Statistics Explained

Employment statistics within national accounts


Data extracted: 30 April 2021

Planned article update: April 2022

Highlights

Over the whole year 2020, total employment fell by 1.6 % in the euro area and by 1.5 % in the EU.

In 2020, employment levels were below 2010 levels for 5 EU Member States based on persons and respectively for 13 EU Member States based on hours worked.

Annual growth rates of total employment, employees and self-employed, 2010-2020
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 2020, total employment fell by 1.6 % in the euro area and by 1.5 % in the EU. In comparison, the annual growth rate for 2019 was +1.2 % in the euro area and +1.0 % the EU.

Total employment can be split into 'number of employees' and 'number of self-employed'. Both the number of employees and the number of self-employed decreased in 2020, but employees has had a more positive evolution over the preceding years (see Figure 1).

Figure 1: Annual growth rates of total employment, employees and self-employed, 2010-2020
Source: Eurostat (nama_10_a10_e)


Variations among Member States

Based on annual data, five EU Member States had in 2020 employment levels in persons that were below their 2010 levels; most notably Greece and Bulgaria (-4.3 % and -4.2 % in 2020 compared with 2010). The largest increases were visible in Malta (+57.4 %) and Luxembourg (+31.9 %). Please note these variations can also be related to population changes. Total hours worked fell sharply in 2020 due to the COVID-19 pandemic, but compared to 2010 the level of hours worked was higher in around half of the Member States for which data are available (see Table 1).

Table 1: Total employment by number of persons and hours worked, 2020
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 85.5 % and 14.5 % respectively of total employment in persons and 82.2 % and 17.8 % respectively of hours worked in the EU in 2020. However, the significance of self-employed persons still varies across EU Member States (see Table 2). In 2020, their share was highest in Greece (28.1 %), Bulgaria (25.4 %), Italy (23.3 %) and Romania (22.3 %), and lowest in Sweden (3.9 %), Luxembourg (6.0 %), as well as in Norway (5.4 %).

Changes between 2010 and 2020 varied significantly. The share of self-employed persons decreased in both the EU and the euro area (-1.9 % and -1.3 % respectively), as did their share in total hours worked (-2.9 % and -2.3 % respectively). The largest decreases in the number of self-employed were observed in Romania (-11.2 %) and Croatia (-9.8 %) and the highest increases in Estonia (+2.1 %). For changes in hours worked, the largest decreases were observed in Romania (-11.5 %) and Croatia (-7.8 %) and the highest increase in Estonia (+1.8 %).

Table 2: Self-employed by number of persons and hours worked, 2020
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 before and after 2015. They indicate that there has been a shift in employment across sectors of the economy. The largest losses of employment were recorded in construction, industry, agriculture and financial and insurance activities. Construction and industry have somewhat recovered since 2015. The sectors information and communication and professional, scientific and technical activities experienced the largest growth in employment since 2015.

Figure 2: Change in employment by sector 2010-2015 and 2015-2020, 1000s 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 (-4.8 %), since government subsidies maintained number of employees rather stable, while GDP fell at the same time . Labour productivity per hours worked grew by 0.2 % in 2020.

Figure 3: EU GDP, productivity and unit labour costs, annual growth rates in %, 2010-2020
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