News

On the occasion of the start of the school year, we are raising the curtain slightly on the “Education” category of the upcoming edition of Regional Profiles: Development Indicators 2023 (which will be presented in the month of November).

The category is made up of eight indicators in the field of education and include data at the district level from NSI, MOS, CoAPSE, IME.

• The capital, Varna, and Smolyan are approved leaders among the districts.

In 2023, the capital was at the top of the classification, followed by Varna and Smolyan districts. In all three districts, there are almost no children who don’t attend kindergarten or school. There are a few second-year students, a lot of students, and the results are good.

The first ones are complemented by traditionally strong ones in education: Ruse, Plovdiv, Veliko Tarnovo, Blagoevgrad, Gabrovo, and Burgas.

But at the bottom of the classification are Sliven, Lovech, and Pazardzhik, where the availability of kindergarten and pre-gymnasium education is low, the results are fairly weak, and there are relatively few students.

Although the research in Regional Profiles includes other indicators such as children in kindergarten and the number of students, here we focus on the main indicators that assess school education.

• In some districts, the percentage of children who don't attend school after the 4th grade is still high.

While in some districts, the educational system in the pre-gymnasium stage covers almost all children of relative age (such as in Smolyan, Blagoevgrad, and the capital), in others, the net coefficient of enrollment in 5th-7th grade remains low over the years. In 2022, it was under 85% in Sliven, Dobrich, and Targovishte districts.

• The mathematical abilities of 7^th grade in these districts are diverged significantly.

The average score on National External Evaluation after the 7^th grade at Math from the country is 35,3 points (from 100 points scale) and is absolutely equal to the last year one. Again, the students in capital performed as the best one with 46,6 point result. After the capital are followed Varna (42,6 points), Smolyan (37,6 points) and Burgas (37,2 points) districts. At the bottom of ranking with 25-26 points are the results of Sliven, Vidin and Razgrad. These huge differences between leaders and these one with lowest marks are result of concentration the qualitatively studying of math in a real little number of schools in the country, usually in largest district centres, where are more children, higher competition between educational institutes and more resources. The required score for admission into vocational school of math is diverged in times between distinctive districts. The tracking of data from last year about admission in classes with “Math” profile from this year shows that amid the capital and Plovdiv district for example the difference is 3,6 times.

• The professional education does not correspond to the structure of local economy.

The main role and advantage of professional education is to provide a direct connection between  the education and the labour market. The elaborated by IME “Index of the correspondence between vocational education and the profile of the economy” reveals that studying at specialities, which are not searched by the labour market, proceed and nearly half of students, acquired their qualification, will not work with for what they have studied. Between separate regions there are also large differences. With the highest outcome is the capital - 67,3 points (from 100 p. max), and with the lowest - Lovech district - 36,4 p. The first place is for Sofia (capital) which is conditioned by high part of students at PPQ, as and employed at ICT segment, and together with it - lowest portion of students and employed in agriculture. The capital safes the first place from the last edition of index. The last place is for Lovech is due to that is the region with highest part of  learners in specialities, which are directed to segment of hospitality industry and restaurant business (almost twice the average share in the country) with relatively low share of those employed in this economic activity in the region.

• The results of matriculation examinations of Bulgarian language are going down, and the weakest performers are getting worse.

The average score for state matriculation exam of “Bulgarian language and literature” in 2023 year is “Good” 3,93, a decrease of four hundredths lower than last year and far away from average values of previous years, when it is about “Good” 4,20. The only ones, who this year have result above “Good” 4,00 were the capital (4,24) and Smolyan (4,09). The seniors from Shumen ( “Intermediate“ 3,43), Razgrad and Pleven are performed in the weakest way.

The performance of students can also be observed in the occasions of scores below “Intermediate“ 3,00. In 2023 year it continues to increase for Bulgaria and it’s 17,9%. Between the leaders - the capital and Smolyan with under 7%, and Shumen district is at the bottom with 30% weak marks, the margin is four times that shows serious distinctions in quality of secondary school.

