Bulgaria: Education, Personnel and Labor Market
The education level in Bulgaria is among the top five in Europe. The country has compulsory school education up to the age of 16, 70% of the students speak English. Higher education is provided by 51 universities and colleges, whereas 15% of the population has university degrees.
In Bulgaria there are 3.5 million economically active working people, counting 53.5% of the population. 56.8% of the employed population is working in the service sector. The unemployment rate has been constantly decreasing during the last years and was recorded at 6.6% for the first three months of 2007. Only 8.4% of the unemployed population are people with higher education.
According to the law in Bulgaria there are 12 monthly salaries to be paid per year. The income tax is on a progressive rate from 0% to max 24%. The social security contributions are to be paid partly by the employer (22.125%) and partly by the employee himself (11.375%).
Notice: From January 2008 Bulgaria is changing its tax map, and is adopting a fixed flat tax rate on income of 10%.
From next year on, the minimum monthly wage in Bulgaria will be 220 BGN (approx. 113 EUR), up from currently 180 BGN (approx. 92 EUR), while the statutory expenses for free-lancers will be at least 25%. The current tax-exempt income minimum of 200 BGN will be revoked.
According to a Mercer survey, salaries in Bulgaria will be raised by 9.3% in 2008, which will be a 4.9% increase above inflation. These figures rank Bulgaria at one of the top positions in Europe concerning to salaries.
»Brain drain«, the loss of a country's most talented and skilled workers to more attractive overseas employment, is a common challenge for developing economies. In Bulgaria, however, the private sector is taking the initiative to reverse this process, and brings skilled Bulgarian emigrants back home.
A study on human capital by the Lisbon Council, a Brussels-based think tank, concludes that for Bulgaria, along with Croatia and Poland, »there is a realistic chance of being stuck in relative poverty compared to the European average« and recommends heavy investments in human capital.
In addition to changing demographics – Bulgaria's working population is forecast to drop by 26% between 2005 and 2007 – and insufficient investment in education, persistent »brain drain« is one of the key causes of the human capital problem, according to the report.
A World Bank report published in January this year states, that 688,000 Bulgarians or 7.7% of the population, emigrated from the country between 1989 and 2005. Following the country's accession to the EU at the beginning of this year, the rate of emigration was expected to increase, although actual numbers did not reach the rates many analysts predicted.
A survey by BSS Gallup reported, that only 46,000 Bulgarians have serious intentions of working in another country. However, many of these will be amongst the most skilled, especially in key sectors like information technologies.
