Journal of Innovations and Sustainability Vol1 N1 2015

ISSN 2367-8127

Journal of Innovations and Sustainability Volume 1, Number 1, 2015

Innovations and Sustainability Academy 2015

Journal of Innovations and Sustainability Volume 1, Number 1, 2015 https://sites.google.com/site/journalinsust/

Editor-in-Chief: Prof. Vesela Radović, Ph.D. Managing Editor: Ekaterina Arabska

Š Innovations and Sustainability Academy 1, Lotos Str., Plovdiv 4006, Bulgaria

E-mail: insustacademy@gmail.com https://sites.google.com/site/insustacademy/

2015 ISSN 2367-8127

ISSN 2367-8127

Journal of Innovations and Sustainability

Volume 1 Number 1 2015

Contents Foreword .............................................................................................. 5

Assessment of Social Programming Efficiency in Dynamic Social Environment Venelin Terziev, Sevdalina Dimitrova, Evgeniy Stoyanov Vasil Levski National Military University - Veliko Tarnovo, Bulgaria ....... 9

Development of Active Social Programs Venelin Terziev, Sevdalina Dimitrova, Evgeniy Stoyanov Vasil Levski National Military University - Veliko Tarnovo, Bulgaria ..... 27

Peculiarities of Labor Market Development in the Republic of Bulgaria Venelin Terziev, Sevdalina Dimitrova Vasil Levski National Military University - Veliko Tarnovo, Bulgaria ..... 47

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Journal of Innovations and Sustainability

Volume 1 Number 1 2015

Foreword The topics of the first issue of the Journal of Innovations and Sustainability are in the field of Social sciences, particularly stressing social programming, development of active social programs and peculiarities in development of active labor market. The authors are prominent scientists and researchers in the field of social activity and labor economics. The sharing of this valuable experience is a step forward to good practices exchange and encouragement of active social policies development.

The accent on the economic and social pillar of sustainable development is not accidental. Contemporary challenges in the global world impose the search of new approaches and instruments finding different kinds of expressions in various policies and strategies on European and national level. The active social programs are innovative models of social development targeted to increase in effectiveness in both economic and social aspects. Development of social technologies is the right way of reaching the desired impacts on well-being and sustainability.

Bulgarian experience in labor market and social policies’ development is characterized by a number of peculiarities reflecting outer influence and inner traditions but it is also a model providing valuable implications with great potentials for extrapolation into similar situations of transition. The problems of employment and unemployment worldwide will continue being in the focuss of politicians, governors, public organizations, business and the whole society. Presented studies provide new insights bearing specific recommendations for further development directions and open new fields of scientific research oriented to concrete practical applications. Thus, their originality and significance is indisputable regarding contribution and impact.

Ekaterina Arabska Innovations and Sustainability Academy

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Journal of Innovations and Sustainability

SOCIAL SCIENCES

Volume 1, Number 1, 2015

ISSN 2367-8127

Journal of Innovations and Sustainability

Volume 1 Number 1 2015

Assessment of Social Programming Efficiency in Dynamic Social Environment Venelin Terziev, Sevdalina Dimitrova, Evgeniy Stoyanov1 Vasil Levski National Military University - Veliko Tarnovo, Bulgaria Abstract The paper presents the basis of the scientific research in assessing the efficiency of social programming, seeking its justification and control on national, regional and local level. Different theoretical and practical options are reviewed analyzing their characterization and opportunities of application.

Key words: social programming, social technology, social efficiency.

INTRODUCTION Starting basis of the scientific research in the direction of assessment of the efficiency of social programming are the objectives and tasks of the social work, the definition of which depends on the level of its realization. In other words, they can be defined at national and regional level, as well as at the level of settlements, at a group level or at the level of an individual. Accordingly, the criteria for assessment of the efficiency of the achieved goals of the social work and related social programming, are established.

Studies in this direction allow us to determine the qualitative characteristics of relevance of the system of criteria for assessment of the efficiency of social work. This relates to the following:

1

Corresponding author: Prof. Dipl. Eng. Venelin Terziev, D.S. (Ec.), D.Sc. (National security), Ph.D.

6, Otetz Paisii Str., Ruse 7000, Bulgaria E-mail: terziev@skmat.com

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

to express the efficiency of all types, forms and methods of social services to

the population; 

to show how efficient is the work of the public administration and in particular

the work of social services in the contemporary Bulgarian conditions, related to conducting continuous and complex reforms; 

to reflect the level of efficiency of the leadership and management of the entire

process of purposeful and systematic social work with the population and individual people, in need of professional social assistance.

In accordance with this, several approaches to determining the efficiency of the implemented specific social activity at national and local level, can be k The first one is related to a maximum objective assessment of the relationship between the achieved results or effects, and associated with them costs. Key problems in this case become the measurement and description of both the results (effects), and the cost. As much as the cost, can be planned, so much the efficiency of social services can be anticipated, planned, actual, actually achieved.

According to another approach, the focus is on assessing the efficiency of social work from the standpoint of determining the degree of satisfaction of social needs and expectations of the clients served, in their capacity as users or beneficiaries of the project or the program. Critical here are the subjective assessment methods, i.e. opinions, judgments, statements (on someone, or something more or less specific), and the particular entity carrying out the assessment of the efficiency of social work.

Therefore, in this case it is particularly important to determine and select the appropriate source of information for the assessment.

This in essence is the entity, which is the holder of significant for the assessment information, in the face of managers, specialists, representatives of bodies, users and others. At that, it should be taken into account that the assessment information derived from specific people, is always subjective. The more entities take part in the assessment process, the greater is the extent, to which, with other conditions being equal, this assessment seeks to ascertain the objective and reliable picture of the activities of social services and the realization of a specific social program (project).

The complex nature of the assessment suggests also a purposeful organization of the process of disclosure of opinions, reasoning and conclusions, stated by means of certain forms and methods. In this case we are dealing with procedural and organizational significance of the term "assessment of the efficiency of social services." In our quest to achieve a goal or to assess a process, or a person, it is necessary to organize the assessment process. For this purpose, sufficient in quantity

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assessment information should be collected and processed, and specific assessment procedures, which include the appropriate tools and methods for complex verification of the assessment, shall be created and used.

The whole diversity of assessments derived from various entities, going through certain procedures and stages in the assessment process becomes a resultant (final) assessment. As a rule, the organizational process of assessment of the final information can serve as a basis of certain important practical conclusions for the implementation of relevant events and actions, and development of programs to increase efficiency.

ASSESSMENT OF THE EFFICIENCY OF SOCIAL ACTIVITIES Before the start of the practical measurement of the efficiency of a social activity, before the researchers inevitably arise a number of questions that are related to the definition of the assessment object, the assessed object, the subject of assessment, the set of criteria and indicators for assessment, etc.

Since efficiency is a summarized integral indicator of the quality of the system it is determined both by the environment in which the system operates, and the internal properties of the system (the meanings of different indicators characterizing the potential and resources). For this reason, we believe that it is more correct to speak not about efficiency in general, but about the efficiency of the functioning of the system in performing specific tasks in specific environments. Moreover, an opportunity arises all private quality indicators to be functionally linked in a general integral indicator - efficiency. The study of quality in this manner allows for many difficulties arising in the analysis of complex systems to be circumvented.

Among the factors allowing to formulate the goals and objectives for assessment of the efficiency of the social services, we focus on the following: 

the analytical capabilities of the social service in identification and assessment

of "inquiries"; 

the social service resources for operative satisfaction of "requests";



the potential of social services (including the level of interaction with

government, state, municipal, non-governmental organizations and companies); 

the socio-economic conditions in the administrative territory in which the

social service operates; 

the qualifications of the staff of the social service.

Special attention in assessing the efficiency must be paid to the special problem of quality assessment.

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Indeed, many issues are dealt with in terms of quality, while as indicators (experts) play both subjects of management activities of the social service and the objects of its activity. The most typical operation in quality assessment is ranking. Objects (phenomena, processes) are ranked if any quantified dimension of them is in accordance with a certain quality that they have to different degrees. In the practice of the various social services ranking can be used in different situations. The most typical of these are the arrangement of the objects (processes, phenomena) from the point of view of their positioning in space and time, in accordance with the level of expression of a quality which cannot be measured by any objective scale, in accordance with certain measurable or susceptible to reporting qualities (as a rule, the degree of expression of the quality, according to which the ranking is done, can always be practically measured), in accordance with a quality that is generally measurable, but in the particular case cannot be measured for reasons of practical or theoretical nature.

As a characteristic example in the use of expert assessments in the management, can serve the worked out matrix on the dependence "goal-means". The cells of this matrix have to be at the end filled with information derived from the results given by expert assessments.

Methodologies for assessing the efficiency of the social protection system are very diverse, which is determined primarily by the subject of assessment. Conditionally we call these methodologies "of first order". Each subject to assessment may be considered in more details and then respectively appear new methodologies of "of second order." To every new type of social services (welfare, socio-medical, socio-legal, socio-rehabilitational,

socio-psychological,

socio-advisory,

material

help),

corresponds a separate methodology for efficiency assessment.

In analyzing the existing concepts of efficiency of social services, respectively of national social policy, of theory of organization and administration, efficient management is defined as "an attitude of pure positive results (exceeding of desirable over undesirable consequences) and admissible costs. The decision may be called efficient if the best results are achieved within the set temporary expenditure or if the result is achieved at the lowest cost for the choice made.

Modern Western societies are experiencing a crisis of efficiency of the traditional systems of state government. We can analyze three key factors having influence in shaping the crisis situation: socio-political, economic and socio-cultural. Overcoming the crisis of modern democracies and thus solving the problem with the efficiency of administrative and state government are directly related to building a management

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paradigm, corresponding to the new cultural, social and political situation, adequate to the challenges of the postmodern era. To play the role of a management paradigm, appropriate is the synergistic methodology.

It is believed that the theory of coordination denying the extremes of deterministic and atomistic positions on the analysis of institutional systems, gives in researchers disposition two key for the conceptualization of the term "social efficiency" categories: „interpretative rationality” and „transactional costs”. It is these categories which contribute to solving the main research task: the search for a general principle, on the basis of which to interpret the concept of managerial decision in the context of different institutional subsystems, each of which has its own specific set of goals.

Besides the "economic" component of the concept of efficiency (the ratio of the volumes of the provided services to the value or volume of resources needed to provide the volume of services), we can also note the "technical" or organizational component, determined from point of view of goals achievement. Technical efficiency is the degree of conformity of the social services with the needs, desires and resources of their clients.

The concept of social efficiency is considered in the context of the new post classic paradigm of the state government. Researchers M. Dimok, Anisele Port and Lane in defining the concept of social efficiency, update the problem of resource allocation methodologically closer to political economics or organizations management2,3. Social efficiency is determined as a function for minimization of transactional costs. The main condition for a socially efficient state government is the presence of an efficient mechanism for coordination of social interactions. The transaction costs, which are most characteristic of the system of state government can be the type of costs of opportunistic behavior, like „truancy”, „influence”, „agency costs”, „blackmail”, politicization costs, etc..

Modern times are indicative that in the conditions of a transitional period it can be spoken about a system-wide crisis, covering all spheres of society for a long period of time. The success of economic reforms depends on two sets of conditions: taking into consideration the interests of the subjects of reforms (mostly the political elite of the country) and taking into account the need of objects to reform (the management and staff of enterprises in all forms of property, the regional structures, the population) .

At that, taking into account the interests should be made both on „accounting” level,

2Fundamentals

of Modern Social Management M. 1999.

3Fundamentals

of Modern Social Management: Theory and Metodology М. 2000.

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and through the study of thinner motivations covering the multilayer structure of needs.

The experience of industrial and postindustrial development of all, without exception countries in the world, convincingly demonstrated the inadequacy of a purely technocratic approach to governance. New technologies, information, Taylorism, economic and mathematical methods are very important, but they allow for reaching real efficiency and competitiveness only together with social motivation of employees by creating a deliberate system for stimulation. From this point of view it is appropriate to derive criteria for assessing the social efficiency of the system of state government. In this respect two groups of such criteria are set up: general system ones, which include balance, stability, diversity, presence of feedback, etc. and social specific, the most important of which are providing social security and social protection of population.

The problem of social efficiency is closely intertwined with the issue of the safety of the social system. In statistical aspect, social system safety can be perceived as an area in space, the state of this system, the parameters of which are determined by the historically conditioned public interest. For the contemporary Bulgarian society in particular, going beyond the outlined area means bringing the society to some other variety.

Of great importance for this study are the scientific developments, in which the problem of the efficiency of different social events or technologies is revealed.

Social technology is a method of management of social processes, providing the system with consistent actions of the individual, the team, the management bodies of

the

region,

district,

municipality

and

settlement.

The

model

for

„technologicalization� of social space is expressed in arrangement of the represented in it social objects and processes, by a totality of symptoms, properties, characteristics, the nature of their formation, manifestation and reproduction. It is more appropriate to evaluate the technologies in terms of optimality of the approach for achieving the set goal and ensuring the achievement of defined results.

The efficiency of social technologies can be evaluated on the basis of the recently widespread assessment studies. Assessment studies can be conducted both by the developer and the client of a social technology. At that, it is important that it can be carried out both at the stage of development, and at the stage of implementation of the technology.

The practice of assessment research can be oriented not towards all the technology, but only towards a separate part of it. It should be noted that in an assessment study

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of the process there is orientation to the internal characteristics of the technology, allowing to judge of its positive and negative qualities.

In this case the productive and implementation strategies of research orientation transfer into a search and assessment of its external effects, or of its productivity.

The assessment of the efficiency of the technology can be also conducted by means of application of various models - goal and non-goal oriented. The goal oriented model for an assessment study focuses on assessment of the goals themselves, on the compliance of social technology, its set goals and on determining the extent of their achievement. In this case, the quality of reporting and the list of potential goals, to which the specific social technology may be related, are assessed. In the basis of such an assessment, analytical and expert methods can be applied. Also assessed are the technological procedures themselves in terms of their relevance to the goals set. The efficiency of technology is as much higher as much greater is the extent to which it complies with the goals set in it.

The non-goal oriented assessment study is aimed at detecting overt or latent effects of social technology. Assessment of the efficiency of social technology relates to the complexity of the team and the expected effects themselves: on the one hand, there is polymodaliy of the real effects for the object, the subject and the social technology itself as a means, and on the other hand, there is no adequate valid document for their measurement.

Efficiency of social technologies can be also measured by comparing the possible levels of activity. The first level shows evidence that it can be achieved with existing resources and restrictions without technology deployment. The second level is related to the deployment of specific technologies within existing resources and constraints and potentially with development of the technological means used, and removal of restrictions of various kinds. At that, we can speak about the limits of growth of the efficiency of social technology in the presence of resource constraints for its implementation.

Efficiency of social technology is determined by both subjective and objective factors.

To the number of first should relate the individual characteristics of the people involved in the implementation of particular technology, the level of their professional training and status. To the objective factors relate the factors of organization of the activity: the objective conditions of the environment, the organization of the workplace, the information flow, the control over the activity.

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ASSESSMENT OF THE EFFICIENCY OF SOCIAL PROGRAMS In theory and practice, attempts have been made to characterize the methodology for assessment of the efficiency of social programs (projects), representing the complex of social events, united by a common goal, on the basis of which stays the applicability of social programs in our country, directed primarily towards social protection of the population.

What is characteristic of programs for social protection of the population, realized by social services in Bulgaria, is that the existing today system of social protection of the population and its social services are primarily focused on the "process"4. The control bodies of social protection, the social services, typically plan and assess their work exclusively in terms of such concepts as quantity of aid beneficiaries, amount of services rendered and amount of resources spent from the budget or drawn from extra-budgetary sources, such as operational programs etc.. Beyond the frame of their attention turns to be the result from the rendered services (how did rendered services affect the behavior, capabilities and self-perception of the client group, etc.).

Notwithstanding the transition to program-goal method of management, the question of measuring the results achieved by this or that social program and their relation to the resources spent, continue to remain out of sight of the managerial bodies of social protection or finance.

It is no secret that amongst the number of most acute problems in the social sphere, the most often mentioned problem is the one of insufficient funding, both of the existing programs and the ones under development. At that, there is a tendency to forget that despite the relevance of this problem, funding is only a resource necessary to achieve the final result, namely - reduce the social tension in society, enhance welfare, etc.

Insufficient transparency of budgets and exceptional attention to resources may be deemed one of the most important factors influencing the efficiency of political decisions and the ability of the state to improve the quality of social services. Even if the actual results of service provisioning or provision of social assistance are known to certain social service offices, or a social worker or employee in the particular office, the managerial bodies as a rule do not require them to report and therefore pay not for result, but in the best case for the process or in the worst case for simulation of a

4Vladimirova,

K. Labor Economics. S.: CIELA. 2009.

Vladimirova, K. Labor Economics. S.: NBU-CCE. 2002.

Vladimirova, K. Labor, Employment and Unemployment. S.: 2000.

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process. At the same time there is a lack of efficient mechanisms to motivate the service or assistance provider to achieve results, and also ensure his responsibility for their achievement.

One of the available instruments for changing the status quo and transferring the attention to the efficiency of budget expenditure, is the assessment of social programs. Assessment not only attracts the attention of state controls to the diagnosis of the achieved results and the resulting effect (by means of both quantitative and qualitative methods), but also improves the analytical base and increases the culture of the social services. It allows for asking the right and timely questions, developing analytical approaches to solutions for spending the budget and attracted funds, and also for the development or adjustment of social policy. In particular, it comes to the following questions: Does the program reaches the set goals? Is the social aid given exactly to those for whom it is intended? Is employment ensured for the appropriate beneficiaries? Is there a leak of budget funds to those who do not need help or inclusion in the program? Are there administrative barriers impeding access to the program? How do the achieved results relate to the funds spent?

All these and other questions formulated during the assessment of the social program, outline the measurable tasks within the frame of a medium- or long-term development of the system for social protection of the population.

Budget constraints are only one of the external factors determining the need to assess the efficiency of spending of budget funds. Public pressure from the population, being potential voters, is another key factor in stimulating the deployment of assessment.

Each of the developed social programs reflects specific interests of society, for example, to see less homeless on the streets, fewer young people suffering from drug addiction, more old people, preserving their social activity in the local community, fewer unemployed people from critical and risk groups, etc. Political pressure from voters on the one hand, and budgetary constraints on the other, determine the need for analysis of concrete results from social program, funded by the national budget, as well as from attracted funds. The assessment gives to the representatives of national and local governing authorities complete, reasonable, objective information about the program results and efficiency of the course of its implementation. Thus, assessment becomes a way to provide feedback between the representatives of the authorities, beneficiaries and the program. The information obtained during the assessment, allows also to promote particular program in the local community.

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Interim assessment, setting as one of its goals the analysis of budget expenditures and attracted funds in the implementation of the program, allows to reveal the reasons for the discrepancy between the estimated and actual data. Sometimes the error can be hidden inside the very estimates, not accounting for a number of external factors affecting the cost of the program. Assessment allows for timely detection of such impact factors, allowing to adjust the forecasted cost of the program on the basis of accurate actual data.

The assessment also serves as the basis for the adoption of weighted economic and politically rational decisions, concerning the implementation of the program, and also its timely correction. Especially important seems to us the possibility to compare social programs with other forms of social assistance in a situation of budget cuts and the need to adopt decisions on continuing the funding.

Very often, in the course of realization of the social program, new mechanisms are used for services provisioning - systems for search and selection of clients, payment collection schemes, structures and schedules for provision of this or that service, etc.

