SDG 8 - Decent work and economic growth

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all


Data extracted in August 2018

Planned article update: September 2019

Highlights


EU trend of SDG 8 on decent work and economic growth

This article provides an overview of statistical data on SDG 8 ‘Decent work and economic growth’ in the European Union (EU). It is based on the set of EU SDG indicators for monitoring of progress towards the UN Sustainable Development Goals (SDGs) in an EU context.

This article is part of a set of statistical articles, which are based on the Eurostat publication ’Sustainable development in the European Union — Monitoring report - 2018 edition’. This report is the second edition of Eurostat’s series of monitoring reports on sustainable development, which provide a quantitative assessment of progress of the EU towards the SDGs in an EU context.

Goal 8 recognises the importance of sustained economic growth and high levels of economic productivity for the creation of well-paid quality jobs as well as resource efficiency in consumption and production. It calls for providing opportunities for full employment and decent work for all while eradicating forced labour, human trafficking and child labour, and promoting labour rights and safe and secure working environments.


Full article

Decent work and economic growth in the EU: overview and key trends

Monitoring SDG 8 in an EU context looks into trends in the areas of sustainable economic growth, employment and decent work. As Table 1 shows, the EU has achieved some progress in terms of sustainable economic growth over the past few years. While the overall employment situation and working conditions have also improved, a gender gap in labour market participation persists and the economic security of the working population still remains an issue.

Sustainable economic growth

Economic growth contributes to society’s well-being by enabling people to make a decent living and to enjoy high living standards. While it is an important driver of prosperity, economic growth might also harm the environment it depends on. Therefore, for future well-being it is crucial to pursue sustainable economic growth that tries to satisfy the needs of the present generation in a manner that sustains natural resources and the environment for future generations. The indicators selected to monitor these aspects show that over the past few years Europeans have been enjoying moderate economic growth, which has also become more sustainable.

The EU economy has shown a moderate growth

Citizens’ living standards depend on the economic performance of the EU, which can be measured by several indicators. One of these is growth in gross domestic product (GDP), which is commonly used as a proxy for measuring a country’s socio-economic development. Although GDP is not a complete measure of welfare, it gives an indication of an economy’s potential to satisfy people’s needs and its capacity to create jobs. It can also be used to monitor economic development.

Figure 2: Real GDP per capita, EU-28, 2000–2017 (EUR per capita, chain-linked volumes (2010))
Source: Eurostat (sdg_08_10)

Real GDP per capita (GDP adjusted for inflation) in the EU in 2017 reached EUR 27 700, which was 16.9 % higher than in 2002. After the severe economic slump in 2009, real GDP per capita was slowly recovering and almost reached its pre-crisis level in 2014. On average, GDP per capita has been increasing by 1.3 % per year since 2009. In 2017, real GDP per capita in the EU grew by 2.2 %, which was the highest annual growth rate in ten years. It is expected that in 2018 the European economy will continue expanding at a solid pace [1].

Another indicator of economic growth is investment, as it represents spending that enhances an economy’s productive capacity. This has an impact on living standards in the medium and long terms. The acquisition of capital goods can encompass, among other things, energy and transport infrastructure, industrial and service facilities, eco-innovative technologies, education and research and development (R&D). Long-term investment that is economically, environmentally and socially sound is crucial for supporting sustainable growth.

Figure 3: Investment share of GDP by institutional sector, EU-28, 2002–2017 (% of GDP)
Source: Eurostat (sdg_08_11)

The total investment share of GDP in the EU was 20.6 % in 2017. It was influenced by the economic crisis, which interrupted the steady growth observed between 2004 and 2007. After periods of decline and stagnation, the indicator has grown moderately by 1.3 % on average per year since 2013. This growth is mainly attributable to an increase in business investment.

Economic growth in the EU has become more sustainable

Economic growth should not lead to increased environmental pressures and to major depletion of natural capital. Using natural resources more efficiently reduces the pressure from production and consumption and increases the competitiveness of the economy. Resource productivity, measured as GDP divided by domestic material consumption (DMC), monitors the relationship between what an economy produces and the physical materials it uses [2]. Hence, it depicts an aggregate measure of an economy’s material efficiency. The EU has increased its resource productivity by 36.4 % since 2001, reaching 2.04 EUR/kg in 2017. This favourable development can be attributed to GDP growth accompanied by a 9.0 % decrease in DMC, which reflects such factors as the long-term shift of the EU towards a service economy, globalisation and increasing reliance on imports [3].

Sustainable economic growth is also driven by trends in the green economy sectors represented by the environmental goods and services sector. Such goods and services include those produced for environmental protection and resource management. Environmental protection includes all activities that have the main aim of preventing, reducing and eliminating pollution and any other environmental degradation. The output from the EU’s environmental goods and services sector has increased by 137.5 % since 2000, reaching EUR 735 727 million in 2015 [4]. Over the same period, employment in the environmental goods and services sector increased by 47.3 % [5]. These positive trends are especially remarkable as they have persisted during the economic crises and recovery, showing the sector is highly resilient.