IME also counts average result in municipalities, where it is visible that the results of the underperformers are getting worse. In 2023 year in 80 municipalities the average result is under “Intermediate” 3,00 (with 69 in previous year). It is even more startling that in six of municipalities - Zemen, Krushary, Yakimovo, Strumyani, Hitrino and Kameno - there is not a single student who managed to get a grade above "Average" 3.00.

Although the trends are concerning, sometimes weak marks are not clear indicator of failure of school education, because in many of small municipalities, there are few students who have taken the exam, but the mark for many of them suggest the “Intermediate” achievement.

The data used to assess the development of different fields in scope of education system clearly show who are the leaders and the underperformers are over the years. The research into their performance is even reveal the importance of full coverage of children within educational system, of competition between schools  for students and resource, of the connection of professional education with the labour market, and the necessity in creating system to stimulate higher added value of education and learning.

At the end of the last year, the current offer of amendment to the minimum wage level was published. This is interesting for several reasons, primarily because  a new mechanism was applied for the first time to determine the minimum wage that bound it to the dynamic of the average. This means that in the context of increased inflation and the consequent rapid growth of salaries, leads to its largest nominal growth for the last two decades that will have rather much a significant impact on the labour market compared to its traditional growth. Once again, it emphasizes the need for amendments and precisions in the accepted mechanism.

In the beginning let’s to remember who the new mechanism works. This mechanism introduces the European Commission’s requirement to determine the minimum wage as 50% from average salary or 60% from the median. In Bulgaria’s case, the first approach was chosen, as for the basis first two quarters of current year and the last two of the previous year are taken, with the purpose to be maximum actual with used data for the moment of conducting the budget procedure in the fall. Apparently, the biggest weakness of this approach lies in a strong uneven one between separate economic activities and regions of the country.

The determined layer with the mechanism of minimum wage is 933 leva, or 153 leva higher compared to 2023 year. But submitted as proportion of the average for diverged economic activities it is definitely to see wide differences. While the new minimum wage is represented barely as 20% from average salary in the ICT and the telecommunications, 30% at the energy, 32% in the finance and the insurance, and 33% in the mining industry, it reaches as much as 78% in the hospitality and restaurant business industries, and 66% in agriculture (by the way, these shares are very close to those predicted by the IME at the end of  2022, when the introduction of the mechanism was discussed).

The differences, though smaller, are still significant at the same time, in the “coverage” of minimum and average wage across the regions and districts of the country. The capital, with its plenty large labour market, is the only region where the minimum average is below 50% of the average. In only 19 districts is it over 60%, and in Smolyan, Haskovo, Silistra, Blagoevgrad, Kyustendil and Vidin, it exceeds 70%. As with the industries, so with the districts there is clearly visible weakness of supplement of current mechanism. Although it reaches 50% coverage of the average from the minimum wage at the national level, and these results are in the weakest developed parts of the country and the sectors, the rapprochement is mush more aggressive.

What consequences can we expect? In the assessment of the impact for the offer of actualisation is included interesting statistic - according to it, the number of employed with minimum wage is 442 thousands people in the second quarter of the year, as it decreased with 5% concerning to the same period of the last year. To what extent it is considerable portion of the common employment, the direct administrative growth of income in this group of people (with more than 150 BGN at once) can create a severe venture from further the inflation onslaught. Here we are talking primarily about poor people or the households that are close to poorness, where the growth of salaries will lead to higher current consuming. After that, to the extra consumer prices onslaught, with whose high growth several successive governments are struggling. It shouldn’t be neglect the possibility of the sharp increase in expenses for the labour to push the businesses already has been pressing by the deteriorating economic conditions to losses and therefrom to losses of work places.

We also shouldn’t overlook self-insured individuals, whose insurance and minimum insurance income will unavoidable be affected by the size of the minimum wage. According to the latest information from NSI, there were 883 thousands self-employed individuals in 2022 year. Although the raising of their insurances could mean a substitutional rising of budget incomes and therefrom (in pursuit of a 3% budget deficit) sharp increasing of minimum wage will definitely means reducing of available income for self-employed due to the new insurances size.

