory information role. Unlike other OECD countries that have experienced substantial emigration in the past few decades, Romania has no single portal that provides information on return options. Romania should take steps to scale up and adapt its outreach to the working-age diaspora, especially in terms of communication about job opportunities to create businesses at home. Finally, Romania should draw on good practices to create a return-information hub and should co‑ordinate related services.

1.3.2. A sharp increase in less-skilled labour migration has created vulnerabilities

A more recent challenge for Romania in this domain is labour migration. While Romania still has relatively few migrants, the increase in labour migration in the past decade is greater than in most OECD countries. The contribution of labour migrants to total employment rose 94% between 2022 and 2024 alone. In part this is because the labour migration system in Romania is very open – with no skills threshold and few barriers for employers who wish to use the system. As such, there have been sharp increases in recruitment of labour migrants, which is in line with a tight labour market. The openness of the migration system and rapid increase in labour migration raises the risk of abuse and exploitation of workers, as well as misuse of visas to transit to other countries. Romanian immigration services have suffered from understaffing for years, despite increasing workload. To address this risk, Romania should scale up its inspection capacity by increasing staff, improving interpretation and translation capacities, and improving the complaint mechanism. It should regulate intermediaries more carefully, including with regards to the imposition of fees. Romania should also increase its bilateral engagement with origin countries to fight excessive fee‑taking for placement, and to ensure that workers arrive better informed and with clear channels for redress.

Romania sets quotas for annual admission of labour migrants, based on PES vacancies, prior demand and unstructured submissions of positions from stakeholders. The current system of annual quotas on admissions should take into account actual visa issuance rather than authorisation of employment or issuance of work permits. Finally, only real entries should be counted against the quota. The mechanism for determining the quota should be adapted to expanding availability of labour market information, outcomes of migration and employer histories. Processing capacity at Romanian representations abroad should be scaled up in line with the changing demand for work visas.

Placement agencies employ many labour migrants and dispatch them or find them work via platforms. This is unusual in OECD countries and is not aligned with the labour market testing principle. Recruitment for these jobs should be subject to greater scrutiny, and platform work should not be grounds for issuance of work permits.

Romania’s statistical reporting system is inadequate for this new reality. To align with OECD standards and best practices, Romania should improve its capacity to produce regular statistics on migration by category, nationality, gender and more. It should also identify first entries separately from changes of status and renewals of status.

1.3.3. The integration framework in Romania is still undeveloped

Romania has created an integration programme for beneficiaries of international protection, largely with support from earmarked European funds. Romania’s general integration programme for other migrants was introduced in preparation for accession to the EU in 2004. Romania adapted its language education framework in 2022 around a 216‑hour course programme, but participants – except for beneficiaries of international protection – must pay their own costs. As immigration levels increase, it will be necessary to ensure that an integration infrastructure is in place, especially language‑learning. This imperative extends to the retention of international students after graduation. Romania has not made a concerted effort to retain international students despite inclusion of this objective in policy documents. While the asylum reception system has the capacity to handle current inflows, integration services offered to beneficiaries of international protection should be reinforced to improve longer-term integration prospects.

1.4. Empowering vulnerable households through social support

1.4.1. Low social expenditures and limited safety nets insufficient to reduce poverty

Social expenditures are low in Romania, and social transfers and taxes have the lowest impact on poverty reduction compared to European OECD countries. Social spending was curbed by very low indexation of social benefits for more than a decade. Spending on old-age benefits is in line with the OECD average, while income support for the working-age population is a third lower than in OECD countries on average. Spending on social assistance and unemployment benefits are particularly low, at around five times less than the average across OECD countries.

The eligibility conditions and duration of unemployment benefits in Romania do not stand out compared to OECD countries. The period of payment of the benefits is between 6 and 12 months for a contribution record of between 1 and 10 years. For those who do not meet the eligibility conditions, there are no means-tested unemployment assistance benefits. These types of benefits exist in some OECD countries so that low-income jobseekers without unemployment benefit entitlements have to rely on minimum-income benefits. The amount of the unemployment benefit in Romania is low. It provides little insurance against income loss and does not incentivise reporting full earnings. Only 9.8% of jobseekers in Romania received unemployment benefits 2022.

