Can Romania’s Labour Market thrive in the Age of Population Ageing? A Bayesian VAR Approach
Can Romania’s Labour Market thrive in the Age of Population Ageing? A Bayesian VAR Approach

Summary/Abstract: After the fall of communism and the transition to a democratic and open society, Romania has been making significant progress adapting its economy to rising demands from internal and external forces with the goal of becoming an integral part of a much larger system of trade and commerce within the European Union. As many Member States, Romania is undergoing a severe demographic transformation, defined by decreasing birth rates, a higher life expectancy known as population ageing. Similarly, due to harsh economic conditions and social factors, a large number of capable young adults have migrated to other Member States in search of higher wages and better conditions resulting in challenges for labour market efficiency. Romania's current labour market requirements for employees are covered by a slowly shrinking group of adults, leading to shortages of labour resources, with significant consequences for economic growth. This paper aims to evaluate future employment trends under current economic and demographic conditions. To these ends, a VAR model will be employed to assess the effects that economic and demographic factors have on the employment rate. The expected results are of a slowing down of economic growth due to the expected decline in labour resources.

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