There are not real grounds to claim that Bulgaria has the immediate affect by increased minimum wage along the lines of shrinking employment and increasing unemployment. But with the necessary clarification that the present increasing is much more sizeable than those we have seen in the last two decades. The grounds to expect the effects in situation with high and almost universal searching of labour and shortage of workers are much less, and where every worker is momentous. However, it does not seem out of the question that employers and workers could agree to keep their current relationship – and wages – but in the grey market, where they do not have to comply with the new state requirements. This, of course, goes against the clearly stated goal of the current government to actively struggle the underground economy and pocket wages.

At the end, the binding with average wage creates a kind of self-feeding growth mechanism - essentially, an increase in the minimum wage leads to growth of the average. Under the default approach, this could necessitate a new rise in the minimum wage for the potential equalization. The side effect could be an inflation abrupt due to nominal growth of incomes of employees, with lagging productivity growth.

Does it signify that the process of application of mechanism  for the minimum wage is certainly bad? Definitly no, because the present mechanism was activated at the worst possible moment of the elevated inflation and rapid, but unevenly surging of average wage. However, there is the fundamental positive effect - removing the determination of this crucial threshold from syndicates and employer’s agreements and linking it with the objective economic realities of the country. However it means that the mechanism clearly requires correction and refinement.

The simplest way to achieve that is by using the median salary instead of average, as the other variant states which was proposed by European Commission. The median has a smoother dynamic and is much less susceptible to the extreme values, which have a particularly huge role in determining the average in Bulgaria due to large differences amidst the sectors and the regions. The obstacle to the expansion of this method is that the median is calculated much less frequently than the average wage (only once every four years). But this means that the national statistic office would need to “hump” with more frequent tracking and posting of another one indicator.

However, it is much more important to enrich the formula of the minimum wage, so that it takes into account much more fully the state of the economy and the labour market. For this aim, it should be taken with others indicators - growth of economy, changes in consumer prices, labour productivity dynamics, employment balance, unemployment and proportion of inactive individuals in the labour market… The list with potential indicators is wide and the formulation of certain mechanism is an effort, long away from the periphery of current text. It is important, however, that it provides much more adequate and predictable increase in the minimum wage than the current, and at the moment of economic conditions deterioration and the risk of unemployment increase - it should prevent significant growth.

It is appropriate to take on eye the regional and sectors’ disparity. The regional coefficients application could enable a slower increase in the minimum wage in less developed economic parts of the country, which shouldn't additionally limit the access of the employees with lowest experience and level of skills to the labour market. The industry’s approach also is irrelevant. It is not surprising that the sectors where the minimum wage approximate mostly to the average are exactly those with the highest rates and shares in the underground economy.

In conclusion, the first step has been taken with the introduction of a formal mechanism for the minimum wage. However, the next step involves finishing touches and refinement of it so that it imports a maximum less distortions in the labour market, which are inevitable during applying for regime of the minimum wage.

The admissions’ campaign of 8^th grade for the next school year is almost ended and now it could be the right moment to represent some observations of this process and its outcomes. The 8^th grade admission is a crucial step in student’s education path: choosing the type of school, profile, and profession in the gymnasium, which presuppose the child’s future (both professionally and personally). This choice is strongly dependent on student’s wish (and its parents) to develop in certain segment as well as the results of NEE that the child has achieved after the 7^th grade at “Bulgarian language and literature” and “Mathematics”. The school’s classification is performed by score, separately formed for every class as combination of the results from NE and the years’ grade of definite subjects - between 30 and 500 points. This means that for the same profiles, the classifications’ score and the admission could be distinctive in different schools and districts of the country.

To illustrate this differences, we will represent the minimum scores of the second classification for admission to the state mathematics and the nature mathematics schools (MG/PMG)in Bulgaria, in the classes with  “Mathematics” profile [1] by regions. The second classification makes it possible to compare the admissions’ score, because of  it is mainly performed at the same list of wishes for candidacy for all school placements. The “Mathematics” profile in MG/PMG was chosen due to comparatively straightforward tracking the similar schools [2] with a theoretical close level of preparation, facilitating easy comparison between them.

