Social

Undeclared Work Hurts Moldova's Pensions, EU Warns

The Republic of Moldova's pension system faces a precarious situation due to an official employment rate below 50% and a nearly equal ratio of contributors to pensioners.

To ensure decent pensions for all citizens, formalising undeclared work remains essential.

These concerns were highlighted by Nicolas Schmit, European Commissioner for Jobs and Social Rights, in an interview with Moldova 1. He also expressed appreciation for the reform of labour institutions in the country.

"Attracting as many people as possible into the workforce is paramount. Transforming undeclared work into official work is an absolute necessity since informal work does not contribute to the pension system. Our primary challenge and objective are to strengthen the labour market and increase social contributions and taxes paid," Schmit stated.

The official noted positive developments in reforming the State Labor Inspectorate and the National Employment Agency.

"Reform processes appear to be on the right track. Additionally, the labour market is improving as women's participation in the workforce increases. However, much work remains. Moldova still has a fairly low labour force participation rate, less than 50%, significantly below the EU average. Attracting people to the labour market is an absolute necessity," the European Commissioner added.

The European Union recently allocated two million euros to reform key institutions regulating Moldova's labour market. This has led to the launch of the "EU Support for a More Inclusive Labor Market in the Republic of Moldova" project, implemented by the International Labor Organization.

In 2023, the State Labor Inspectorate identified over 456 cases of undeclared work, legalising over 80%. Additionally, the National Employment Agency placed over 11,000 job seekers and provided vocational counselling to over 16,000 individuals, primarily pupils and students.

Translation by Iurie Tataru

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