Archive:Employment content in EU exports - an analysis with FIGARO data
Data extracted in July 2022.
Planned article update: 16 June 2023.
Highlights
In 2020, the employment of 30 million persons in the EU was supported by exports to non-member countries, equivalent to just over one in seven of the 206 million persons employed in the EU.
In 2020, the EU Member States with the highest share of employment supported by EU exports are Luxembourg (24 %) and Ireland (23 %).
Germany was by far the largest contributor to export-supported employment spillover in the EU: in 2020, 1.2 million persons employed in EU Member States other than Germany were supported by German exports.
Manufacturing exports supported 18 million persons employed in the EU in 2020, 59 % of all export-supported employment.
Share of employment in each Member State supported by EU exports, 2020
The production of goods and services requires inputs which may have been sourced domestically or globally. The final value of a product may well reflect value that has been added in many different stages through the combination of factors of production, including employment. The employment input may have been located in many different countries.
An analysis of the employment content of exports of goods and services can provide insight into international trade relations. This article aims to provide an indication of the relationship between employment in the European Union (EU) and the EU’s exports. This is done by analysing the employment content of EU exports at a detailed industry [1] level.
The article provides an overview of the data compiled using the FIGARO tables – full international and global accounts for research in input-output analysis – and the Leontief input-output model (Miller and Blair, 2009). For more information, see the Data Sources and Context sections below.
Full article
Whole economy – all industries combined
Number and share of persons employed
The number of persons employed in the EU or in individual EU Member States supported by exports includes not only employment in enterprises that are directly exporting, but also in those providing goods and/or services to support the production of exported goods and services; in other words, it also includes employment in upstream enterprises. This may concern employment in enterprises in the same industry as the exporter or in a different one (depending, in part, how detailed an activity classification is used). Equally, exports by enterprises in one Member State may support employment in that Member State or in a different one.
Regardless of whether presenting data for the EU as a whole or for individual EU Member States, all references to exports in this article concern exports to non-member countries, in other words extra-EU exports; trade between Member States is not considered.
Overall, the employment of some 30 million persons in the EU in 2020 was supported by exports to non-member countries (Table 1). This export-supported employment accounted for 14 % of total employment (206 million persons), equivalent to just over one in seven persons employed within the EU.
Germany was the EU Member State with the highest employment supported by EU exports (Figure 1): in 2020, the employment of 7.4 million persons in Germany was supported by exports from the EU, including Germany itself. The level of export-supported employment in Germany was more than the combined level of export-supported employment in France (3.5 million) and Italy (3.4 million), which had the second and third highest levels (see Table 1). As a share of total employment, the employment in each of the EU Member States supported by exports to non-member countries ranged from just under 1 in 10 in Croatia (9.2 %) and Greece (9.8 %) to nearly one in four in Ireland (23.3 %) and Luxembourg (23.5 %).
In addition to estimating export-supported employment in each EU Member State, FIGARO also provides insight into the employment anywhere in the EU that is supported by the exports from a particular EU Member State. Figure 1 compares these two indicators. The figure has been ranked on the difference between the two indicators.
The EU Member States on the left-hand side of Figure 1 are those that benefit more (in employment terms) from exports from all Member States than the employment they support in the whole EU through their own exports: in other words, they are net beneficiaries from cross-border spillover effects (see Box 1). For example, employment of 2.4 million persons in Poland was supported by exports from all Member States (including Poland), whereas employment of 1.8 million persons across the EU (some of which in Poland) was supported by exports only from Poland; the difference – with Poland being a net beneficiary – was 636 000 persons employed. Similarly, all three Baltic EU Member States were net beneficiaries from spillover effects, as were Bulgaria, Czechia, Greece, Spain, Croatia, Hungary, Portugal, Romania and Slovenia.
Conversely, the EU Member States on the right-hand side of Figure 1 are those that benefit less (in employment terms) from exports of all Member States than the employment they support in the whole EU through their own exports: these Member States are therefore net contributors of cross-border spillover effects. As an example, in Ireland employment of 523 000 persons was supported by exports from EU Member States (including from Ireland), whereas employment of 800 000 persons across the EU (some of which were in Ireland) was supported by exports from Ireland alone; the difference was 277 000 persons employed, making Ireland the highest net contributor. Other large net contributors of spillover effects were Italy and Belgium with differences of 174 000 persons and 158 000 persons, respectively (Figure 1).