What do the data show?

• The admission in the MG/PMG - maybe also in others gymnasiums of the country - requires a score, many times differing among separate districts. For example, amidst Pleven and the capital the difference is 3.6 times. Only in four districts of the country the minimum score of “Mathematics” profile exceeds 400 points . The minimum score only in 7 of 25 districts is below 200 points. Two regional administration of  education do not provide the information of minimum score from the detached steps of classification - Haskovo and Kurdzhali. In one region - Montana - there are no classes with “Mathematics” profile, despite the city having a nature mathematics gymnasium.
• The profiling in mathematics, in general, is not wished by masses of the students and their parents. Excepting some of gymnasiums in the capital and mathematics schools in Varna, Burgas, and Ruse, where is observed huge competition for admission, in the last mathematics gymnasiums there is an achievable, fairly with low outcomes, admission. Even in Sofia, out of both mathematics schools (Sofia mathematics gymnasium and National nature mathematics gymnasium), the classes with the “Mathematics” profile are not proposed, and their scores are rather mediocre. This offering is a consequence of searching, so we can draw a conclusion that choosing of profile in the field of mathematics science is leaded not by wish of the students to develop and to specialize their own skills, but by the school’s prestige and name. This conclusion is proven by relatively a little number of students, appearing for the profiled matriculation every year in mathematics after graduating secondary school.
• Even out of the “Mathematics” profile, comparatively lower scores in many of provincial schools for analogous classes reveal that "hysteria 7^th grade" already is not reality in Bulgaria everywhere. Obviously, the preparation which starts one or two years before appearing at NEE and significant amount of resources separated for private tuition, schools, and additional occupations is unknown for an ever greater part of the students and their families. And this is actually good news.

In conclusion, it is important to note that heavy differences in the admission scores at similar profiles are unavoidably going to have the distinctive quality as the result and the output results. The quality of education, both at the national and regional levels, remains a primary task for the Ministry of Education. An appropriate system of assessment and incentives needs to be developed and implemented with high quality, but it is still under discussion without any concrete steps taken.

[1] Some notes to the data: 1) The first ranking results are presented for Silistra, Dobrich, and Yambol due to no available spots in the second ranking of selected parallels. In Dobrich, scores from the mathematics class at SS 'Stefan Karadzha' were used as there is no 'Mathematics' profile class in the nature mathematics gymnasium. 2) Targovishte has no mathematics schools. The score from the class with the 'Mathematics' profile at 1st SS 'Sveti Sedmochiselnitsi' was utilized, the only one in the district. 3) In Kyustendil district, RAE represents school data, not individual classes. The minimum grade from 'Prof. Emanuil Ivanov' nature mathematics gymnasium, Kyustendil city, was used. 4) No data is available for Haskovo and Kardzhali. 5) In certain areas like Sofia (city) and Stara Zagora, there are two mathematics gymnasiums in each city. The table displays mathematics classes with lower minimum scores.

[2] Tracking “Foreign language” and “Natural Sciences” profiles, for example, is more challenging due to the varying schools that offer them to students.

The regional development is one of the primary focuses of the IME in the country. Unique in its coverage and profundity, the “Regional profiles: indicators of development” has been published for more than ten years and has followed the economic and social developments in the fields, and the initiative “265 stories about economic” focuses on municipalities.

All data reveal that Sofia continues to be a major economic engine of the country. The capital city accounts for 40% of the Gross Domestic Product (GPD) and the same proportion of the total output produced by the country. The capital attracts more than a half of all domestic and foreign investments.

It is often required to exclude the data of the capital in some indicators for a better comparison of districts and municipalities, because of the capital strong development that significantly distorts the average values and does not allow to see another great municipalities or a factual reality for citizens and many businesses. For example, the Plovdiv district ranks second in GPD production , but its values are six times lower than those of the capital. When the country’s unemployment is low, it regularly means that there is virtually no unemployment in Sofia, while in other places, it could be high. The increase in country’s average wage could be the result of the capital’s large labour market growth, while rest of the regions might have small or no changes. When there are discussions about the ever-increasing role of high-tech industries in the country, it’s often forgotten that the industry is a considerable sector outside of the capital that makes primary prosperity and ensures employment and incomes.

