Source: NBS
Three sub-sectors can be identified in the public sector:
public administration, which currently accounts for around 17.0% of employment in the public sector and 4.6% of total employment in Moldova;
public services (education, health protection and others), which represents 60.3% of employment in the public sector and 15.9% of total employment in Moldova;
public enterprises, which has a 22.5% share of employment in the public sector and a 6.0% share of total employment in Moldova.
These sub-sectors have developed quite differently. The number of employees in public administration has practically doubled, from 30,800 in 1996 to 57,600 in 2007. To some extent this change can be explained by the fact that as a young nation that has been in existence only since 1991, Moldova has had to put in place many public institutions that did not exist before its independence. However, the current position of the government is that the public administration sector is over-sized and should be restructured in order to increase efficiency, reduce the number of employees and increase wages.
This ongoing reform has not yet produced results. Because of low wages and out-dated HR policies, young professionals do not remain for long in public administration. They usually prefer to accumulate some expertise and then start looking for jobs in the private sector, or very often in one of the various programmes and projects implemented in Moldova with the support of foreign donors. While the expertise gained in the public sector may not be of practical use in the private sector, employers are still looking for people with work experience, in most cases as testimony of the fact that the employee can be trusted.
In the case of public services, from 1995 to 1999 there was an abrupt reduction of almost 20% in employment in education and health protection. That particular period was associated with the closure of many educational establishments and a structural reform in the health system. In the 2000s the number of employees in education has remained roughly unchanged, while in the health system there was a moderately declining trend until 2004. From a longer-term perspective the outflow of
professionals from the public services can be clearly seen. In 2007 the outflow from the public
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education sector was 15% of the total number of employees in 1997, while the outflow from the public health sector was 32%.
In contrast to the two other sub-sectors, the public enterprise sector has seen a great reduction in the number of jobs. There are no detailed data available for periods before 1999. However, even after 1999 the changes have been significant. In the period 1999–2007 the reduction of jobs in the public enterprise sector (24%) was much greater than in the private sector (10%). This was not simply a result of the structural reforms in the Moldovan economy associated with economic and social transition (large-scale privatisation, public enterprise restructuring). Many people also left the sector because of low wages and poor working conditions. So-called ‘technical unemployment’ is not as serious a problem in public enterprises as it was in the mid 1990s. According to NBS estimates, in the entire Moldovan economy in 2007 there were around 380,000 employed people who worked less than 40 hours per week, including 6.4% for the reason of technical unemployment. While no statistical data are available regarding the distribution of technical unemployment across types of ownership of enterprises, it is assumed that most would be in public enterprises and in private agricultural entities.
2 Human capital, employment and economic transition
2.1 Investment in human capital
2.1.1 Organisation of the education system in Moldova
During the Soviet period the education system was fully controlled by the state. Education was free at every level, with mandatory enrolment in primary and lower secondary education and limits set by the state for post-secondary and tertiary education in line with state needs. Vocational education had an important role and VET schools were attached to enterprises under the Soviet system.
The new economic realities of the transition period led to important changes in the education system, which were introduced in 1995 by the new Law on Education26. Primary education (four years) and lower secondary education (five years) remain mandatory and continue to be provided by the state.
The state also guarantees secondary professional education for graduates of lower secondary education under 16 years of age who do not continue their studies in upper secondary general schools. Upper secondary general education (two to three years) is free of charge. Although no limits are set for the number of students enrolled in general upper secondary schools, enrolment is
competitive in order to ensure that students can be taught curricular subjects in an efficient way.
The government has been unable to continue providing free education at other levels above general secondary education. Thus, for vocational secondary education, post-secondary non-tertiary
education and higher education, enrolment is competitive, with the possibility of state-funded or fee-based enrolment (see Annex 3, Structure of the education system in Moldova). The Law on Education stipulates that public authorities should approve state needs for specialists, according to which the educational institutions are financed. Before 2006 limits were only set for state-funded enrolment, but because of the mismatch between labour supply and labour demand created in the transition period, the state intervened by also setting limits for fee-based enrolment, with effect from 2006.
Vocational secondary education (polyvalent schools and schools of trade) provide training to
graduates of lower secondary or general upper secondary schools in a large range of qualifications in one trade or several related trades. Post-secondary non-tertiary education is an intermediate
institution between vocational schools and universities that can be an autonomous institution, part of a university or affiliated to a university. Before 2006, when Moldova adhered to the Bologna process, higher education in the country lasted between four and six years. Post-graduate studies are
organised in many forms, including doctoral, post-doctoral, residency and secondary clinical studies.
2.1.2 Coverage of education
The gross enrolment rates for primary and lower secondary education levels were around 100%
during the transition period (Chart 10), since enrolment remained mandatory for these levels of education following the collapse of Soviet Union. At the same time enrolment in non-mandatory levels of education decreased during the first decade of transition as a result of economic decline,
deteriorating quality of life and the increase in poverty rates that made additional educational
expenses unaffordable for many households. After 2000, upper secondary enrolment increased as the economy recovered and poverty rates decreased. Enrolment in upper secondary education increased from less than 60% in 2000 to 82% in 2006; the share of vocational education has also increased to 33% of total enrolment in ISCED 3. However, there are still many graduates of lower secondary education who enter the labour market without any qualifications, and also many employers who prefer to hire them illegally and pay them lower wages. The objective of increasing the enrolment in secondary education should therefore still be on the government agenda.
26 Law on Education of the Republic of Moldova no. 547 from 21.07.1995.
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