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Labour market developments and reforms

DG ECFIN examines labour market developments from a macroeconomic perspective, shedding light on the interaction of employment trends with other macroeconomic developments such as GDP and productivity growth, within the framework of the Lisbon strategy for growth and jobs.

DG ECFIN undertakes periodic, general reviews of the labour market across the EU. These focus on the main labour market indicators and also on other aspects according to specific requests/needs. The reviews are examined by the Labour Market Working Group (LMWG) of the Economic Policy Committee. Reviews of labour market developments consist mainly of an analytical interpretation of the most recent trends and prospects on both the quantity side (participation, unemployment and employment), and the labour cost side (wage and unit labour cost developments).

More particularly, the following elements are analysed:

Quantity side

  • Employment and unemployment performance and comparison with the Europe 2020 employment targets;
  • Responsiveness of employment to economic growth;
  • Contribution of employment and labour productivity to GDP growth;
  • Employment perspectives in coming years;
  • Decomposing changes in employment rates by taking account of the population effect and participation rate effect.

Labour cost side

  • Developments in unit labour costs and the impacts of labour-cost changes on the euro area and outside;
  • Sectoral wage developments.

Special issues

  • Nature of differentials in output growth and labour market performances;
  • Role of initial conditions on labour markets;
  • Wage adjustments in the euro area;
  • Structural change as a source of productivity growth;
  • Structural change and the reallocation of employment.

DG ECFIN contributions include notes to the Economic and Financial Committee and the Economic Policy Committee and its working groups, analytical reports and publications, briefings, speeches and inputs to the Commission's work in general.

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