Labor supply and demand. How does our country compare to other countries in the European Union?

Romania is among the EU member states with one of the lowest rates of job vacancies in industry, construction, and services, at only 0.8% of total jobs, while the European Union average is 2.9%. The job vacancy rate reflects the percentage of unfilled positions out of the total number of jobs in a country or sector of activity.

Alongside Romania (0.8%), countries in Eastern and Southern Europe such as Poland (0.9%), Bulgaria (0.8), Slovakia (1.1%), Greece (1.6%), Spain (0.9), and Portugal (1.4%) are also on the map of low job vacancy distribution, according to Eurostat statistics from 2023. At the opposite end of the spectrum, a high rate of job vacancies is recorded in Western countries with strong economies, such as Austria (4.7%), Belgium (4.6%), the Netherlands (4.5%), and Germany (4.1%).

Let's briefly look at the significance of a low job vacancy rate and how this indicator relates to other economic factors, such as the unemployment rate.

On the one hand, a low rate of job vacancies in a given year indicates tensions and bottlenecks in the supply of jobs available on the labor market. For example, when demand for jobs exceeds supply, this imbalance can affect wages in certain areas of activity where many unemployed and other people who are not officially registered are looking for work.

On the other hand, the comparative differences between the low rate of job vacancies in Romania and the relatively high unemployment rate reflect mismatches between the skills required by employers and the skills of job seekers. In Romania, the unemployment rate is 5.6%, which is in line with the EU average. In terms of unemployment, our country ranks alongside Western European countries such as Belgium (5.5%), Luxembourg (5.2%), Denmark (5.1%), but also countries in Southern and Eastern Europe, such as Slovakia (5.8%), Cyprus (5.8%), Croatia (6.1%), and Estonia (6.4%). The figures also show that among countries with very high unemployment rates (double that of Romania) are those with the lowest number of job vacancies, such as Spain, with an unemployment rate of 12.2%, Greece (11.1%), Italy (7.7%) and France (7.3%). By comparison, a situation similar to that in Romania can be found in Slovakia, Croatia, Estonia, but also in Luxembourg and Ireland.

After the unemployment rate and the job vacancy situation began to return to normal following the difficult years of the COVID-19 pandemic, when many people were looking for work due to government restrictions, the current analysis of labor supply and demand shows a reorganization of available jobs.

In line with European policies on the digital transformation of employment and labor market flexibility, Romania's trend towards a low vacancy rate must be analysed in line with the need for autonomy and mobility of people who perform gig work through digital work platforms, or people with intermittent contracts and freelancing activities.

Last but not least, high economic migration from Romania plays a fundamental role in signaling a relatively low capacity of the labor market to absorb new employees in industry, services, and construction, compared to Western countries such as Austria, Belgium, the Netherlands, and Germany, which have very high rates of available jobs.

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Data processing and text design: Delia Bădoi

Infographic: Pascalone Media SRL