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Figure 2 focuses on the change in export-supported employment within each EU Member State (supported by exports from anywhere in the EU). Most EU Member States recorded an increase in export-supported employment between 2010 (during the recovery from the global financial and economic crisis) and 2020 (the beginning of the COVID-19 pandemic). Small decreases in absolute and relative terms were observed in Estonia and Finland.
The share of export-supported employment in total employment in the EU increased from 11.7 % in 2010 to 14.5 % in 2020. Overall, export-supported employment in the EU increased by 7.0 million during this period. Just over one quarter of the increase (1.8 million more persons employed; 25.5 % of the EU increase) was located in Germany, with the next largest increases in Italy (980 000 more persons employed; 13.9 % of the EU increase), France (922 000 more persons employed; 13.1 % of the EU increase), and Poland (681 000 more persons employed; 9.7 % of the EU increase).
In relative terms, the largest increases in export-supported employment between 2010 and 2020 occurred in Malta (up 66.7 %), Cyprus (up 51.7 %), and Portugal (up 50.4 %).
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Domestic and spillover effects
The share of export-supported employment within each EU Member State can be divided into two parts – the domestic effect and the spillover effect – with a further division of the domestic effect between direct and indirect effects: see Box 1 for more information. The share of total employment in each Member State related to these effects is presented in Figure 3.
Box 1: What are domestic and spillover effects?
The domestic effect is employment in a given EU Member State that is supported by its own exports. This employment may be in the same industry as the one that exports the goods or services (direct domestic effect) or in another industry (indirect domestic effect). As such, the indirect domestic effect is effectively an industry spillover effect within a single EU Member State – it is the employment in a particular industry that is supported by the exports of a different industry (within the same Member State).
In this article, the split of the domestic effect into a direct and indirect effect is based on an analysis of the economy dividing it into 21 different industries (according to EU’s activity classification called NACE).
The spillover effect reflects the employment in a given EU Member State that is supported by the exports of other Member States. For example, it includes employment in a Member State engaged in the production of intermediate inputs to be used in other Member States’ exports to non-member countries.
In 2020, the direct domestic effect accounted for 6.8 % of total employment in the EU, while the indirect domestic effect accounted for 4.8 % and the spillover effect for 2.8 % (see Figure 3).
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Among the EU Member States, the largest contributions to total employment of the direct domestic effect occurred in Ireland (12.2 %) and Bulgaria (11.7 %), while this effect also contributed 10.0 % or more of employment in Malta and Latvia. The lowest contribution of the direct domestic effect was observed in Croatia (4.6 %). In turn, the largest contribution to total employment of the indirect domestic effect was in Luxembourg (8.4 %), followed by Ireland (8.1 %) and Malta (7.4 %); the smallest contribution was again in Croatia (2.2 %). As to spillover effects, the largest contribution to total employment was in Luxembourg (5.9 %), followed by Slovakia, Czechia, Slovenia (all 4.9 %) and Poland (4.8 %), while the smallest contributions occurred in Greece and Italy (both 1.7 %) – see Map 1.
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The direct domestic effect accounted for 47.3 % of all export-supported employment across the EU Member States in 2020. This effect was the dominant effect in all Member States (see Figure 3), accounting for more than half of export-supported employment in 11 of them. In relative terms, the largest impact of the direct domestic effect within all export-supported employment was 55.7 %, recorded for Bulgaria; the smallest impact was 39.0 %, recorded for Slovakia.
The indirect domestic effect accounted for 33.4 % of all export-supported employment in the EU Member States in 2020. This was the second largest effect (among the three shown in Figure 3) in two thirds of the EU Member States: in Poland, Slovenia, Hungary, Estonia, Czechia, Croatia, Slovakia, Austria and Romania, the spillover effect was larger. It accounted for one fifth to two fifths of export-supported employment in all but one of the Member States: the lowest share was 21.0 % in Hungary while the highest share – over two fifths – was 41.8 % in Italy.
