Human Capital Development in Romania: an Economic Analysis of Tertiary Education Reform and Labour Market Outcomes

Abstract

The reform of higher education in Romania represents a critical dimension of economic development, particularly in the context of aligning human capital with evolving labour market demands. This study examines the relationship between higher education outcomes and employment performance, highlighting structural imbalances in the Romanian education system. Using data from Eurostat (2025) and the OECD (2025), the analysis reveals a declining trend in tertiary educational attainment among individuals aged 25–34, from 24.7% in 2022 to 23.0% in 2025, placing Romania significantly below the European Union average. At the same time, the employment premium for tertiary graduates remains above the OECD average, indicating strong labour market demand for highly educated individuals and suggesting a shortage of qualified workforce. This paradox reflects a persistent mismatch between the supply of graduates and the needs of the economy. The paper further explores key policy directions for reform, including performance-based funding, university–industry partnerships for research and innovation, internationalisation strategies, and the development of applied and industrial scholarship schemes. Drawing on OECD recommendations, the study emphasises the need for systemic coherence between education policies and labour market requirements. The findings suggest that improving tertiary education outcomes is essential not only for increasing employment rates but also for enhancing productivity and long-term economic competitiveness. The paper concludes that sustainable reform requires an integrated approach that links funding mechanisms, institutional performance, and labour market integration in order to better align educational outcomes with industry needs. UDC: 378.014.5:331.5(498); JEL: I23, J24, I25, J21