Employment rates and Europe 2020 national targets

Data from April 2017. Most recent data: Further Eurostat information, Main tables and Database. Planned update of the article: April 2018

The employment rate gives information on the share of the adult population who have a paid job (or, more technically, is an employed person). The pay can be in cash or in kind, and the job can be as an employee, as self-employed, or as a family worker. As a paid job in most cases is the main source for determining the living standard of people, the employment rate gives an indication of the socio-economic conditions of individuals in a country. It also describes to what extent the human resources of a country are utilised for economic purposes, and thereby also provides key macroeconomic information.

All but one of the EU Member States have set national targets for the employment rate in 2020, as part of the EU 2020 strategy. This article will show how they are progressing towards this goal, and offer some further details of the reasons for these developments.

Main statistical findings

Figure 1: Employment rate 2001-2016 and required growth 2017-2020, persons aged 20-64, EU-28, % - Source: Eurostat (lfsi_emp_a) and EU2020 targets

In 2016, the employment rate of persons aged 20-64 in the EU-28 was 71.1 %. This was the highest rate ever recorded since the start of the data series in 2001.

The rate increased one percentage point between 2015 and 2016, the fastest growth since 2006 (measured in year-on-year percentage point movement). There has now been three consecutive years of growth, averaging 0.9 percentage points per year over these years. The average annual growth over the period 2001 – 2013 was 0.13 percentage points.

Seven Member States have reached their EU2020 employment rate goal.

In order to reach the EU level employment rate target (marked with the 75 % line in Figure 1), the growth will have to continue at at least 1 percentage point per year until 2020.

The differences in rate development are more visible in Figure 2, where we effectively zoom in on the percentage point changes, and disregard the level of the rate. The decreases of 2002, 2009-2010, and 2012, and the peak periods of 2005-2008 and 2014-2016 are the main features. We see also here that in order to reach the EU2020 target, the increase will have to continue at its current speed for the coming four years. If this happens, it will become the longest and largest growth period since the start of the dataset in 2001.

Figure 2: Year-on-year percentage point change in employment rate, 2002-2016, and required growth 2017-2020, persons aged 20-64, EU-28, percentage points - Source: Eurostat (lfsi_emp_a)

However, as shown in Map 1, there are notable differences in employment rates between the EU Member States. In 2016 there was a difference of 25 percentage points from the lowest to the highest. At the bottom we find Greece (56.2 %), the only Member State with a rate below 60% and at the top we have Sweden (81.2 %), the only Member State above 80 %.

Inbetween these two extremes we find two major groups of Member States, one in the range of 60 % - 69.9 %, and one for the 70 % - 79.9 % range.

The group with rates in the 60s contains 10 countries. They are predominantly southern and eastern Member States, but also includes Belgium.

In the 70s group we find 16 Member States, among which are Germany, France and the United Kingdom. Additionally it includes a large majority of the Central and Northern countries, but also Portugal.

The countries outside the EU showed an even higher spread, from 53.3 % in Macedonia, to 87.8 % in Iceland.

Map 1: Employment rates, 2016, persons aged 20-64, country level, EU Member States, EFTA countries and candidate countries, % - Source: Eurostat (lfsi_emp_a)

Employment rate targets at EU and national levels

As already seen, one of the targets of the Europe 2020 strategy is to have an employment rate of at least 75 % for persons aged 20-64 in the EU by 2020. This objective has been translated into national targets in order to reflect the situation and the possibilities of each Member State to contribute to the common goal. The national targets vary considerably across countries, stretching from 62.9 % in Croatia to 80.0 % in Denmark, the Netherlands and Sweden.

Seven Member States reached or exceeded their national target in 2016 (Germany, Estonia, Lithuania, Sweden, the Czech Republic, Ireland and Latvia). Three of them reached their target in 2016, another three reached it in 2015, and one reached it in 2013. It is worth noting that Sweden, while being one of the Member States with the highest national targets, achieved it five years ahead of schedule, and is still keeping it in 2016.

Goal attainment levels

Figure 3: Heat map of annual average employment rates, national EU2020 employment rate targets and goal attainment level, 2003 – 2016, persons aged 20-64, all Member States, % - Source: Eurostat (lfsi_emp_a) and EU2020 national targets

At the top of Figure 3 we find the countries which in 2016 have achieved their national employment rate targets. There are, however, quite different paths for how they got there. Germany and the Czech Republic are the only two among these seven countries which have had a steady upward movement over the last 14 years. For Sweden, Lithuania, Estonia, Ireland, and Latvia, there have been ups and downs over this time period.