In 2024, Romania reformed minimum-income benefits and increased them. Previous minimum-income benefit levels were extremely low and inefficient in fighting poverty. The new benefit amounts are substantially higher, weighing in at more than double the previous amount for a single‑person household, and around 40% higher for a couple with two children and no other income. As a result of the reform more people are covered and the total spending on minimum-income benefits surged by more than three times. The new benefit maintains previous incentives for job-search efforts by adults and for participation in education by children. Despite the 2024 surge, the level of minimum-income benefits in Romania, as a percent of the median disposable income, remains substantially below the average across OECD countries. As of 2024, minimum‑income benefits for a couple with two children without other income are estimated to be 26% of the median disposable income in Romania compared to 38% among OECD countries on average. Households with children also receive unconditional non-taxable benefits. These benefits amount to around 20% of the median disposable income for children aged up to two years old and 8% for older children. People with low incomes may also qualify for a heating allowance. This allowance is subject to means testing and depends on the type of heating.

Social services for older people, people with disabilities, homeless people, children and victims of domestic violence face many challenges in Romania. Limited financing is as an important constraint to supplying adequate value and quality of services. Co‑ordination among different levels of governance could be improved. Fragmentation of the provision of services is particularly challenging in rural areas. Public entities supported by NGOs deliver services primarily.

Sectoral strategies for social services envisage increasing central government co-financing, improving co‑ordination among institutions, making the provisions more effective, e.g. through digitalisation, and improving activation and prevention measures. Romania’s National Long‑Term Care and Active Aging Strategy 2023‑30 aims to increase the number of older people who manage to live independently for as long as possible, and to improve access to long-term care services for older people. The National Strategy on the Rights of Persons with Disabilities “A fair Romania” 2022‑27 adopts a comprehensive approach to improving the situation of people with disabilities. Additionally, the National Strategy on Preventing the Institutionalisation of Adults with Disabilities 2022‑30 and the Law on Supporting the Process of Deinstitutionalisation of Adults with Disabilities provide a normative framework to both prevent institutionalisation and help keep adults with disabilities active. The National Strategy on Social Inclusion of Homeless People 2022‑27 aims to increase social inclusion of homeless people by improving monitoring and better integrating existing services.

1.4.2. Generous parental leave while underdeveloped childcare infrastructure

In Romania, parental benefits are available for prolonged periods and are relatively generous. Women can receive maternal and parental leave together for up to two years after having a child, which is very long compared to OECD countries. On average, OECD countries grant paid leave to mothers for about a year. Only three OECD countries grant a longer paid leave than Romania. However, in these three countries the benefit replaces 35% or less of previous earnings, while in Romania it replaces 85%.2 The average replacement of income among 28 OECD countries is 54%.

Some policy measures aim at reducing the labour market impact of long care leaves on women. In 2023, Romania implemented the EU Directive on work-life balance for parents and carers, and doubled the parental leave ascribed solely to fathers from one to two months. Although almost all parental leave can be claimed by fathers, two months can be used by fathers only on top of two weeks of paternity leave ascribed solely to fathers. Among OECD countries, leave restricted to fathers is slightly less than three months. The total duration of paid leaves for mothers following childbirth in Romania is double the OECD average. Additionally, working parents entitled to paternity leave receive the childcare benefit (so called insertion allowance). At its minimum amount, this benefit is equal to 45% of minimum wage and is paid until the child in six months old. The benefit falls to 20% of minimum wage thereafter and can be claimed until the child turns three years old. Finally, as of 2024, labour income of up to EUR 2 642 a year, does not reduce childcare benefits.

Enrolment of children in early childhood education and care is very low despite the fact that care in kindergarten is free and parents pay only for meals. Only 8% of children aged 0‑2 attended childcare facilities in 2020, against the OECD average of 36%. This is related to the shortage of places – particularly in urban areas with high population densities, as well as in remote rural areas – but also to cultural norms about children benefitting from childcare provided at home. As of 2023, the preschool education in Romania became mandatory starting at age four. The mandatory age will decrease to three years old in 2030. Still, the enrolment rates for 3‑5 years old stagnated between 2015 and 2017 at around 84% and decreased thereafter to 76% in 2020. Enrolment rates are particularly low among the Roma population and in rural areas. Spending on early childhood education and care is low in Romania. It stood at 0.4% of GDP in 2019, which was half of the OECD average.

Romania has taken steps to improve access to high-quality early childhood education. In 2020, nurseries were transferred from the social protection system to the educational system. That same year, the Ministry of Education lowered the starting age for compulsory education to include the last two years of pre‑school (ages 4 and 5). In 2021, new curricula and new reference standards for early education system have been issued. In addition, the central government increased its financing of early childhood education in 2021. Finally, Romania’s National Recovery and Resilience Plan envisages projects aimed at increasing capacity for early childhood education.

