Bulgaria Unveils 2025 Employment Plan, but Heavy Reliance on Subsidies Raises Concerns
Sofia, The Gulf Observer: The Ministry of Labor and Social Policy of Bulgaria has released its National Employment Action Plan (NAP) for 2025, aiming to enhance both the quantity and quality of the national labor force in alignment with current economic needs. While many of the goals reflect those of 2024, this year’s plan emphasizes labor importation and reactivating economically inactive citizens, according to an analysis by the Institute for Market Economics (IME).
Despite the progressive rhetoric of “quality labor” and “innovative skills,” the IME warns that subsidized employment remains the primary mechanism to address labor market imbalances — a strategy that may no longer suit Bulgaria’s evolving labor demands.
The budget for active labor market policies (ALMP) remains unchanged at 88 million leva, yet the plan anticipates fewer participants, increasing the average cost per individual. While this could suggest a shift toward more durable and higher-quality employment, IME’s analysis attributes the cost increase largely to the rising minimum wage, not significant investments in training or long-term job security.
In 2025, the state’s employment priorities continue to favor labor supply quantity over quality, a trend that runs counter to employers’ growing demand for skilled workers. Rather than ramping up vocational or retraining programs aligned with labor market needs, the government persists in relying heavily on short-term subsidized job schemes.
IME notes that approximately 85% of ALMP funding is allocated to subsidized employment, with only a modest share directed toward training, upskilling, and retraining. This approach stands in contrast with many EU countries, which have largely abandoned subsidies in favor of sustainable workforce development tools.
Critics argue that subsidized employment offers only temporary relief. It may provide a short-term income boost, but rarely leads to lasting employment once the subsidies end. Moreover, it can distort the labor market, as employers may opt to replace regular staff with subsidized workers or delay productivity-enhancing investments.
For instance, under the “Starting a Job” program within the Operational Program for Human Resources Development (OPHRD), 115 million leva is allocated to create just 2,000 jobs, meaning one subsidized position costs nearly 60,000 leva. In comparison, the DiGi program, with a similar budget of 109 million leva, aims to enhance digital skills for 200,000 individuals, spending just over 500 leva per person.
While the 2025 NAP outlines the vision of an “adaptive workforce,” IME contends that the policy structure remains outdated, with the bulk of funds sustaining short-term measures. The institute argues that a strategic reallocation of resources toward well-targeted training, retraining, and digital upskilling would not only boost employment but also improve long-term competitiveness and resilience in the face of technological change.
In conclusion, the IME urges Bulgarian policymakers to shift from subsidy-heavy programs to workforce development strategies that invest in human capital, productivity, and future readiness — a move essential for the country’s sustained economic growth and labor market modernization.
