The background study for the nationalstrategy on social inclusion and poverty reduction 2015-2020was produced under a RAS agreement with the Ministry ofLabor, Family, Social Protection, and Elderly of Romania.The report is a companion volume of the strategy, adopted bythe Romanian Government in May 2015, and summarizes thediagnostics and analyses carried out by the World Bank teamto provide a sound empirical base for the strategy. Giventhe multi-dimensional nature of poverty, the report includesdiagnostics and policy recommendations on employment, socialprotection, education, health, housing, socialparticipation, as well as regional and rural developmentpolicies. The document is based on a combination of deskresearch, qualitative data analysis, new data collected bythe World Bank team and analyses of administrative, census,and survey data. This included qualitative research (forexample, case-studies in two counties, interviews withrepresentatives of central governmental bodies, interviewswith recipients and eligible potential beneficiaries ofmeans-tested benefits and with social workers), andquantitative data collection and analysis (a census onsocial housing stock; census of frontline social workers; aconsolidated database of physicians, representatives of thepharmacies, community nurses, and health mediators;administrative dataset with social services for elderly,social services for people with disabilities and specializedchild protection services; analysis of poverty. The book isorganized in four parts. The first part starts with ananalysis of the trends in poverty and social exclusion overthe past few years and with a poverty forecast for the nextfive years (2015 to 2020). The second part analyzes thesectoral policies that must be implemented to tackle theproblems identified in the first part of the volume. Thethird part turns its focus to area-based policies anddiscusses regional disparities, urban-rural differences, andspecific problems in small towns and villages, rural, andurban marginalized areas, and Roma and non-Roma communities.The fourth part discusses the actions needed to strengthenthe capacity of the public system to reduce poverty andincrease social inclusion.