Extended parental leaves and limited access to childcare contribute to low labour force participation by women. The gender gap in labour market participation is very large in Romania. In 2022, the gender gap in labour participation was 19 percentage points, which is among the highest in OECD countries. This gap results from the 57% labour participation rate for women in Romania, which is very low. Between 2008 and 2020, Romanian women’s labour participation rate increased by 4 percentage points. Despite this, the increase was half that of men during this same period. Childcare is often provided by grandparents in Romania, which puts pressure on women to withdraw from the labour market when they become grandmothers. Informal care arrangements, i.e. care provided by grandparents or other family members or friends without pay, is the highest in Romania among the EU countries.

1.4.3. More effort needed to promote gender equality and combat violence against women

Gender-based violence is one of the most severe forms of gender inequality not only in Romania, but around the world. One in five women experience intimate partner violence in Romania as on average among OECD countries (OECD, 2024[1]). Romania lacks key data to properly monitor the magnitude of the problem. The EIGE index does not provide a score in the field of violence for Romania, due to insufficient evidence on violence against women in the country (Băluță and Tufiș, 2022[2]). That said, EIGE (2021[3]) has estimated that gender-based violence costs Romania 7% of GDP, double the value found on average across the EU.

Romania has made a substantial commitment to combat gender inequalities in recent years, but there is still room for improvements. In 2016, Romania ratified the Council of Europe Convention on Preventing and Combating Violence Against Women and Domestic Violence (also known as the Istanbul Convention). The 2022 recommendation on the implementation of the Istanbul Convention acknowledged Romanian progress in this area (Council of Europe, 2022[4]). Gender-related policies in Romania are co‑ordinated by the National Agency for Equal Opportunities between Women and Men. The 2021‑30 Strategy for Preventing and Combating Sexual Violence (SYNERGY) aims at strengthening prevention and protection measures, including through creating specialised centres for victims of sexual violence (OECD, 2023[5]). In 2022, Council of Europe (2022[4]) identified many areas for improvements in Romania. In particular, it recommended that Romania: 1) better align definitions of family violence in its criminal code with those set forth in the Istanbul Convention; 2) continue to address multiple forms of discrimination faced by women and girls from Roma community; 3) improve institutional frameworks and co‑ordination of actions; 4) improve the monitoring of policies; and 5) improve detection of all forms of violence. Romania is also implementing an information system to centralise data on offences collected by all prosecutor offices. Finally, Romania has outlined the plan for policy actions in the 2022‑27 National Strategy for Promoting Equal Opportunities for Men and Women and Preventing and Combating Domestic Violence.

1.4.4. Important pension reform effort to address ageing pressure

The relative income situation of older people is similar in Romania and OECD countries on average. In 2021, the average disposable income of people aged 65 or more stood at 94% of the total population, which was higher than the 88% average found across OECD countries. The old-age income poverty rate in Romania was at 16% in 2021, equal to the one for the total population.

The Romanian pension system includes two mandatory schemes: a pay-as-you-go earnings related points scheme and a funded scheme. Low‑income earners are protected by a minimum pension financed from the state budget. Mandatory funded pensions are maturing because they were introduced in 2008.

In 2023, a substantial pension reform was approved. This reform took effect in September 2024. The reform will equalise the retirement age between men and women and will link the retirement age to life expectancy increases. The statutory retirement age of women, at 62 in 2023, will gradually increase and equalise with that of men at 65, by 2035. After 2035, changes in pension qualifying conditions will be linked to half of increases in life expectancy. Based on UN demographic projections, the links to life expectancy will increase the statutory retirement age in Romania to 67 for people entering the labour market in 2022. Linking retirement ages to life expectancy is increasingly popular among OECD countries and as for 2024 nine OECD countries have established such links. In addition, the reform increased low retirement ages for workers in hazardous or arduous occupations. However, the 2023 reform decreased by three years the contribution period required to access a full pension. As a result, the reform lowered the normal retirement age, i.e. the age at which a person starting an uninterrupted career at age 22 can claim pensions without penalties, from 65 to 62 for men and from 62 to 59 for women. The actual impact of this change is unclear as the reform also excluded some non-work spells from the contribution period. The Romanian Government assesses that – given the current contribution histories of Romanian workers – the narrower definition of the contribution period is likely to outweigh the shorter required contribution period.

