Labour market integration

A new law in Moldova projects more employment and better life opportunities

On August 9th, 2018 the Government of Moldova introduced a new Employment Promotion Law. With a very low labour force participation rate (slightly above 40 percent in 2017), Moldova is faltering far behind its peers in the region. The law aims at more employment opportunities and better life prospects for many Moldovans, both women and men. The ILO has provided technical guidance and played a facilitating role in the process leading up to the adoption of the new law.

News | 22 August 2018

 ©Jaap Ariens/AFP

The new Employment Promotion Law is expected to provide concrete responses to a labour market in disarray.  Political and economic changes, as well as a long-lasting transition to a market economy have had a strongly negative impact on the Moldovan labour market.

The main problems are low employment opportunities, difficult school-to-work transition, high inactivity because of discouragement, and a large outflow due to labour migration. Many years of productive life have been lost across all demographic groups. Every third young person is neither in employment, nor in education or training (NEET). Women are overrepresented among youth NEET. Some adult workers have been confined to long-term unemployment and sinuous transitions across industries. Underdeveloped lifelong learning culture, unadjusted skills and capabilities with ageing lead to unescapable hurdles for many of them.  One third of the active age population chooses migration to escape low-wage employment, informality, working poverty and precarious work.  
 
For dynamic labour markets and better livelihoods, both legal and practical responses are essential. This understanding led Moldova to a new National Employment Strategy in 2017, and, just very recently, a new Employment Promotion Law. The employment policy-making process brought together all actors concerned, including various ministries, under the leadership of the Ministry of Health, Labour and Social Protection, and the country’s Central Bank. The ILO has provided technical guidance and played a facilitating role, in particular to ensure that social dialogue among Workers’ and Employers’ organizations and the Government takes place throughout the process.

The new Employment Promotion Law aims at making the labour market more effective and inclusive. It benefits jobseekers, the unemployed, and employers alike. The bill promotes Active Labour Market Policies (ALMPs) which are proven to help averting lay-offs, increase employability through training, create job opportunities via wage subsidies and stimulate start-ups. Special target groups mentioned in the law include unskilled youth, women above 50, people with disabilities and the Roma minority. The law also defines passive interventions to support income and help people cope with the loss of salaries and prevent poverty. This will ensure Moldova meets the promise made to the 2030 Agenda for Sustainable Development “leaving no one behind”. The law urges rapid modernization of the Public Employment Service, which is expected to play a crucial role in rolling-out many of the planned initiatives, monitor and evaluate the impact of ALMPs for greater efficiency and impact. 

To walk the talk and keep stronger connection between the employment policies and the national budget, the Moldovan Government has earmarked MDLei 100 Mio (Euro 5 Mio) for 2019. This amount, three times larger than the 2018 allocation, is going to support the labour market integration of roughly 10.000 Moldovans, i.e. 25% of registered unemployed.