ROMANIAN ACADEMY

NATIONAL INSTITUTE OF ECONOMIC RESEARCH „COSTIN C. KIRIŢESCU”

PHD. THESIS
THE INVESTMENT IN HUMAN CAPITAL AND ECONOMIC
GROWTH IN THE CONTEXT OF MARKETS GLOBALIZATION

Scientific coordinator:

PhD. CHIVU Luminiţa

PhD. Student:

JOSAN Ioana – Julieta

Bucharest

2015
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 Summary of PhD thesis

„The investment in Human Capital and Economic Growth in the context

of Markets Globalization”

CONTENTS:

Introduction .........................................................................................................................................................p. 1

1st Chapter Human capital in the economic theory and practice

1.1 Genesis and development of human capital theory …………….……………………..………….p. 11

1.2 The main shortcomings of the original theory of human capital ……………………………p. 18
1.3 Developments of human capital theory …………………..……………………………………………p. 21

2nd Chapter Peculiarities on the evolution of the globalization. The economical

integration – an answer to the globalization
2.1 Chronological landmarks on the evolution of globalization ………………...…………………p. 32
2.2 Trends of the main indicators of globalization …………………………………….……………….p. 37
2.3 The relationship between globalization and human capital ………………….………………p. 48
2.4 International economic integration - a consequence of globalization …………………….p. 50
2.5 European Union – an advanced form of international economic integration ….………p. 54
2.6 The role of human capital in the process of European economic integration ….………p. 62
2.7 European policies on human capital development ……………………………………….……….p. 64
3rd Chapter The investment in human capital. Comparative approaches
3.1 Aspects of macroeconomic investment in education …………………………………………….p. 69
3.1.1 Direct and indirect costs of education ………………….…………………………….………..p. 72
3.1.2 The European Union cost of education ……………………………………………….……….p. 74
3.1.3 Funding models applied in European education systems …………………….………p. 79
3.2 The investment in education in Romania ……………………………………………………….……..p. 86
3.2.1 The structure of pre-university and higher education system. Types of
funding……………………………………………………………………………………………………………….p. 92
3.2.2 Characteristics of the Continuous Vocational Training (CVT) in Romania …...p. 100
3.2.3 Funding of the Continuous Vocational Training (CVT) …………………………….…p. 108
4th Chapter The relation between the human capital and economic growth
4.1 Human capital and the models of economic growth …………………………………..…….…p. 115
4.2 Human capital approach in terms of investment and recovery ……………………………p. 125
5th Chapter Case study “The usage of the human capital of graduates of economics
and administrative sciences acquired in higher educational system”
5.1 Background research ………………….……………………………………………………………………..p. 141
5.2 Objectives and research methodology ……………………….……………………………………….p. 142
5.3 Summary of the study …………………….………………………………………………………………….p. 144
5.4 Research results ……….……………………………………………………………………………………….p. 148

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 5.4.1 Socio-demographic profile of graduates and the correlation between it and the
degree of integration in the labor market analysis …………………………………………….p. 164
5.4.2 Graduates satisfaction on work …………………………………………….....………………..p. 166
5.4.3 Analysis propensity to change jobs / city or country …………………………………p. 168
5.4.4 Analysis of correlation between income and the graduated education level p. 169
5.4.5 Analysis of correspondence between the studies completed and job
characteristics (Public Administration vs. Business Administration) ………….………p. 171
5.5 Conlcusions and recommendations ..............................................................................................p. 172
Final conclusions and recommendations .....................................................................................p. 175
References .......................................................................................................................................................p. 183
Appendices
Appendix 1. The evolution of the school population in secondary education ....................p. 194
Appendix 2. The questionnaire used in research on „The usage of the human capital of
graduates of economics and administrative sciences acquired in higher educational
system”................................................................................................................................................................p. 195
Appendix 3. List of Graphics ......................................................................................................................p. 208
Appendix 4. List of Tables ..........................................................................................................................p. 209

