Bulgaria is undergoing both a rapiddemographic transition and a significant structural shift inits economy. Increasing longevity combined with lowfertility and emigration have made Bulgaria’s age structureincreasingly top-heavy and its dependency ratios higher. Atthe same time, the economic sectors that absorbedlow-skilled workers during the high-growth early 2000s, suchas construction and manufacturing, were those thatcontracted most during the 2008–09 economic crisis and theyhave not yet recovered. Meanwhile, activities demandinghigh-skilled labor, such as financial and business servicesand information, communication, and technology (ICT), havebeen faring relatively well. This study uses a new datasetwith direct measures of cognitive and socio-emotional skillsto examine the relationship between skills and labor marketoutcomes in Bulgaria. For a long time, labor market studieshad to rely on formal educational attainment as a measure ofan individual’s skills. However, the correlation betweenformal education and skills is not perfect, and not alldiplomas are equal in terms of imparting certain skills tostudents. Moreover, valuable skills can be acquired withoutformal diplomas, for example through on-the-job training orlearning-by doing. In addition to using educationalattainment this study therefore looks at direct measures oftwo types of skills that employer’s value: cognitive skills,such as functional literacy and numeracy, andsocio-emotional skills, such as self-discipline,perseverance, and ability to work well with others. Theobjective is to assess the extent to which these directmeasures shed light on what matters for labor marketsuccess, defined as being in the labor force, beingemployed, and earning more. This analysis relies on originaldata (the Bulgarian Longitudinal Inclusive Society Survey,BLISS) collected by the World Bank and Open SocietyInstitute–Sofia in the spring of 2013, which for the firsttime in the country included nationally-representativeinformation on the cognitive and socio-emotional skills ofthe working-age population.