The 2023 reform raised current and future pensions, increased the progressivity of the benefits, and simplified their calculation without worsening the long-term financial sustainability of pensions. The average pension is expected to increase from 36% to 43% of the average wage between 2023 and 2025. The EU Ageing Report projects that – after having increased from 8.5% to around 10% of GDP between 2022 and 2025 – pay-as-you-go pension expenditure will remain stable, peak at 10.6% in 2046 and decline thereafter. Including benefits from the mandatory funded scheme, the future net replacement rate for an average‑wage earner is high at 77% in Romania, compared to the average of 61% across OECD countries.

1.4.5. Strengthening inclusion policies for Roma people

Supported by the EU, the Romanian Government has shown a relatively strong commitment to improve Roma’s social inclusion (World Bank, 2018[6]). So far, some progress has been made towards social and economic inclusion of Roma communities, but disparities in living conditions, health, education, and employment between Roma and non-Roma people remain. These inequalities are deep-rooted, perpetuated across generations, and reinforced by discrimination in access to education, employment, healthcare, and housing (FRA, 2019[7]).

Romania has undertaken a comprehensive policy approach to tackling the substantial social challenges faced by the Roma community. That said, further effort is needed to radically improve the situation. The National Roma Integration Strategy 2022‑27 (NRIS) includes many actions for Roma community, including in education, housing and social services. The strategy aims to better engage local governments in solving issues facing vulnerable Roma communities, while it improves financing of such measures from the central government budget. In the housing area, NRIS highlights the need to secure decent living conditions for Roma people and to regulate informal settlements.

In the area of education, NRIS aims at reducing school dropout, increasing participation in lifelong learning programmes for all age groups, improving basic skills and digital skills, and diversifying professional opportunities. The strategy builds on previous actions. For example, the National School Dropout Reduction Programme is being implemented between 2021 and 2026 to support Roma students and combat school dropout among them. The Programme aims to: reduce the risk of school dropout by at least 25% in the participating schools, improve the test results of students, and increase the rate of students who enter upper secondary education. Participating schools can access grants to finance activities that identify and monitor students at risk of dropping out. These grants also fund pedagogical support, learning activities, counselling and guidance, psychological support, special therapies and extracurricular activities. The programme includes schools with many Roma children, so that 24% of Roma students are covered. In 2019, the government created specialised bodies to reduce school segregation and adopted a methodology to achieve this. Between 2003 and 2022, the programme trained over 1 200 Roma school mediators, who represented Roma communities in schools. Currently, about 450 school mediators (of which 75% are of Roma ethnicity) are working in the educational system. With 170 727 Roma children aged 5‑19 years old, according to the 2021 census, there are 380 Roma children per one mediator (NIS, 2023[8]).

Additionally, the government supports teaching Roma language and including topics related to Roma history in school curricula. As of 2024, 263 teachers teach Romani language. In addition, 19 486 Roma students study the Romani language, and 918 Roma children learn in Romani in kindergartens and primary, and secondary schools.

European funds have been an important source of financing for the social integration of Roma communities in Romania. Their role is likely to increase because, in the current planning horizon, the EU has explicitly assigned some funds for this purpose. The new government Education and Employment Programme for 2021‑27 includes a specific objective to promote the socio-economic integration of marginalised communities like the Roma community.

1.4.6. Combating discrimination against LGBTIQ+ individuals

The situation of members of the LGBTIQ+ community in Romania is marked by conservative societal attitudes, discrimination and the need for more action in favour of LGBTIQ+ rights. LGBTIQ+ individuals still face substantial discrimination both in the workplace and in public life in Romania. Four in ten people living in Romania say they would feel uncomfortable if a colleague at work with whom they are in daily contact were gay, lesbian, bisexual or transgender. This figure is three times the average among EU countries (Box 5.1). Half of people living in Romania say they would feel uncomfortable if a gay, lesbian, or bisexual person were elected to the highest political office. Only one in four people living in Romania says they would be comfortable with of one of their children being in a romantic relationship with a gay, lesbian or bisexual person.

Romania ratified the Council of Europe Convention on Preventing and Combating Violence Against Women and Domestic Violence, also known as the Istanbul Convention in 2016, and Romania’s labour code bans any discrimination based on gender or sexual orientation, though gender identity is not explicitly mentioned (Art. 59/a). Government Ordinance No. 137/2000 bans all forms of discrimination, and explicitly includes discrimination based on sexual orientation. The National Council for Combating Discrimination is Romania’s autonomous institution under parliamentary control that is tasked with guaranteeing the implementation of non-discrimination principles. The National Strategy for Preventing and Combating Sexual Violence (SYNERGY) 2021‑30 co‑ordinates implementation of broad prevention and protective measures in this area.