KEY WORDS: human capital, investment, economic growth, globalization, education

SUMMARY:
The human capital represents the mirror of a nation, and the more that society
invests in education and health, the closer it will be to prosperity and development. The
richness found in human resource can be effectively used as long as there are polices to
support the revaluation of this type of capital. In their absence, part of one nation human
capital is lost, due to phenomena such as unemployment, immigration or miss-usage.
Therefore, along with the development of the new economy and the transition from the
industrial-based economy to the knowledge-based economy, the educational component is
being assigned a significant role in ensuring the economic progress and development.
People are no longer ordinary workers, but are the one adding value to the products and
services, while their knowledge and skills represent key elements of the competitiveness in
a globalized and independent economy. In this context, the technological factors raised the
knowledge to a new level, allowing its transfer to a global level, and creating relational and
economic interdependences.
The globalization of the economic markets led to an unprecedented development of
the sectors based on advance technologies and use of highly qualified human resources.
Therefore, we are witnessing, today, not only a reconfiguration of the power poles, as a
result of increased competitiveness and wealth of certain nations, based on innovation and
technology, but also a restructuration of the labour market, characterized by a demand for
very well trained human resources, with high level of skills, and a greater ability to adapt
more easily to dynamic organizational environments, competing to introduce new
technologies and to enter as many markets as possible. In such context, it is necessary to
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balance the investments and to support the development of human resources, all needed to
increase the economic competitiveness.
Current debates in business and academic environments are merging to the usage of
new educational contents to ensure a lifelong learning, so as the individuals to be able to
continually acquire new skills and competences, more adapted to the innovative processes
and technologies.
In Europe, during the economic integration process, there can be observed obvious
concerns for human resources, in general, and human capital, in particular, after the 80s,
when the European Union, as well as the member states have proposed to obtain a higher
level of employment percentage, of productivity and social cohesion. Even now, in a
European Union affected by global changes, investments in education and vocational
training are of a particular interest. Investing in human capital is a priority to create the
most competitive and dynamic knowledge-based economy in the world.
In Romania, the concerns on the human capital component were marked by a series
of reforms initiated in the system of education, usually either inadequate or improperly
implemented following the last two decades period. The effects of this period of searching
and positioning of Romania in its relation to the merger to capitalism and then to its
alignment to the European Union standards led to an uncertain economic, political and
social environment, an environment in which the development of appropriate use of the
human capital have suffered. During all these transformations, the human capital was in a
very sensitive position, requiring strategies and actions leading to a higher allocation of
resources for recovering the quantitative and qualitative discrepancy in between Romania
and other European countries and worldwide countries, mode developed.

After becoming a member of the European Union, the situation has improved, as a result of
European investments and of the know-how of the European best practices, but we are still
at the beginning of this „battle”, as Romania may not decelerate the process of economic
growth for ensuring its highest level of competitiveness. The content and the quality of the
education represent the main factor of progress of Romania, in general, and of the business
environment, in particular, given that it is the only way to sustain the changes and
transformations predicted on the labour market for the following decade. From this point
of view, the improvement of the quality of the human resources available in our country
through the investments in education and health systems, as well as elaboration of a
national strategy including precise actions to improve the efficiency of the usage of human
capital represent major pillars of our future development and progress.

Therefore, this paper work aims to provide a broad framework for the analysis of
the investment in the human capital, with a special view on the context and situation in
Romania, compared to the other states members of the European Union. The comparative
analysis finds its justification in the fact the European Union is one of the most advances
forms of economic integration. In theory, this paper work approaches the human capital
from the perspective of the theory opened by the Chicago school (in its economic version:
Mincer, Schultz, Becker, Kicker), the human capital being understand as education (formal
and informal) and health. Due to scientific and economic reasons, this paper work

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considered only the component of the educational capital acquired during the initial
education and during the further continuous vocational training.

