The employment rate of the EU working age population (15-64 years) in 2009 was 64.6%, 2.4 percentage points higher than in 2000, but nevertheless still more than 5 percentage points short of the Lisbon target of 70% (Box 5 and Table 7). The unfavourable economic situation has caused the EU to fall behind in its attempts to reach this target, with virtually all Member States experiencing a decline in employment rates in 2009.
The 2000 Lisbon European Council set a strategic goal over the decade 2000–2010, for the EU to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. It specifically stated that the overall aim of employment and economic policies should be to raise the employment rate to as close to 70% as possible by 2010 and, as part of that goal, to increase the employment rate for women to more than 60% by the same year. In addition to the 2010 Lisbon targets, the 2001 Stockholm European Council set a new target of raising the average EU employment rate for older men and women (aged 55–64) to 50% by 2010.
In early 2010, the European Commission launched a new strategy for the next decade, the Europe 2020 Strategy, to support recovery from the crisis and to set out where the EU wants to be by 2020. The new strategy provides a vision of Europe’s social market economy for the 21st century, based on three mutually reinforcing priorities:
As a key part of the strategy, the Commission proposed several headline targets for the EU, including a new employment target, namely that 75 % of the population aged 20-64 should be in employment by 2020.
In March 2010 the European Council agreed the main elements of the Europe 2020 strategy, including the headline employment rate target, emphasising that this target should be met in part through greater participation of youth, older workers and low-skilled workers and better integration of legal migrants. This overall EU target is also to be translated into national targets.
In 2009, only five Member States recorded an employment rate of more than 70%, the overall Lisbon target (Chart 64), namely the Netherlands (77.0%), Denmark (75.7%), Sweden (72.2%), Austria (71.6%) and Germany (70.9%). Three Member States were less than 2 percentage points short: Cyprus and the United Kingdom (both 69.9%) and Finland (68.7%). In 2008, these three exceeded the target, but the economic crisis resulted in their rates dropping to just beneath the threshold. At the other end of the scale, six Member States remained a considerable distance from the target, with rates of over 10 percentage points below, namely Malta (54.9%), Hungary (55.4%), Italy (57.5%), Romania (58.6%), Poland (59.3%) and Spain (59.8%). The low rates in Italy, Poland and Spain have a substantial impact in pulling down the EU average.
Regarding the EU target for the female employment rate, progress has been better. In 2009, 58.6% of working-age women were employed - a shortfall of only 1.4 percentage points compared to the Lisbon target. Since 2000, considerable progress has been made in expanding female employment, with the employment rate for women increasing by almost 5 percentage points, although the rate decreased by 0.5 percentage points in 2009 compared with 2008.
In 2009, 14 Member States had a female employment rate at, or above, the Lisbon target of 60% (Chart 65). However, most of the remaining Member States were still a long way from reaching the target, with four more than 10 percentage points short, namely Malta (37.7%), Italy (46.4%), Greece (48.9%) and Hungary (49.9). In four Member States (Estonia, Ireland, Spain and Latvia) the labour market situation deteriorated significantly in 2009, with a decrease in their female employment rates of more than 2 percentage points compared to the previous year. In a longer-term perspective, and against the general trend of expanding female employment in the EU, Romania, Hungary and the Czech Republic have registered virtually no progress at all since 2000.
In most Member States the gender gap in employment rates remains substantial (Chart 66). This is particularly the case in Greece, Italy, and Malta where the employment rate for men is more than 20 percentage points higher than that for women. In a further 15 Member States, the gap lies between 10 and 20 percentage points. In contrast, in Finland and Sweden the employment rates for men and women differ by less than 5 percentage points, and are broadly the same in Estonia, Latvia and Lithuania.
In contrast to the decline in employment rates observed for other age groups, the EU employment rate for persons aged 55–64 increased slightly in 2009, rising by 0.4 percentage points on 2008 to 46%. Although the rate has risen substantially since 2000, increasing by almost 9 percentage points, it still falls 4 percentage points short of the target set by the 2001 Stockholm Council of an employment rate of 50%.
In 2009, only 11 Member States had an employment rate for persons aged 55–64 of above 50%, with Portugal just edging back below the target in that year. However a considerable number of Member States remain more than 10 percentage points short of the Stockholm target: Belgium, France, Hungary, Italy, Luxembourg, Malta, Poland, Slovenia and Slovakia. Luxembourg made significant progress in 2009, with the rate increasing by 4 percentage points. Slovenia also showed substantial progress, with its rate rising by close to 3 percentage points. With a value of less than 30%, however, Malta had the lowest employment rate for older persons among all the Member States, having made no significant improvement since 2000 (Chart 67).
Despite the recent setback in employment rates brought about by the crisis, substantial progress has been made in EU labour markets since 2000. Until the crisis hit, the number of people in employment had increased by around 16.5 million between 2000 and 2008 and, even with the impact of the crisis, the increase was still almost 12.5 million, or 6%, in 2009 compared with 2000. The longer term progress particularly reflects the substantial increases since 2000 in employment of women and especially of older workers aged 55-64 (whose employment has risen 43%). In contrast, employment of young people aged 15-24 has declined by almost 8%, reflecting both that they have been hit particularly hard by the crisis and the trend of young people remaining in education longer.
The marked rise in the employment of women reflects their increasing participation in the labour market, in part due to the greater availability of more flexible working arrangements, especially part-time work, and their improved skill levels. For older workers it partly reflects the impact of active ageing strategies and pension reforms that have encouraged people to remain in the labour market longer, together with age -composition effects on the older population combined with the cohort effects of increasing female participation in the labour market.