NGOs report that in practice the treatment of sexual and hate speech offences varies substantially between local police and prosecutor offices. This issue has received substantial policy action recently. In 2022, the government partnered with the LGBTIQ+ association ACCEPT to implement the project, Partnership for the Equality of LGBTIQ+ Persons: Implementation of the ECHR Case Law on Sexual Orientation and Gender Identity. Between October 2022 and February 2024, 147 prosecutors and 160 police officers received training to ensure a standardised and victim-centred approach in investigations of sexual and hate speech offences. The project also produced a manual called Investigation of Hate Crimes Based on Sexual Orientation and Gender Identity, which is a tool both prosecutors and police can use to standardise prosecution processes. The manual defines key concepts in the field of sexual orientation and gender identity, and it describes how to best help LGBTIQ+ victims. Starting in 2019, the prosecutor’s office started monitoring cases of gender-based violence for which the European Court of Human Rights observed ineffective reactions by authorities. In addition, the Norwegian Financial Mechanism 2014‑21 funded some projects to enhance protection of victims of gender-based violence through improving prosecution procedures. Importantly, some acts of gender-based violence and domestic violence are subject to ex-officio prosecution in Romania, meaning they can be prosecuted without a victim’s complaint. In 2024, the government expanded the types of violence that can result in protective orders to include physical, sexual, and psychological violence and harassment, even when the violence is committed online.

Although some political figures exploit resentment of sexual minorities for political purposes, such tendencies have not provoked legislative changes in Romania. The recognition of same‑sex marriages and civil unions is an ongoing political and legal debate in the country. Since 2008, there have been a few attempts to introduce civil unions into Romanian legislation, but none has been successful. In 2023, the European Court of Human Rights ruled that Romania breaches the right to private and family life of same‑sex couples. As such, the court obliged Romania to provide same‑sex couples with legal recognition. In 2018, Romania’s constitutional court ruled that residence rights can no longer be refused to foreigners in same‑sex relationships who married in another EU state.

Box 1.1. Main policy recommendations for Romania

The Romanian Government is invited to consider the following items as part of its strategy to cope with the demographic challenge, raise employment, increase job quality and wages, and improve inclusiveness and living standards, including for vulnerable groups:

Enhancing employment opportunities, raising job quality, and reducing labour-market disparities

• Support employment of women by improving access to good-quality early childhood education and care, and – as the access improves – gradually shifting resources from parental benefits to delivering good-quality early childhood education and care; and reducing barriers to the creation of formal part-time jobs.

• Reduce informality by further improving co‑ordination between labour and tax inspection, and providing these institutions with adequate resources, enhancing economic incentives to fully declare wages by strengthening the link between wages and unemployment benefits, and improving the coverage of health insurance and pension insurance among the self‑employed.

• Promote longer working lives by eliminating or increasing the mandatory retirement age for most workers, reducing incentives to retire at an age below the statutory retirement age, and enhancing employability of older workers.

• Enhance employment of people with disabilities by broadening the use of tailored activation instruments, and prioritising activation and support for out-of-work people with partial work capacity.

• Monitor the impact of the recent reform of the Social Dialogue Act on collective bargaining coverage and the quality of social dialogue; work towards a better functioning of the national tripartite dialogue institutions by ensuring that social partners are systematically consulted on key policy issues and receive sufficient preparation time by arranging more regular meetings of the Tripartite Council for Social Dialogue.

• Following through on the current initiative to develop a minimum-wage setting mechanism that ensures that changes in the minimum wage are based on objective criteria and reflect trends in economic fundamentals, ideally by establishing an independent minimum wage commission made up of academic experts and representatives of social partners.

Boosting the skills of Romania’s workforce

• Support young people’s school-to-work transition by prioritising the fight against early school leaving, promoting outreach to inactive NEETs, and continuing ongoing efforts to modernise the vocational education and training system.

• Shore up efforts to increase participation in adult learning by creating a mechanism to facilitate and encourage participation in training activities (e.g. through a voucher-based system), strengthening and better monitoring requirements for employers to provide on‑the‑job training, and substantially expanding the training for registered jobseekers.

• Strengthen employment support by continuing ongoing efforts to modernise the National Agency for Employment, increasing the insufficient funding available for active labour market policy – and in particular activation and training –, and developing relevant and attractive support options for employers and workers.