The choice of such subject if justified by the importance attributed to the education
during the recent decades, due to its influence on the economic growth and increase of the
competitiveness of the countries investing in the human capital. The Organization for
Economic Cooperation and Development (OECD) is stating that the level of the
international competitiveness varies depending on the level of education of the population,
thus explaining much of the differences in productivity among OECD countries. The level of
education contributes not only to the increase of the productivity through the competences
and skills, but also contributes to the improvement of life quality (reducing the mortality,
maintaining an optimal level of health of the population), as well as to the increase of the
flexibility and adaptability of the individuals, which are vitals in the context of economical
structural changes. However, the choice of this subject was also based in considerations
identified during the stage of pre-analysis, considerations which revealed a poor
development of this topic in the specialised Romanian literature, as well as a low interest in
elaboration of more specific studies and researches, at national level, on the investment in
human capital, as well as a comparative analysis with other countries members of the
European Union.

In order to reach the proposed objective, that of achieving an accurate X-ray image
on the investment in human capital and economic growth in the context of markets
globalization, the paper work aimed to obtain an analysis developed over five chapters.

The first chapter, „Human capital in the economic theory and practice” has the
role to provide the theoretical framework of the development of the concept of human
capital in the economic theory. The concept was presented and approached in terms of
focusing on added value and on the limitations of the theory of human capital theory, in
close correlation with the evolution of school of thought. We can say that the human capital
theory could be considered as the promoter of the empirical analysis and explanation of
some phenomena the base for the development of other models. The primary model of the
human capital developed by the initiators of this theory seemed to provide most of the
answers at the time, by building a model of the demand for education. However, their
assumptions were contradicted by researches stating that the inequalities of the demand
have, in general, other causes than those related to individuals’ preferences, while the offer
of education is not unitary and has influences in the development of schooling. Further
developments of the models and the theories elaborated in recent decades on the human
capital can be found in this chapter. Some of the most recent theories converge to a number
of tendencies which characterize the newest economical realities, such as: increase of the
consumption of new developed technologies, increase of the interdependencies, increase of
the labour consumption, characterized by high qualifications and replacement of less
qualified human resources.

In this chapter we approached the conceptual boundaries (definitions, forms,

characteristics) concerning the human capital, in the context the globalized markets. In the
approach of the human capital we started from the presumption that the human capital
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accumulation process is a dynamic process that occurs throughout the life cycle of a person
by families, schools and companies. In some cases, various stages of the life cycle may get
critical for the person formation. In the event that the training opportunities of these
abilities are temporarily lost due to adverse economic conditions, the process of correction
is much more expensive. The effect is similar if the usage of the human capital is low or
completely absent. The disuse of the human capital for a longer period of time will lead to
its erosion, to a partial or total loss of some abilities / skills which could have been used
but, due to economical and political changes (industrial and economical sectors
restructuration), this human capital will no longer find use on the labour market, will no
longer produce incomes. These observations highlight the necessity to adopt a more
comprehensive image of skills training throughout the life cycle, so as the more efficient
policies to increase the abilities and skills to be elaborated, and the investments to become
increasingly more and more efficient.

The second chapter, „Peculiarities on the evolution of the globalization. The

economical integration – an answer to the globalization” presents the concept of
globalization from the perspective of its chronological development, and also the
tendencies among the main indicators of globalization. Thus, to achieve a more
comprehensive economical analysis, were highlighted the tendencies of the gross domestic
income (GDI), of the direct foreign investments (ISD) and of the migration flows on a global
level, directly related to the expansion of the process of globalization.

The researches have revealed the increasing tendency in the global GDI since the late
eighteenth century, when the Industrial Revolution begun, leading to an impressive growth
of the GDI per capita. This evolution determined even greater increases in the more
developed economies, or in the emerging ones. The periods of growth coincided with the
biggest jumps in the evolution of the process of globalization.