A professionally conducted assessment can detect errors in the "design" of the program or difficulties arising in the course of its implementation, which allows to improve the mechanism of provision of services, achieving their greater efficiency at lower cost. Furthermore, the assessment allows the managers and specialists of the program to more clearly envisage the complete picture of the realization of the program, including the means of achieving the goals and final results. The opportunities for assessment with regard to removing the barriers between businesses and local authorities are determined by the results of the assessment, to the extent to which they allow to dispel the preconceived notion of state government and control efficiency. Not only the population, but also the business structures sometimes have too vague idea of what local authorities do to improve the welfare of the residents of the city or municipality. The assessment makes different groups of economic agents, the business in particular, to start thinking about the efficiency of social programs, possible ways to improve them from the point of view of the local population, opportunities for bringing their own contribution to solving local problems.

What are the requirements brought to the assessment? Assessment of the efficiency of the program should be based on precise criteria – a kind of references, determining the efficiency of the social program with specific indicators. These references may be formally adopted standards for social services, but may also be parameters developed specifically for this program, such as e.g. minimum standards for the quality of social

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services. In England, these standards are developed by the Ministry of Health and inspections on the compliance of the provided services with these standards are constantly carried out by government agencies, such as Social Services Inspectorate (SSI) and the Audit Committee ( AC) (SSI, 2001-2002)5.

In order the assessment to be efficient, it must not depend only on the opinions of managers and program managers. In other words, the decision to conduct or contract an assessment must be derived from the competence of the people standing above the management of the particular program. Important means for preserving objectivity is the attraction of independent experts, who have no personal or professional interest in the results of the assessment. To ensure assessment’s practical orientation and useful results, it must take into account the opinion of experts-practitioners (e.g. social workers in the relevant service offices), as well as of customers (users) of the program. The experts and users provide significant information on various aspects of program implementation, arising difficulties and ways to overcome them.

For the assessment to be reliable, it must be carried out by specialists and to use consistent contemporary methodology standards. At that, the information about the assessment results should be available to key stakeholders and should be reviewed by as wide range of specialists as possible, involved in one way or another in the implementation, financing or development of the social program. Thus the main method used to determine the efficiency of government programs for social assistance of population, are the assessment studies of various efficiency indicators at all stages during the implementation of the program. In particular, it comes to the following: 

development stage: the program project is assessed by qualitative indicators of

the fixed inside it basic value references (degree of compliance of the goals of the creators of the program with the goals of the socio-economic development of the country, declared legislative norms and principles, as well as expectations of the subjects of the program); 

implementation stage: the efficiency of the program, expressed by the

qualitative indicators of the organizational, legal and managerial components in the implementation of the program (a precondition for socially efficient state government is the presence of an efficient mechanism for coordination of social impacts in the state through its social services - executor of the program);

5Social

Management as a system. Problems of Theory and Practice of Management. 1997, No. 2.

Social Philosophy of History - Theory of Social Development К. 1996.

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

completion (assessment) stage: the program is assessed by quantitative

indicators of economic efficiency composite components (referencing the volume of services and their value in the environment of limited human and material resources), and by the quality parameters, established by the creators of the program (the degree of compliance of the goals of the leaders and organizers of the program with the needs of the subjects of the program).

Given the multi-aspect nature of the assessment the efficiency of social programming and its product – the social program, in the context of management by results, observing the principle "what-if", according to social activity priorities, stemming from the dynamic changes in the social environment, we deem it appropriate to offer a model for efficiency assessment, based on the approach of "organizational efficiency"6.

In the basis of such a model lies the combination of certain elements7, such as the system of acquisition of resources, choice of goals, assessment of the impact of the environment and the choice of strategy. In the context of the nature of social programming, we believe that the presence of these elements to the maximum extent can satisfy the efficiency requirements of a social program. And it, the social program, as a set of social activities (specific actions with specific deadlines) carried out by the authorities and structures for social work, aimed at specific goal, in order to be assessed as efficient, should be secured resource-wise, should have a clearly defined goal, as a final result, consistent with the dynamic social environment, the achievement of which is based on the choice of an appropriate strategy, contributing to the achievement of the desired end result. And all this depends on the way of transformation of the resources into necessary social skills in the interest of social policies. Here we should point out that the social capability should be interpreted as the capability to perform certain actions for the achievement of certain goals or desired end result, under certain conditions and in accordance with certain standards and social policies. This is the reason for our choice of the approach of "organizational efficiency" for the purpose of the offered by us model, which is proven as a good management practice in the implementation of the dependency „resourcescapabilities-benefits (results)”8.

In the setting of the model we focus our attention to the input of the organization (the Ministry of Labor and Social Policy (MLSP), the social services at different levels of

6

Kamenov, K. Management. V. T. 1999, p. 682-695.

7Griffin, 8

P. Management. Boston. 1990, p. 116.

Dimitrova, S. Management of resources in dynamically changing security envrionment. 2014, p. 13.

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management). In essence this is the system of acquisition of resources necessary for the realization of the social program, in order to implement a particular social policy as a desired result. This means that the system of acquisition of resources is directly dependent on the goals and the potential of the social agency and social services. And as for each individual resource users are different in time, arises the need for an ongoing control over them.

Hence the appearance of the system of acquisition of resources as the first element of the proposed by us model, is visualized in fig.1, which shows the presence of the following two groups of links: resources- organization-goals and specific resourcespotential-strategy.

Resources

Material

Organization

Goal(s)

MLSP, social services

(Social protection)

Potential

Strategy

(Capabilities)

(Social policies)

Financial Human

Other

Fig .1. System of resources acquirement

The first link, resources-organization-goals expresses the type of necessary resources, in order to achieve the goals set in the social sphere by means of particular social program for social protection.

The second connection, specific resources-potential-strategy is more specific and shows, by the specific input resources and the available potential (capability) of the state, represented by the Ministry of Labor and Social Policy, respectively the social services at different levels of management, what strategy/strategies should be implemented to achieve the goals set with the implementation of the social policy.

The second element of the model is related to the choice of goal and is directed towards the output, determining the extent of achieving the pre-set goal. And this means how to transform the input resources to achieve the goal, which is evident from fig.2.

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Financial resources

Material resources

Transformation of resources Organization

Goal(s) of MLSP

(MLSP, Social services) Social protection

Human resources

Other resources

Fig. 2. Choice of goal

The third element of the model is assessment of the external impact. Main point here is minimizing the impact of the external environment and maximizing the benefits from achieving the goals. This means that it is necessary to correctly assess the impact of external factors, which is largely directly related to the fourth element selection of strategy. To make such a choice, the priorities of social policy should be defined by their degree of importance, according to the potential (capability), the interaction with the organizational environment, the direction and strength of the external pressure, the priority areas of social policy in future.

In accordance with the above, the summarized model for assessment of the efficiency of social programming, based on the approach of organizational efficiency is presented in fig. 3.

It is noteworthy that the presented model is a cyclical process, related to goal management. Put another way, the goal is examined as a desirable state and the results - as achieved goals. On this basis, the dependencies are: 

resources - assessment of the impact of the external environment (fig. 4);



achieved goal (achieved result) - a managerial decision (in line with the change

in the social environment) - new goal (fig. 5).

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1

2

Acquiring the necessary resources from the environment

Combination of resources for achievement of the necessary results

system for resource selection

assessment of the external impact

Input

3

Goal setting Goal selection (social protection)

Output

Transformation Feedback

4

5 Selection of future resources

Implementation of the selected strategy from…to…

combined selection selection of strategy

Fig. 3. Model of efficiency assessment of social programing, based on the approach of organizational efficiency

Resources Goal (Social protection) Strategy Desired result Assessment of the impact of the environment

(Social policy)

Fig. 4. Dependency „resources-environment-achieved result (goal, benefits)“

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Achieved result (social policy) Achieved goal (social protection)

Managerial decision

in connection with

necessity for

the change

new resources

of environment

Selection of strategies

New goals (future social protection)

Fig. 5. Dependency „achieved result-solution-new goal“

Both indicated dependencies relate to the benefits (effects), which means that the practical implementation of the proposed model lies in the assessment of the degree of achievement of the goals (results), set by the social program, whose expression is the efficiency assessment of social programming, taking into account the multiple aspects in a dynamic social environment.

CONCLUSION The problem of studying the efficiency is one of the key areas of various activities of society, especially in production and management. Traditionally, the focus is on economic efficiency, reduced to simple enough and calculated "cost-result" ratio. This is a fundamental principle, characterizing the concept of "economic efficiency". Social efficiency does not have so direct character. It is rather a more complex category and is difficult to express in one dimension. Certain contradictions and discrepancies may arise between different approaches and the task for reaching the aggregate social efficiency shall be formulated primarily as a task for optimization of the social managerial activity.

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REFERENCES Dimitrova, S. Management of resources in dynamically changing security envrionment. 2014.

Fundamentals of Modern Social Management M. 1999.

Fundamentals of Modern Social Management: Theory and Metodology Đœ. 2000.

Griffin, P. Management. Boston. 1990.

Kamenov, K. Management. V. T. 1999.

Social Management as a system. Problems of Theory and Practice of Management.

1997, No. 2.

Social Philosophy of History - Theory of Social Development Đš. 1996.

Vladimirova, K. Labor Economics. S.: CIELA. 2009.

Vladimirova, K. Labor Economics. S.: NBU-CCE. 2002.

Vladimirova, K. Labor, Employment and Unemployment. S.: 2000.

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Journal of Innovations and Sustainability

Volume 1 Number 1 2015

Development of Active Social Programs Venelin Terziev, Sevdalina Dimitrova, Evgeniy Stoyanov1 Vasil Levski National Military University - Veliko Tarnovo, Bulgaria Abstract The paper presents an active model of a social program and discusses its strategic advantage.

The analyses made are based on a study of the experience of the Republic of Bulgaria in the transition period and afterward. Active social policies are considered and a methodology of development of an active social program is concerned examining characteristics of an active social program of human development and the components of the mechanism of social program activation.

Key words: social policy, social program, active program, labor market, employment.

INTRODUCTION The decline in the economic activity of the population and even more in the employment in the 90s of the XX century, the high rate of long-term unemployment and the mass poverty led to the contraction of the domestic market, reducing the chances for production development and increasing employment. All this reduced the social security (even if only in terms of insurance funds) and retarded the society development, making the transition to a market economy long and happening at high social and economic costs.

The restructuring of the workforce and the changes in the employment of the population in Bulgaria are radical, large-scale and diverse. Generally they are divided into two groups: one is in the direction of building a market economy in the country

1

Corresponding author: Prof. Dipl. Eng. Venelin Terziev, D.S. (Ec.), D.Sc. (National security), Ph.D.

6, Otetz Paisii Str., Ruse 7000, Bulgaria E-mail: terziev@skmat.com

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and it expands the opportunities of the country for integration and the other one bottlenecks, sets barriers to the successful integration and development on the path to market economy and democracy. The latter requires an adequate policy for increasing employment and reducing unemployment in the context of the agreed policies, strategies and plans of the EU member states.

The first group of changes in employment, creating a good basis and opportunities for the integration into the EU and the development on the path to market economy and democracy are: 

change in the model of employment - from administrative to market

distribution of employees and their mobility; from full employment on social basis to unemployment and uncertainty in terms of paid work; from passive to active behavior and competition in the labor market. 

elimination of administrative restrictions on the movement of the workforce

inside and outside the country; creation of conditions, albeit limited for now, for greater mobility of the workforce; 

transition from administrative to contractual relations in the field of paid

employment, negotiations on the labor price and on other conditions of employment between the immediate participants in the labor process (employees and employers); 

new and radical change in the existing national labor and social legislation in

the context of the development of the market economy and the democratic processes and in accordance with international conventions, European directives, etc .; 

establishment and development of social partnership at all levels and

development of the system of collective labor bargaining; 

creation and development of the labor market and its institutions and policies

with the development of a network of employment services throughout the country, their equipment and the qualification of the persons employed in them; 

creation and development of a policy for regulating the labor market, an active

policy for stimulating unemployed to return to work and employers to hire certain groups of unemployed; 

restructuring of branch and sectoral employment, rapid increase in the

number of employees in services and reduction of those in industry; 

increase in the employment in the private sector, in the number of

entrepreneurs and self-employed; 

development of different forms of employment, although still limited at this

stage, slow increase in the number of the people working part-time, etc .;

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

rapid increase in the number of employees in NGOs as a kind of guarantee for

the development of civil society in the country.

The second group of changes in employment, changes posing problems and barriers to the achievement of economic growth and social cohesion, include: Reduced participation of the population in paid work, employment and economic development. Growing economic burden on workers (social contributions, taxes, restrictions on wage growth, etc.). The drastical decline in the employment of young people, ethnic groups, women, rural population stands out on the background of the general drop in employment.

As a result, there is a rise in the number of poor and impoverished, excluded from the world of work. There is a high proportion of the employable population dependent on and in need of social assistance. For part of the unemployed (mainly long-term unemployed) it is difficult to return to work, for another part it becomes impossible to provide education to their children. The preliminary school leavers are therefore numerous.

Despite the significant contraction in employment in the 90s of the XX century (about 40% compared with 1989), the hidden unemployment and the inefficient use of the employed remain high. Improving the efficiency, the competitiveness of the majority of the national production requires reducing the share of the costs of production, including labor costs. This virtually requires dismissal of some employees.

The process of deindustrialization and economic restructuring naturally resulted in the sharp reduction of employment in industry. The decrease in production was more significant. Crushed were the employment and the production in some sectors for which it is considered that the country has a good potential and traditions and in sectors in which a lot has been invested in recent decades. The first ones include light and food industries and the second ones - electronics, computing, electrical industry, instrumentation, specialized equipment, etc. In this way the national economy has not only lost foreign markets and opportunities for more accelerated growth and employment, including of highly skilled labor, but also opportunities to change the technical and technological level of production in the near future, to keep in the country and to use professionally trained and qualified specialists in an effective way.

The expected institutional restructuring of research (from institutes to universities) failed to occur.

Production was deprived of research and innovation, needed for an increase in the effectiveness and competitiveness of the domestic production. The scientific potential, very limited in number and scattered in many directions, is virtually ineffective also

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because of the limited resources that can be spent from budgets on research and equipment.

In the public and especially in the private sector, there is a high share of employees, receiving wages around the minimum amount. Part of the private sector employees are still not insured for social risks. This leads to an increase in the number and the proportion of the so-called working poor and also increases insecurity and social differentiation. One part of these people choose official unemployment to employment (the social benefits are relatively high or sufficient in size so that they are preferred to the receipt of income from work) or continue their stay in unemployment as preferred to the alternative of low pay and insecurity.

In the 90s the unemployment was high, mass and long and lead to profound social and economic changes in society. Actually the labor supply was much greater because of the many graduates of educational establishments or early drop-outs, desperate and disillusioned unemployed who gave up their official registration, seeking employment pensioners and students and others. Thereto was also added the huge number of exempted from the army in connection with the ongoing reform in it. During this period the unemployment rate in many communities was over 30%, and in some - over 40 and even 50%. Most of these regions are with mixed and Roma population. Only about 1/4 of the unemployed receive social benefits or the majority of the unemployed have no income. Relatively few of them can hope for social assistance or involvement in subsidized employment programs. The majority of the unemployed have lower education without professional training and/or without work experience. The majority of them are Roma, young people and women. About 60% of the unemployed are with low education and without profession, which means that, case of favorable economic growth, increase in the foreign investments, increased labor demand, it is very unlikely that they find paid employment. And this is confirmed in practice as in recent years a high growth, a high labor demand, even a shortage nationwide, have been registered in the country. The unemployment, although significantly decreased, remained relatively high, especially for the unemployed from the so called risk groups (long-term unemployed with low education, no profession, disabled, etc.). For many of them paid jobs remain inaccessible and entering into such an employment is accidental, non-continuous, uncertain. This in turn results in social insecurity and in the "best" cases employment in the informal economy, migration and others.

The employment policy has long been focused mainly on the unemployed, on financing the highly restricted activity vocational guidance and training, promoting

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and encouraging unemployed to take up work and employers to hire certain groups of unemployed. Very little funds are still used for active policy, teaching, professional training and retraining of the unemployed, for job creation for long-term unemployed in the real economy, for increasing the mobility of the workforce and other activities that would actually reduce the unemployment and the occurred social tension.

Employment and unemployment are closely related and dependent on the cycles and characteristics of the economic development and its management. On the other hand, as a product of the functioning of the labor market, they need to be considered in the context of the general economic theory of the market economy, by distinguishing the capabilities and the effectiveness of the public policy for intervention and regulation.

Regardless of the existing differences in the level and structure of employment, there are some general trends and structures such as: 

significant reduction of the employment in the sectors of the primary

sector, the extractive ones (agriculture, ore mining, coal mining, etc.); 

reduction of the employment in the industries of the secondary sector

(manufacturing, construction, etc.); 

increase in the employment in the tertiary sector (services);



increase in the educational level of employees, decrease in the number of

employees with lower than secondary education; 

increase in women's employment;



reduction in the proportion of employees on a permanent contract and

increase in employment for definite working hours; 

increase in the proportion of part-time employees and of other non-

traditional forms of employment; 

the majority of the employees are employed, the proportion of employers

and self-employed is under 1/5 of the total number of the employed.

The levels of employment and unemployment are influenced by the following factors or policies for their activation: 

policy to increase the employment of the population as part of the

macroeconomic policy and policy to reduce the imbalance in the labor markets; 

the level of education and vocational training, the level of compliance with

the preparation of the economically active population and the demand of organizations; 

policy for development and improvement of the preparation of the

population, policy for investment in human potential;

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

level of the economic development, the structure of the economy and the

course of its development; 

policy for development of small and medium-sized enterprises for

promoting entrepreneurship and self-employment; 

development and improvement of legislation and secondary legislation to

ensure the right to work and to create opportunities for the realization of this right by the various population groups; 

policy

for

development

of

the

regions

and

localities

with

high

unemployment and declining economy; 

financial, tax, investment policies of the state, creating an environment for

economic activity of enterprises, increasing their demand for labor; 

social and demographic policy, income and special protection policy for

certain categories of the population in employment and others.

The transformations in the labor market, income and social security, social assistance and the formation and development of human resources as well as the relations between these systems have not been subject to thorough research in the Bulgarian scientific literature so far. The development of these systems has not been studied in relation to the implementation of various policies in terms of unemployment and employment.

The latest financial and economic crisis of 2008 finds us insufficiently prepared to implement an integrated approach to the social sphere, and in particular in the development of the labor market, social protection and human resources, in line with the adverse changes in the macroeconomic environment. Practically, different programs and measures borrowed from foreign experience are applied, as attempts are made for their approval at regional and national level without a preliminary comprehensive analysis to be made.

ACTIVE SOCIAL POLICIES Introduced in response to the significantly rising unemployment in the OECD countries in the 70s, active policies are continuously expanding the range of programs and measures, currently including the following key elements: 

mediation services in the labor market;



creation of new jobs (temporary employment programs);



training/retraining of unemployed and employed;



promotion of entrepreneurship;

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

subsidized employment.

Despite the existence of numerous modifications and specific variations of the implementation of the specified fields of the active policy, this qualification is valid for all countries, including the active policy implemented in the labor market in Bulgaria.

The adverse negative demographic trends in our country, leading to the reduction and the aging of its labor resources; the steadily unbalanced nature of the labor market, characterized by high unemployment and low labor demand; the presence of disadvantaged groups and significant regional differences in the development of the labor market were among the major challenges for the country in the first decade of the new century. The so called active programs and measures on the labor market take a special place among the macroeconomic policies and resources. They are subject to an increasing interest and comment not only because of the expectations for tangible effects, but also due to the relatively significant financial resources needed for their implementation.

The problem of efficient spending becomes more acute in the current situation of limited social spending in the country. Capacity building for conduction of regular monitoring and evaluation of the effectiveness of the active policy is one of the priorities in the European Employment Strategy.

