Statistics Explained

Employment statistics within national accounts


Data extracted: 26 April 2022

Planned article update: April 2023

Highlights

Over the whole year 2021, total employment increased by 1.1 % in the euro area and by 1.2 % in the EU, still 0.3 % and 0.4 % lower than before the COVID-19 pandemic.

In 2021, employment was still below the 2019 pre-pandemic levels for 11 EU Member States based on persons and respectively for 21 EU Member States based on hours worked.

Annual growth rates of total employment, employees and self-employed, 2011-2021
Source: Eurostat (nama_10_a10_e)

Employment data in National Accounts covers employees and self-employed persons working in resident production units, i.e. the domestic employment concept. The methodology is consistent with other national accounts variables, but differs from the employment estimates published by the Labour Force Survey (more information here). Employment in persons counts all persons engaged in productive activities. Employment in hours worked refers to all hours actually worked, whether paid or not.

This article presents key messages and data extractions based on Eurostat's annual employment figures. Information on quarterly employment developments can be found in the article on Quarterly national accounts - GDP and employment.


Full article

General overview

Over the year 2021, total employment increased by 1.1 % in the euro area and by 1.2 % in the EU. In comparison, the annual growth rate for 2020 was -1.5 % in the euro area and -1.4 % the EU. Overall, total employment in persons remained below the levels reached in 2019, before the COVID-19 pandemic (-0.3 % for the EU and -0.4 % for the euro area).

Total employment can be split into 'number of employees' and 'number of self-employed'. The number of employees increased in 2021, but the number of self-employed decreased by 0.3 % in the euro area and 0.8 % the EU. (see Figure 1).

Figure 1: Annual growth rates of total employment, employees and self-employed, 2011-2021
Source: Eurostat (nama_10_a10_e)


Variations among Member States

Based on annual data, three EU Member States had in 2021 employment levels in persons that were below their 2011 levels; Romania (-9.2 %, with a break in the series in 2021), Bulgaria (-1.9 %) and Latvia (-0.2 %). The largest increases were visible in Malta (+56.1 %) and Luxembourg (+31.7 %). Please note these variations can also be related to population changes. Comparing with 2019 levels before the COVID-19 pandemic, eleven Member States had lower employment levels in 2021. Total hours worked fell sharply in 2020 due to the COVID-19 pandemic, and when comparing 2021 with 2019 only five Member States showed an increase in hours worked. In comparison with 2011, the level of hours worked was higher in nineteen of the Member States for which data are available (see Table 1).

Table 1: Total employment by number of persons and hours worked, 2011 - 2021, % change
Source: Eurostat (nama_10_a10_e)

Contributions from self-employed

Total employment in the EU can be split into employees and self-employed, which accounted for 85.8 % and 14.2 % respectively of total employment in persons and 82.2 % and 17.8 % respectively of hours worked in the EU in 2021. However, the significance of self-employed persons still varies across EU Member States (see Table 2). In 2021, their share was highest in Greece (27.3 %), Bulgaria (24.9 %), Italy (22.5 %), and lowest in Sweden (3.5 %), Denmark (5.7 %), as well as in Norway (5.3 %).

Changes between 2011 and 2021 varied significantly. The share of self-employed persons decreased in both the EU and the euro area (-2.0 % and -1.3 % respectively), as did their share in total hours worked (-2.7 % and -2.2 % respectively). The largest decreases in the number of self-employed were observed in Romania (-18.2 %, with a break in the series in 2021) and Croatia (-9.2 %) and the highest increase in Estonia (+2.2 %). For changes in hours worked, the largest decreases were observed in Romania (-16.7 %, with a break in the series in 2021) and Croatia (-7.1 %) and the highest increase in Estonia (+0.8 %).

Table 2: Self-employed by number of persons and hours worked, 2011-2021, % change
Source: Eurostat (nama_10_a10_e)

Evolution by sector

Employment trends can also be decomposed by sector. Figure 2 shows changes in employment by sector between 2011-2021 and between 2019-2021. They indicate that there has been a shift in employment across sectors of the economy. The largest losses of employment over the whole time period were recorded in agriculture and financial and insurance activities. Industry and wholesale and retail trade, transport, accommodation and food service activities show a decrease since 2019, however both sectors increased since 2011. The sectors information and communication and professional, scientific and technical activities experienced the largest growth over the whole time period.

Figure 2: Change in employment by sector 2011-2021 and 2019-2021, persons in EU
Source: Eurostat (nama_10_a10_e)

Relation to GDP, productivity and unit labour costs

Employment data are also combined with data on production (GDP) and compensation of employees used to compile indicators on productivity[1] and unit labour costs[2]. Figure 3 shows that labour productivity in persons dropped significantly during 2020 (-4.6 %), since government subsidies maintained number of employees rather stable, but increased by 4.1 % in 2021. Labour productivity per hours worked grew by 0.3 % in 2021.

Figure 3: EU GDP, productivity and unit labour costs, annual growth rates in %, 2011-2021
Source: Eurostat (nama_10_a10_e)

Data sources

Eurostat collects employment data in the framework of ESA 2010. See here for more details. Additional information on the dissemination of ESA 2010 data is available under latest news on the dedicated section on Eurostat's website and in the database section National accounts (ESA 2010) (na10). The ESA 2010 distinguishes between two employment concepts depending on geographical coverage: resident persons in employment (i.e. the national scope of employment) and employment in resident production units irrespective of the place of residence of the employed person (i.e. domestic scope). The ESA 2010 recognises several employment measures: persons, hours worked and jobs. Eurostat publishes mainly employment data measured in persons and in hours worked.

Context

Employment and population have traditionally been considered auxiliary variables in national accounts, aimed to calculate ratios like value added, output, or labour costs per inhabitant or per employed person. Employment, however, has gained importance and nowadays it is an endogenous variable in the national accounts framework. Quarterly employment also stands now as a key short term economic indicator. There are some advantages in estimating employment in the framework of national accounts. First, national accountants integrate information from many sources (labour force surveys, population censuses, employment registers, income tax registers, business production surveys, labour cost surveys, etc). A second level of integration is reached when employment is estimated simultaneously to and consistently with other national accounts variables, like output and compensation of employees i.e. salaries and social contributions. Resulting from it, national accounts employment estimates are best suited to measure the overall level of employment in an economy and its breakdown into main economic categories. National accounts, however, do not provide information on social or gender aspects of employment. The classical and most reliable source for this information is the Labour Force Survey. The differences in methodology between national accounts employment and the Labour Force Survey can be found here.

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Annual data: Auxiliary indicators to national accounts /Employment, domestic concept (tec00112)
Quarterly data: Quarterly national accounts detailed breakdown/ employment tables (teina310, teina305, tec00108, tec00109)

Annual data: Basic breakdowns by GDP aggregates and employment/Employment by A10 industry breakdowns (nama_10_a10_e)
Quarterly data: Basic breakdowns by GDP aggregates and employment/Employment by A10 industry breakdowns (namq_10_a10_e)

Notes

  1. Labour productivity is defined as the ratio of Gross Domestic Product GDP (in volume) to total employment (according to the domestic concept). Unit labour cost (ULC) measures the average cost of labour per unit of output. It is calculated as the ratio of labour costs to labour productivity. ULC represents a link between productivity and the cost of labour in producing output.
  2. See footnote 1