Human Capital and Labour Force Participation in Romania – a case study on Romanian Roma

1. Human Capital and Labour Force Participation in Romania–a case study on Romanian Roma Author: *Ana-Maria Zamfir PhD. Candidate, researcher, Research Institute for Labour and Social Protection *Cristina Mocanu, PhD. Candidate, researcher, Research Institute for Labour and Social Protection

2. Structure of the presentation • Introduction • Objective of the case study. Data and limits • Romania at the moment of its EU Accession – evolutions of the Human Development Index • Disparities in human development – gaps of human development between Romanians and Roma population • Disparities in labour force participation – differences in participation to the economic activity between Romanians and Roma population • Concluding remarks

3. Introduction • Human development paradigm looks at the wellbeing of the individuals and on their capacity to promote development • Human capital – essential resource for a sustainable development process • Such a process can be hindered by disparities • Fighting against disparities is important in order to strengthen social inclusion and support social development • Employment is one of the most important paths to prevent marginalization and social exclusion • Investigatinghuman capitalas major determinant of employability is important for: • A better knowledge of causes and forms of marginalization • A better focus of the actions and policies for fighting against exclusion • For several years, Romania has embraced the European goals and developed its institutions and legal framework in order to increase social inclusion for all citizens and fight against discrimination

4. Objective of the case study • Roma population is one of the most disadvantaged and discriminated groups of Romania and European Union, being associated with high risk of poverty and social exclusion • Roma population is characterized by low participation with respect to most of the social structures/mechanisms - marginalization • Lots of studies have underlined the existence of an “exclusion trap” or a “vicious circle” generated by poverty, lack of identity papers, low education/qualification, poor health, low access to public services and dwellings, attitudes and acts of discrimination and ethnic segregation • Insufficient capacity of the governments to address Roma issues in an efficient manner - for increasing their participation and wellbeing Objective: to analyze Romanian Roma’s participation to the labour market and its determinants • The background idea: belonging to Roma group affects human capital development which determine low employability. • Poor human and social capital embed all the elements that inter-correlate and define Roma’s “dependency trap”

5. Data and limits Sources of data: • Romanian National Institute of Statistics - Census of Population and Dwellings, 2002 – only official source of data which includes ethnic breakdowns • Soros Foundation Romania – Roma Inclusion Barometer, 2006 • Data base of the national survey on Roma population carried out for the Regional Report “Roma in Central and Eastern Europe”, UNDP, 2001 • National Human Development Report – Romania, 2007, UNDP • Multiple Discrimination in Romania, 2007, National Research Institute for Labour and Social Protection Limits of the study • Unfortunately, reliable data on Roma are rather old, except for the ones coming from the “Roma Inclusion Barometer” which don’t include employment data; • Low rate of Roma declaring their ethnic identity

6. Romania at the moment of its EU Accession (1) • Global Human Development Report, 2006: Romania has finally joined the group of countries with high HDI (2005 – 0.808 index points) • Unfortunately, Romania still holds the last position among the EU countries • However, HDI registers an upward trend as it rose since 1995 continuously, with a more accelerated pace since 2000 - 1990-1995: Romania alongside with Bulgaria experienced a decline in HDI, while all European countries gained human capital - 1995-2000: EU10 registered a significant increase of HDI, higher than EU15; Romania joined the positive trend - After 2000: the trend flattened for EU15 and EU10, while Romania displays a solid increase of its HDI Source: Human Development Report, 2006

7. Romania at the moment of its EU Accession (2) • Analyzing HDI by components, we discover that Romania is not very far to EU25 average with respect to Education Index • Romania registers significant deficits in life expectancy and GDP index • Life expectancy index for Romania measures 0.1 points lower than EU25 average which means that Romanians live, in average, with six years less • Still, Romania registers its most important gap in the case of GDP index Source: Human Development Report, 2006

8. Romania at the moment of its EU Accession (3) • The most important determinant of the HDI increase lies in the GDP Index growth due to the economic development of the country (in 2007, Romania achieved eight consecutive years of economic growth) • except for 2003, the life expectancy index also presents an upward trend • The Education Index contributes to the HDI increase in the smallest extend. Its increase is determined by the improved participation to tertiary education. The adult literacy rate registered a slow increase Source: Human Development Report, 2006

9. Disparities in human development (1) • Regional Report “Roma in Central and Eastern Europe” (UNDP, 2001) offers an estimation of HDI and its components for Romanian Roma (2000) - Roma reached a value of 0.57 in 2000 • Roma population registers a significant deficit of human development • It proves that Roma represents one of the most vulnerable groups from Romania and Europe as they have low capacity to access opportunities and generate development Source: National Human Development Report 2007 and Regional Report “Roma in Central and Eastern Europe”, UNDP, 2001

10. Disparities in human development (2) • For all the components of HDI, Roma population registers significant gaps as against the values of Romania • Estimations indicate a GDP per capita for Roma of around 1/3 of the national average • Low level of the Life Expectancy Index for Roma highlights poor health of Roma: - Life expectancy at birth for Roma is estimated on the ground of their juvenile mortality rate which is three times higher than the national average • Roma life expectancy reaches 63-64 years as against the national average of 70.5 years (2000) • The highest deficit appears in relation with the Education Index: - Romania registers an adult literacy rate of 97%, while Roma has no more than 72% - Gross enrollment ratio for Romania measures 66.5% in comparison with just 35% for Roma Source: National Human Development Report 2007 and Regional Report “Roma in Central and Eastern Europe”, UNDP, 2001