In the practical assessment of active programs and measures, researchers often face a number of problems arising from their multipurpose and multifaceted nature; lack of a unified and well-established evaluation methodology; measurement errors and lack of adequate statistical information; objective impossibility to track persons and to determine the benefits of participation in such programs. More than a hundred studies have been carried out on various active programs in the world and they have given ambiguous and often contradictory results as regards the effectiveness of these programs. The results are strongly influenced by the peculiarities of the country, the term and the manner of the program implementation.

The starting point for the evaluation of active programs and measures is the clarification of the goals, the tasks and the expected outcomes of the program. Active programs have multiple effects on the labor market. Arisen as a means of reducing unemployment, today they are associated with very broad anticipated effects of their application. Generally, active programs can be regarded as a tool for supporting the effective functioning of the labor market. They provide assistance to removing the obstacles and the problems for the functioning of the market economy.

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Active programs are a means of enhancing the competitiveness of the workforce, mobilizing the labor resources and increasing the economic activity of the population.

In the absence of credit funds, microcredit schemes become real and often the only means for the development of small and medium-sized business in the country.

Active policy performs a very important socio-distribution function, especially in the presence of disadvantaged groups in the labor market. For the latter, the participation in active programs is often the only chance for employment, thus preventing them from falling into extreme poverty and social deprivation (isolation). Last but not least, the proper definition of the objectives and the expected results from active programs and measures and their appropriate disclosure in the public space determine the extent, the trust and the support for the socioeconomic reforms in the country.

Classical complex targeted social programs are traditionally used in the conditions of a command-administrative (totalitarian) social system. In such a situation programs are developed and implemented largely disconnected from one another, tied to the state centralized directive, prospective and current planning. These social programs are implemented in parallel with the external social environment. They rely on state funding and budgetary planning, but at the same time they do not envisage significant corrective effect on the part of the subject and the object of management, correction of the cross-program social aspect, interaction of the participants in the social programs, adjustment of the relatively social evaluation of the program implementation.

In the conditions of democratic transformations, these social programming principles are underperforming. In moments of social instability, the classical form of social programs requires a substantial adjustment. In the practice of developing social programs one is forced to abandon the rigid program development that has not been changed for a long time. Although today enough has been done in the system of labor and social development, the social policy is still slightly based on science, on the strategy for search of resources for human development, on well-considered personnel policy, scientific methodological ensurĐ°nce

of the

social sphere

development, on scientific and practical developments of current social problems.

Irrelevant factors regarding the population’s health such as sustainable ecosystem development, including the quality of social education, the level of the organizational culture of institutions, the professional qualification structure of services, the level of the professionals working with the population are often ignored. The ideology of social services as a whole is gradually distancing from the old system of social protection, but the final distancing from the paternalistic position has not occurred yet.

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The democratic changes require a new ideology for the development and implementation of social programs. The public can no longer choose social objectives as a component of targeted actions invariant over time. It is the change in the conditions of the social life activity that gives rise to the necessary amendments in the realization of social programs. Social programs should make possible the active partner interaction of their participants, introducing the principle of democratic interaction with the subject of social impact. Modern social programs should not be deprived of relations with the state financial and budgetary planning. Their main source of funds should be formed on the basis of the budgets at federal and regional level.

Classical complex social programs are oriented towards determining their social performance through the efficiency of capital investments, partially abstracted from other investments (including social investments, investments in educational, scientific and human capital). It is considered that in a stable social environment, the implementation of its partial amendments does not need to be recorded in the estimated indicators of the social program. Therefore the indicators for socioeconomic justifications, met on the basis of the used regulations, have been positive as a rule, but the actual social results from the development of human resources often turned negative and, what is strange, this affected in no way the subsequent stages of the implementation of the social program.

In the late 80s of the last century, the classical approach used in the development of social programs was acutely criticized in scientific literature. It was noted that the social programs, determining the realization of the social policy, should cover the entire range of needs and interests of people. The subject of the social program should be determined by a flexible influence over "the situation of classes and social groups, nations and nationalities, social class and national relations, the situation of individuals in society and their relationship with it, all aspects of people's welfare, typical of the society and its component classes, social groups and lifestyles.�

Researchers noted that it was necessary to significantly expand the field of influence of social programs, to combine the long established social technologies with new, more flexible and socially mobile ones, i.e. effective means of influencing the social processes. "The rejection of the established methods of management inevitably disrupted the stagnant equilibrium of the social processes and it would reveal many contradictions and problems hidden until recently, also creating new ones. At the same time, the reform of the political system opens up opportunities for solving these problems through scientific inquiry and democratic comparison of the different

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Journal of Innovations and Sustainability

alternatives of social policy.� It turns out that the new conditions require a change in the basic approach for social program development. In the conditions of a reform, the current foundations determine the existence of a flexible mechanism for free formation and disclosure of the interests of all classes and social groups, their flexible coordination and realization in the process of social programs development and implementation.

In the 90s the social programs were not only characterized by rigidity and social inefficiency, but they reflected the negative context of corruption, which had become a stable system of relations. Specific relations were formed between entrepreneurs and officials, reflecting not the cooperation in the name of achieving social goals, but as a means of deprivation of financial resources in the interest of a narrow group of people. As a result the serious violations in the process of social program implementation led to the loss of their social efficiency and resulted in subsequent crisis phenomena reflecting the ineffectiveness of the social policy at macro level. The losses for society substantially exceeded these social gains that it would have received, if the social programs had been implemented.

According to most people polled in recent years, the main objective of the social programs in Bulgaria has been to ensure stability and not the development of human resources and to provide assistance to disadvantaged people.

In the conditions of building an information society, new theoretical approaches originate, a new model of active, dynamically self-developing social programs is formed - programs that can be actively self-improved and adapted to the dynamically changing social life conditions. In the new conditions there is also an increasing actual need for targeting the social programs towards a solution of the problems of intellectual and educational development, but at the same time the characteristics of health and physical development do not lose their social significance. Today public health is a real indicator of the country's wealth, a reflection of the quality of life and the level of development of human resources. The health state is directly related to the income per capita and the maintenance of the health care system.

In summary, we can say that, in the conditions of a market economy, the contemporary social programs can occur in many forms, which in turn have specific principles, methods, technologies for identifying and reaching social goals, ways and means for the realization of human resources development. The general trend in the development and implementation of social programs for human resources development lies in the fact that their main target orientation is related to solving the

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problem of health and physical development of the population, the intellectual and educational development of human resources.

The application of social programs in a modern market system of production requires not only deep knowledge and understanding of its nature and essence, but also creative skills for using the specific forms of the method of social management, elaborating detailed technical procedures for the drawing up of social programs and their implementation in accordance with the principles of the systematic social management.

Objectively the population prefers to participate in active social programs synthesizing active projects as a complex of flow projects at the heart of which lie social processes directed towards human development. The social processes based on active programming and projecting have an unbalanced, dynamic nature and this is why they are in the forefront of active social programs. The fundament of social resources for support of the programs may be conditionally structured as a combination of at least three layers of support, which, taken together, form the space of the flows of the supporting social resources. The first layer, the first resource fundament of the space of the flows, consists of a chain of electronic impulses (telecommunication, computer processing, systems for broadcasting and high-speed transport, based on information technologies). The second layer of the space of the flows is composed of nodes and communication centers. These are mostly large social institutions which are a link to the global network for supporting social projects. "The third important layer of the space of the flows refers to the spatial organization of the dominant managerial elite performing management functions, around which the organizational space is built. The persons of the technocratic, financial and management elite, occupying a leading position in our society, also have their specific spatial requirements regarding the material and spatial basis of their interests and actions. " In the new conditions the development of programs requires an active research and innovative work for setting its self-development in the mechanism of its implementation. The adequacy of the program-targeted social management in an unstable and constantly changing way of life is manifested in its orientation towards an active examination of the results from the social program implementation (social evaluation of the implementation results), attracting large groups of the population for its development. Active social programs are a system of social projects with a direct and a reverse link of social interaction, which determines the opportunities for adaptation of the program components to the changing demands on it. Moreover, in

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Journal of Innovations and Sustainability

connection with the implementation of the social program there can be a change in its social objectives, implementation deadlines, partly in the participants and there can be a transformаtion of the attracted social resource.

METHODOLOGY OF DEVELOPMENT OF AN ACTIVE SOCIAL PROGRAM Nowadays in their essence active social programs reflect the transition from a traditional to an innovative model of social development. It is this transition that determines the complex utilization of social programs within the innovative creativity, the partner relations of the participants in the program, the delegation of auxiliary functions to lower structures, but also the wide participation of the population in the implementation of the programs.

The methodology of the development of an active social program requires focusing on the following theoretical components: 

Establishment

of

the

social

problem.

"Apprehending

a

clearer

understanding of the problem and a more reasonable control over certain key processes, we can turn the crisis into an opportunity, thus helping people not just to survive but also to reach the tops of the waves of change and gain a new sense of mastery over their own destinies "; 

Determining the social objective of the program is the starting point for

programming the process of the human resources development. The external social environment provides an objective characteristic of the surrounding conditions, the parameters and the structure of external objects, interacting with the subject in one degree or another; 

The design of the planned trajectory for human resource development takes

place within and by taking into account the comprehensive set of federal and regional programs, approved for implementation in line with predetermined social criteria.

The design of the trajectory of human resources development is related to the solving of the following objective tasks: first, determining the initial coordinates of the process of the human resources development; second, description of the conditions and the parameters of its extreme states (the final coordinates of the movement trajectory); third, setting the criteria for qualitative and quantitative indicators of the human resources development.

There are many works of scientists-mathematicians related to the solving of the task of building the planned trajectory of the manageable system. Examining in details some attempts for using the results of these studies, we came to the conclusion that the mathematical formulation of the problem has limited practical significance in the

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design of methods for influencing the human resources development. The truth of the statement is confirmed by the fact that "any attempt to execute the transfer of the object ... through the actions of management ... from the starting state to the desired final state builds on the principle impossibility for mathematically precise determination of the initial states of the object. A similar problem is also related to the need of formalization of the impact of external disturbances of the system for the vital activity of the population.

In this connection, a question of interest becomes the maintenance of the conditions for material consumption and the level of health of the population, but also the design of the trajectory of the educational development of the human resources. In the future the modern system of scientific and educational institutions will become a fundamental element of the information society as a society based on information resources, but also on self-learning educational systems. In the modern models of active social programs it is needed to set a trajectory for proactive education of the population. Educational development must be of a continuous nature, providing targeted training, self-training, retraining of the population and other new forms of training. Proactive education in an abstract form looks like some ideal at which the educational process can aim, shifting its emphasis for development from the past to the present and the future. „The uncertainty of the future can be significantly reduced through the selection of the most desirable tendencies out of the various alternatives and forecasts and at the same time by selecting the most actual trends extending into the future, which is amenable to targeting (manageable impact). Such tendencies or traits of the future can turn into a normative vision of the society development or the individual areas of its activity.

It should be noted that the most important goal of modern social programs is determined by the proactive level of knowledge, foresight and achievement of socially significant consequences from the future within the shaping of the general education process. Reaching a goal can serve as a criterion during the implementation of the model for proactive education as a basis of social construction of anticipatory human development. In its essence this social construction is a synthesis result of the implementation of complex active social programs in society. Proactive educational development of human resources at society level reflects the transition of individuals from one socio-professional layer to another, accompanied by the development of the capabilities and the needs of individuals through the utilization of one or another set of universal cultural items - language, symbols, customs, traditions, social norms, general and specialized knowledge - translational with the education and self-

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Journal of Innovations and Sustainability

learning system of the society and providing an opportunity for continuous objectification of personal skills, habits, experience in the system of social professional action".

The central axis in the search for optimal forms of social construction is a dynamically developing system of education and a new type of dynamically developing intelligence, a new personality, corresponding to it. This position can be argued with the fact that the educational system is a social industry which prepares specialists in one or another type of thinking, this is a spiritual targeted development of this or that type of personality, i.e. it is essentially a system of expanded reproduction of the spiritual culture of society members. The society transforms and evolves rapidly and the system of educational institutions, pedagogical practice is an obstacle to this process.

Educational institutions of a different rank record a quantitative growth of graduate specialists, without taking into consideration the conformity of their qualities with the growing needs of the current social development. This contradiction can only be overcome by providing conditions for competition of the structural elements of the education system, which is oriented in a targeted way to the development of the literacy of different population layers. "Namely the educational development of human resources, defining the totality of the acquired systematic knowledge, skills and professional habits, but also the acquired skills for further learning and analysis of knowledge, the exchange and the use of information in the course of professional activity are the most important factors and social objectives of the entire social policy.�

An active social program also features dynamic adjustment regulation through the including of feedback upon its implementation. The functions of the adjustment regulator are a kind of solution to the task of optimization of its components as a result of the changes in the conditions of the activity of the population - bringing under control the disturbing external social impulses arising upon the social program implementation.

The adjustment regulator of the program consists of three interrelated parts: a system for social research, an organic system for planning and an organic regulatory system.

The system for social research is executed by methods for studying the social interests of the population. As a result the social studies reveal the needs and the population’s preferences for certain social benefits: housing, health promotion, sport and cultural needs, advanced training and retraining. Social planning is implemented for the purpose of addressing a social problem caused by the mismatch between the social program components and the changed requirements.

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Social regulation is Đ° process of creating conditions for active realization of the social program. The successful implementation of the social regulation contributes to the unification of the participants in the program, the approximation of their interests and the interests of the population being targeted by the program.

The specified components are completely identical in structure and consist of the following interrelated parts: forecasting (anticipatory reflection of reality); planning of the social changes in the components of the system; simulation model for the formation of the program implementation process; immediate internal adapter of the program management system; external adapter of the program management system; internal adapter of the program management system.

The principle of anticipatory reflection of reality expresses the possibility of adaptation of society to changing environmental conditions and the actual possibility of existence, the ability of realization of the current and future reality. The anticipatory reflection of social reality is one of the forms of reflecting the future social development, which is "a historical foundation for the emergence of all higher forms of the forecasting of future events and above all the emergence of conditioned reflex."

In the social program the principle of anticipatory reflection of reality is expressed in the considering of the determination of the future features of the project impact: social forecasting, social prognosis, social design, social programming, social planning, social construction, social engineering. Based on the principle of anticipatory reflection of the social reality, "in this dimension one can formulate the principle of anticipatory reflection of the social reality as a fundamental principle of social design.

In the new conditions the theoretical paradigm of social programs requires a synthesis with the theory of active systems, which must objectively lead to the provision of conditions and motivational activity among the participants of the targeted social program. Namely the activity feature of a system element mostly corresponds to the model of an active targeted social program, for the implementation of which individual actors were attracted: the population, the state and the public social institutions.

The theory of active systems is transformed into a part of the theory of program social management determining the social adaptability of social programs, the use of more participants in the program, the realization of their activity. Namely the property of the system element activity mostly corresponds to the active model of the social program. Activity is manifested in the partners’ autonomy and the interest of the participants in the program. The coordination of the efforts directed towards

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Journal of Innovations and Sustainability

achieving the social objectives of the program must be combined with the obtaining of social benefits by the participants in it.

Active targeted social program for human development

Complex system of interrelated social projects

It is developed on the basis of an analysis of unified ideas from a large number of prospective participants

Achievement of the objectives of the social program

Large cast of actors in the social program independent subjects

Coordination of the interests of the program participants

Realization of different interests of the participants involved in the social program

Partner style in the program management

Fig. 1. Characteristics of an active social program of human development

Social programs acquire an active character as a result of the expanding of the members and the systematic unification of the participants in the program on the partnership principle, but also as a result of economic stimulation, activation of their social actions, i.e. the opportunities for a strategic choice of the participants in the program are targeted, but within the realized social program. In the development of social programs this means that each participant in it, on account of his/her participation, solves some kind of social task that is of present interest to him/her.

The active model of the social program implies the development of conditions for obtaining benefits from the participation in the social program. In the active program targeted systems, the manageable subjects are placed in conditions and have increased active management powers. What is of importance here are the conditions and the opportunities for freedom of choice of one’s own state, the possibility to express one’s own interests and preferences, i.e. deliberately to choose one’s state, but in the system of the priority of the executed social program. The active model of the social program reflects the network structure of social management in the

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program implementation, within which the participants in the target social program have a high degree of freedom of action, aim at a choice of such strategies, which appear to be optimal in terms of their target results, with the preset or predictable meanings of the social potential used.

The development of an active targeted social program presupposes four components of its activation mechanism (Fig. 2).

First, the participants in the program have a wide range of choices of action to implement the objectives of their interests. This means that, on account of his/her participation in the program, each participant in it is interested in solving some social task that is of importance for him/her.

Second, the presence of a body of the social program, with broad composition of managers, with broad involvement of the public. This body must not only study the social results of the program implementation, collect data, evaluate the stages of the program implementation as a whole, but also develop guidelines for the correction of the program elements.

The third is determined by the system for motivation of a broad composition of participants in the program. The development and implementation of a social program requires a special form of motivation for an actively liberated, proactive, scientific style of work, determining self-education, creativity and innovation development in any workplace.

The forth - the necessity for a constantly operating innovation center for innovative improvement of the social program, for activation of the processes of its renovation.

The highly qualified intellectual labor is a potential opportunity for self-improvement of the social program. The scientific innovative activity of the participants in the program - that is a self-increasing resource, having cultural and assessed value and determining the potential for active adaptation to the changing social conditions.

"People performing mental labor possess their own means of production, i.e. the knowledge stored in their heads. This is an absolutely portable and unusually voluminous type of fixed capital. As the employees of mental labor are in control of their means of production, they are very mobile. Figuratively speaking, the employees of physical labor are more interested in the work than it is interested in them.

Probably not for each employee of mental labor can be said that he/she is needed to the work more than it is to him/her. But in most cases the relationship of the employees of intellectual labor with the organization providing work to them are characterized by the fact that they are equally interested in each other�.

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Mechanism of activation of the social program

Participants in the program - partners having a high degree of autonomy in their actions

Great part of the public in the program management

Center for innovation development

Social innovation Upon the implementation of the program, the participants in it solve their current social task

Targeted social analysis of introductions, evaluation, activity and perfection of the social program

System for motivation of the activity of the program participants

Motivation to adopt an active, open- minded, proactive way of working, self-education, creativity, innovation

Fig. 2. Components of the mechanism of social program activation

In this way active social programs aim at solving social problems through the implementation of breakthrough, innovative social technologies, attraction of investments, optimization of social resource flows, integration of the social systems.

Social program development rejects the principle of an end of the carried out social events. Above all every active social project is an innovation as its main objective is to be found in the development and the use of new ideas which may be new social technologies aimed at providing social services, ensuring the dynamic social development of the population.

Active social programs are created as a set of social projects on the basis of a unifying idea for social interaction guaranteeing the coordination of the interests of the population in the conditions of an unstable social environment of impact. An active social program is a system development. Each, taken separately, component of an active social program is interconnected and interdependent on the other parts of the program. As a rule, the isolated realization of the individual elements of the social program, cut off from one another, creates conditions for a sharp reduction in the effectiveness of its implementation.

The unifying social idea of the active program - this is the optimal synthesis of thoughts, ideas and objectives of the program participants, among whom there are representatives of the public. Moreover, the participants in the social program are

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relatively independent, they act proceeding from their own interests – upon their participation in the social program, each one makes decisions in his/her own interest. The program is developed on the basis of the creation of a socially important unifying idea, so that the interests of the participants in the active social program can be consistent with the objective of the active program itself. The social program is developed on the basis of the study of ideas and innovative thinking of the participants, on the basis of a comprehensive analysis in the field of realization of the active social project, through the formation of a unifying idea and the design of schemes about the interests of the participants and the population. Then, taking as a starting point the obtained data, the structure of the active social program is formed, a network of organizations with the program participants is created around the representative of the unifying social idea, who enters into the role of a coordinator and supervisor of the program implementation.

