Publication: Markets and People: Romania Country Economic Memorandum
Loading...
Files in English
5,036 downloads
Date
2020-01-30
ISSN
Published
2020-01-30
Author(s)
Editor(s)
Abstract
Romania’s income per capita has increased from 26 percent of the EU-28 average in 2000 to 63 percent in 2017, but this economic success rests on the wobbly foundations of unfavorable demographics, weak human capital, and ineffective institutions. Going forward, stronger competition and better human capital are critical to increasing the economy’s growth potential. Romanian manufacturing firms are exposed to domestic and international competition, ensuring the flow of resources and market shares to more efficient players. This has not been the case for services, where anticompetitive regulations and direct state control often limit efficiency gains. Romanian state-owned enterprises do not compete on an equal footing with private sector firms, distorting market outcomes and hampering the efficient allocation of resources. Removal of these restrictions would have a significant positive impact on GDP growth. Competitively neutral policies are needed to ensure that all enterprises, public or private, domestic or foreign, face the same set of rules. Romania’s human capital accumulation--proxied by the World Bank’s Human Capital Index (HCI)--is the lowest in the European Union and varies widely across counties. Disparities in education outcomes remain relevant across and within regions of Romania. Learning gaps in primary and secondary education persist. These can be seen clearly between urban and rural areas, across regions, and across social groups, requiring changes both at the systems level and at the learning-center level. In the labor market, the automation of production processes has started driving demand for higher levels of cognitive skills, while jobs involving the routine application of procedural knowledge are shrinking in number. A paradigm shift would require reforms in primary and secondary schooling, in addition to more targeted actions, to establish an effective skills development system to bolster human capital.
Link to Data Set
Citation
“World Bank. 2020. Markets and People: Romania Country Economic Memorandum. International Development in Focus;. © World Bank. http://hdl.handle.net/10986/33236 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Skills Road : Skills for Employability in the Kyrgyz Republic(World Bank, Washington, DC, 2014-09)This report is about education, skills, and labor market outcomes in the Kyrgyz Republic. The report shows that skills are valued in the Kyrgyz Republic labor market, yet skills gaps persist. Three findings are particularly noteworthy. First, higher skilled youth have better employment outcomes, meaning that youth with more cognitive and non-cognitive skills are more likely to be employed than inactive or discouraged youth. Second, workers with higher cognitive and non-cognitive skills are more likely to use those skills in their daily work. Third, workers with higher skills—cognitive skills especially—tend to have higher quality (formal sector, less repetitive tasks, less physical work) jobs. However, large variations in observed skills among those with the same level of educational attainment indicate that formal education is failing too many people, even though skill development occurs at different stages in the life cycle and a host of actors are involved—families, for example, play a central role. The report argues that the government could shift some of its focus from providing access to educational institutions and instead focus on providing the skills (cognitive, non-cognitive, and technical) students need to succeed as adults. The government can also do more to get children off to the right start by investing in early childhood development programs, where rates of return to investment are generally very high and important soft skills are learned. Finally, more can be done to match the supply of skills with employer demand by improving the use of information in matching skills to jobs in the labor market.Publication Transitioning to Better Jobs in the Kyrgyz Republic(Washington, DC, 2015-09-18)This report takes an in-depth look at the development of jobs in the Kyrgyz Republic over the past decade to understand why the country has not realized better job outcomes. Drawing on evidence at the macro, household, and firm level, it examines key shortcomings in the current migration-led, remittance-driven development model that have weakened the country’s ability to create sufficient and high-quality employment opportunities and are likely to result in deteriorating job outcomes in the future. The report argues that several broad transformations will be needed to develop engines of growth in the Kyrgyz Republic outside remittances and shift to a better jobs path. The distortions and obstacles that currently prevent the expansion of private sector employment need to be unraveled; macroeconomic, regulatory, and logistical impediments to greater, more diversified export orientation need to be strategically addressed; the compensation of public employees must be reformed to reduce the level of corruption that discourages business growth; and the migration phenomenon, which will be a part of the employment mosaic for at least another decade, must be made to contribute to domestic employment creation and the country’s development.Publication Educational