Study: Romanian labor market under pressure due to its aging population and higher demand for qualifications

Romania faces multiple demographic challenges, which will have a major impact on the labor market in the next 10 years, according to an analysis by the Bucharest Center for Economy & Society (CES Bucharest).

Romania’s aging population will lead to fewer young people in the labor market, according to the study. Meanwhile, the demand for highly qualified labor will continue to grow as the economy develops.

By 2030, Romania will need more than 600,000 people to occupy highly qualified jobs. At the same time, the country is estimated to triple the number of active people over 65 by the same year.

According to the data of the National Institute for Scientific Research in the Field of Work and Social Protection (INCSMPS) analyzed by CES Bucharest, by 2030, occupations that require highly qualified labor, such as IT, legal, or health specialists, will register increases in demand by 624,000, or an average of 100,000 people per year. Romania’s universities can cumulatively only provide 40,000 graduates in the field per year.

At the same time, also until 2030, the demand for people with medium and low levels of qualification will register a sharp decrease, by more than 400,000 people, according to INCSMPS. In order to remain competitive in the labor market, they should re-specialize, either at work or through vocational retraining courses, to acquire new skills adapted to current market requirements, such as digitalization and automation skills, sustainability, or human resource management.

According to World Bank data, in Romania, only 1% of the population aged between 25 and 64 participates in professional training courses, compared to the European average of 9.1%. On the other side, only 21% of Romanian companies invest in training employees in skills adapted to the demand of the labor market.

Beyond skills, the aging population adds increased pressure on the labor market. The average age of the resident population in Romania increased from 40.8 to 42.3 years between 2012 and 2022. The trend will force many people over 65 to continue working.

At the same time, the number of young people active in the labor market, aged between 20 and 34, could decrease by 3.5% in 2035 compared to the level of 2020, according to CEDEFOP.

Another major challenge for the labor market in Romania is the phenomenon of migration. The ratio between the number of Romanian emigrants and the number of foreign immigrants who settled in Romania is 6 to 1, according to the World Organization for Migration.

Romania has been importing more and more workforce in recent years, especially from Asia. In the year 2023, almost 30,000 people from Asia were working in Bucharest and Ilfov county, most of them from Turkey, Nepal, Sri Lanka, China, India, or Bangladesh.