The intensification of the process of globalization, mainly in the second half of the last
century, led to increases of the commercial, investment, technological and information
flows, greatly increasing the role of the direct foreign investments. This aspect led us to
believe that the ISD transactions represented a primordial instrument for the globalization,
contributing to the economical growth of those regions, as well as becoming a catalyst for
other factors of production and for the domestic capital as part of the world economies.

At the same time, the globalization and internationalization of the markets

determined large flows of human capital in the form of territorial migrations in between
the global economic markets, with effects on all contemporary societies. It is estimated that
the migration flows, as evidenced by the existing data, has intensified during the twentieth
century, simultaneous with the increase of the interactions and transactions, at global level.

Another important component of this chapter was represented by an analysis of the

European model of economic integration. The choice of the European model was based on
the consideration of this model as representing the most advanced form of economic
integration occurred as an answer to the process of globalization. In analyzing the
European model of economic integration a significant role was attributed to identifying and
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emphasizing the politics and instruments of human capital instruments, as promoted by
the European Union, with references to the community instruments used by Romania, as a
state member, concerning the investment in human capital. On European level, the human
capital represented the key element to increase the solidarity and social and economic
development. The European strategies centered on the development of knowledge through
education and acquisition of superior competences for its citizens represented an answer
to the changes arising from the process of globalization. The characteristics of this
phenomenon include: the creation of interdependencies between different countries an
outstanding development of the technologies, which led to the revolutionizing of the
European economy, of the daily life of the European citizens who had to adapt to the global
registered progress. Also, on a global level, there is an increase of the investments in the
human capital, mainly in the more developed countries, yet also in the emerging ones. The
increase of the level of investments testifies to the awareness of the role of the education in
ensuring a high level of competitiveness, with direct influences on the economic growth of
those countries. Moreover, we can also observe an increase of the private investments due
both to increased wealth as well as to the interest of the private organisations to have
access to a better trained labour force, a labour force able to easily adapt to the fastest
development of technologies and of the business strategies centered more and more on the
market.

The third chapter, “The investment in human capital. Comparative

approaches”, includes an analysis of the types of investments, financing models and
investments level in Romania and in other EU state members. The analysis revealed that at
European level the education system are being mainly financed from the public budget and
in a very low proportion for private financing sources. The costs associated with the
investment in human capital represent, in the last decades, a subject of debate and analysis
both in the economic field, as well as in the political one. Most reviews support the
necessity to streamline the national budgets due to financial constraints caused by the
economical crises that have characterized the last decades, and the changes due to
globalization, which national economies have to face. Therefore, it is necessary to
restructure both the allocation of resources as well as the optimal way to finance the
educational services. These efforts are justified by the importance they have for public
budgets, determining the level of investments made by a nation for development of the
human capital. At European level, the structure of financing and the policies applied in
educational system varies from one country to another and sometimes there are variations
within the same country, from one region to another. Also, there are significant differences
between countries in what concerns the level of financing, according to EUROSTAT, in
2014, the percentage of GDI for the education vary from 8%, in Denmark, to 3.4% in
Romania, while the European average stood at 5.3%. Romania is characterized by a very
low level of private expenses for education, compared to the European average. The total of
private contributions, in 2010 was of 0.12 of GDI, compared to 0.82% as it was the
European average.

A consequence of underfunding the education, both from public, as well as from

private funds, as well as the financial incapacity of families to cover the additional expenses
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for education are affecting the efficiency of the Romanian education, leading to lower
educational outcomes at national and international evaluation of pupils, as well as to lower
rates of enrolment in a form of education. Also, we may notice increases if dropout, as well
as a tendency of downward in the school population due to aging population, a lower birth
rate after the 90s and increase of the migration phenomena, especially young persons,
having the potential to continue their studies or to start a family and have children.