Upgrading and Returns to Skills in Latin America : Evidence from a Supply-Demand Framework, 1990–2010(2011-12-01)It has been argued that a factor behind the decline in income inequality in Latin America in the 2000s was the educational upgrading of its labor force. Between 1990 and 2010, the proportion of the labor force in the region with at least secondary education increased from 40 to 60 percent. Concurrently, returns to secondary education completion fell throughout the past two decades, while the 2000s saw a reversal in the increase in the returns to tertiary education experienced in the 1990s. This paper studies the evolution of wage differentials and the trends in the supply of workers by educational level for 16 Latin American countries between 1990 and 2000. The analysis estimates the relative contribution of supply and demand factors behind recent trends in skill premia for tertiary and secondary educated workers. Supply-side factors seem to have limited explanatory power relative to demand-side factors, and are only relevant to explain part of the fall in wage premia for high-school graduates. Although there is significant heterogeneity in individual country experiences, on average the trend reversal in labor demand in the 2000s can be partially attributed to the recent boom in commodity prices that could favor the unskilled (non-tertiary educated) workforce, although employment patterns by sector suggest that other within-sector forces are also at play, such as technological diffusion or skill mismatches that may reduce the labor productivity of highly-educated workers.Publication Turkey - Education Sector Study : Sustainable Pathways to an Effective, Equitable and Efficient Education System for Preschool through Secondary School Education, Executive Summary(Washington, DC, 2007-12)This Education Sector Study (ESS) is the World Bank's response to the need for a comprehensive study of Turkey's education system, in light of the dramatic changes that are sure to alter the country's social and economic landscape over the next decade. The study was prepared in association with the Education Reform Initiative of the Istanbul Policy Center on the basis of research and dialogue with a wide array of education stakeholders and actors. The overall objective of the ESS is to provide an assessment of current challenges to the education system in Turkey and identify policy options that can complement the country's existing pre-tertiary education strategy. Volume one provides a complete description of challenges, conclusions, and policy options for the reform of pre-school, primary, and secondary education. It includes an Annex that summarizes the research studies and policy notes commissioned to inform the report. Volume II is a collection of the complete research studies and policy notes commissioned for the ESS report.Publication Education in Sub-Saharan Africa : A Comparative Analysis(Washington, DC: World Bank, 2012-06-26)As in most countries worldwide, Sub-Saharan African countries are striving to build their human capital so they can compete for jobs and investments in an increasingly globalized world. In this region, which includes the largest number of countries that have not yet attained universal primary schooling, the ambitions and aspirations of Sub-Saharan African countries and their youth far exceed this basic goal. Over the past 20 years, educational levels have risen sharply across Sub-Saharan Africa. Already hard at work to provide places in primary schools for all children, most countries of the region are also rapidly expanding access to secondary and tertiary levels of education. Alongside this quantitative push is a growing awareness of the need to make sure that students are learning and acquiring the skills needed for life and work. Achieving education of acceptable quality is perhaps an even greater challenge than providing enough school places for all. Thus, Sub-Saharan African countries are simultaneously confronting many difficult challenges in the education sector, and much is at stake. This book gives those concerned with education in Sub-Saharan Africa an analysis of the sector from a cross-country perspective, aimed at drawing lessons that individual country studies alone cannot provide. A comparative perspective is useful not only to show the range of possibilities in key education policy variables but also to learn from the best performers in the region. (Although the report covers 47 Sub- Saharan African countries whenever possible, some parts of the analysis center on the region's low-income countries, in particular, a sample of 33 low-income countries). Although countries ultimately must make their own policy choices and decide what works best in their particular circumstances, Sub-Saharan African countries can benefit from learning about the experiences of other countries that are faced with, or have gone through, similar development paths. Given the large number of countries included in the analysis, the book finds that Sub-Saharan African countries have more choices and more room for maneuver than will appear if attention were focused on only one or a few country experiences. Countries can make better choices when understanding the breadth of policy choices available to them. They are well advised, however, to evaluate the applicability of policy options to their contexts and to pilot and evaluate the results for performance and subsequent improvement.