CONCLUSION Active social programs share a number of common characteristics: they are aimed at achieving specific objectives; incorporate the coordinated execution of interrelated actions; they have an action limited in time with a defined beginning and a specified period for drawing up of a new program or its completion; to a certain extent they are unique.

The result of active social programming allows the realization of a complex program with maximum efficiency in a rapidly changing social environment. Moreover, the unifying ideas ensure the involvement of relatively independently functioning social institutions by coordinating their needs and interests. The active approach primarily aims at obtaining effective development of the social object of the program by introducing

disruptive

technology innovation, attracting the

public

to the

management, optimizing the resource flows, integrating the social systems of the participants in the program. The term "active programming" emphasizes on the continuous process of adaptation of the developed program to the conditions of the social environment in the system. Therefore an active social program is open for system self-development. The success of its management implementation is largely determined by the factors of the interaction of the social program elements with the constantly changing environment of its impact. Unlike conventional social programs, the active form of social programming is a creative self-developing project with transformable final social goals, means and tasks of the process of social changes, with rejection of the rigid static schemes of the classical social programming. Active

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social programs are aimed at local social stabilization in unstable, dynamically changing conditions of the environment for social impact. Active programming is mainly oriented towards the effective development of social objects through development of innovations; optimization of financial, resource and innovation flows; integration of socioeconomic projects in the global economic relations.

The information obtained as a result of social research on the conditions for program implementation is the basis for the formation of any significant, systemically interrelated factors for social changes, reflecting the nature of the ongoing processes and phenomena. The participants in an active social program have and realize skills for an active creative conduct related not only to the development and organization of the social program implementation, but to the ability to accumulate and to reasonably apprehend different kind of innovations. The realization of the social program largely depends on the professionalism of its realization. In the modern conditions of professionalism, this is a major criterion for the qualities of the program.

In this aspect one should tackle with care the question of attracting professionals from other countries.

REFERENCES Koceva, M., Terziev, V., Andreeva, Z. 2003. Problems in assessment of the active policies on the labor market. Fifth National conference “Employment services and the European labor market”, Ruse, Bulgaria, p. 9-13.

Terziev V., Dimitrova S. Social programming in the context of stimulating social activity and regulation of social development through active policies. “East West” Association for Advances Studies and Higher Education GmbH, 2015.

Terziev, V. 2013. The role of the social policy in economic development. Proceedings of the Annual scientific conference of VasilLevski National Military University, Volume 6, p. 154-164.

Terziev, V., Dimitrova, S. 2014. Strategic advantages of the active model of social programs. International scientific conference UNITECH’2014, Proceedings Volume IV, p. 215-220.

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Journal of Innovations and Sustainability

Volume 1 Number 1 2015

Peculiarities of Labor Market Development in the Republic of Bulgaria Venelin Terziev, Sevdalina Dimitrova1 Vasil Levski National Military University - Veliko Tarnovo, Bulgaria Abstract The paper examines development of labor market in the Republic of Bulgaria during the transition to a market economy and afterward in conditions to joining the EU. The questions connected to the heritage at the beginning of the transition, structural changes in employment and unemployment, individual labor supply and policy of building a functioning labor market are discussed. Specific factors of the unemployment and the growth in the country are scrutinized, as well as the movement of the flows of the unemployed. Some general conclusions about future development are drawn on the basis of the examined aspects of labor market development influenced by the periods of economic development and the place and the roles of labor market policies in the general economic policy.

Key words: labor market, employment, unemployment, transition period.

INTRODUCTION After World War II the actually existing conditions for full employment enabled almost all countries to focus their efforts on the issue of labor efficiency, the behavior of the participants in the labor process, the attitude to labor. After the 70s essential changes happened in the economic and social life worldwide and they had an impact on "attitudes regarding labor" and labor relations in the strict sense of the term. The widening gaps between the demand and the supply of labor brought to the focus of

1

Corresponding author: Prof. Dipl. Eng. Venelin Terziev, D.S. (Ec.), D.Sc. (National security), Ph.D.

6, Otetz Paisii Str., Ruse 7000, Bulgaria E-mail: terziev@skmat.com

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attention a concept of the labor market in which the main emphasis was on the relation between employers and employees. Major signs of the so called "black economy" and "black labor market" came into existence. Quantitative and qualitative discrepancies, on the one hand, resulted in measures for reducing the labor supply and, on the other hand, in measures for stimulating the labor demand. The marginalization of certain groups of the population and the rising inflation were important issues in this period. In the European Union, the USA and Japan the period after 1980 was characterized by some achievements in economic growth, allowing for a corresponding increase in employment, albeit at a slower pace. The structural changes in the economies were of such a nature that the use of the old methods for regulating employment and unemployment were already inadequate.

At that time Bulgaria and the other socialist countries, which had been subject to the idea of "full employment" for more than half a century, suffered the heavy consequences of the transition and the economy restructuring, which seemed to be most severe in employment. Bulgaria turned out to be relatively unprepared to meet the challenges of the market economy in this field also because of the lack of public attitudes

towards

greater

personal

activity,

personal

responsibility

and

entrepreneurship. The expectations for a change were linked again and primarily to the role of the state.

The specific objectives of labor policy and in particular of employment policy depend on many circumstances. Taking as a starting point the consequences from unemployment, theoretically one could formulate several main objectives: 

preservation and protection of the human resources as the most important

element of the productive forces of each country; 

integration of new generations to the values of work life and labor ethics;



socially equitable distribution of labor in society;



compliance with the principle according to which labor is the leading factor

determining the security balance of personality and the provision of social benefits only replaces or supplements the income from work; 

preservation of social peace in society;



solving the problems of employment not at the expense of higher inflation;



using the efforts of the state as well as the ones of local communities and

voluntary associations in solving the problems of employment and unemployment.

In terms of the position of the state in the regulation of labor relations, in the European Union one can differentiate three systems: the Roman-German (Belgium, France, Germany, Italy, etc.), in which the state plays a central role in setting the

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rules for the functioning of the labor market; the English-Irish, in which the state regulates only the rights and the obligations arising from the contractual relations regarding labor and the Northern system, in which the state also has a limited role, but the regulation of labor relations is carried out on the basis of agreements between the labor unions and the employers in the labor market.

The subjects of the employment policy in Bulgaria include: the state and its specialized bodies: the Employment Agency at the Ministry of Labor and Social Policy, the National Council for Tripartite Cooperation (representing workers' organizations, employers' organizations), the Agency for Social Assistance at the Ministry of Labor and Social Policy; at regional level - regional governors, municipalities, regional employment services and labor offices. The specified subjects are engaged in institutionalized relations "regarding labor" and in these between employers and employees. The institutionalized subjects also include the established and the legalized private agencies and labor offices, some non-governmental organizations, which, among their other social functions, perform intermediation in finding employment for persons at risk and participate in the implementation of projects for training, qualification and retraining of people in difficulty.

Pursuant to the act adopted by the XXXIX National Assembly in December 2001, the public relations in promoting and supporting employment, the provision of professional information and counseling, the training of unemployed and employed for acquiring professional qualification and the intermediation in providing information and employment for Bulgarian nationals in other countries and Bulgarian and foreign nationals in the Republic of Bulgaria shall be governed by the Employment Promotion Act. After 1 January 2002 the policy in the labor market has been based on the provisions of the Act on Protection against Unemployment and Employment Promotion and includes a number of passive and active measures agreed with the social partners and implemented by the employment services.

Since 1 January 2002 the existing Act on Protection against Unemployment and Employment Promotion has in practice been divided into three parts. One part of it, which relates to the insurance relations in case of unemployment, is included in the Code of compulsory social insurance in part IVa, art. 54a – 54h. Another part relating to the matters of employment is fully included in the new Employment Promotion Act. A third part, relating to the promotion of employment, remains generally unchanged and continues to be part of the current legislation.

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EPA regulates the basic employment issues. It covers issues related to the employment bodies, the rights and the obligations of persons seeking employment and employers who offer it; it also covers the measures for promoting employment, training for acquiring professional qualification, etc. Outlined are the key issues in connection with the active measures for promoting employment and professional training, etc.

Subject of the employment policy are labor relations in the strict sense of the concept and relations regarding the distribution of social labor. These relations affect the entire population of working age and give reason to be said that the policy on unemployment and employment is comprehensive in general. The measures, by which these relations are regulated, are basically divided into traditional and alternative (non-traditional). Alternative measures and programs in the field of employment are usually associated with the implementation of the selective approach and relate to specific groups of the population.

Risk groups are viewed as a specific subject of the labor policy and in particularly employment and unemployment. As far as the risk groups of the population are concerned, it is of particular importance that the employment problem is analyzed in the context of labor distribution. In developed economies, permanent risk groups appear to be those of women, young people, people with reduced ability to work, workforces from ethnic groups, long-term unemployed.

Regarding the development of specific policies in the short, medium and long term, it is of paramount importance to find out the reasons for the distancing of the risk groups from the labor market. It should be clarified whether it is about direct discrimination by legislation, indirect restrictive economic measures, actual noncompetitiveness due to low skills and education or livelihood options for earning one’s living outside the world of work. These circumstances should be examined well so that a policy can be developed for increasing the chances of risk groups to get engaged in the institutionalized labor market.

Women as a risk group are characterized by the fact that, despite their relatively uniform educational qualifications and skill levels as compared to these of men, they are not preferred as workforce by employers and unemployment among women is not only higher, but also long-term. Because of the fact that some of them are busy working on family farms and perform unpaid labor, their economic independence and social security are significantly lower. By reason of the devotion of some of their time to bringing up children, they lose their professional qualities and become unequal in the labor market.

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The reasons why young people belong to the risk groups in the labor market are generally the following: 

high proportion of unemployed youths in the total number of unemployed;



increasing proportion of youth workforce outside the institutionalized labor

market and participation of young people in the black economy; 

increasing duration of the period of youth unemployment;



vocational training not meeting the needs of the economy;



preference of employers for workers with experience.

From a social perspective, the emergent state of youth employment, which is typical of the most European countries, brings a negative accumulating effect in itself.

Today’s discrimination of young people in the labor market will result in their alienation from labor in general, forcing them to search for other sources of income outside labor and will eventually lead to the social isolation of most of them.

Invalids are the generally acknowledged risk group in labor policy. Their disadvantage is conditioned both by personal reasons connected with their health and ability to work, but also by economic and social factors. They are characterized by the following: 1) The risk group has a too heterogeneous composition in terms of the causes, the nature and the time of acquisition of the disability, so this requires a significantly larger variety of forms for adaptation to work, reaching to the development of individual plans for job placement; 2) Disabled persons face objectively set barriers depending on their health status, in terms of an equal start for participation in employment. At the same time it is a scientifically proven fact that labor is a key factor for health and social integration of people with ill health and impaired ability to work; 3) The disability (even when the disabled people are socially insured) gives them an unsatisfactory economic status, accompanied by strong dependence on the insurance and welfare institutions. In certain socioeconomic conditions the disability leads to social isolation.

The risk group of the long-term unemployed is recruited from all the discussed so far risk groups, especially the ethnic groups: Turks, Gypsies and others. The common feature of the otherwise heterogeneous nature of this group is the unemployment for more than one year. The characteristics of this group are: 

lower education and qualification level;



personal initiative and activity in the labor market blunted over time;



tendency for obtaining benefits from outside the world of work;

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

difficult adaptability to the requirements of the legal labor market.

This risk group is characterized by the highest degree of fragmentation in the labor market. For a part of this group it is valid the so called concentration effect, which means that some people in society are left in social isolation and it is getting more and more difficult for them to overcome the border wall between the "ghetto" and "the others."

The universal and conventional measures are not effective enough for the risk groups and in many cases they are inaccessible because some of the long-term unemployed have lost their rights.

The reduction of the share of industry in creating GDP and in aggregate employment is a natural process marking the transition from industrial to information society.

This cardinal change in the structure of national economies is often accompanied by a radical change in the professional careers of the employed, a rise in unemployment and poverty, exacerbation of social conflicts. The transition from industrial production to development of different types of services is difficult and often has a high cost.

The deindustrialization in Bulgaria has a number of specifics and as compared to Western economies, it was determined not so much by the natural course of the economic development, but rather by the initiated political changes and policy reforms for transition to a market economy. So the process of deindustrialization had to solve both economic and political tasks: the economy had to become efficient and competitive, but together with that it had to change its ownership, scales and features. The reforms began with the change of ownership, the restriction of monopoly and environmental pollution, the eradication and limitation of inefficient industries, and it continued to the establishment of a functioning market economy, corresponding to the standards and the rules of the EU policy and the requirements of the globalizing economy. These two essential transitional periods - to a market economy and to integration into the EU - led to a radical restructuring of production and employment. Unlike in other countries in Central and Eastern Europe, going through similar transitions, in Bulgaria these processes had a high social cost and significant impact on the incomes of the population, its security and employment.

THE HERITAGE FROM THE TRANSITION TO MARKET ECONOMY In the years of socialism, the state policy was aimed at preventing unemployment, which was happening at the expense of economic efficiency and productivity. New job positions were opened all the time and all available labor resources were mobilized to

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participate in production. The mass accumulation of fixed capital and the major investments in the development of the human resources of the country did not contribute to the stable and continuous growth of productivity. There was a development of the so called hidden unemployment connected with the inefficient use of the already employed workforce, loss of working hours for various reasons, low labor intensity and others.

By the mid-70s the economic growth was based on a continuous increase of the used production resources (workforce, investment, raw materials and materials, energy) in proportion to the increase of production or at a faster rate. Long before the end of the 80s, it started to become clear (and that’s why the question was openly posed) that a further increase in production could not be provided following the previous extensive path, i.e. through a steady increase in production factors. Attempts were made for a shift to an intensive type of development through increasing the labor productivity at a faster rate, in terms of used resources and production. However, the conditions for this development were not provided - modernization of production, new technologies and techniques and economic incentives for the employed in a more productive labor. The deceleration of the economic growth rate in the 80s, related to the detention and decline in the labor productivity, increased hidden unemployment.

Serious difficulties came out to maintaining the achieved standard of living of the population.

The leaders of the enterprises were also interested in maintaining a higher employment rate than the economically necessary one. The category of the company and the level of the payment depended on its scale, including the number of those employed in it. In addition, there existed a reserve of workforce that could be used, if necessary, to complete or exceed the plan - usually at the end of the year or a fiveyear period. The overexpenditure of means of production, including for salary, was not penalized.

The distribution of the workforce between sector activities, sectors and economic regions was done administratively. Insofar as under these conditions it could be assumed that there existed a labor market, it had the following characteristics (particularly in the last decade): 

the labor demand exceeded the labor supply, i.e. the number of jobs was

more than the number of the employable persons; 

high level of employment of the population, including women. Virtually all

employable persons, who did not continue their education in regular training and

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were not in the army, but were healthy, were involved in the economy, that is, were employed; 

relatively low wages and little differentiation in the level of pay for various

groups of employees (by education, professional training and qualification, working conditions and other factors for differentiating wages); 

continuous improvement of the level of education and professional training

of employees, mainly at the expense of the younger generation, regardless of the low wages of skilled labor, often lower than the ones of the labor of workers with low education and without vocational training; 

universal and guaranteed employment, a high degree of protection against

dismissal, until in fact the employee himself/herself wanted to be dismissed; 

controlled movement of the population and especially of the workforce to

the large towns; 

mandatory distribution of jobs to the university graduates and the

graduates from other professional schools (up to the early 80s); 

substantial share and priority of social benefits in enterprises in labor costs

and motivation to work in one or another organization such as opportunities for early retirement, protection against dismissal - especially before retirement, before birth and

for

mothers

with

small

children, disabled

and

others;

provision

of

accommodation or hostels by the enterprise at symbolic prices; mandatory paid leave for childcare (up to the age of 3 years of the child) and continuing education with preservation of the workplace; free or relatively low-priced dining in the enterprises; cheap annual family holidays by the sea and/or at the mountains; purchase of food and other products from the enterprise at low prices; use of free medical, dental, preventive and sports services in the enterprises; use of low-priced childcare places at the enterprise; scholarships for the studying children of long-time employees of the organization and others. In the second half of the XX century, the economy of Bulgaria changed from a typical farming to a highly industrial one. In the early 50s the predominant share of the production and of the employed was in agricultural production.

The executed collectivization of agriculture in the 60s and the intensively pursued policy of industrialization radically changed the structure of production and employment. More than one million agricultural workers changed their occupation with one in other sectors - mainly industry and to much lesser extent, construction and services. The share of industrial production and employment was continuously growing and at the end of the 80s, by share of industrial production, investment,

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long-term assets and employees, Bulgaria had the characteristics of a typical industrial economy.

Several years before the beginning of the transition, in accordance with the ongoing at that time attempts to reform the socialist economy, the distribution of the workforce and its mobility was freed from administrative interference. The very beginning of the transition to a market economy coincided with the realized liberalization of the movement of the population and the workforce - in and outside the country, between different settlements and to large towns; wages; employment and dismissal and others.

The first half of the 90s was a period of economic reform: establishment and development of markets, including the labor market; a change in the pattern of employment and formation of adequate policies to address the social problems arising from the privatization, the structural reforms and the evolved unemployment and impoverishment of the population. Since the late 90s Đ° policy of EU integration was pursued and related actions of strategic plan character were carried out on reduction of unemployment and increase of employment. Strategies were adopted (including the Employment strategy and national plans) for linking the economic development with job creation.

The inherited (considerable in volume and diversity) social benefits enjoyed by the population at the time of socialism led to a kind of turn in the situation during the transition. On the one hand, people expected that they would be preserved and on the other hand, the budget constraints, the poor financial situation of the enterprises, the uncertainty on the part of the management team regarding its own future and that of the organization proved to be an obstacle to this.

In practice, the costs of these benefits increased labor costs, reduced profits, worsened the economic conditions of the transforming state enterprises and for the newly established small private enterprises there was a lack of practice and often desire or inability to stimulate and motivate the staff.

In 1991 in the country was first introduced the negotiation of the employment salary within the settlement of individual and collective labor relations. The corresponding government act created three levels of formation of wages: national - for determining the minimum wage for the country, the types and the minimum amount of the additional payments for work (for continuous work, overtime work, etc.); collective employment contracts – at sectoral and branch level and at enterprise level; individual employment relation.

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Based on the legislation and the relevant regulations, there was a fundamental change in the form of employment – through negotiation of both parties of the employment relation and not as it was, unilaterally, by order of the respective head of the enterprise. During these years of transition the existing situation in the labor market predetermined that hiring took the form of fixed-term contracts (with a maximum duration of three years under the current legislation). The practice and the specific situation of the labor markets widely approbated the hiring under short-term employment contracts (with up to 1 year) and the hiring not based on a contract, but on civil contracts, the employment without any contract, without social insurance and others.

The foundations of industrial relations, completely unknown and undeveloped at the time of socialism, were laid during the years of the transition to a market economy.

This happened in the early years (1989-1990) and in the subsequent years they developed and enriched. The legislation established the principle of tripartism in the management of human resources at national level, determined the subject of the three-way partnership (regulation of labor and social security relations and issues related to the living standards of the population), regulated the manner of the state partnership with the representative organizations of employees and workers (consultation and cooperation), determined the basic criteria for representativeness of the organizations of employees and workers and of employers (membership, representation of sectors, availability of national and regional structures). The institutions of industrial relations in Bulgaria were built. They came into existence mainly in the form of tripartite cooperation councils (in enterprises - bipartite). For this purpose, in this regard it was used the rich experience of the European countries and the relevant conventions and recommendations of the International Labor Organisation (ILO).

The creation of guarantees for the realization of the fundamental rights of workers required the preparation and the adoption of a number of specific laws and the development of the relevant institutions, funds and other conditions on their basis.

It was impossible for the National Assembly to prepare and adopt the numerous acts on labor and social protection of the population for such a relatively short period.