Neither the second pillar of the education, the vocational training, with an important
role in developing the individual skills and competences in order to develop the human
capital, with an impact on the increase of the quality of the work and economy as a whole
has not benefited from better conditions in Romania after the 90s. There is an
improvement, in the recent past years, through the development of a legislative framework
meant to stimulate the level of participation in vocational training programs, but this is not
enough. There are evolutions in what concerns the level of participation in vocational
training programs, but the increases are registered in the sectors with a tradition of
investing in the continuous vocational trainings, such as financial intermediation and
insurances, electricity, thermal, gas production and supply, information and
communications. However, there is a high proportion of companies & enterprises choosing
to find less expensive solutions, mostly implemented only to meet the legal requirements
on employees training, solutions which are not designed to aim the quality of the human
resources training, but the lowest cost. Nationally, the share of the direct and indirect
expenses of the overall cost of vocational training is around 0.2% of GDI.

The fourth chapter, “The relation between the human capital and economic
growth” aimed to achieve a presentation of the main models of economic growth
developed over the time, with particular reference to the relation between these models
and human capital. In the specialised literature, there are a variety of theories on the
factors generating the economic growth. The first school of thought rooted in Becker
theory according to which the increase if being determined by the accumulation of human
capital. According to this theory, the differences in the growth rates of the income per
capita in between economies are mainly determined by the rates at which the economies
are accumulating human capital. The second approach sustain the assumption according to
which the quantity of the human capital has influences on the economy, on its capacity to
innovate or to obtain performances similar to the more advanced economies, thus
determining the economic growth. According to this approach, the size of the human
capital is considered as an indirect factor which determines the average economic growth
per capita. For instance, in Lucas` s view, the significant differences in between states are
explained by the technological differences and by the differences in knowledge of their
inhabitants, as the human capital. Therefore, it should be noted that the fact that there is an
interdependence of the factors involved in the production, but only some of them have a
superior role in the economic growth process.

In the fourth chapter we have conducted an analysis of the investment in the human
capital, at the level of the initial education, approached from the perspective of its recovery
or by contribution to the balancing of the budgets, and the imbalances generated by

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migration. The analysis also includes an evaluation of the labour productivity given its
importance for the economy. The growth of the labour productivity is translated into
higher wage and economical prosperity.

In terms of methodology, for determining the costs of the investment in human

capital of the person included into the analysis, official information were used, information
provided by the authorities for pre-university and university educational systems, within
the Ministry of Education and Researches, by conversion of all costs in euro currency, at the
cost of the average annual exchange rate as set by the National Bank.

For the pre-university educational system, for calculating the standard cost, we used
as term of reference a standard pupil attending the gymnasium, in urban environment,
having a coefficient of one (1). For emphasizing the main effects of the export of labour
force through migration, we analysed the main losses registered by Romania, as provider,
compared to the financial benefits of the host country. For such a comparison, we had
chosen Spain, the second European country in terms of number of migrating Romanians,
representing the largest community of emigrants. The official figure used for the persons
who have chosen Spain was of 796 608, while for the total of Romanian emigrants in 2014,
the used figure was of 3 000 000, estimated data.

The results of the analysis indicated an average cost for pre-university and
university educational system. In addition, we also estimated the expenses of a family for a
pupil/student, which are emphasizing a tendency not having an absolute representation.
Therefore, for the pre-university educational system, the Romanian state is investing, in
one single pupil, who started the first grade in 2002 and graduated high school in 2013, an
average of 6816.44 euro. In the event when, due to various reasons, this pupil is only
graduating only the primary educational system, the invested amount is being reduced at
4563.64 euro. For primary educational system, the expenses of a family are of 289.65
euro/year. In the event when the pupil is also graduating from high school, the average
expenses of his family will be of 3475.8 euro. In the end, the public and familial expenses
will reach a total of 10 292.24 euro for the education of a high school graduated pupil.
In terms of college/university education, the costs are higher than those above
mentioned, requiring an average public funding for a student graduating the three years
period college program, of 5 347,91 euro. For a student graduating from a four years period
college program, the costs are even higher, of 6 493,91 euro. The investment was calculated
for a student starting the studies in 2008 and graduating in 2011 (for three years college
program), respectively in 2012, for a four years college program. In the event of additional
expenses paid by the family, the average personal or familial cost is of 3 692, 66 euro, (for
three years college program), respectively of 4 923, 68 euro, for a four years college
program. In this case, the investment in the education of one student from public and
familial sources may reach a level of 9 040, 57 euro, (for three years college program), and
of 11 417, 59 euro, for a four years college program.