Improving migration policy

• Reinforce diaspora engagement by developing a strategy and portal to provide Romanians abroad with information on job vacancies and employment and entrepreneurship conditions in Romania and orientation for their return.

• Strengthen the labour migration framework by regulating intermediaries more closely, reinforcing inspection and compliance capacities, co‑operating with origin countries to improve recruitment channels, develop a more accessible compliance and redress channel for foreign workers, and excluding certain activities from work permit authorisation.

• Expand capacity for empirical policy development by improving statistical monitoring of migration flows and integrating additional indicators into the determination of labour migration quotas.

Improving the labour market and social inclusion of women and minority groups

• Limit the negative impact of long and generous parental leave on women’s labour force participation by promoting fathers’ involvement in the childcare, extending the part of the parental leave ascribed solely to fathers, and making employment incentives for mothers more effective.

• Equalise career opportunities for men and women by expanding proactive public policies such as improving pay transparency through requiring companies to report on gender pay gap, introducing mechanisms to improve the gender balance in leadership positions in the public sector, encouraging greater participation and representation of women at all levels of politics and promoting gender diversity in leadership positions in private companies.

• Intensify efforts to combat gender-based violence by developing a comprehensive monitoring system, improving legislation on domestic violence, enhancing law enforcement and criminal justice approaches to violence, upgrading services provided to the victims/survivors of violence, ensuring the availability of high-quality, person-centred services and support for those affected by violence, and strengthening efforts to prevent gender-based violence.

• Reinforce the efforts for the socio‑economic integration of Roma people by increasing financing of initiatives targeted at the Roma community and thoroughly evaluating the effects of these initiatives and expanding measures as needed.

• Intensify the fight against discrimination of minorities, including LGBTIQ+ people, by strictly and systematically enforcing the ban on discrimination based on sexual orientation and gender identity, and by launching public awareness campaigns to reduce social stigma.

Tackling poverty, raising living standards and improving social services

• Fight poverty and material deprivation by closely monitoring the impact of the recent reform to the minimum-income benefits and considering further expansion of these benefits, increasing income replacement of the unemployment benefit, and consistently uprating these benefits to reflect increases in prices.

• Improve access to social services for older people, people with disabilities, Roma people, homeless people and people in rural areas by making financing more consistent with needs, implementing existing sectoral strategies for long-term care, people with disabilities and Roma people, and reinforcing a comprehensive case management approach.

References

[2] Băluță, I. and C. Tufiș (2022), Barometer of Gender-Based Violence, FILIA Center for Curriculum Development and Gender Studies, https://centrulfilia.ro/new/wp-content/uploads/2022/12/Barometer-of-Gender-Based-Violence-2022-Romania-1.pdf.

[4] Council of Europe (2022), Recommendation on the implementation of the Council of Europe Convention on Preventing and Combating Violence against Women and Domestic Violence by Romania, Secretariat of the Council oEurope Convention on Preventing and Combating Violence against Women and Domestic Violence, https://rm.coe.int/ic-cp-inf-2022-6-cop-recommendation-romania-eng/1680a95319.

[3] EIGE (2021), The costs of gender-based violence in the European Union, European Institute for Gender Equality, https://eige.europa.eu/publications-resources/publications/costs-gender-based-violence-european-union.

[7] FRA (2019), Fundamental Rights Report, European Union Agency for Fundamental Rights, https://fra.europa.eu/sites/default/files/fra_uploads/fra-2019-fundamental-rights-report-2019_en.pdf.

[8] NIS (2023), Rezultate definitive: Caracteristici etno-culturale demografice, National Intitute of Statistics, https://www.recensamantromania.ro/rezultate-rpl-2021/rezultate-definitive-caracteristici-etno-culturale-demografice/.

[1] OECD (2024), Society at a Glance 2024: OECD Social Indicators, OECD Publishing, Paris, https://doi.org/10.1787/918d8db3-en.

[5] OECD (2023), Supporting Lives Free from Intimate Partner Violence: Towards Better Integration of Services for Victims/Survivors, OECD Publishing, Paris, https://doi.org/10.1787/d61633e7-en.

[6] World Bank (2018), Romania Systematic Country Diagnostic. Background Note: Roma Inclusion, https://documents1.worldbank.org/curated/en/160691531142484229/pdf/128105-SCD-PUBLIC-P160439-RomaniaSCDBackgroundNoteRomaInclusion.pdf.

Notes

← 1.  This high share does not reflect spending on job retention support during the pandemic.

← 2.  OECD Family Database www.oecd.org/els/family/database.htm.