Besides, in the same period there was a need to be adopted a number of laws in other areas of the public life. That’s why the relevant governments prepared and adopted a number of regulations (decrees, regulations, etc.) on the issues of the labor market regarding the creation and development of its institutions, insurance and unemployment assistance, stimulation of unemployed and employers to increase

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employment, vocational training and qualification, etc.; about the social insurance of employed people and self-employed, entrepreneurs, people of liberal professions and others; social assistance and social care; health care; education; wages; work conditions and others. Based on that, the relevant institutions were also developed with central management and corresponding regional structures.

The development of the labor market followed the main trends in the economy restructuring, privatization, liquidation of inefficient industries and activities.

Throughout the first period there was a high labor supply and a shrunk, very limited demand. This turned the low employment and the high unemployment into a significant social problem for the successful integration into the EU.131 The changes in the volume of production affected the unemployment and employment rate of the population.

In the process of the complex market restructuring of the Bulgarian economy, since the late 80s specific factors of the actual situation have been generated and activated.

In the first period they suppressed the growth, leading to deterioration and even to certain deformities in some key macroeconomic relations and proportions. During this period the liberalization of trade and prices happened and the painful and protracted reforms in the agricultural sector began.

The quantitative determination of the dependence outlines the lagging response to the unemployment, which resulted in about three times smaller change in its rate compared to the relative change in GDP. This was mainly related to three factors. If interpreted more broadly and updated, these factors reveal some overt and covert, indirect signs of unemployment, employment and labor productivity; intractable differences between the statistically tracked and the actual dimensions of unemployment. These factors include the following major impacts: 

In cases of a significant and prolonged decline in production, the process

of dismissing employees is accelerated, although it is possible that this process runs with a different intensity. The unemployment rate increases at a slower pace (and not similar), because for different reasons less (but not all) of the total number of dismissed workers additionally fall into the group of unemployed. 

One part of the discharged people relatively quickly orients to self-

employment, entrepreneurship (mostly in the field of small business), others give up participating in labor activities, i.e. go into the group of economically inactive persons. 

Every more significant and lasting decline in production affects the length,

forms and nature of employment. The number of persons employed part-time is increased. Because of the fact that the volume of production is reduced, due to the

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dropping revenues and profits, companies seek to reduce their costs in order to get quickly out of the situation. Very often this results in a decline in labor productivity and GDP growth rate. Part-time employment can be regarded as a form of flexible employment, attainment of freedom of individuals in relation to the duration of their work time, but also as an "intermediate" labor indicator that is formed on the border between

employment

and

unemployment,

because

human

resources

are

underutilized, employees receive a not rhythmic, significantly smaller pay which does not satisfy them. Thus, although formally employed, part of the employees can be defined as hidden unemployed. In practice, especially during the first period of the transition, the employment in many enterprises did not comply with the definition of employment, the longitude of the working time, the labor productivity and the receipt of remuneration did not match the established standards. The employment of these people was more limited and less reliable than the regular one. This happens mainly in case of deterioration of the global economic growth of development, production limitations for individual enterprises (markets, supplies, cooperated supplies, etc.), resulting in deteriorated production and financial results and increased likelihood of mass layoffs (dismissals, discharges).

Significant development happened in the informal economy and employment, there was a particular increase in the insecurity of employees and the ones who had lost their job.

Bulgaria registered the highest decline in employment: in the period 1989-2000 the decline was 34.3%, in Romania - 17% (1987- 1990), in Hungary - 9% (1992-1998), in the Czech Republic - only 4% (1985-1993). In 2002 the number of the employed in Bulgaria was one-third less than the number of the employed in 1989, mainly due to the reduction of the employment in manufacturing. The growth of the employment in construction and services failed to offset the mass layoffs in the industrial sector.

To avoid at least taxation or because of financial distress, irregular incomes and the uncertain future, some of the companies did not report the total volume of goods manufactured or concluded transactions and sales. This effectively reduced the volume of GDP produced in the country. For households, the relatively high income from family farms kept stable.

The sphere of services is crucial in the modern structure of the Bulgarian economy.

Its share in different years was approximately 60%. These industries have a scope for development and, on the other hand, they have a relatively high potential to increase employment, because they are more labor intensive. But they require and hire more workers with lower education and without appropriate professional training, for a

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lower pay, under fixed-term or civil contracts or without contracts, for seasonal or temporary employment.

The industry branch, most affected by the process of privatization and reorganization of the corporate activity, gradually overcame its lagging behind and already predisposed to increased employment. Since 2005 there has been a rise in the number of the employed in the manufacture of food products, textiles and clothing, leather processing, wooden material and others. Because of the predominant development of activities with high labor intensity, even the productivity growth of about 7-8% annually, recorded during the last years, is not enough.

Prevailing are small and medium-sized enterprises which have limited opportunities to generate jobs and growth. They often change employees, that is, they have a high turnover of employees.

The unfavorable situation is predetermined by the choice of models and approaches for economic reforms and their slow and inconsistent implementation.

STRUCTURAL CHANGES IN EMPLOYMENT AND UNEMPLOYMENT The more significant changes in the employment of the countries in Eastern Europe, including Bulgaria, have been: a drastic reduction in the employees in the public sector - with a different rate for each country. There is an increase in the number of the employed in the private sector by way of privatization and development of SME. 

significant reduction in the number of the employed in industry and an

increase in the number of the employed in services; 

development of a new structure of employment (by status) and emergence

of a trend of increase in the number of self-employed, entrepreneurs and employers; 

development, albeit with different scales in the countries, of the informal

economy and employment; 

diversification in the forms of employment and employment contracts, as a

rule reducing the security and stability in employment, and others.

Table 1. Restructuring of the employment in Bulgaria by sectors of the economy Sectors

1990

1995

1997

2000

2001

2002

Industry

44,7

33,8

27,5

28,3

28,1

28,0

Agriculture

18,4

23,8

25,3

26,2

25,8

25,6

Services

36,6

42,3

47,0

45,5

46,1

46,4

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For many years the registered unemployed exceeded the number of the vacancies many times. Among the registered unemployed dominated the high proportion of women, young people aged up to 29 and those over 50 years, low-educated and longterm unemployed.

By parameters of unemployment Bulgaria ranked in one of the first places among the European countries. In 2000 the unemployment rate was 12.4% on average for the region, for Bulgaria - 19.7% (the highest) and in other countries - 18.2% (Lithuania), 6.9% (Slovenia), 7.2% (Hungary) and 7.4% (Czech Republic).

The unemployment fluctuated from its lowest level in 1990 (1.5%) to 17.9% in 2000 and 2001. Its annual change was uneven and was related to the irregularity and the slowdown of the economic reform aimed to eradicate or strongly limit the inefficient industries.

During the 90s the economic growth was also uneven – with more

economic downturns, but with booms during some years. Therefore, the unemployment was changing unevenly and ambiguously, but remained high. At the same time, during this period the employment of the employable population declined dramatically. The proportion of the people of working age, who were neither employed, nor registered as unemployed, grew and reached the rate of the registered high unemployment. Only after 2000 the employment began to grow and there was a decline in the economically inactive population.

Among the reasons for the few significant changes in the unemployment in the 90s were mostly mass layoffs of employed in the public sector and in large state or privatized companies after the reorganization of their activity, the outflow of qualified specialists in intensive emigration flows and others. Some of these factors were temporary, short-term, and transient. The decline in the level of employment during the period from 1995 to 2001 can be considered as a sign of the increasing efficient use of the available functioning capital and the employed workforce. This trend, however, turned for the period after 2001. The unemployment rate for the fundamental 1990 was too low, unrealistic (1.5%), but this was the beginning of the unemployment officially registered in the country over the past four decades.

The changes in the actual and cyclical unemployment were closely related to the process of market transition, with the experienced deep financial and economic crisis and the recently set under control variation in the growth rate, although they happened relatively smoothly and monotonously. In the first 2-3 years of the period, the unemployment dynamics was characterized by an explosive drastic increase and a sharp drop in 1994. In the remaining years of the period it was oriented towards a more moderate rate. So in 1993-1994 the unemployment rate fluctuated mostly

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within a more narrow range, regardless of the collapses, the booms or sometimes the large variations in the rate of growth, showing only occasional distortions. The proportion of the structural unemployment grew, driven by the simultaneous introduction of radical branch, product and technological reforms and restructuring of the national production. The provided benefits and other social payments in case of unemployment had an adverse impact on the demand for employment and on the long stay in unemployment.

Along with the rise in unemployment (in absolute terms, level and duration), there was an increase in the gray economy and informal employment, production and marketing without paying taxes, employment without employment contracts and without insurance. The presence of hidden economy was visible by many indirect indicators including the highest number and proportion of the people of working age, who officially did not work, that is, did not receive income from work, nor were registered as receiving social benefits (what is more, for many years) and the difference between the total amount of the income received and the expenditure of households.

The high number and the relative proportion of the working age population outside the

economically

active

population

(employed

and

officially

registered

as

unemployed), i.e. inactive, had an adverse effect on the economic development, the state budget and the social security funds and it became a source of social insecurity not only for the moment, but mainly in perspective.

CHANGES IN THE BEGINNING OF 2000 Since the beginning of 2000 and especially after 2003, the reduction of unemployment in Bulgaria has been associated with the attenuation of the processes of privatization and liquidation of unprofitable businesses, as well as with the pursued active policy, creating a high share of offered subsidized jobs. Since the mid-2008 one could observe again processes of increase of the officially registered unemployment, which are connected not only with the usual seasonal fluctuations in production and employment, but also with the started global financial and economic crisis, which had repercussions in Bulgaria – a country with an open economy, with a significant export to the developed countries affected by the crisis and with a high proportion of import of raw materials and materials, whose prices were rising. The global financial crisis resulted in a drop of the foreign investments in the national economy. An additional factor were the constraints, the drop in the transfer of financial resources in the country by Bulgarian emigrants which were

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significant in volume and share, including in the financing of consumption and investments and therefore in the GDP growth.

In the second period, the growth conditions were gradually recovered and improved mainly after the reduction in the intensity of denationalization and privatization. NSI data show that in the beginning of 2007 the employment rate in Bulgaria was 47.2%, including 52.4% for men and 42.5% for women.

The highest was the employment of people aged between 35 and 44 years (82.2% men and 78.5% women). Much less was the employment among the young and the most adult people of working age. The highest was the employment rate of people with university education: 71.7% for men and 73.6% for women. The employment rate of the persons with primary and lower education was respectively 13.5% for men and 5.7% for women.

For 2007 as a whole there were reported some of the best results for the entire period of the labor market operation in the country. The employment rate of the population between 15 and 64 years of age reached 61.7%, women (15-64 years) - 57.6%, adults (55-64 years) - 57.6% and the total unemployment coefficient rose up to 6.9%.

The state of the workforce in the period from 2000 to 2010 depended on the demographic trends during the year and on the economic conditions. The economic situation, though changed in a positive direction, still did not provide favorable conditions for a more open and dynamic labor market.

The labor market as a whole retained its stability and development trends, despite the deterioration of the economic situation and the business environment in the last two years.

As a result of the economic crisis, the number of the employees was reduced and their average annual number dropped to and below the level of 2006 – 3052.8 thousand people.

Compared to the previous year, the employment coefficient declined by 2.7% and reached 46.7%.

Given the comparability of the data for Bulgaria and the European Union, under consideration shall also be the employment coefficient in the age range 15 to 64 years.

In 2010 in Bulgaria it was 59.7% and also declined by 2.9 percentage points annually.

According to Eurostat data, for 2010 the employment coefficient for the population aged 15 to 64 years in the European Union was 64.2%, as compared to 64.6% for 2009 (Fig. 1).

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Bulgaria

European Union (EU-27)

2010 г.

59,7

64,2

64,6 62,6

2009 г.

2008 г.

65,9 64

2007 г.

65,4 61,7

2006 г.

58,6

2005 г.

55,8

2004 г.

54,2

2003 г.

10

20

30

40

50

63

62,4

50,6

0

63,5

62,6

52,5

2002 г.

64,5

60

70

Fig. 1. Employment coefficient /15- 64 years of age/

Over the last two years the changes in the structure of employment by gender were in favor of women. More than half of all employees were still men - 52.7% (1608.3 thousand people, as compared to 53.2% in 2009), but their proportion was reduced in 2010. Women represented 47.3% (1444.5 thousand people), with 46.8% in 2009.

The dynamics of the age structure of employees showed signs of deepening of the observed trends, decline in specific age groups. In 2010 the coefficient of employment of all age groups declined, as the highest coefficient could still be observed in the group of those aged from 35 to 44. The lowest coefficient of employment was the one of persons aged 65 and over – 2.8%. The greatest decline was observed in the employment coefficient for those between 25 and 34 years of age.

The proportional dependence between the level of education and the value of the employment rate remained unchanged in the educational structure of the employed, as the amplitude between the two extreme values was very large.

The highest was still the employment rate of people with university education 70.01%, with 72.7% in 2009. For those with secondary education it was 57.7%, with 61.6% in 2009. For people with primary education – 20.0%, with 23.2 percent in 2009. The lowest employment rate was the one for persons with elementary or lower education - 8.5%, with 11.2% in 2009.

The dynamics of the education structure of employees showed a continuing decline of employment in all groups, with the largest decline for those with secondary

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education (by 3.9 points less), followed by the employees with primary education (by 3.2 percentage points less) and the group with elementary or lower education (by 207 percentage points less).

In terms of the employment of the population at the age over 15 years by residence, one can notice a declined employment rate in large towns (from 54.1% to 51.4% - by 207 percentage points less) and in villages (from 38.0% to 35.2% - by 208 percentage points less). The situation of uneven distribution between urban and rural areas remained unchanged.

The employed in large towns were 2390.8 thousand people or 78.3% of all employed and in villages - 662.0 thousand people or 21.7% of all employed. These processes were influenced by the economic crisis and the different employment opportunities offered by large towns and villages. This process was long-term and was increasingly deepening.

The impact of the global financial and economic crisis, that started to occur in Bulgaria at the end of 2008, worsened the economic situation in the country during the period from 2009 to 2011, turned the direction of the firm trend of economic growth and significantly changed the situation in the labor market causing a rise in the number of unemployed. The unfavorable economic environment resulted in market contraction, reducing the workload in many economic activities, cost optimization, implementation of structural changes and reduction of the employees in companies. According to the National Statistical Institute, in the period 2009 2010 over 300 thousand jobs were closed.

The average annual number of the unemployed in 2010 was 350944 people, which is close and goes back to the recorded value in 2006 (Fig. 2).

Similar findings were reported by the Labor Force Survey of the National Statistics Institute for the average annual number of unemployed persons, which in 2010 increased to reach 348000 people.

Average annual number and average level of unemployment of the unemployed persons at the age of 15 and over in the period from 2000 to 2010, according to the Labor Force Survey of the National Statistics Institute.

The average annual rates in the country during the period from 2001 to 2008 showed a lasting positive downward trend, but in 2009 and 2010 they increased as compared to the previous year. In 2010 the unemployment rate was 10.20% and was 3.40 percentage points higher, reaching the level of 2005 (Fig. 3).

In 2010 and 2011 the registered unemployed in labor offices significantly increased.

The average annual number of the unemployed registered in labor offices was 350

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944 people. Compared to the previous year, there was an increase by 69 964 unemployed persons (Fig. 4).

At the end of 2010 the unemployed were 342419, increasing from the beginning of the year by 24 468 people or 6.7%. In 2010 the average annual unemployment rate was 9.47%. Compared with the previous year, it had increased by 1.88 percentage points. In 2010 the unemployment rate gradually declined from 10.26% in February to 9.24% in December and became almost equal to the values of December 2009.

Unemployed total

800000

Unemployment rate

18,14 18,08 17,71

20 14,25

12,67

600000

11,46

15 9,61

469223

424381

356054

286980

233719

280980

350944

10

528041

7,59

655998

0

6,31

669610

200000

7,75

693481

400000

9,47

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

5 0

Fig. 2. Average annual number and average level of unemployment of the unemployed persons aged 15 and over in the period 2000-2010 according to the Labor Force Survey of the National Statistics Institute

Total number of unemployed

600000

Unemployment rate

19,8

700000

25 17,7

16,7

20

500000

13,7

400000

12 10,1

300000

15 10

449100

399800

334200

305700

240200

198700

238000

348000

6,8

592400

0

5,6

663900

100000

6,9

566800

200000

10,2

9

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

5 0

Fig. 3. Number of registered unemployed and unemployment rate for the period 2000-2010

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Journal of Innovations and Sustainability

2009

2010

e Av

er ag

r be

r be

ec em D

N

ov em

er

r

ct ob O

st gu Se

pt

em be

ly Ju

Au

ne Ju

ril Ap

ay M

ch ar M

ua br

Fe

Ja

nu

ar

ry

y

400000 350000 300000 250000 200000 150000 100000 50000 0

Fig. 4. Number of registered unemployed in 2009 and 2010

There was a persistent downward trend in the average annual unemployment rate in Bulgaria, according to data of the National Statistics Institute and anticipatory estimation of the reported average annual unemployment rate in the European Union (Fig. 5).

9,24 9,13 9,07 8,66 8,23 8,92 8,03 9,03 9,14 7,88 9,23 7,62 9,26 7,29 9,53 7,08 9,95 7,04 10,14 6,88 10,26 6,69 9,9 6,5

December Nov ember October September August July June May April March February January

0

2

4

6

8

10

2010 2009

12

Fig. 5. Unemployment rate in 2009 and 2010

In 2010 the reported average annual unemployment rate in Bulgaria was higher than the EU average one. According to Eurostat data, the average annual unemployment rate in 2010 in the Euro area was 10.00% and for the European Union - 9.60% (Fig. 6).

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25 20

2009 Đł.

2010 Đł.

15 10

C

Be ze B lgiu ch u m R lga ep ria D ub en lic G ma er rk m Es any to I re nia la G nd re ec Sp e F r ain an ce I C taly yp r La us t L Lu it h via x e ua m nia b H ou un rg ga N r et M y he a rla lta n Au d s st Po ria Po lan d R rt ug om a Sl an l ov ia Sl e n ov ia a F i kia nl Sw an d ed en U K

5 0

Fig. 6. Average unemployment rate in the EU

Under the impact of the global financial and economic crisis, in almost all states of the European Union the average annual unemployment rate in 2010 increased, as compared to the previous year. The largest increase was observed in three countries, among which Bulgaria was also (Lithuania by 4.10 percentage points, Estonia by 3.10 percentage points and Bulgaria by 3.10 percentage points).

A large increase was also observed in Slovakia (by 2.50 percentage points), Greece (by 2.50 percentage points), Spain (by 2.0 percentage points) and Latvia (by 2.10 percentage points).

In the other member states of the European Union the increase in the average annual unemployment rate varied in the range of 0.10 percentage points in Sweden and 0.20 percentage points in Finland, Great Britain and France, to a growth by 1.40 percentage points in Denmark, Portugal and Poland, 1.50 percentage points in Cyprus and 1.60 percentage points in Ireland.

In 2010 the average annual unemployment rate showed a decline compared to the previous year only in four states of the European Union. The greatest decline was observed in Germany (by 0.70 percentage points), followed by Luxembourg and Austria (by 0.40 percentage points) and Malta (by 0.30 percentage points).

In the ten districts of the country the unemployment rate was lower than the national average, while in the other 18 areas the rate had values above the average for the country. The trend of the previous years was retained and the lowest unemployment rate was again recorded in the districts of Sofia-city 3.47%, Burgas – 6.48%, Gabrovo - 6.59%, Varna - 7.22%, Stara Zagora - 7.43%, Plovdiv - 8.26%, Pernik - 8.80%, Veliko

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Tarnovo - 9.23%, Ruse - 9.34% and Haskovo - 9.37%. The highest rate was recorded in the following districts: Smolyan - 17.34%, Targovishte - 16.14%, Montana 15.39%, Shumen - 14.75%, Vidin - 14.71%, Razgrad - 14.27%, Silistra - 13.72% and Vratsa- 13.49% (Fig. 7).

