Developments in the labour market during 1989-93 exhibited fluctuations. The first four years were characterized by an intensive demand for labour and severe shortages in all sectors of the economy. In contrast, during 1993 the demand for labour decreased as a result of the slow-down of economic activity and unemployment rose steeply.

The gainfully employed population increased from 237,5 thousand persons in 1988 to 265,0 thousand in 1993 or at an average annual rate of 2,2%, marginally higher than the target set in the Plan, 1,9%. The overshooting of the provision of the Plan was due to the rapid development of the economy, despite the fluctuations exhibited at times, and particularly of the services sectors, which are labour intensive. The unemployment rate was contained to 2,3% of the gainfully employed population on average during 1989-93, a percentage lower than envisaged in the Plan, 2,7%, while the participation rate rose from the already high, by international standards rate of 47,5% in 1988 to 48,5% in 1993 (1), as provided for by the Plan. The increase in the participation rate concerned almost exclusively women.

The shortages in the labour market, during the first years of the implementation of the Plan led to radical changes of Government policy regarding the employment of foreign workers and to granting of permits for the employment of foreign workers on a large scale, in contrast with the provisions of the Plan which aimed at a balance between demand and indigenous sources of labour. As a result the number of the gainfully employed foreign workers reached 5% in 1993, as against 1,5% of the gainfully employed population in 1988.

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