Germany is the only country which reached its goal in 2013 and has kept it since then.

The largest group of countries (14 in total) is the one where they are less than 5 percentage points below their national employment rate targets. They also come in several categories: Denmark has been stable over the whole period. Malta and Poland have grown considerably and steadily, from being more than 10 percentage points from their targets in 2003 to being less than 5 percentage points from them now. Slovenia and Portugal have had ups and downs.

Further down in Figure 3 we find the four countries which are 5-10 percentage points below their targets. Belgium is the only one among them with a stable situation over these years, while Cyprus, Italy, and Bulgaria have experienced notable fluctuations. Finally, at the bottom of the figure we have Greece and Spain, which are more than 10 percentage points below their targets, and have been so for more than five years in a row.

Employment rate by sex

Figure 4: Gender employment gap, 2006 and 2016, persons aged 20-64, all countries, % - Source: Eurostat (lfsa_ergan)

Figure 4 shows the gender employment gap, as well as the employment rate level of men and women in each country in 2006 (in orange) and 2016 (in blue). The countries are ranked on the size of gender gap in 2016, with Lithuania on the far left hand side having the smallest gap, and Malta on the right hand side having the largest gap among the Member States. The bottom of the bars show the employment rate of women, while the top of the bars refers to the employment rate of men. The difference between the employment rate of men and women (i.e. the gender gap) is consequently represented by the length of the bar. This means the longer the bar, the larger the gender gap.

At EU-28 level the gap was 15.7 percentage points in 2006, and it has diminished to 11.6 in 2016. The decrease is a result of increasing employment among women. Among men the rate has practically been standing still the last ten years (the top of the orange and the blue bar are practically the same, whereas the bottom of the bars do not line up).

Sweden is the only Member State where both of the bars are above the 75 % line, meaning that it fulfilled the average EU28 employment rate target both for men and for women in both years (2006 and 2016). This was also the case for Norway and Iceland, although they do not count towards the EU28 average. On the opposite side (both bars are fully below the 75% line), we find Bulgaria, Belgium, Croatia, Romania, and Macedonia.

Twenty-five Member States have a decrease in the gender employment gap over the period 2006 – 2016. The exceptions are Romania, Estonia, and Poland.

Three Member States (Denmark, Greece, and Cyprus) have falling employment rates both for men and for women over this time period. Twelve Member States (Estonia, Poland, Hungary, Sweden, Bulgaria, the United Kingdom, the Czech Republic, Slovakia, Germany, Lithuania, Austria, Malta) have increasing rates both for men and for women. In ten of these (all but Estonia and Poland), the rates increased faster for women than for men.

We find that employment rates dropped for men while at the same time they increased for women in another twelve Member States (Finland, Slovenia, the Netherlands, France, Croatia, Italy, Belgium, Portugal, Latvia, Ireland, Luxembourg, Spain). Only Romania saw an increase among men with a simultaneous decrease among women. The decreasing gaps are therefore due to two main factors, almost equally distributed among the countries: about half of the countries have a rising working life participation of both women and men, but with faster increases among women, and the other half of the countries has decreasing employment rates among men while at the same time increasing rates among women.

Employment rate by age

Figure 5: Annual average employment rates, by five-year age groups, 2003 and 2016 , % - Source: Eurostat (lfsa_ergan)

In addition to increasing the employment rate of women, a clear policy target in the European Union is also to increase the employment rate of older persons, i.e. make people work longer. Under the hypothesis that the employment rate of younger people is stable, this should increase the total employment rate.

In Figure 5, light orange is the decrease in employment rate between 2003 and 2016, darker orange shows the level in 2016, and the full bar shows the level in 2003. This means that an age group with an orange bar has had a decrease in employment rate over this period. For the bars that are blue, dark blue represents the increase in the employment rate in the same period. Consequently the lighter blue bars show the level in 2003, and the total length of the blue bars represents the level in 2016. Age groups with blue bars, therefore, have had an increase in their employment rate. The numbers on the bar show the development (in employment rate percentage points) between 2003 and 2016 for each of the age groups.

We see clearly that the increase in the employment rate is proportional with age: among persons aged 60-64 it has increased 15.6 percentage points between 2003 and 2016, whereas it has decreased 2 percentage points among persons aged 20-24. The age groups from 30 up to 59 are above the 75% EU2020 target. The highest employment rate in 2016 is recorded in the 40-44 age group, whereas in 2003 it was the 35-39 age group which was highest.