Shumen Yambol

Stara Zagora Targovishte Haskovo

Sliven Sofia Sofia region

Razgrad Ruse Silistra

2009 г.

Pernik Pleven Plovdiv

Montana Pazardzhik

Kardzhali Kyustendil Lovech

Vrasta Garbrovo Dobrich

Varna Veliko Tarnovo Vidin

20 18 16 14 12 10 8 6 4 2 0

Total for the country Blagoevgrad Burgas

2010 г.

Fig.7. Unemployment rate in 2009 and 2010 by administrative districts

In 2010 there was an interruption in the long lasting positive trend of shrinking of the variation range in the values of the unemployment rate in the country. The variation range showed the difference between the reported minimum and maximum values of the unemployment rate in the country, respectively in Sofia-city and Smolyan District. The value of this indicator increased by 2.16 percentage points compared to 2009 and reached 13.86 percentage points, with 11.70 percentage points in 2009.

The variation range, showing the difference between the reported minimum and maximum average monthly unemployment rate in the municipalities of the country, rose to 48.98 percentage points. In the last ten years these two municipalities had been on the two extremes.

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The trend that the municipalities with the highest unemployment rate were concentrated in the North, Northeast and Southwest planning regions, remained unchanged.

MAIN STRUCTURES OF THE UNEMPLOYED In 2010 the labor demand was formed mainly under the influence of the economic situation in the country, the seasonal factor and the active employment policy. At the end of 2010 the total business climate indicator, according to data of the National Statistics Institute, showed an increase trend compared to the end of 2009, while the rate remained unchanged as compared to the rates in 2000-2001.

The main reasons were the uncertain economic environment and the market contraction. The consequences were insufficient financial security, reduction in the consumption of goods and services, reduction of the volume of production, closure of companies, substantial limiting of foreign investment in new productions or for expanding existing productions, cost optimization and more. The specificity of the reactivity of the labor market to the changes in the economy over the year explains the continuing decline in the labor demand on the primary market, regardless of some optimistic signs at the end of 2010. At the same time, the efforts of the Ministry of Labor and Social policy and the Employment Agency to balance the labor market were related to the implementation of an active policy for promoting employment through the state budget and the European Social Fund, respectively the Operational Program "Human Resources Development" and the announcement of a large number of jobs for subsidized employment.

As a public recruitment agency, the Employment Agency was among the major and preferred intermediaries in the labor market. Through its services connected to the labor demand and supply, in spite of the competitive environment created by private employment agencies, print and electronic media, specialized sites, etc., it had a market share of almost 25%.

In 2010 the contraction of the labor market continued as a result of the negative impact of the economic crisis in the country. It dramatically affected the labor demand and the trend of reduction of the announced jobs in labor offices continued.

Due to the crisis, a significant decline (compared to 2009) was observed in the real economy and in particular in the private sector. There was also a great reduction in the number of jobs for subsidized employment within programs.

In 2010 the proportion of vacancies in the primary market, in the structure of the requested jobs, increased by 2.4 percentage points compared to the previous year

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and reached 66.0%. This change happened at the expense of the proportion of jobs under employment programs, which decreased to a value of 31.9%, due to limited financial resources. The EPA measures retained their relative proportion (from 2.2% in 2009 to 2.1% in 2010).

In terms of professional-qualification structure of the requested jobs, there was still a steady trend, people to seek mostly low-skilled labor in labor offices. A slight increase by 0.5 percentage points was recorded, as in 2010 the proportion of the jobs for persons without qualification and profession reached 79.5%.

For the period 2000-2008 the number of the registered unemployed persons without specialty dropped significantly and in 2009 and 2010 one could observe a logical rise, given the increase of unemployment in the country. Extremely high values of the supply of this kind of labor were reported during the first three years of the period.

The situation changed in 2003, with the launching of the National program “From Social Assistance to Employment�, which resulted in the creation of a large number of jobs, mainly for unskilled workers. The launch of the program coincided with the revival of the economy in the country and these circumstances led to a certain balance between the demand and supply of unskilled labor in the following years.

With the reduction of the program, the demand for workforce decreased from 2005 on. In 2010 the labor demand for people without education and qualifications dropped more sharply than in the previous years, while at the same time the supply significantly increased. This resulted in a turn of the proportions. These processes formed a large discrepancy between the demand and the supply of labor for people without qualification.

INDIVIDUAL LABOR SUPPLY In its essence the model of labor supply is an application of the theory of rational consumer behavior. In it the task of the individual is (with predetermined and exogenous for the model period, prices and limited income) to obtain maximum utility of its consumption C (measured by the real total individual income and including all the benefits available to the individual, with the exception of time) and the hours during which the individual does not work for some remuneration or income L (conditionally, these hours are called leisure and include the time for rest, work in the household, education and training).

It should be noted that the solving of this problem comes not from the combination of labor and consumption, but from the combination of consumption and leisure that maximizes the individual utility under the given constraints. This formulation of the

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problem is generally acknowledged and is done so that it can fully satisfy the assumptions of the standard model of consumer choice. In this way it is relatively easy to explain the choice of leisure, and then, considering that the total time available to the individual is fixed and is divided only between labor and leisure, the composed model becomes also a model of the individual labor supply.

The choice of an individual of a combination of consumption and leisure (C, L) is dependent on his/her preferences. They are based on different economic, psychological and sociological motives - economic necessity, striving for a social status and realization, family commitments and roles, material and psychological conditions of labor, inner desires and aspirations.

The presence and relative strength of these motives depend on the specific situation and the subjective attitude of the individual to the situation. For example, the reasons for the demand of leisure and hence for the supply of labor are linked to marital status, gender, age and education. In general, economic motives dominate over noneconomic in periods and countries experiencing greater economic difficulties. If the reasons for labor supply are available, they, taken in their totality, make labor supply a basic need of the personality and rise attitude and willingness in the individual to work.

The analysis of these questions about the nature and the origin of individual preferences is in the field of social psychology and personality psychology. The economic model of individual labor supply considers the preferences not as endogenous, but as predefined and sets as its single task their description by a utility function. This function has the general form U = U (C, L; a, u) and shows the utility U, which the individual with individual characteristics Đ° (such as age, gender and education) and tastes u (which, unlike the individual characteristics, are unobservable and explain the different preferences of individuals with similar characteristics) obtains from the use of different combinations of points C and leisure L, wherein it is assumed that the preferences are complete, double consistent and transitive and unsaturation exists.

Graphically the preferences and the function of individual utility are represented through a map of indifference. It contains a countless number of continuous curves of indifference, each of which is a geometrical locus of the combinations of consumption and leisure equally desired by the individual. From the assumptions for transitivity and unsaturation follows that the individual curves of indifference do not intersect or touch and that the utility reflected by the more remote curves of indifference is greater than that associated with the ones closer to the beginning.

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Each of the indifference curves is characterized by its slope and shape. The measure of their slope is calculated by differentiating the utility function U = U (C, L; a, u).

The requested jobs in the real economy continued to become less, as a result of the stagnation and the economic crisis in the country. The impact of seasonal factors on the primary market was significant.

In 2010 there was a continuation of the negative trends in the labor market in the real economy. The private sector employers were reluctant to creating new jobs and the market was formed mainly by jobs resulting from the staff turnover in the companies. It is known that new jobs are opened more slowly than they are closed, as employers balance the workforce and their costs and they are cautious about increasing them.

During the year in the primary market 123887 vacancies were announced in labor offices - which means 18926 (13.2%) jobs less. The largest number of jobs was announced by the private sector - 91787, representing 74.1% of all the jobs announced in the real economy. The jobs announced by the private sector became less in number and in share. Their proportion decline was 6.4 percentage points for a year and their number was 23188 less. The data show that the private sector was more affected by the crisis than the public one.

During the year in almost all economic activities there was a registered decline in the labor demand. The demand was unchanged in the production of electricity, gas and water and in financial intermediation. Growth in demand was observed only in the field of state government (by 1754), which has its explanation. The change in the Employment Promotion Act in 2010 had a significant impact. Since August all employers of state and municipal enterprises and the administration were obliged to declare in labor offices the vacancies for employment relations. A reflection of this can be seen in the direction of increasing the jobs in the government, administrative and complementary activities. Except in quantitative terms, the effect was reflected in the quality of demand - provided were jobs suitable for professionals and for this group of unemployed the demand was insufficient.

The number of the new jobs in the economy is symptomatic of its state. In times of economic crisis, the creation of new jobs is sharply declined as a consequence of the unfavorable economic situation. Companies focus their efforts on keeping the most effective employees and on cost optimization.

When one analyzes the sought jobs in the real economy in the professional section, as in 2009, the most sought after through labor offices turn out to be the jobs in the textile and clothing production - tailors, machine operators in the textile and clothing

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production and others (over 13400 jobs). During the year there was also a great demand for workers in agriculture, forestry and hunting, gardeners, plant-growers, forestry workers, stock-breeders, producers of mixed products and others (almost 9440 job positions), kindergarten teachers, teachers in elementary, primary and secondary schools, university teachers and others (over 9200 jobs), administrative and office staff, secretaries, lawyers and others (around 9000 jobs).

Unlike in other years, there was a significant growth in the demand for care workers (domestic helpers and related to them - approximately 7700 jobs). In labor offices there was a considerable number of vacancies advertised in the area of tourism and hospitality: administrators, bartenders, waiters, maids (over 7600 jobs) and in the manufacturing industry: workers in manufacturing industry (for manual operations) - also over 7600 jobs.

The jobs under the measures of the Employment Promotion Act can be considered part of the primary market, but of mixed nature, since for their creation and filling employers make use of preferences and because of this they are defined as jobs for subsidized employment.

The subsidized jobs requested under employment measures during the year were 3867. A decline was registered by 992 jobs (20.4%). The largest number of jobs was announced under the promotion measure, encouraging employers to create jobs for internships, thus hiring unemployed persons under 29 years of age (art. 41 of the EPA). Under this measure 1180 jobs were announced. Employers were very interested in the preference for hiring persons with disabilities (art. 52, para 1 of the EPA) and under the measure (art. 52, para 2 of the EPA) 889 and 566 jobs were respectively created. Next in new jobs was the measure that promoted hiring unemployed to work part-time (art. 51 of the EPA), as 474 jobs were announced under the measure.

The imbalance between the demand and the supply of labor in the labor market continued to deepen. The crisis mostly affected the most vulnerable groups in the Bulgarian labor market. In this situation the employment programs and schemes under the Operational Program "Development of Human Resources" had a significant role in reducing tensions in the labor market. They were used as a tool for providing greater access of disadvantaged groups to the labor market.

During the year the filled vacancies were 153669. Their number fell by 65732 jobs (30%) compared to 2009. 96623 were employed in the primary market. The decline in the number of filled vacancies in the real economy was by over 40000. The data suggest that the filled vacancies in the primary market declined at a more rapid rate than that of the announced ones, which is an indicator of the disparity between the

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characteristics of the supply and the demand of labor. The data for a total increase in the remained unfilled vacancies at the end of each month can be considered an argument in that direction. Within incentives of the EPA 3374 jobs were taken and under employment programs 53672 jobs were utilized. The closest values of the announced and the filled vacancies were the ones for January and November, when the vacancies under employment programs (mainly under the National program “From Social Assistance to Employment�) were filled in priority.

The regional differences in the labor demand remained the same. The situation of the local labor markets was directly determined by their socioeconomic development.

Differences were recorded both between districts and between the municipalities within one district. Many factors determined the uneven distribution of vacancies in the country - the specificity of the branch structure of the local economy and the seasonality, the size of the region, in terms of the number of economically active population and the traditions of the population in employment, which is decisive in the search in the primary market.

The opportunities for the unemployed to find employment in the labor market are in a direct and significant correlation with the gender, age, vocational and educational characteristics of the unemployed.

An increase in both groups of unemployed (men and women) was recorded in the structure of the unemployed according to Paulsen. The average annual number of women registered in 2010 was 191684 and that of unemployed men - 159260.

The economic crisis mostly affected the economic activities in which the workforce is dominated by men - construction, agriculture and forestry, manufacturing and others.

The monthly dynamics expressed by the average monthly rate of change was almost the same for unemployed women and men. The average monthly rate of decline in the number of unemployed women was 0.6% (with an increase of 2.2% in 2009), while that of men was decreasing - 0.7% (with a growth of 4.5% in 2009).

The ratio women: men (54.6%: 45.4%) continued to shrink in favor of women, as in 2010 there was a significant reduction in the proportion of women - by 3.1 percentage points (with 57.7%: 42.3% in 2009 and 62.5%: 37.5% in 2008).

In the crisis 2010 the dynamics in the age structure of the unemployed mainly concerned the groups at the most active working age (from 35 to 44) in the direction of increasing their proportion and the group of the youngest (up to 19) and the elderly (over 55), whose relative shares continued to decline. The steady trend of population aging over the last decade is the reason why the age groups over 45 continued to be

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the most numerous in number and with the highest proportions. In 2010 the average annual number of unemployed increased in all age groups.

In the age structure of the unemployed, with the lowest relative share was still the group of young people under 29. The unfavorable upward trend in the number of persons over 50 years, observed in all years since 1991, continued.

Young people under 29 and people over 50 are among the main target groups of the active policy in the labor market pursued by the Employment Agency in recent years.

The structure of the unemployed by occupation includes the following occupational groups: people with worker specialty, specialists and people with no specialty.

The unemployed with worker specialty registered in labor offices were 82058 people.

For a year they increased by 20289 people (32.8%), as the average monthly rate (monthly dynamics) showed a decline by 0.6% (with a growth of 4.2% in 2009). Their proportion for one year period was increased by 1.4 percentage points up to 23.4%.

On average for a year, the group of the unemployed specialists included 70945 people, with an increase of 14438 (with 25.6%). The average monthly rate of decline in their group was 0.4% (with a growth of 3.7% in 2009). The proportion of the unemployed specialists remained almost unchanged - 20.2% (only by 0.1 percentage point more).

The increase of unemployment in these two professional groups was mainly due to dismissals and layoffs of qualified staff from enterprises as a result of the economic crisis, as before that the employers had dismissed the low-skilled staff.

The unemployed without qualification and specialisation were the largest group in the professional structure of the unemployed, including 197941 persons - with 35237 people (21.7%) more than in the previous year. The average monthly rate of decline in their group was 0.7% (with a growth of 2.5% in 2009). The relative share of the unemployed without qualification and specialty continued to be high in 2010, but at the same time one could observe a decline in their share from 57.9% in 2009 to 56.4% in 2010 for the third consecutive year.

The economic crisis affected very negatively the disadvantaged groups in the labor market, for which there is an increased risk of social exclusion and poverty. These groups include young people under 29, people over 50, long-term unemployed, unemployed persons with permanent disabilities and other smaller groups. They were a priority of NEAP (National Employment Action Plan) in 2010 and respectively the action plan of the Employment Agency.

In 2009 and 2010, in parallel with the increase in the total number of registered unemployed, there was an increase in youth unemployment. The persons under 29

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years form one of the disadvantaged groups, as during economic crisis most employers prefer to dismiss mainly employees without experience for the position.

There is another unfavorable fact - the majority of the unemployed young people under 29 registered in labor offices have very low education and skills.

In 2010 the unemployed young people up to 24 years were 30168 on average for a year and for one year they increased by 5449 persons or 22.0%. Their proportion, however, declined from 8.8% in 2009 to 8.6% in 2010 of the total number of registered unemployed. The long lasting trend remained unchanged - the highest relative share (67.2%) among the unemployed youths under 24 was the one of those without qualifications.

The group of the unemployed young people up to 29 years included 63500 people, with an increase by 12165 persons (by 23.7%). Their proportion was 18.1% of the total number of registered unemployed.

The unemployed persons over 50 were 131887 people, with 23.7% (25240 people) more. In recent years (after the introduction of the point system for retirement in 1999), the group of the persons over 50 years stood out with a permanently growing proportion, but in 2009 this many-year unfavorable trend was interrupted and in 2010 their proportion of the total number of the unemployed in the country continued to decline from 38.0% in 2009 to 37.6% in 2010. The reasons for the decline in the proportion of this group were related to the fact that it was among the priority target groups of the active policy pursued by the Employment Agency in the labor market and also because of the bigger number of dismissals in the lower age groups (35 to 44 years) during the year.

The long observed trend was preserved among the unemployed over 50, with the highest relative share of those with no qualifications (55.7% in 2010, 57.5% in 2009) and with elementary or lower education (52.9% in 2010, 55.9% in 2009), but these values were significantly lower.

There was a significant rise in the number of long-term unemployed in 2010, both in number and share. The average annual number of the long-term unemployed registered in labor offices for more than one year was 110848 people, as it had substantially increased by 39.0% (31120 people) in comparison with the previous year. The average monthly rate (monthly dynamics) of long-term unemployed had increased by 2.3% (with much lower rate of 0.6% in 2009). Their proportion also increased substantially (by 3.2 percentage points) from 28.4% in 2009 to 31.6% in 2010.

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The proportion of the long-term unemployed (for more than a year) remained high in the districts of Targovishte (45.6%), Razgrad (43.0%), Kardzhali (41.9%), Silistra (40.7%), Sliven (40.5%), Shumen (39.6%) and Montana (39.0%), with the lowest proportion in the country in Sofia-city (7.8%). In the districts of Burgas (13.6%), Gabrovo (21.1%) and Varna (21.8%), the proportion of the long-term unemployed for more than one year also had much lower values.

There was a sharp increase in the number of the long-term unemployed registered in labor offices for one to two years, with a turn in the observed downward trend in this group from 2002 on. Furthermore, in almost all previous years, the long-term unemployed for one to two years were the smaller part of the total number of longterm unemployed for over a year. In 2010 the long-term unemployed for one to two years were 59495 people and they increased by 34145 persons (2.3 times), as their proportion of all long-term unemployed reached 53.7%. The average monthly rate in this group of long-term unemployed showed a significant growth of 3.9% (with an even higher growth of 5.4% in 2009). Their proportion also almost doubled by 8.0 percentage points compared with 2009 to 17.0% of all unemployed registered in labor offices. This change was a result of the economic crisis, which led a large number of unemployed persons in the labor market over the previous two and a half years people who had permanently lost their jobs. In fact the significant growth in the number of long-term unemployed for more than one year as a whole was due to the sharp increase in the group of long-term unemployed for one to two years.

In 2010 the average length of the stay of unemployed in the labor market significantly increased, compared to the previous year, by 9.1 months, as it reached 14.7 months, i.e. exceeded one year. Among women, the average length of registration in labor offices increased by 9.6 months to reach 15.9 months. The average length of the stay of men in labor offices also increased, but less - by 8.6 months up to 13.5 months, as they retained their lower average duration compared to that of women and the total average duration of unemployment. The problem with long-term unemployment is lasting and extremely important.

The unemployed persons with permanent disabilities were 13657, with 883 people or 6.9% more. For unemployed persons with disabilities labor offices provided the major opportunity for employment.

Single mothers form a specific group, particularly disadvantaged in the labor market.

An annual average of 2906 women got registered in labor offices - single mothers, as their number increased by 17.0% (423 women) compared to the previous year.

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Another disadvantaged group among unemployed women is that of mothers with children up to three years of age, who were 7745 people on average for 2010. They showed a considerable growth of 25.7% (by 1585 women) compared with 2009.

BUILDING A FUNCTIONING LABOR MARKET The institutions and the legislation related to the labor market were created at the beginning of the transition and this gave the opportunity to have them developed in accordance with the existing ones in the European Union countries.