As conclusion, the average public investment for a university graduate, including

also the primary educational system, is of 12 754, 67 euro.
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 If that student would get employed in Romania after graduation, and would earn the
average gross wage, in one single year, the Romanian state could collect taxes and fees of
about 2 337, 6 euro.

But, taking into account that approximately 13% of Romania`s total population
chose to live in another country, the level of invested and uncollected amounts are
burdening the Romania` s public budget. For example, analysing the losses registered by
Romania due to the migration of 769 608 persons in Spain, resulted a level of losses
incurred in those persons education of 5 409 372 358, 34 euro, while the loss of potential
contributions to the public budget from wage taxes and fees are of 6 421 508 333, 34 euro.
We have also identified losses from the diminution of labour productivity, by analysing the
social productivity of labour, the labour productivity per employee and the according to the
salary costs.

The more detailed results of the analysis of the contributions for balancing the
budgets and of the imbalances caused by migration are presented in the second part of this
chapter, emphasizing, therefore, an unfavourable situation for Romania, as a provider of
labour force, compared to the countries that are hosting the people who have migrated.

The fifth chapter is providing a case study on “The usage of the human capital
of graduates of economics and administrative sciences acquired in higher
educational system”. The innovation of this research, reported in other socio-economic
studies completed in Romania, is the provision of a comparative analysis of these two
majors, belonging to two different areas of studies, in order to emphasize the extent to
which the differences occurs in the hope of employment of the graduates, of income labour
and human capital development after graduation.

The usefulness of this research includes two dimensions: theoretical and practical.
The theoretical theory is to widen the knowledge on the use of the human capital of the
graduates of Economics and administrative science. The practical dimension is translated
into practical benefits that the interested entities may earn (graduates, the higher
educational institutions, employers, public authorities).

The study was based on the fulfilment of the central goal of the research that of
obtaining an X-ray image on the integration of graduates and their positioning on the
labour market, from the perspective of the use of the human capital acquired during higher
education. From the methodological point of view, we investigated the persons who
obtained a bachelor` s degree in the Faculty of Business and Administration (University of
Bucharest), included into the 2007/2008, 2009, 20011 promotions, Public Administration
and Business Administration specializations.

After analyzing the answers given by the respondents, we could outline the
following guidelines of the research, outlines which could be use for developing complex
researches on the integration of the graduates on the labour market, in order to widen the

10
scope of knowledge in these specializations, as well as to improve the politics and
strategies concerning the graduates of economics and administrative science.

The main results indicate a higher rate of continuing the studies, at postgraduate
level, thus contributing to a higher development of the human capital. Most graduated or
will graduate post-university studies offered by the state university, having a good
reputation on the labour market. In terms of attending the vocational training programs,
the situation is not as good, given that the interviewees had a much lower rate of
graduating a vocational training program, compared to attending a postgraduate program.
A very good situation stands out in terms of degree of insertion, which is high, 91% of the
interviewed graduates occupying a job, as employee. Among these, the graduates of the
economics have found, in a much greater extent, (69%), a job corresponding to the
investment they have made in the undergraduate studies, while only 34% of the Public
Administration graduates (coursework in Administrative Sciences) declared the same.
Also, another major difference between these two coursework is the earned salary. The
graduates of Business Administration had higher earnings than the graduates of Public
Administration. This aspect is also reflected in the answers given on the perception on their
lives quality: the Business Administration` s graduates declared to be more satisfied by
their style of living, compared to the Public Administration graduates.