Employment rate by education

Figure 6: Persons in employment, persons aged 20-64 by sex and education, 2003 and 2016, absolute numbers - Source: Eurostat (lfsi_educ_a)

In Figure 6 we see that persons with a medium level education (defined as upper secondary and post-secondary non-tertiary education, ISCED levels 3 and 4) constitute the largest proportion of those in employment both in 2003 and in 2016. That means that their situation is rather stable over the period 2003 – 2016, both for men and for women.

In contrast, the fastest decreasing group is men with low education (a drop of 8.2 million persons in employment over the time period 2003 to 2016), and the fastest increasing group is women with high education (an increase of 15.5 million). In 2016 women with high education outnumber men with high education, a clear shift from what the situation was in 2003.

In 2003, one quarter of the persons in employment had a low education, another quarter had a high education, and half had a medium education. In 2016 this had shifted, so that one sixth had low education, one third had high education, and the medium level education stood still at one half.

In conclusion we see a marked shift in the European labour market over the last decade, with many more highly educated persons, a notable rise in the number of women, and longer working lives.

Data sources and availability

Source: The European Union Labour Force Survey (EU-LFS) is a large sample, quarterly survey providing results for the population in private households in the EU, EFTA and the candidate countries. Conscripts in military or community service are not included in the results.

Reference period: Yearly results are obtained as averages of the four quarters in the year.

Coverage:
France - since the first quarter of 2014 the overseas departments of Guadeloupe, Martinique, Guyane, and La Réunion are covered, in addition to the metropolitan territory. Overseas departments are included in the results of the detailed series, but not in the results of the main indicator.
Cyprus - the survey covers only the areas of Cyprus controlled by the Government of the Republic of Cyprus.

European aggregates: EU refers to the sum of EU-28 Member States and EA to the sum of the 19 euro area Member States. If data are unavailable for a country, the calculation of the corresponding aggregates takes into account the data for the same country for the most recent period available. Such cases are indicated.

Definitions: The concepts and definitions used in the survey follow the guidelines of the International Labour Organisation. Employment covers persons aged 15 years and over (16 and over in Spain, Italy and the United Kingdom, 15-74 years in Estonia, Latvia, Hungary, Finland, Sweden, Norway and Denmark, and 16-74 years in Iceland), living in private households, who during the reference week performed work, even for just one hour, for pay, profit or family gain, or were not at work but had a job or business from which they were temporarily absent, for example because of illness, holidays, industrial dispute or education and training. The LFS employment concept differs from national accounts domestic employment, as the latter sets no limit on age or type of household, and also includes the non-resident population contributing to GDP and conscripts in military or community service. Definitions of indicators reported in this publication are available on the EU-LFS Statistics Explained website: EU Labour Force Survey (Statistics Explained)

Context

Please note that Eurostat provides two sets of indicators linked to the annual employment rate, which serve different purposes and which in some cases differ from each other:

1) The main indicators, which are seasonally adjusted. They include the headline indicators under the EU2020 Strategy and are consequently used for monitoring the EU2020 targets (at EU and national levels). They have only a few breakdowns and normally refer to the age group 20-64. Please also note that for France the main indicators exclude overseas departments.

2) The detailed results, which are not seasonally adjusted. They have a large number of breakdowns and can therefore be used for more detailed analysis. These include the French overseas departments.

This article presents annual results for some indicators from the two sets described here above.

The article on Labour market and Labour force survey (LFS) statistics presents a series of other annual results of the LFS. For deeper insight into the labour market, this article should also be read together with Unemployment statistics and Underemployment and potential additional labour force statistics. The main source for the employment rate calculation is the labour force survey (LFS). The results from the survey currently cover all European Union member states, the EFTA member states of Iceland, Norway, Switzerland, as well as the candidate countries Turkey and the Former Yugoslav Republic of Macedonia. The survey is based on the same target populations and uses the same definitions in all countries, which means that the results are comparable between the countries. Five different articles on detailed technical and methodological information is linked from the overview page EU labour force survey.

The EU-LFS is the largest European household sample survey providing quarterly and annual results on labour participation of people aged 15 and over as well as on persons outside the labour force. It covers residents in private households. The EU-LFS is an important source of information about the situation and trends in the EU labour market.

Each quarter around 1.8 million interviews are conducted throughout the participating countries to obtain statistical information for some 100 variables. Due to the diversity of information and the large sample size the EU-LFS is also an important source for other European statistics like Education statistics or Regional statistics.


See also

Further Eurostat information

Publications

Main tables

Database

Dedicated section

Methodology / Metadata