Moldovan labour market issues in context of demographic changes

Abstract

This article is the result of a macroeconomic analysis of labour market in the Republic of Moldova. The article examines demographic factors, such as population decline and demographic ageing, that can impact to the change in macro indicators of labour market in prospective. The author's Forecast of labour force supply for the period up to 2035, including three scenarios, showed that the supply of economically active population will decline and losses can be significant. The reduction in amount of labour force, the -contraction‖ of labour market will have an impact on the functioning of labour market. By 2035, the labour force will decrease not only quantitatively, but its qualitative characteristics will change. The labor force structure will be characterized by a disproportionate reduction in number of workers under the age of 40. Age groups from 40 to 54 years will dominate the labour market. Accordingly, the average age of labour force will rise. The increase in the number of older age groups in labour market will lead to question of increasing the competitiveness of these age groups in labour market. Model of demand for labour force, elaborated by author, is based on the use of the production method of calculating GDP based on the system of national accounts. On the basis of this model, the Forecast of labour demand for the period up to 2035 was elaborated. The ratio of forecasts the supply and demand for labour showed the deficit of labour force in labour market by 2035. The economic growth will require the involvement of additional number of workers in next decades. Analysis of the reserves for maintaining the balance of supply and demand of labour force, market stability in the perspective period has shown that the inactive population cannot compensate for the need for additional workers. The main reserve for maintaining the balance between demand and supply of labour force in conditions of the decline and ageing population is the increase in labour productivity. Sectors of economy with low labour productivity can serve as the obstacle to the growth of total labour productivity and economic growth. The growth of labour productivity is possible only on the basis of the increasing in the educational level and improvement in the quality of labour force. Consequently, the supply and demand for labour force were calculated in the perspective, the reserves for maintaining stability in labour market in conditions of demographic changes were determined and argued. The results of research can be used in the elaboration and evaluation of state employment programs, in the practical activities of the structures responsible for labour market. Given paper has been developed within the framework of the Scientific Project for the period 2020- 2023, registered in the State Register of projects in the field of science and innovation of the Republic of Moldova with the code 20.80009.0807.21 Proiect Program de Stat - Migrația, schimbări demografice și politici de stabilizare a situației‖ / Project State Program - Migration, demographic change and stabilization policies‖.