At the outset of the transition, with the advent of the first groups of unemployed, was adopted a special government decree (Decree №57 of the end of 1998), which regulates the establishment of employment services and cash payments in case of unemployment - benefits (for the insured) and social benefits (for those with no insurance, mainly the ones graduating from secondary and university education institutions, with vocational training and registering as unemployed in employment services). This regulation, which has been changed (supplemented, amended or elaborated), gave rise to conditions for: 

registration of unemployed and others seeking employment and of the

vacancies from employers; 

payment of cash benefits to employees dismissed not because of their fault,

but on the initiative of employers and mainly due to full or partial liquidation of enterprises, structural changes, cuts in the number, expiration of the employment contract; 

payment of cash benefits to registered unemployed graduated from

secondary schools and universities with vocational training, registered in public employment services (labor offices); 

training, career guidance and retraining of employees, dismissed from the

organizations. This training was organized by labor offices at the expense of the special fund "Professional Qualification and Unemployment" (Fund "PQU") aiming at the more rapid return of the unemployed to work; 

development of a state system for organizing mediation, retraining,

registration, payment of benefits and unemployment benefits, implementation of state employment policy and regulation of the labor market - National Employment Service at the Ministry of Labor and Social Affairs, which includes the central management, 9 regional offices and labor offices (some of them with branches) in all district centers and larger towns and settlements in the country;

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

formation of a special fund for the unemployed - for the payment of cash

benefits in case of unemployment, recruitment mediation, training and other active employment measures - Fund PQU whose source are the monthly contributions of employers from the business sector (currently 5% of the accrued funds for salary) and the state budget.

Essentially there are two contradictory trends in the developed and functioning state Employment Agency- decentralization of most of the functions and at the same time centralization, administration regarding the provision of resources for the various institutional levels in the labor market, development of strategies and measures of active employment policy and others.

The role of a main mediator in the labor market is assigned to labor offices. Over the past years their functions have evolved, their priorities have enriched and changed.

In the early years they mainly carried out functions of registration of unemployed, announcing vacancies to them and paying cash benefits and benefits to the unemployed. Until recently these activities of the so-called "passive policy" occupied over 90-95% of the work of labor offices. And still today, although much less, there are labor offices for which these functions are the main or sole ones. Unemployed still got registered in labor offices mainly because of the opportunity to receive benefits or unemployment benefits. In support of this claim come the data for the relatively mass refusal of the unemployed to retain their monthly registration at labor offices after the expiry of the term for receipt of these cash payments. This means that the unemployed do not trust, do not expect that, by using public employment services, they would return to work.

In the public employment services there has been a gradual development of the activities of the so-called "active" employment policy: 

recruitment mediation, including information on vacancies and work

conditions, vocational guidance, motivation and professional qualification with the purpose of getting jobless people employed in the available jobs on the market; 

stimulation of self-employment, entrepreneurship of the unemployed;



implementation of programs and other measures of the state policy for

regulation of the labor market; 

performance of specialized control over the observance of laws and other

normative documents in the field of unemployment insurance, payment of cash benefits and compensations, use of the provided incentives for hiring unemployed for the purpose intended, entrepreneurship and others.

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During the first transitional period, passive policy measures prevailed in the labor market. The share of the costs of this policy varied from 93.7% (1991) to 68% (1999).

The majority of the measures were in the form of unemployment benefits paid only to the people dismissed. At first, their size was generously determined and depended on the remuneration received by then, and the period of receipt of the benefits was the same for all. Very soon another, more restrictive system was introduced.

The policies got more oriented towards the labor supply and less towards the labor demand. Dominating were passive policy measures: payment of benefits and social benefits for certain groups of unemployed, encouraging early retirement and withdrawal from the labor market of part of the working age population. The number of the people who continued their education increased; there was also considerable external migration, which reduced the supply of labor.

There was a lack of purposeful state policy for employment restructuring. Significant development was given to the social policy and the passive policy for the labor market, with adverse long-term consequences for the economic activity of certain groups of the population.

The deindustrialization resulted in the implementation of employment programs with sectoral focus – for qualification and employment of the massively dismissed workers from the restructuring or the closure of inefficient industries (ore mining and coal mining, steel industry, etc.).

Since the late 90s, and especially since the beginning of the new millennium, there has been a change in the strategy on the labor supply - from passive to active measures; from social benefits to employment; from individual measures and programs to national action plans in favor of employment.

The employment policy got included in the macroeconomic and regional policy. There emerged the understanding that employment policy is rather an economic than a social problem and that the solution to the problems of high unemployment and poverty is in the economic and not in the social policy, social benefits and temporary subsidized employment. The employment policies started to become more regional.

There appeared more programs that reflected the socioeconomic priorities of the regions.

Business promotion and mitigation of social problems are among the main guidelines. The actions are aimed at: 

supporting the establishment and operation of small and medium-sized

enterprises, particularly in the regions in need of diversification of the economic structure (regions of industrial decline, underdeveloped rural areas);

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

projects for employment and restructuring of manufacturing plants, mainly

in regions with high unemployment and risk of exacerbation of social problems; 

creation of entrepreneurial and innovative environment (establishment of

networking cooperation, regional marketing and distribution of information, support to the creation and operation of market and technological infrastructure, business services, improving the quality of human resources, improving the quality of the environment as a general condition for increasing the investment attractiveness, etc.).

The programs with a focus on infrastructure sites are aimed at the reintegration of unemployed and are expected to have a positive impact on the development of municipalities.

The total effect of the transition from a planned-distributive to a market system in key economic areas such as changing the form of ownership through privatization or transformation of the financial system from a state to a mixed one (establishing a system of commercial banks, stock and other exchanges, etc.), seems relatively transparent today. The area related to labor relations remains more diffuse. It is generally accepted that an economic planning and distribution system inherently denies the existence of market regulators of labor processes. At first glance, it is true.

In the planning and distribution system one of the fundamental public relations – the right of labor – is interpreted as an obligation of people to engage in socially useful labor. In contrast, in a market economy voluntary labor is fundamental - the right of people to choose freely between self-employment and voluntary unemployment without any coercion.

In the two systems the state's role in providing employment is determined in a different way. If in the first case, in response to the binding nature of labor, the state declares a guaranteed provision of work to its nationals, in the second case, by virtue of the different distribution of rights and responsibilities between the nationals and the society, there is no such guaranteed obligation in respect to every person. If the planning system based on state ownership involves the regulation of wages centralized through a unified tariff network or system, in the market economy operate more complex mechanisms that involve wage determination by the labor market, through a developed system of collective contracting (but not in all countries), a legislative determination of the minimum wage, limiting the wage growth in order to curb inflation, etc.

The planning system also uses its immanent instruments to influence the demand and supply of labor, the regulation of hiring and dismissal of workers. Among these tools are: statutory limits on numbers, rules for determining the wage, the ratio

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between the increase of wages and the labor productivity, a progressive tax on the raising of wages, payment for labor resources, the institute of address registration, planned distribution of university graduates, agricultural migration, organized borrowing of workers, etc. Such tools are not characteristic of the market economy.

However, despite the quality differences, the staunch opposition is not always fair.

The constitutional obligation of people to work, for example, was combined with the free choice of profession. In the search of a job employees had the right (with certain restrictions related, for example, to the place of residence) to communicate freely with employers. In turn, employers had relative freedom in choosing the needed employee (within, for example, the staff listing and the settlement). Đ•mployees had the right to leave of their own free will, which is more characteristic of the nature of a market economy. Generally the freedom of movement of employees from one establishment to another was not restricted. If tariff rates were determined at the central level, within the established systems of labor remuneration, non-cash income (company housing) turned into a factor of market differentiation. These and many other facts are evidences of the presence of elements of market labor relations in the planning and distribution system characteristic of Bulgaria.

Perhaps the main difference between the two systems, erected years ago to the rank of a political advantage of the planned economy, is the absence of open unemployment. Since it was believed that full employment was achieved, there was no policy on unemployment. The main task of the state was to maintain full employment and its rationalization. This policy direction was determined as employment policy. Given that the chronic problem of the Bulgarian economy was not unemployment, but the deficit of personnel, the senior management considered the provision of workforce for the national economy as Đ° main economic objective of the employment policy.

However, in the 70s and 80s there was an observed retreat from the pure planning system. Problems, connected not with the shortage of staff, but with the possible deficit of jobs were indirectly recognized. Thus, for example, one of the main tasks of a number of decrees and regulations was connected with an improvement in the organization of wages and introduction of new tariff rates and wages for the workers in the productive sectors of the national economy and in achieving a better balance between the number of jobs and the number of employees. This expanded the degree of freedom of employers to dismiss workers for economic reasons. The possible occurrence of unemployment forced the taking of such decisions (as temporary rules) on the procedure for recruitment and retraining of workers exempt from associations,

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businesses and organizations, as well as to ensure effective employment of the population, improvement of the employment system and increase in the social guarantees for workers.

However, these and other changes took place within the existing political and economic paradigm. Its change at the beginning of the reforms in the 90s questioned the basic steps of the transition and the features of the transitional period itself.

Perhaps the least dramatic turned out to be the transition related to the return of democratic civil rights. The Act on Protection against Unemployment and Employment Promotion of 1997, and before that the new Constitution of the Republic of Bulgaria adopted in 1991, gave the statutory right of citizens to self-administer their ability to work without any coercion. But in economic aspect this transformation proved much more dramatic. On the one hand, many workers remained "attached" to the companies through different non-monetary levers (housing, kindergartens, etc.), with the preserved institute of address registration, the absence of housing market, etc. Job loss or change meant also loss of significant social benefits. On the other hand, the redistribution of economic responsibility between citizens and the state led to the irrelevance of the state's obligation to ensure the provision of jobs for its citizens. The latter became impossible due to the leveling of the balance of the rights and the obligations of employees and employers. Unlike within the previous centralized system, the state lost its right to dictate the conditions of employment for people in need of work (through mechanisms of non-economic coercion) to the increasing range of privatized enterprises. The shrinked public sector of the economy, on which the state could have a direct influence (e.g. by increasing the jobs in the civil service), had its limitations and by volume it could not accumulate all who lost their jobs. But, if the legislative recognition of the new relations required minimum time, the formation of new institutions and instruments to support employment, offsetting to some extent, the old ones, could not be achieved so quickly. As a result of such transformations inequality arose in the labor market. Graduates, persons returning from places of detention, women trying to return to work after maternity leave due to pregnancy and childbirth and many other groups of citizens found themselves in a more disadvantaged position in the labor market. Inadequate tools or lack of tools for their support and their return to employment, implemented in the market economy, brought back the attitude to the state as to an institute obliged to provide guaranteed employment. But very rarely one could find an answer to the question where these people could be employed.

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Another consequence of the democratic changes in the labor law in the transitional period was the increase of discrimination in recruitment and dismissal. But, as in the previous case, these processes were caused not only by the nature of the labor market, but rather by the transition state, when the area of traditional state control over the compliance with the labor rights of citizens narrowed and new tools and institutes (institutions) had not yet been created or were not working effectively enough.

The transformation of the Bulgarian economy into a market one revealed numerous peculiarities and paradoxes in the formation of the labor market, which are not usually characteristic of the countries with a traditional organization of the market economy. Thus the absence of major economic growth in the first years of the reforms contributed to the establishment of a view of the uniqueness of the Bulgarian transition phase in the sense that the successfully selected macroeconomic strategy resulted in the avoidance of serious problems in the labor market. This "success" however was accompanied by hypertrophic appearance of intermediate forms in the status of the employees who were not completely unemployed, but were also not working. "Unemployment in the workplace", including the one connected with the preservation of excessive, economically unjustified employment, paradoxically coupled with a shortage of staff. The actual unemployment resulting from a periodic change of jobs met the inflexible employment system, the weak points of the labor market, the insufficient understanding of the role of some market mechanisms such as the employment services (primarily with their functions in informing about available vacancies and workers seeking employment). Structural unemployment, usually determined by the recession in some industry branches and the growth (including the increase in the number of jobs) in new sectors is generally eliminated by systems for retraining of employees. But in the transition conditions in Bulgaria, the compensating creation of new jobs was clearly insufficient, and the new jobs often required no training but professional habits and skills of a lower level than the ones in the previous job. In response to cyclical unemployment (unemployment of insufficient demand) are often used measures for recovery of aggregate demand (or for retention of its decline), promotion of job creation (tax concessions, removing the obstacles to the creation of small businesses, provision of know-how, etc.), promotion of part-time employment. But in the Bulgarian transitional conditions, cyclical unemployment rather took the form of systematic unemployment as a result of the continuous and prolonged economic recession, sectoral imbalances and other causes that put into question the traditional means of counteracting to unemployment.

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Similar paradoxes of the labor relations in an economy in transition often suggest that the measures of state influence on the labor market make no sense in such a situation. Therefore, their application should be postponed until the moment when the labor market and the economic system as a whole finally acquire classic market features. But the problem is that not only the listed, but also many other paradoxes of the transitional period entirely dictate the situation in the labor market. The increasing discrimination in hiring and dismissal, for example, can hardly be attributed to the regularities of the transition. Even the distortions related to the causes of unemployment cannot be used to deny the fact that each year tens of hundreds of people change their jobs remaining in a state of frictional unemployment for a certain period of time. Structural changes, although acquiring the form of almost universal, but uneven decline, coexist with different points of growth both in new sectors (e.g. financial and commercial sector) and within the industries that are experiencing recession (some companies hire new workers and others dismiss workers). The weak points of the institutions in the labor market, regulating the wage dynamics (e.g. employment contracts and agreements) can not also be used as a starting point for conclusions about their temporary inappropriateness. Nowadays the transformation of the labor relations from such that are typical of the planning economy to ones typical of the market economy is significantly delayed, compared with the advent of other attributes of the market (formation of different forms of ownership, financial and other markets). A delay of this kind may become an essential factor leading to the delay in the completion of the transformation period. It could be stated that this period will not end if the labor relations, the creation of effective institutions in the labor market remain inadequate to the other economic transformations.

It seems that one of the main differences in the regulation of the processes connected with the employment of the population in a planning and market economy is the unacceptability (to a large degree) of the linear management dependencies, characteristic of the previous economic system, in the new conditions. The relations between the state (guaranteeing a job for everybody) and employees (bound by the state to work) were replaced by more subtle and complex relations, free from such a direct dependence (it is required to maintain employment while respecting the right of people to work or not work and the right of employers to hire only the needed workers in the right amount). Furthermore, the state is no longer the sole participant in the policy in the labor market. The role of employers (through their associations) and employees (with trade-unions) is increased. There is a change in the distribution

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of competencies between government bodies. In place of the state planning system (such as the Ministry or Planning Committee) as the primary institute for planning the distribution of labor resources is established a new division of labor between government structures that have an impact on the processes of generation, distribution and utilization of workforce. This division of labor is impossible without a proper division of responsibility within a unified state employment strategy. Such a strategy is a targeted image of the employment arrangement and a kind of a set of actions in different areas (finance, taxation, employment relations, income, education, labor market, etc.), which are implemented by legislative and executive state bodies and are aimed at non-inflationary achievement of full, productive and freely chosen employment.

One of the areas of influence on the state of employment and unemployment, whose role remains undervalued to this day, is connected with the policy of the state on the labor market. The nowadays existing variety of interpretations of the term "labor market", the influence of the state on it, but also of the factors that directly or indirectly affect its condition and functioning, are also a reflection of the state of transition.

SPECIFIC FACTORS OF THE UNEMPLOYMENT AND THE GROWTH In such circumstances the increase in unemployment as a result of an accidental, single drop of the real GDP is due to the formation of cyclical unemployment, which is limited - about one percentage point. That’s why A. Okun puts special emphasis on these few more important factors with indirect influence that lower the actual or the recorded unemployment rate and retain the growth of labor productivity. Some of these factors have a manifestation in Bulgaria, while at the same time the dependence between GDP and the unemployment in the country is also under the influence of a set of other specific conditions.

The changes in the actual and the cyclical unemployment are closely related to the process of market transition and its recessive impulses, the experienced deep financial and economic crisis and the recently set under control variation in the growth

rate.

However,

they

run

fairly

smoothly

and

monotonically.

The

unemployment dynamics was characterized by an explosive, dramatic increase in the first two or three years of the period (for example, by 9.6 percentage points in 1991 and by 3.8 points in 1999) and by a sharp drop by 3.6% in 1994. In the other years of the period there was a shift to more moderate changes.

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So after 1993-1994 the unemployment rate fluctuated mainly in a more narrow range, changing by 1.1 to 1.9 percentage points per year, regardless of the declines, the moments of boom or sometimes the large variations in the growth rate. This was accompanied by a reverse dependence to the growth rate, which showed only occasional distortions. But the values of the changes in the unemployment rate still exceeded the surveyed ones by A. Okun and this affected the figures of the measured coefficients.

Any recorded rate of actual unemployment includes a certain rate of natural unemployment. It is based on current and structural conditions for the movement of the workforce, which are constantly present in the economy, regardless of the situation. In this sense natural unemployment is insuperable. By introducing the assumption that the natural unemployment rate remains constant and by fixing it on a particular level, A. Okun has the opportunity to express only the cyclical component through the changes in the actual norm of unemployment. But the natural unemployment rate may be different and variable, especially in a longer period and in case of more dynamic economic processes. During the first years of the transition in Bulgaria, it increased, which further raised the actual unemployment rate and distorted the assessment of the cyclical unemployment rate.

The natural unemployment growth is predetermined by cardinal economic changes, specific personal motives and objective conditions which determine a relative share of friction that is higher than the most prevalent (about 1%) and especially regarding the structural component.

The relative weight of the friction component increases due to the intense internal migration, the gradual expansion of the private sector share and the differences in the amount of wages, the higher requirements to the professional skills of workers, the demand for workers with other specializations, the need for updating the vocational training or the retraining of specialists. There is a growth in the proportion of the structural unemployment, determined by the simultaneous introduction of radical branch, product and technological reform and restructuring of the Bulgarian production. The low unemployment benefits provided until recently have a discouraging effect on employment. The composition of employees (classified according to different criteria) is gradually changing, with an increase in the participation of certain groups of employees, of whom are typical more frequent fluctuations, change in the workplace and hence a higher level of unemployment.

Furthermore, at the outset of the transition a significant part of the previously employed (almost completely, but inefficiently used workforce) left the sphere of

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production and did not get back into it. In some cases these people got transferred to the group outside the active workforce, in others they made attempts to develop their own small business or remained long-term unemployed. Among the reasons for this movement were the difficulties encountered in finding other suitable employment, especially for people over a certain age limit, the emerged and partly preserved up to now mismatch between the demand and the supply of labor for some specialties and professions, the increasing share of the hidden economy and the employment in it, the reduction of real wages and the availability of savings from previous periods, etc.

As a result, the number of the discharged exceeded the one of the registered unemployed.

A more accurate picture of the impact of GDP on unemployment cannot be obtained also because of the (updated and standardized) methods for calculating the relative amount of unemployment, applied in our country. This indicator includes not only the people already registered in labor offices, but also other groups of job seekers within a variety of own initiatives. Thus the scope of the indicator is widening but this also provokes the overlapping of more elements that cannot be correctly recorded and evaluated in an approximate and expert way. So in many cases, for example, after acquiring secondary or university education, young people do not turn to the relevant state employment institutions and rely on other options (such as personal contacts, private agencies etc.) to find their first job.

It is comforting that very little (only about 8%) of the people seeking their first job are specialists with university education (bachelor, master and doctorate). But the proportion of long-term unemployed still remains significant (almost 60% of all unemployed in 2005), among whom there are people discouraged or completely given up the services of employment services. Job seeking through a variety of other resources and the long duration of unemployment (going beyond the period for receipt of unemployment benefits) are indicative of the persistent distrust to labor offices as a trusted intermediary in finding work, of the higher actual versus officially recorded unemployment and the limited capacities of the production to absorb the unemployed workforce.

