Bulgaria is undergoing both a rapid demographic transition and a significant structural shift in its economy. Increasing longevity combined with low fertility and emigration have made Bulgaria’s age structure increasingly top-heavy and its dependency ratios higher. At the same time, the economic sectors that absorbed low-skilled workers during the high-growth early 2000s, such as construction and manufacturing, were those that contracted most during the 2008–09 economic crisis and they have not yet recovered. Meanwhile, activities demanding high-skilled labor, such as financial and business services and information, communication, and technology, have been faring relatively well.

This study looks at direct measures of two types of skills that employer’s value: cognitive skills, such as functional literacy and numeracy, and socio-emotional skills, such as self-discipline, perseverance, and ability to work well with others. The objective is to assess the extent to which these direct measures shed light on what matters for labor market success, defined as being in the labor force, being employed, and earning more.