What would happen to the average values of any basic economic indicators, if we were to exclude Sofia from the calculations?

A few clarifications: First, the regional statistics are published with a long delay, and the latest data for selected indicators are from 2021. Second,  the differences become even more striking in absolute terms. However, when considering the relative value of the indicators, weighted by population - economic development appears more realistically.

Gross Domestic Product (GPD)

The gross domestic product (GDP) in the capital was over BGN 59 billion in 2021, which represents 43% of the total value for the country.

The GDP per capita in Sofia (the capital) is BGN 45.2 thousand, which is more than twice as much as the second district - Stara Zagora, and about five times more than the last in this ranking - the districts of Haskovo and Silistra. Precisely because of the high GDP level of the capital, the average level of this indicator is so high (BGN 20.2 thousand per person) that only it is above it.

If we exclude Sofia from the accounts, the average GDP per capita in the other regions is BGN 14.3 thousand and eight regions would go "over the line" - Stara Zagora (20.2 thousand BGN), Sofia (19.3 thousand BGN), Varna (17.9 thousand BGN), Vratsa (17.8 thousand BGN), Gabrovo (16.5 thousand BGN), Burgas (15.8 thousand BGN), Plovdiv (BGN 15.5 thousand) and Ruse (BGN 15.1 thousand).

Produced output

The value of production in Sofia was close to BGN 81 billion in 2021, constituting 38% of the total production in the country.

The value of production in the capital is BGN 61.9 thousand per capita. The average value for the country is BGN 31.2 thousand per person and in four more regions the production is above it - Sofia (BGN 57.1 thousand), Stara Zagora (BGN 34.0 thousand), Plovdiv (BGN 32.3 thousand) and Ruse (BGN 32.1 thousand).

If we exclude Sofia from the calculations, the average value of the production in the rest of the country would be BGN 24.1 thousand per person, which would add three more districts "above the line" - Gabrovo (BGN 30.2 thousand), Vratsa (BGN 29.0 thousand) and Varna (BGN 26.7 thousand).

Expenditure on tangible fixed assets

The costs for the acquisition of tangible fixed assets in Sofia were over BGN 10 billion or 48% of the total costs for the entire economy of the country in 2021.

With average costs for TFA of BGN 3.1 thousand per person per population, only three regions in the country are above this value - the capital (BGN 7.8 thousand), Plovdiv (BGN 3.4 thousand) and Sofia (BGN 3.2 thousand).

If we take out Sofia from the accounts, the average costs for TFA in the country would be BGN 2.0 thousand per person and as many as twelve regions join the group "above the line" - Burgas, Varna, Stara Zagora, Ruse, Smolyan, Gabrovo, Pazardzhik , Pleven, Veliko Tarnovo, Yambol, Silistra and Razgrad.

Foreign direct investments (FDI)

Foreign direct investments (FDI) in the capital were close to 15 billion Euro with accumulation by the end of 2021 and were more than half of the total for all non-financial enterprises in Bulgaria.

The average FDI per capita for the country is 4.1 thousand Euro and only three regions are above this value - the capital (11.2 thousand Euro), Sofia (7.3 thousand Euro) and Burgas (5.6 thousand Euro).

Without the capital, the average value of FDI per capita would be 2.4 thousand Euro and six more regions would stand out above the average level - Stara Zagora, Gabrovo, Plovdiv, Varna, Targovishte and Kardjali.

The exclusion of Sofia from the accounts in no way changes or underestimates the economic and social development of the capital, but allows the good indicators of other areas to be highlighted. Thus, although they do not even reach the average values for the country, in this case it should be noted the strong economic development in the districts of Sofia and Stara Zagora, highly productive industry in Gabrovo and Vratsa, intensive business activity in Burgas and Ruse, attracted foreign investments in Plovdiv and Varna.

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