In the calculation of the employment indicators one may not fully cover or may not clearly distinguish the until recently growing number of partially, occasionally employed. Pressured by the lack or shortage of money, in spite of the uncertainty, many people accept proposals for a short-time job or mostly services, for temporary or part-time activities, including part-time and irregular, campaigning commitment without contractual obligations. Even the reported (based on civil contracts

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concluded) parameters of temporary and part-time employment are still alarming.

Thus, for 2004 and 2005 the full-time employed were around 91% of the total employees, as 85% were the employed under a permanent contract. On the other hand, as a component of unemployment it is reported that in 2005, for example, over one-sixth or almost 16% were the unemployed, who had lost their jobs due to the termination of temporary or seasonal employment. Although in the recent years the labor legislation in the country has improved, the legal labor relations have been regulated and put under tighter control, the existing problems in this field and the number of the employed unregistered persons have been reduced, but this problem has not yet been completely overcome. Statistics show that over 85 thousand people (5.2% of the employees in the private sector and 0.4% of the employees in the public sector) are employed without a contract, but their actual range is probably higher.

An unambiguous idea of the labor market, not fully free from elements of the shadow economy, is acquired by the persisting differences between the total amount of the earned income and the expenditures made by households (in favor of the expenditures). Part-time employment is a temporary, compromised solution to the problem with the lack of adequate work; it is often not permanently guaranteed and is connected with the performance of unusual activities, not providing an adequate income. These are the reasons why it is considered as hidden partial unemployment, with no formal opportunity for its reference to the national unemployment rate.

A fact of actual importance is that the dependence found by A. Okun is consistent with the officially reported GDP value in a country with limited negligible share of the shadow economy. In the larger parameters of the hidden economy in the country, the proportion of the employed in it (hidden employment) is significant, which contributes to the aggravation of the social problems. In order to partially avoid taxation or because of financial difficulties, because of irregular incomes and the uncertain future, some companies do not account for the full amount of the goods manufactured or for all concluded transactions. Thus the value of the actually generated GDP is lowered. At the same time, though experiencing difficulties, many Bulgarian households still have a high proportion of non-market activities carried out by them (various forms of domestic production, repair, etc.). Though in experts’ judgment part of these has been included in the GDP in the last 1-2 years, they do not cover all the diversity and the volume of these activities. Even with the macroeconomic improvements of the recent years, the share of the income from home production remains high (over 12.5% of the average income per person of household)

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and this eloquently demonstrates that the alternative and hidden forms of employment and sources of income in this country should not be ignored.

The market orientation induced processes leading to a profound disruption of the labor market. The decline in production in the mid-90s caused Đ° reduction in the number of employees, as this trend also had technological prerequisites. It significantly affected the people with higher education. Thus, while almost 39% of the total number of the registered unemployed in 2005, for example, were with no profession, with primary or lower education, about half of all unemployed had a specialty and almost 23% of them were university graduates and were long-term unemployed. The dismissals of trained staff and the narrowed opportunities for developing the production areas so that they can fully absorb this labor potential increased the relative "price" of the growth, affecting its current and future rate. The backward inclusion of people with higher qualifications in labor activities was hampered by the irreversible changes in the company and sectoral structure of the GDP, by the advanced technical and technological characteristics of the production, by the new and higher requirements for professional knowledge and skills of the specialists which were set by companies.

In the modern structure of the Bulgarian economy, the services sector has crucial importance and share - its share in creating GDP amounted to more than 60% at the end of this period. Its accelerated development can serve to explain the recently observed increase in the number of the persons employed in trade, catering and hospitality, construction, utilities and utilities services. These industries are prospering and labor-absorbing, but they provide opportunities for engagement mostly of people without special training, with lower qualifications, for a not too high remuneration or under not especially attractive work conditions. So this has retained the gap between the supply and the demand of labor, there were many vacancies (over 2400 in 2005). Only 15% of these vacancies, however, were suitable for university graduates. The violated conformity between the proposed jobs and the qualification level gave additional contribution to the extension of the duration of unemployment – around 60% of the unemployed in the country searched for work for a period exceeding one year. Industry – the sector most affected by the process of privatization and reorganization of the corporate activity - was gradually overcoming its falling behind and already predisposed to increased employment. So over the past few years there has been an increase in the number of the employed in the manufacture of food products, textiles and clothing, processed leather, wood and wood products and others. However, the proportion of the employment in the

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industries remains marginal, over 80% of the employees are concentrated in trade.

The trend towards fewer employed under a permanent employment contract is observed in the public sector, while in the private sector (which quickly responds to the reactivating domestic market) the number of the employees increased by 5% at the end of the period. Because of the predominant development of areas characterized by higher labor intensity, even the productivity growth of about 7-8% annually, reported in the last several years, is insufficient. This growth failed to induce a significant change and approximation in the ratio between the growth rate and the unemployment rate to the findings of A. Okun.

The specific degree of correlation between the GDP dynamics and the unemployment (and the employment) is determined largely by the relevant corporate structure. The established in the country and already amounting to 79.4% share of the private sector in basic prices covers more than 99% of micro and small enterprises. Therefore there is a dominance of companies with extremely tight capacity to generate employment and growth, also for their own growth, characterized by a more frequent change of employees, reduction of their number or firmly established family commitment. While in both institutional sectors (the public and the private one) one can recently observe a tendency of increase in the number and the proportion of medium-sized and larger companies, they do not carry out reciprocal parity process of increasing employment.

The opportunities for higher employment through own business and self-performed activities are not utilized, insofar as the data show that only 3.8% of the employed in 2005 were employers and only 8.6% were self-employed.

The indicators of employment and unemployment in the country tolerate negative organizational and technological adjustments. In the cardinal reconstruction of the management and organization of the state and privatized companies, the number of the employees is significantly reduced in general; the specialists keeping their jobs are loaded with more functions, tasks and responsibilities. The increased work anxiety is not necessarily tied to an increase in wages, which often remain unchanged or even reduced. Thus, despite the increased number of functioning companies, in the process of corporate and sectoral market reformĐ°tion there is a deviation in the manifestation of the compensatory principle and a dominance of the principle of reducing employment.

The Bulgarian business and industry structures have a marked impact on the degree of correlation between GDP and unemployment in another aspect. They determine the weaker, slowed GDP growth, not allowing the achievement of the ratio 3:1, derived in the law of A. Okun. In other, more developed countries, the size of the companies,

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the cost intensity of labor and production are far larger and this implies even higher numerical expressions of this ratio. In the Bulgarian conditions effectiveness is more limited and therefore the growth is insufficiently impulsed. By optimizing the sources of growth, achieving a greater similarity with the world trends in contributing to the growth of labor and capital, Bulgaria will probably establish different dimensions of the dynamics of the relation GDP – unemployment.

The recorded disproportionate features of the labor market and the negative effect of them on the growth rate may persist and later reverse if the government pursues a more stringent policy for reducing unemployment and promoting employment.

Already started, the implementation of state-funded infrastructure projects, the provision of financial incentives and the assistance in finding work without using the services of labor offices and by self-employment provide positive results – the unemployment rate declined to 12.2% in 2004 and once more to 10.7% in 2005. The level of employment is still problematic, as its increasing requires a more dramatic increase in the incentives to labor activity - the minimum and the average wages in the country. They will affect the individual consumption; the growing domestic demand will accelerate the realization of the production and will provide an increase of its volume, further accelerating the growth. In this aspect, other areas of the macroeconomic policy also become important - it is necessary to pursue investment, innovation, industrial, regional and other policy, more steadily focused on employment.

Usually the distinction of the types of regional labor markets is based on a comparison of unemployment rates, coupled with additional socioeconomic characteristics of the regions. We will examine the regional differences in terms of the intensity of the flows and the duration of unemployment.

The regions are characterized by two main types of labor markets, differing in the intensity of the input flows in unemployment, but similar in the fact that each of them is characterized by a relatively high duration of the period of inactivity.

Relatively few regions are characterized by high intensity of the inflow in unemployment, relatively low duration of unemployment and average values of its level.

However, determining the types of regional labor markets makes it possible to answer the main question: to what extent the increase in unemployment is determined by the inflow into it and the extent of the outflow. The inflow mainly depends on external factors. In turn, the outflow of unemployment depends on the availability of jobs (the

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ratio of the vacancies (V) and the number of the unemployed), which is dictated by influences external to the labor market or it is explained by other external factors.

In general, the focus is in particular on the value of the ratio V/U. Usually its value is associated with the degree of "tension in the labor market." Indeed, in most regions the low rates of the unemployment outflow can be explained by the shortage of vacancies. Besides, there is a clear correlation monitored between the ratio V/U and the unemployment rate. But the low outflow rate and the unemployment rate are only partly explained by the deterioration of the relation between vacancies and the unemployed applying for them.

The explanation is in the different influence of the entrance into unemployment and the duration of unemployment on the unemployment rate. How great is the impact of these factors? 

Unemployment level;



Coefficient of entrance into unemployment;



Unemployment duration.

In the Bulgarian labor market one may consider crucial not only the influence of the inflows in unemployment at the expense of macroeconomic and other external measures, but this influence, which would reduce the average duration of unemployment.

In order to be achieved a reduction in the total number of unemployed, there is a need of long and uninterrupted period of growth in the number of jobs. The increase in the number of vacancies need not be necessarily accompanied by a decline in longterm unemployment (and, consequently, of total unemployment). Even in times of economic growth, the increase in the proportion of the long-term unemployed can be significant, but the ratio of the outflow of this group can be reduced. The reason lies in the fact that the economic growth can reduce short-term unemployment, but has little impact on long-term unemployment and on other "fragile" components of unemployment (unskilled workers, young people without work experience, etc.). One major reason is the presence of "effects of duration", not directly related to the economic opportunities of employment.

If the depth of the "availability" of unemployed is represented as an increasing duration of unemployment, for those who have been unemployed for a longer time it becomes more and more difficult to overcome the inflow of new unemployed, regardless of the general options for an outcome of unemployment in terms of availability of jobs. Furthermore, the likelihood of an outcome can be influenced by

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the presence of a number of "filters" that are more favorable to short-term unemployed.

The explanation of the difference in the probability of exiting the group of the unemployed is as follows: on the one hand, the duration of unemployment depreciates the human capital to the extent that the ability to work decreases with time (supply effect). On the other hand, the probability to find a job is further reduced because employers think of long-term unemployed as of unskilled workers (demand effects). In other words, the prolonged period of unemployment is perceived by employers as a signal for low qualification and low initiative in job search. Therefore, the longer a person is unemployed, the less his/her chances to find a job (selection effect). Finally, the longer the period of unemployment, the lower the evaluation of the employee in terms of his/her ability to return to work, which may lead to a decision for exiting the workforce (effect of disappearance).

An important role also plays the fact that the value of employment (the value of selection, employment, training) appears to be higher for those who have been unemployed for a long time. But even if a long-term unemployed person is ready to work for wages lower than the usual ones, the employer may choose a more expensive worker.

Statistically, it is well known that unemployment rate differs depending on occupation, gender, age, region, etc. One explanation may be sought in the emergence of a temporary imbalance between the supply and the demand of labor in terms of qualification, age groups and regions. For example, in the initial moment two professional groups may be characterized by the same unemployment rate, but in the course of a year the demand may be shifted from the one group to the other, and at the end of the period it may go back to its initial rate. But these kinds of imbalances take a small share in the distribution of inequality in the unemployment rates among various groups. A question arises: to what extent the present differences are persistent? If they are truly persistent, then we can talk about imbalances, invariably present in the labor market and related to different levels of risk for one to get unemployed. When getting unemployed, for employees there is a different probability to become long-term unemployed. Moreover, if the problem of mismatch in the labor market is of a serious nature, the imbalances will remain stable over time.

Another issue related to the previous one is how the structure of unemployment correlates with the average level of unemployment. If the unemployment structure affects its general level, what can be done (if at all possible) to change this structure?

The standard recipe is to change the supply in the sector (groups of population) with

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high unemployment and the demand - away from them. In this case, the more elastic the supply of labor becomes, the less the need of actions for correcting it (for example, through retraining or other means of improving employability). But the Bulgarian labor market, like many others, is characterized by a too low elasticity of the supply for the different population groups. One of the manifestations of such a low elasticity is the maintenance of unevenly distributed unemployment in its structural groups.

In order to assess the degree of unevenness in the distribution of unemployment among various groups that compose it, we will make use of the dispersion of the relation between unemployment, i.e. var (u1/u), where u is the level of unemployment of a chosen specific group.

First, we will consider the traditional and widespread belief that unemployment has a "female face". In fact, it does not confirm the significant differences in unemployment rates by sex, but it rather shows that men are more at risk of unemployment than women. It can be assumed that not the gender of the employee is a risk factor for unemployment but rather these are other characteristics.

One of the most significant differences in unemployment rates is by age groups of the population.

Significant and persistent over time indicators of dispersion lead to the conclusion that the specified differences are of a permanent nature and are less influenced by temporary factors. It is appropriate to ask the question: the unemployment rate of the age groups is determined by the intensity of the inflow in unemployment or by its duration? The available data allow us to conclude that the importance of these factors is different for the different age groups.

The high unemployment rate in the age group of young people is mainly determined by the high indicators of the inflow in unemployment - five times more than the intensity of the inflow of those aged over 35 years. With high dynamics in the labor market, the first youth group is also characterized by the highest performance outflow from the group of unemployed. As a result, the average duration of unemployment in this group is the lowest among all other age groups.

It is also significant that over 2/3 of these people become unemployed without having vocational education. Therefore it can be concluded that for them the unemployment is an intermediate state between studying and working. This group should be given particular attention, since the lack of professional habits turns into one of the main obstacles for them to find a first job, regardless of the number of announced vacancies in the labor market. The job they get is most often temporary and unskilled.

If they choose their professional path without professional habits, they are more likely

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to face career obstacles which will make them trapped in jobs with limited career opportunities and will reduce the average duration of occupation of the workplace.

Moving into a higher age group, these young people are (more than others) at risk to become unemployed again. They are also more likely to become long-term unemployed. It can be assumed that the main political line in terms of youth unemployment must be associated with a decline in the entrance into unemployment.

The main reason for the high value of the inflow can be seen not only in the high mobility of young people and the lack of professional and work habits that contribute to their "idle movement". It follows that a reduction of the inflow in unemployment could be achieved through actions for solving the problem "first job" by providing access to jobs after training (stationary professional and job training).

Within the movement along the age scale, the impact of the indicators of the inflow in unemployment and its duration vary. The factor duration is of increasing importance and it becomes determining for the level of unemployment among the employees in retirement age. This age group is characterized by low rates of inflow and outflow of unemployment, combined with long duration. The conclusion that can be drawn is that the employees at retirement age (especially women) are still one of the permanent "fragile" elements in the labor market, they have less competitiveness and therefore the prospects for their employment are hardly directly dependent on the general welfare of the labor market.

Another cut of the unemployment, which allows the finding of persistent differences in its structure, is related to the existence of formal education. To some extent this can characterize the qualification differentiation between workers. A stable pattern is fixed: today the probability for a worker to become unemployed is greater, the lower the level of education of the worker. And if at the beginning of the transition period unemployment was largely unrelated to the educational level (something more, one could talk about unemployed officials and intellectuals), then over time this has changed.

The differences in the unemployment rates according to sex, age, education and professional background give reason to assume that for some groups of employees, the risk of becoming long-term unemployed is relatively higher. This risk is of a sustainable nature. The effects of the duration can also be fully attributed to such fragile components of unemployment. For example, young people without experience can be confronted with the effects of selection. Older workers and low-skilled women who are unemployed may become victims of circumstances, similar to the loss of

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qualification (supply effect) or may face discriminatory practices by employers (demand effect).

The discussed circumstances once again confirm that the increase in the labor demand caused by the economic recovery will have a positive impact mainly on those who have been unemployed for a relatively short period of time. As a rule, this group of employees who have a high capacity for employment does not need intensive support from the state. The reliable and comprehensive information about the available vacancies in the economy is often sufficient to reduce the period of job search. But the long-term unemployed and those for whom the risk to fall into this group is high will hardly be able to reap the fruits of the economic growth and to find a new job on their own.

CONCLUSION Taking into account all these aspects of the development of the labor market, depending on the periods of economic development and the place and role of the policies on the labor market in the general economic policy, it is possible to make some major conclusions for the future development: The sensitivity of the labor market and its main parameters will increase in the future and will experience both the positive and the negative effects of the cyclical economic development. The openness of the Bulgarian economy determines the effects of external influences and the ongoing reform process in the country predetermines additional internal effects on the labor market. Therefore, the efforts to increase the flexibility of the labor market through a relevant policy should continue as they are an essential tool for softening the impacts and for timely adjustments. The more flexible the market, the higher its adaptability will be to internal and external influences and the smaller the negative consequences will be.

The flexibility of the Bulgarian labor market is developed by diversifying the forms of the labor relations and the working time arrangements, by introducing new regulations on the labor relations, such as home-based work and distance working, by establishing an Agency for temporary employment. Yet the traditional models of labor relations and stereotypes of behavior of employers and employees still predominate.

The informal sector of the labor market complements the traditional patterns of labor relations by more flexible, but illegitimate forms of employment and working time.

The presence of this sector significantly deforms not only the image of the real employment in the country, but also the picture of its form and level of pay. Therefore,

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a policy for limiting this sector should remain one of the highlights not only of the policy on the labor market, but also of the economic policy in general.

A significant problem in the development of labor relations is the combination of flexibility and security. So far the flexibility of the Bulgarian labor market has been developing more actively than the security in labor relations in terms of employment contracts, wages and working conditions. In this sense, further development should be given to both the organization of the operation of labor inspectorates and its effectiveness, but also to the actions for increasing the liability of employers, employess and the general public.

The underlying point in the evolution of the labor market and the employment in Bulgaria remains that for formation of a coherent and sustainable strategy for economic development, with a clear vision for the structure of the economy and the demand for labor in the medium term. The deindustrialized Bulgarian economy determines the change in the structure of the labor demand in Bulgaria and the segmentation of employment. At the one pole stands the shrinking skilled workforce and at the other – the increasing mass unskilled labor. A similar structure of the workforce could hardly supply "intelligent" economic growth and substantial growth of economic development in general. Bulgaria is experiencing serious difficulties in ensuring a quality workforce of specialists with secondary education, well-trained professionals with the necessary communication skills and ability to work with modern technologies. The outflow of specialists from the "middle class" from the country, in addition to the continuing emigration of young people, outlines not only quantitative but also qualitative problems with the workforce in the coming years.

The stagnation in the economy, already continuing for several years, will come to an end in the coming years and then the revival of the labor demand will meet the limit of the proposed low-skilled labor. That is why at short notice the country has to solve two very important issues that are outside the labor market, but directly affect it: first, how to stimulate the creation of jobs and second, in what sectors of the economy these jobs will be created - in sectors that provide high performance and competitiveness or in traditional and less productive sectors. The answer to these two questions will determine the future development and in more distant horizons, it will provide a shift to a higher economic growth supported by productive and competitive work or development within the existing inefficient and technologically obsolete economic structures, seeking cheap workforce.

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REFERENCES Employment agency at the Ministry of labor and social policy of the Republic of Bulgaria: http://www.az.government.bg/.

National statistical institute: http://www.nsi.bg/.

Terziev V. Impact of active social policies and programs in the period of active economic transformations in Bulgaria: “East West” Association for Advances Studies and Higher Education GmbH, 2015.

Terziev, V. (2013). Employment and unemployment policy in Bulgaria - goals and tasks. Proceedings of UNITECH’2013, Gabrovo, Bulgaria, p. 179-184.

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Volume 1, Number 1, 2015

Innovations and Sustainability Academy E-mail: insustacademy@gmail.com https://sites.google.com/site/insustacademy/