Users also downloaded
Showing related downloaded files
Publication Empowerment in Practice : From Analysis to Implementation(Washington, DC: World Bank, 2006)This book represents an effort to present an easily accessible framework to readers, especially those for whom empowerment remains a puzzling development concern, conceptually and in application. The book is divided into two parts. Part 1 explains how the empowerment framework can be used for understanding, measuring, monitoring, and operationalizing empowerment policy and practice. Part 2 presents summaries of each of the five country studies, using them to discuss how the empowerment framework can be applied in very different country and sector contexts and what lessons can be learned from these test cases. While this book can offer only a limited empirical basis for the positive association between empowerment and development outcomes, it does add to the body of work supporting the existence of such a relationship. Perhaps more importantly, it also provides a framework for future research to test the association and to prioritize practical interventions seeking to empower individuals and groups.Publication Digital Progress and Trends Report 2023(Washington, DC: World Bank, 2024-03-05)Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.Publication Corporate Governance of State-Owned Enterprises : A Toolkit(Washington, DC, 2014-10-04)This Toolkit provides an overall framework with practical tools and information to help policymakers design and implement corporate governance reforms for state-owned enterprises. It covers the key elements of corporate governance, including legal and regulatory framework, state ownership arrangements, performance management systems, financial and fiscal discipline, boards of directors, transparency and disclosure, and protection of shareholders in mixed ownership companies. Experience shows that no one approach is universally applicable and the choice of measures depends on country and enterprise circumstances. The Toolkit thus provides a range of frameworks, concepts, case examples, checklists, and model documents that together aim to help government officials make the appropriate choices for their circumstances. The Toolkit concludes with guidance on managing the reform process, in particular how to prioritize and sequence reforms, build capacity, and engage with stakeholders.Publication World Development Report 2004(World Bank, 2003)Too often, services fail poor people in access, in quality, and in affordability. But the fact that there are striking examples where basic services such as water, sanitation, health, education, and electricity do work for poor people means that governments and citizens can do a better job of providing them. Learning from success and understanding the sources of failure, this year’s World Development Report, argues that services can be improved by putting poor people at the center of service provision. How? By enabling the poor to monitor and discipline service providers, by amplifying their voice in policymaking, and by strengthening the incentives for providers to serve the poor. Freedom from illness and freedom from illiteracy are two of the most important ways poor people can escape from poverty. To achieve these goals, economic growth and financial resources are of course necessary, but they are not enough. The World Development Report provides a practical framework for making the services that contribute to human development work for poor people. With this framework, citizens, governments, and donors can take action and accelerate progress toward the common objective of poverty reduction, as specified in the Millennium Development Goals.Publication Impact Evaluation in Practice, Second Edition(Washington, DC: Inter-American Development Bank and World Bank, 2016-09-13)The second edition of the Impact Evaluation in Practice handbook is a comprehensive and accessible introduction to impact evaluation for policy makers and development practitioners. First published in 2011, it has been used widely across the development and academic communities. The book incorporates real-world examples to present practical guidelines for designing and implementing impact evaluations. Readers will gain an understanding of impact evaluations and the best ways to use them to design evidence-based policies and programs. The updated version covers the newest techniques for evaluating programs and includes state-of-the-art implementation advice, as well as an expanded set of examples and case studies that draw on recent development challenges. It also includes new material on research ethics and partnerships to conduct impact evaluation. The handbook is divided into four sections: Part One discusses what to evaluate and why; Part Two presents the main impact evaluation methods; Part Three addresses how to manage impact evaluations; Part Four reviews impact evaluation sampling and data collection. Case studies illustrate different applications of impact evaluations. The book links to complementary instructional material available online, including an applied case as well as questions and answers. The updated second edition will be a valuable resource for the international development community, universities, and policy makers looking to build better evidence around what works in development.