During Bulgaria's political and economic transition, changes in its political institutions have been rapid and fundamental. However, Bulgaria's socio-economic systems have changed much more slowly mainly due to the inherited backward structures from pre-socialist and socialist times, the locational disadvantage of the country in terms of its distance to the core markets of Western Europe, general instability in the Balkans and discontinuities in the government's process of privatisation and orientation to a market economy. As a whole, the socio-economic system can be characterised as developing towards diversification. The analyses of the education, labour and welfare systems in Bulgaria illustrate this assumption.

During Bulgaria's period of transformation, its education system passed through substantial reforms from changes in the legal framework and its orientation to the private sector. Two major tendencies developed. First, the phenomenon of students dropping out from school emerged and has resulted in a group of citizens with little or no education. Second, there has been an increased interest in university education.

The labour market of the former centrally planned Bulgarian economy has suffered from quantitative and qualitative imbalance during the transition period. Its unemployment rate increased from 0% to 18%, and decreased to about 7% at the end of 2007. During the 1990s, the crucial problem was unemployment. Currently, the lack of an adequately qualified and educated labour force is the most significant issue in the labour market.

The transition period has negatively affected the welfare system – its resources are very limited and decreased during the period of transformation. Bulgaria's welfare system could not compensate the groups experiencing declining living conditions with the economic difficulties that began in the 1990s. This induced tensions between the state institutions and the economically disadvantaged groups.

Education system

Structure of the Bulgarian education system

Overview of the Bulgarian education system after the Second World War

The problem of illiteracy was tackled quite successfully in Bulgaria long before the Second World War. However, secondary education and in particular higher education lagged behind average European standards. The beginning of the 1950s marked a period of great expansion for higher education, with Bulgaria's education system developing in accordance with socialist ideas. The number of its institutions rose initially from five (in 1939) to 13, then to 20, with 33 faculties and over 100 specialties (Topencharov, 1983: 15).