Finally, the spillover effect accounted for 19.3 % of all export-supported employment in the EU Member States in 2020. This effect accounted for 12.1 % of export-supported employment in Malta, while there were also relatively low shares in the three largest EU Member States: 12.3 % in Italy, 14.7 % in Germany and 15.7 % in France. The spillover effect accounted for one quarter or more of export-supported employment in 11 Member States, peaking at 32.9 % in Poland.
Export-supported employment from the domestic and spillover effects are shown in absolute values for 2020 in Table 2. Employment from the domestic effect is shown in the shaded cells running in a diagonal line from the top left to the bottom right of the table.
The largest level of export-supported employment resulting from the domestic effect was clearly in Germany, where 6.3 million persons employed were supported by Germany’s own exports, with the next largest domestic effects observed in Italy and France (both 3.0 million).
The single largest spillover effect between any pair of countries in 2020 was the 216 000 persons employed in Poland and supported by German exports. Four other country pairings had spillover effects of more than 120 000 persons employed:
- 143 000 and 138 000 persons employed in Germany who were supported by French and Italian exports, respectively;
- 129 000 persons employed in France who were supported by German exports;
- 124 000 persons employed in Italy who were supported by German exports.
Germany was by far the largest contributor of export-supported employment resulting from spillover effects: 1.2 million persons employed in 2020 in EU Member States other than Germany were supported by German exports. Out of this figure, 216 000 were in Poland, 129 000 in France and 124 000 in Italy, while Czechia (107 000), Spain (96 000), the Netherlands (81 000), Romania (64 000), Austria (58 000) and Hungary (also 58 000) all had more than 50 000 persons employed who were supported by German exports. For comparison, the next highest contributors to employment spillover were France (652 000 persons employed in other Member States), Italy (592 000) and the Netherlands (432 000).
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Industries
Whereas Table 2 focused on employment in EU Member States supported by exports, Table 3 provides a similar analysis for industries. This presentation reveals the extent to which employment in specific industries is dependent on exports from the same industry or from other (downstream) industries. Unlike Table 2, Table 3 does not show absolute values of the number of persons employed but instead presents employment shares. The shares in each column sum to 100 %: each column shows the distribution (among employing industries) of employment that is supported by exports from a specific industry.
The share of export-supported employment within the same industry as the exporting industry is shown in the shaded cells running in a diagonal line from the top left to the bottom right of the table. The highest share [2] was observed for education: in 2020, 89.3 % of all employment in the EU supported by exports from this industry occurred in the education industry itself. The 20 other industries received the remaining 10.7 %, with the administrative and support service activities industry as the largest beneficiary (2.5 %) of export-supported employment from industrial spillover effects.
By contrast, two industries had shares along this diagonal that were below 50 %.
- For employment supported by exports from the electricity, gas, steam and air conditioning supply industry, 35.1 % was in the same industry, 9.8 % was in distributive trades, 9.4 % in manufacturing and 8.9 % in administrative and support service activities.
- For employment supported by exports from the real estate activities industry, 30.0 % was in the same industry, 16.5 % was in construction, 8.1 % in professional, scientific and technical activities (which includes, among others, the activities of notaries, architectural and engineering services), 7.5 % in administrative and support service activities, 7.1 % in manufacturing, and 6.9 % in financial and insurance activities.
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The single largest industrial spillover effect between any pair of industries was the 16.5 % noted above for employment in construction supported by exports from the real estate industry. Four other industry pairings had industrial spillover effects exceeding 10% of the employment supported by exports from a particular industry:
- 13.8 % of the employment supported by construction exports was in manufacturing;
- 12.2 % of the employment supported by exports of the financial and insurance activities industry was in the professional, scientific and technical activities industry;
- 11.7 % of the employment supported by manufacturing exports was in distributive trades;
- 10.2 % of the employment supported by information and communication services was in distributive trades.