Given this consideration, for the Administrative sciences graduates, we strongly

recommend the development of the transversal skills, so as their level of employability may
increase. Until a viable solution as regards to the employment in the public sector will be
identified, the educational institutions should change their curricula, so as to be able to
provide more specific competences, and the graduates to get to become more flexible in
finding a job in the private sector or the non-profit sector, by having such transversal skills.
Another recommendation for the graduates is the development of their skills, in another
manner than through undergraduate studies or master studies, but enrolling in vocational
training programs.

The analysis revealed a very low share of graduates developing their own starts-up.
This low percentage is rather worrying, if we consider especially the Business
Administration graduates for whom, among the specific competences of the curricula, the
entrepreneurship is included.

A cause for this low rate is the unfavourable global economic context and the social-
political uncertainties at the moment of graduation, and so forth. Another reason could be
the lack of specific and practical skills that the graduated college failed to provide to the
graduates. This reason is a constant criticism of Romanian educational system in the last 20
years – creating general skills, theoretical skills and the ignorance of the real needs of the
labour market, due to the lack of an efficient communication in between the market
entities, namely the representatives of the educational institutions and the representatives
of the business environment and even the state institutions.

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 The results of the research will be presented to the board members of the faculty
and the teachers, to be used in order to better adapt the curricula, so as all these
shortcomings identified in the skills of their graduates to be improved, and for the
educational content to become more competitive in the current requirements found both
on the labour market, as well as in the academic community. At the same time, the results
shall be made available to the business environment in order to outline a profile of
graduates of these two coursework, a profile which may be used during the selection and
recruitment processes, as well as on the development of the motivation strategies and
vocational training of the employees coming from the analysed specializations, and more.
The public authorities, both in the education area, as well as in the labour market area, in
particular, represent another entity for which the results of this research will be made
available, so as to be used in order to develop more complex researches on the insertion of
the graduation on the labour market, in order to widen the knowledge of these two
specialization, as well as to improve the legislative framework.

The final conclusions of this thesis outlined a number of recommendations for

existing issues and potential risks that were identified during the stage of research and
implementation. These conclusions are concerning recommendations which can be applied
on medium and long term, in order to create a competitive economy, characterized by an
economic growth sustained by more efficient investments, with priority in the human
capital of this nation.

However, it is considered to implement a model of balance growth, focusing on the

development of the quality of jobs, so as to determine an increase of revenues and of the
numbers of jobs, so that the living standards to rise above the level of subsistence for a
larger category of citizens. The investments in education and health will have to be also
implemented in practice, not only at the level of strategies and government plans. It is
primordial to implement a medium and long strategy to encourage the use of the human
capital of the nation, to maintain the population not to emigrate and, simultaneously, to
adopt measures to facilitate the return in the country of a larger number of persons who
have migrated in other states.

Romania also needs to rethink its public policies on education, so as to increase

their efficiency and effectiveness. The effectiveness is to increase the adaptability and
flexibility of the labour force and the preservation (at least) of the quality of the labour
force human capital. On the other side, through efficiency we may foresee the forms and
development of the national stock of human capital, in an optimal ration between the
efforts and the results. Likewise, the policies to promote the employment and to combat
the unemployment may confirm their value in times of economic downturn.

From the perspective of the responsibility of the legislators and public authorities,
there is the need to elaborate and implement policies to facilitate the protection and the
development of the skills of the individuals, by stimulating their participation in lifelong
learning activities. At the same time, it is necessary to improve the medical services, both in
terms of the access to services, as well as in terms of the quality of the medical care, so that
12
the population to have a good health. And last, but not least, identifying some efficient
measures to boost the business environment in creating new jobs and to increase the
quality of the human capital in the organization by participation in continuous vocational
training programs.

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