Unemployment and Labor in the Republic of Moldova Essay

Custom Student Mr. Teacher ENG 1001-04 2 January 2017

Unemployment and Labor in the Republic of Moldova

There are a lot of problems created by the unemployment as poverty, migration, human traffic, and crime and shadow economy. Of course, unemployment is a permanent phenomenon in any economy, because frictional and structural unemployment exists every time and doesn’t make unemployment rate to be equal to zero, and in this essay I’d like to offer the analysis of the specific of unemployment and labour forces in Republic of Moldova. Firstly, I propose to analyze the unemployment rate, activity rate and employment rate. Secondly, to describe any characteristics of labour forces in my country. And after that to analyze data about the migrant workers, who work or looking for a job abroad.

In general my goal is to demonstrate the evolution of unemployment and labor and to determine any problems, which the national economy met during the years after the Soviet Union. First of all I want to note that the definition of unemployment according to International Labor Organization (ILO) has been used in Republic of Moldova only from 1998, before that year the unemployment was equal to the number of official registries unemployed population. It makes impossible to compare the unemployment before 1998 and unemployment after this year. Table 1: Unemployment rate, Activity rate and Employment rate

Source: National Bureau of Statistics of the Republic of Moldova

Trend line on the Graph 1 shows us that in general unemployment rate decreases, but at the same time activity rate (Graph 2) and employment rate (Graph 3) decreases too. It means that number of population, who are working in the national economy, was decreasing during the period from 1998 to 2010 years. Also it’s important to note that the number of economically active people has reduced from 1809 thousand people to 1235 thousand people and it’s 547 thousand people, it equal to 16% of average total population in that period of time and the number of people employed in the economy reduced from 1642 thousand people in 1998 to 1143 thousand people in 2010 and it’s 499 thousand people, but the total population has reduced on 89 thousand people.

It means that the weight of economically active and employed population in the national economy in total population reduced. I think that the solution of that problem is an attraction of international investments or entering in the market of international companies which are able to organize modern management and improve the competitiveness of national goods and services. The RM has the positive experience of this kind of collaboration. For example „Draexlmaier Automotive” created 3000 of the new jobs in one of the free economic zones.

Graph 1: Unemployment rate

Source: National Bureau of Statistics of the Republic of Moldova Graph 2: Activity rate

Source: National Bureau of Statistics of the Republic of Moldova

Graph 3: Employment rate
Source: National Bureau of Statistics of the Republic of Moldova Graph 4: Employment population by occupations

Source: National Bureau of Statistics of the Republic of Moldova Graph 5: Employment population by areas of the economy

Source: National Bureau of Statistics of the Republic of Moldova

The Graph 4 shows us that the weight of skilled agricultural and fishery workers reduced. Analyzing the Graph 5 it is possible to make a conclusion that the weight of people who work in agriculture area was reducing too in the last 13 years. Also it’s important to note that the weight of the people who work in Industry and Construction areas is not high, but the weight of people who work in Services area was increasing during last years. In my opinion this trend means that Moldavian commodities are not competitive. Another argument of this statement is that the weight of services in structure of GDP was increasing during last years as it is shown in Graph 6.

Graph 6: Structure of GDP

Source: National Bureau of Statistics of the Republic of Moldova

Another important characteristic of labor is the level of education. As it is possible to see in Graph 7 the weight of workers who has higher education was increasing from 11.9% to 23% or from 181 thousand people to 263 thousand people. I think it is positive trend, which shows the development of labor during last years. Graph 7: Employed population by the level of education

Source: National Bureau of Statistics of the Republic of Moldova

In the end I’d like to demonstrate data about the migrant’s workers, economically active people who leave their own families in Moldova and go for looking for a job abroad. According to official data there are more than 300 thousand people from the RM, but according to another data there are one million of Moldavians workers in foreign countries. The main part of migrant workers from the RM prefers to work in the Russian Federation and Italy as it shown in the Table 2. Table 2: Population aged 15 years and over, working or looking for work abroad

Source: National Bureau of Statistics of the Republic of Moldova Table 3: Cash transfers from migrant workers

According to the balance of payments cash transfers from the migrant workers were more than $ 1 billion in 2008. Other data are shown in the Table 3. This money flow is the valuable injection in the national economy.

One of the biggest problems is the reducing of the employed population on approximately one half of a million of people, just those who has found a job in the national economy in general works in services area, because Moldavian commodities aren’t competitive on foreign and sometimes domestic markets. Lots of people, who haven’t found a job which could satisfy their needs and wants, travel in foreign countries looking for a job, after that they make cash transfers which are very important injection in the national economy. In my opinion labor in the Republic of Moldova is developing, about it says that the weight of employed population who has higher education was increased, at the same time the fact that activity rate and employment rate were falling during last years and it may create dangerous effects on economy as a whole. The solution of this problem is to put efforts to attract foreign investments.

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