11. Disparities in human development (3) • Most of them (34%) have no school, while 30% graduated just primary education • Therefore, more than 60% of Roma doesn’t graduate compulsory education • Equal shares of Romanians and Roma graduated secondary education • Roma are underrepresented within higher education categories - Roma have low education level which reduces significant their employability as they have no or low qualification Source: Romanian National Institute for Statistics, Census of Population and Dwellings, 2002

12. Disparities in human development (4) • Data broken down by sex indicate that Roma women have lower levels of education • They exceed with more than 10% the share of Roma men with no school • Also, they are underrepresented within all the other categories of education • It proves that their access to education is even more reduced • Therefore, Roma and especially Roma women have access to employment requesting low qualification level which is often associated with poor payment and working conditions Source: Romanian National Institute for Statistics, Census of Population and Dwellings, 2002

13. Disparities in labour force participation (1) • Roma are overrepresented within unemployed and economically inactive population and underrepresented with respect to employed population • Just a quarter of Roma aged 15 and over are employed • Data broken down by sex show that just 16% of Roma women are employed and 5% are unemployed • Therefore, 80% of them are economically inactive population which means a low level of social security • Roma men are characterized by a higher share of employed (36%) which is still low as against the share of employed Romanian men (52%) Source: Romanian National Institute for Statistics, Census of Population and Dwellings, 2002

14. Disparities in labour force participation (2) • most of Roma unemployed have never worked as they are looking for their first job • In fact, 64% of them have no working experience as against 37% of Romanians • Romanian men and women display similar shares of unemployed looking for their first job, while Roma women are characterised by lack of working experience in a higher share in comparison with Roma men • These figures prove that Roma women’ participation on the labour market is rather marginal Source: Romanian National Institute for Statistics, Census of Population and Dwellings, 2002

15. Disparities in labour force participation (3) • the share of Roma pensioners is three times lower than the one of Romanians as they have poor working experience and a lower life expectancy at birth • Due to employment differences between Roma men and women, the share of Roma women pensioners is lower than the one of men’s - thus, only 12% of economically inactive Roma women are pensioners • the share of Roma house wives is two times higher than the one of Romanian women • 15% of them are dependent by others or by state as against just 4% of Romanians • almost half of the Roma economically inactive men find themselves within the “other” category which signifies no income or undeclared work • low share of Roma students which is five times lower than the one of Romanians Source: Romanian National Institute for Statistics, Census of Population and Dwellings, 2002

16. Disparities in labour force participation (4) • poor presence of Roma within first five groups of occupations which are associated with higher level of education and qualification • Also, Roma are overrepresented within groups of farmers and skilled workers in agriculture, as well as unskilled workers due to their low education level and large share of Roma with no school • Roma work mainly in agriculture and construction in low skilled and unskilled positions • Roma women are employed in agriculture in high shares, while men display a larger share of handicraftsmen and artisans due to their higher level of education and “traditional” Roma occupations Source: Romanian National Institute for Statistics, Census of Population and Dwellings, 2002

17. Disparities in labour force participation (5) • 30% of Roma declare that occasional undeclared work represents their main source of income • Moreover, 2.5% carries out regular undeclared work for living • These figures show how marginal and poor the Roma participation to the labour market is • For 13% of Roma, child support money represents the main income of the household • Therefore, only 12% of Roma earn their living mainly through regular declared work. Source: representative survey on Roma, UNDP, 2001

18. Disparities in labour force participation (6) • 80% of Roma declare that they had difficulties in finding a job - it proves their low employability, as well as existence of discrimination on labour market • In fact, more than half of Roma considers that their ethnic identity represents an obstacle for them in finding a job • poor human capital increases the risk of discrimination and Roma are one of the most disadvantaged and discriminated groups in Romania • Recent data indicate that 77% of population perceive that Roma are discriminated in accessing a job, while 70% think that Roma are discriminated at their work place - with respect to advancement in career, access to vocational training (Source: Romanian National Research Institute for Labour and Social Protection, 2007)

19. Concluding remarks • Romanian Roma are characterized by poor human development and social participation which means low access to education, employment and social security systems • In fact, Roma participation on the labour market is rather marginal as they display low employment rate, high rate of undeclared work, high share of employed population working in unskilled or low skilled occupations, as well as increasing flows of irregular migration for employment abroad • Also, Roma are characterized by passivity and lack of confidence in the public institutions. Till now, most efficient actions of the authorities have been the ones connecting social benefits with important elements of social participation such as participation to education (for children) and to employment active programmes (for adults) • Therefore, social policies need to be coupled with active measures and with positive actions (discrimination) designed to increase Roma capabilities in order to promote sustainable human development. • First of all, actions need to be targeted on the improvement of access to education. It will improve Roma’s access to employment and other social opportunities. • Also, awareness raising campaigns for the public services personnel, social partners, mass media and entire population have to be developed