Romania: Selected Issues

International Monetary Fund

No 2023/396, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper analyzes the reasons for Romania’s low labor force participation (LFP), and outlines policy options to raise it. It provides an overview over Romania’s demographic challenges, analyzes LFP across demographic groups, and identifies possible causes. The paper also outlines policy options that could help raise LFP of specific population groups and presents simple simulations of the impact on overall LFP and potential gross domestic product if LFP of particular groups were to increase. Boosting Romania’s low LFP opens opportunities to mitigate the impact of an ageing society and to support Romania’s convergence to Western European peers. Higher LFP could also help mitigate the fiscal impact of an ageing society. The reasons for the Romania’s underperformance in education are difficult to pinpoint, but public education expenditure is by far the lowest in the EU. Moreover, raising education spending would constitute a significant investment and would need to be coupled with targeted reforms in the education system.

Keywords: IMF staff calculation; energy mix; C. climate policy; policy pathway; EU LFP level; Romania team; Greenhouse gas emissions; Renewable energy; Women; Global; Western Europe (search for similar items in EconPapers)
Pages: 32
Date: 2023-12-08
New Economics Papers: this item is included in nep-eur
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