The USAID Labor Market Project (LMP) has provided technical assistance to the Ministry of Labor and Social Policy to enhance its institutional capacity for policy making through improved program analysis, comparative analysis of the labor regulatory framework, and monitoring and evaluation of employment programs and measures. A key aspect of this assistance has been the comparative analysis of the labor regulatory framework focused on changes needed to increase labor market flexibility. The LMP has already completed a comparative analysis of the Bulgarian labor code with respect to the labor codes in the CEE countries, identifying the major constraints placed on employers with respect to making adjustments in their workforce needed to improve productivity and make their businesses more competitive.

A primary focus of the LMP has been to lower unemployment by designing and implementing public education programs to increase the participation of employers, workers and vulnerable groups in various employment promotion activities. As part of these efforts, the LMP organized a series of town-hall meetings, where more than 10,000 copies of different informational materials were distributed, which improved significantly the transparency of the ongoing MLSP active labor market programs and raised the awareness of employers and workers with regard to various opportunities that they have. The tangible result of this effort has been a significant increase in participation in these employment programs, which has contributed significantly to the reduction in unemployment observed over the past two years.

The LMP project has organized study tours for key officials to study "best practices" in the area of labor market policy. One practical result from these study tours occurred when Bulgaria implemented the Spanish practice of requiring the registration of labor contracts and setting wage thresholds by type of work to fight the "shadow" economy.

In order to complement its work at the National level, the LMP started a pilot program in the municipalities of Dobrich, Sliven, and Razgrad intended to strengthen regional economic growth, to stimulate employment by increasing the awareness of employers of available funding opportunities (financing, subsidies, guarantee schemes) from EU and other donor sources and provide technical assistance to the interested to apply for funding. The direct impact of this initiative on employment could be the creation of more than 170 new jobs. In addition, the LMP sponsored and supported the production of curricula for courses on economics and entrepreneurship that will benefit directly 3,250 students in these pilot municipalities by providing them the learning format for business and economic concepts and principles that will help them to become more desirable resources (initially through internships) for employers. The LMP is also working with the local employment offices to strengthen their capacity, improve customer service, and help the staff work with potential investors.

The newly established pension system is considered to be an essential part of the USAID legacy in Bulgaria that will contribute to the sustainable development of the economic and democratic processes in the country. USAID plans to graduate its assistance in the pension sphere by the end of calendar 2004. The gist of the assistance beyond January 2005 will be targeted at addressing the inefficiencies in the labor market in Bulgaria and promotion of employment opportunities for its people.