In absolute terms, the picture is somewhat different, as manufacturing exports alone supported 17.8 million persons employed in the EU in 2020, equivalent to around three fifths (59.4 %) of all export-supported employment in the EU. Some 9.6 million of this total were employed within manufacturing itself, with the remaining 8.1 million persons representing the industrial spillover effect within the other 20 industries. The eight largest industry pairings for export-supported employment resulting from industrial spillover effects all concerned employment in industries outside the manufacturing industry itself that were supported by manufacturing exports. For example, 2.1 million persons employed in distributive trades were supported by manufacturing exports, as were 1.3 million persons in professional, scientific and technical activities, 1.1 million persons in administrative and support service activities, and 964 000 persons in transportation and storage (see Figure 4).
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The largest pairing of industrial spillover effects that did not involve manufacturing was the 208 000 persons employed in transportation and storage activities supported by exports from distributive trades.
Table 4 identifies for each EU Member State which two industries had the highest level of export-supported employment. In 20 Member States, manufacturing had the highest level of export-supported employment in 2020, while there were three Member States where manufacturing had the second highest level.
Greece, Cyprus, Luxembourg and Malta were exceptions as manufacturing was not one of the two industries with the highest level of export-supported employment. The next most relevant industry in Table 4 was distributive trades, which had the highest level of export-supported employment in two Member States and the second highest in 12 more.
Five other industries appear in Table 4:
- administrative and support service activities – seven times (Belgium, Cyprus, Luxembourg, Hungary, Malta, Slovenia and Finland);
- professional, scientific and technical activities – three times (Malta, the Netherlands and Portugal);
- transportation and storage – three times (Estonia, Greece and Lithuania);
- agriculture, forestry and fishing – twice (Bulgaria and Romania);
- financial and insurance activities – twice (Cyprus and Luxembourg).
Earlier it was noted that a considerable number of persons employed in other industries are supported by exports from the manufacturing industry. Still, in most EU Member States – including the five largest ones – manufacturing had the highest absolute level of employment supported by exports (from any industry), as can be seen from Map 2.
Source data for tables and graphs
Employment content in EU exports: tables and figures
All FIGARO data for employment are available from the following files:
Data sources
FIGARO tables are a statistical product of the integrated global accounts for economic modelling. They link national accounts and data on business, trade and jobs for the EU Member States, the United States and 17 main EU trading partners (Argentina, Australia, Brazil, Canada, China, India, Indonesia, Japan, Mexico, Norway, Russia, Saudi Arabia, South Africa, South Korea, Switzerland, Turkey and the United Kingdom) represented in the OECD ICIO (inter-country input-output tables); a ‘rest of the world’ region completes the FIGARO tables.
The FIGARO tables present the relationship between the EU economies and their trading partners at a detailed level of 64 industries and 64 products, as defined in the ‘ESA 2010 National accounts transmission program’.
Frequency and availability
FIGARO tables are available from 2010 to 2020 (period T–24 months, with T being the year of release). As of 2021, they are produced and updated annually. The time series is in line with the latest macroeconomic aggregates.
More information
For more information, please refer to the FIGARO dedicated section.
Context
Partners
FIGARO tables are the result of a long-term collaboration between Eurostat and the European Commission’s Joint Research Centre. Both partners also collaborate in the OECD expert group on ‘Regional-Global Trade in Value-added (TiVA) Initiatives’, which aims to explore synergies and common action among the various initiatives on extended supply, use, and input-output tables.
Purpose
FIGARO tables provide the first official inter-country supply, use and input-output data for the EU. They are a tool for analysing the social, economic and environmental effects of globalisation. These may be analysed through studies on competitiveness, growth, productivity, employment, environmental footprint and international trade (for example, analyses of global value chains).
The tables are used to evaluate EU policies and assess the economic interdependencies of the EU (or the euro area or individual EU Member States) in a globalised world.
Notes
- ↑ The terms industry/industries are used as synonyms for the activity/activities listed in the NACE Rev. 2 classification.
- ↑ Leaving aside the small and somewhat atypical activities of households as employers and the undifferentiated goods- and services-producing activities of households for own use.
Direct access to
- Data can be accessed through the dedicated section as CSV files (flat or matrix format) and Excel files.