Employment statistics within national accounts
Data extracted in September 2018
Planned article update: December 2018
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 quarterly and annual employment figures. The article will be updated with the regular publication of annual and quarterly employment estimates as well as the associated News Release published 7 December 2018 (see: release calendar).
Employment at highest level in persons but still under pre-crisis level in hours worked
In the second quarter of 2018, 238.9 million persons were employed in the EU-28, of which 158 million were in the euro area. These are the highest levels of employment ever recorded in both areas. Compared to when the levels of employment were the lowest during the financial crisis (2013Q1 for EU-28 and 2013Q2 for EA-19), employment has increased by 14.8 million in the EU-28 and by 9.2 million in the euro area until the second quarter of 2018 (Table 1a). However, the total number of hours worked is below the previous peak in both EU-28 and the EA-19.
Different challenges in the Member States
Not all Member States have experienced the same recovery. Based on annual data, around half of the Member States still have employment levels that are below their earlier peaks; most notably Latvia (-15.5 % lower than the pre-crisis level), Greece (-14.1 %), Spain (-8.5 %), Croatia (-8.2 %), Bulgaria (-7.6 %) and Romania (-7.4%). The largest increases were visible in Malta (33.4 %) and Luxembourg (23.8 %). Please note these variations can also be related to population changes. With a few exceptions, total hours worked has recovered more slowly than persons employed in the Member States since 2008.
Interesting divergence in the contributions from self-employed
The analysis of the contribution of self-employed in persons and hours worked is also interesting. Figure 2 shows that the quarter on quarter growth rates for total employment and employees in the EU are usually relatively similar, but volatility is usually lower for persons than for hours worked, which are a more precise measure of labour input, and highest for the evolution of self-employed in hours worked.
Total employment in the EU can be split into employees and self-employed, which accounted for 85.0 % and 15.0 % respectively of total employment in persons and 81.7 % and 18.3 % respectively of hours worked in the EU in 2017. However, the importance of self-employed persons still varies significantly across EU Member States (Table 3). In 2017, their share was highest in Greece (33.0 %), Bulgaria (26.7 %), Romania (25.1 %) and Italy (24.1 %), and lowest in Sweden (4.1 %), Denmark (6.1 %) and Luxembourg (6.1%).
Changes between 2008 and 2017 varied significantly. The share of self-employed persons decreased in both the EU and the euro area between 2008 and 2017 (-0.9% and -0.8% respectively), as well as their share in total hours worked (-1.2% and -1.0% respectively). The largest decreases in the number of self-employed were observed in Croatia (-8.4 %) and Romania (-5.4 %) and the highest increases in Slovenia (+2.4%) and Estonia and Latvia (both +2.3 %). Changes in hours worked were similar, with the largest decrease observed in Croatia (-7.2%) and Romania (-6.1%) and the highest increase in Latvia (+2.2%).
Evolution by sector
Employment trends can also be decomposed by sector. Figure 3 shows changes in employment by sector before and after the crisis. They indicate that there has been a shift in employment across sectors of the economy. The largest losses of employment were recorded in construction and industry, although the sectors have slightly recovered since 2013. The sectors of professional, scientific and technical activities, and information and communication experienced the largest growth in employment since 2013.
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 and unit labour costs. Figure 4 shows that productivity dropped significantly during the crisis, but has increased since then, albeit at a modest pace (+1.0 % productivity per person employed and +1.2 % per hours worked in 2017). The interpretation of unit labour costs for EU-28 needs to take into account inflation and exchange rate effects. For instance, the drop in 2016 can mostly be explained by the devaluation of the British pound.
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.
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.
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)
- 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.
- See footnote 1