Employment

Decent employment for all, including women, people with disabilities, youth, the elderly and migrants, is a cornerstone of socio-economic development and is crucial for improving the well-being of society as a whole. Apart from generating the resources needed to provide decent living standards and to achieve life goals, work grants opportunities for meaningful engagement in society, promoting a sense of self-worth, purpose and social inclusion. Increased employment is a key condition for making societies more inclusive by reducing poverty and inequality in and between both regions and social groups. Overall, while the employment situation of EU citizens has improved over the past few years, many more women than men remain inactive due to caring responsibilities for children or incapacitated adults.

Overall, the employment situation in the EU is improving

Figure 4: Employment rate, by sex, EU-28, 2001–2017 (% of population aged 20 to 64)
Source: Eurostat (sdg_08_30)

The economic recovery in the EU in the past few years has been reflected in improved employment prospects. Overall, the EU employment rate has exhibited a growing trend (with some interruptions in the aftermath of the economic crisis): it has grown by 5.4 percentage points compared to 2002 and by 3.8 percentage points compared to 2012, reaching 72.2 % in 2017. There remains a 2.8 percentage point gap to the Europe 2020 employment target of 75 %, which might still be met if employment keeps rising at the pace recorded from 2013 onwards. The overall growth of the employment rate over the past decade can be partly attributed to older workers delaying their retirement and women increasing their participation in the labour force [6].

While labour market prospects for young people have improved as the economy has strengthened, this group continues to face a high risk of unemployment and social exclusion

People in their early 20s and those in the latter stages of their careers remained underrepresented in the job market: only 52.1 % of people aged 20 to 24 and only 57.1 % of 55 to 64 year olds were employed in 2017 [7]. However, due to diverging socio-economic and demographic characteristics, employment trends for these two groups have developed quite differently over the past decade. Young people were the hardest hit by the economic crisis, with the employment rate for people aged 20 to 24 in 2017 still 2.8 percentage points below their 2008 level of 54.9 %, despite steady growth since 2014.

This age group also remained at a higher risk of unemployment. While the unemployment rate of 20 to 24 year olds has steadily decreased since 2013, reaching 15.5 % in 2017, it still remained significantly higher than for older age groups [8]. It should be noted though that many in their early 20s are studying full-time and are therefore neither working nor looking for a job. As a result, in absolute terms this age group of unemployed people was not large and amounted to 2.7 million people in 2017 [9]. Moreover, during the past few years this age group has experienced marked improvements in their labour market prospects: the youth unemployment ratio, which reflects the share of unemployed in the whole population of the same age group, has experienced a decline of 4.1 percentage points since 2013 and reached 9.6 % in 2017 [10].

Young people aged 15 to 24 are more likely than other age groups to be in involuntary temporary employment (13.9 % of total employees in 2017) or to have an involuntary part-time contract (8.0 % of total employment in 2017), and the share of young people in a part-time and temporary employment for whom it was not a personal choice has increased since 2008 [11].

Figure 5: Young people neither in employment nor in education and training, by sex, EU-28, 2002–2017 (% of population aged 15 to 29)
Source: Eurostat (sdg_08_20)

Young people not engaged in employment nor in education and training (NEET) are among the most vulnerable groups in the labour market. Over the long term they could fail to gain new skills and suffer from erosion of competences, which in turn might lead to a higher risk of labour market and social exclusion. The NEET rate for 15 to 29 year olds in the EU between 2002 and 2017 closely followed the economic cycle, improving from 15.6 % to 13.4 % over these years. In 2017, more than half of NEETs (7.9 % of people aged 15 to 29) were not looking for a job and therefore were inactive, maintaining a similar rate since 2006 [12]. Fluctuations in the total NEET rate have thus been triggered by variations in unemployment. The reduction in the NEET rate over the past four years was mainly due to unemployed NEETs moving into work [13].

Only a small fraction of young people do not want to work — in 2017, only 4.7 % of 15 to 29 year olds were neither in education nor in training and did not want to work. This indicates that nearly a third of NEETs would have liked to work but were not actively seeking employment or gave up looking for a job.

In contrast to young people, the situation of people aged 55 to 64 seems to have been less affected by the economic slowdown: their employment rate has increased by 11.6 percentage points since 2008 and reached 57.1 % in 2017. Apart from structural factors, this trend can be linked to recent pension reforms that led to longer working lives by increasing the pensionable age, the age for early retirement and length of contribution [14]. For people in the latter stages of their career path, unemployment was the lowest among all age groups, at 5.8 % for the age group 55 to 64 [15]. This may be connected to the fact that if people of this age lose their job they tend to become economically inactive or retire and therefore no longer count as being unemployed.

Higher education increases employment possibilities

In a knowledge-based economy, such as the EU is today, educational attainment is crucial for securing a job and adequate income. Indeed, in 2017 a person aged 20 to 64 living in Europe with a tertiary education was much more successful in landing a job (employment rate of 84.0 %) compared to those with upper secondary or post-secondary non-tertiary education (employment rate of 72.6 %) and with lower secondary or lower education (employment rate of 54.9 %) [16]. The unemployment rate among people with tertiary education in 2017 in the EU was 4.6 %, in comparison to 6.7 % for those with upper secondary or post-secondary non-tertiary education and 7.5 % of the total unemployment rate for the age group of 20 to 64 year olds [17]. Nowadays, upper secondary education is considered the minimum level Europeans should attain before leaving the education and training system. Therefore, low educational attainment is one of the key determinants of young people entering the NEET category. In 2017, the NEET rate for people with tertiary education was only 1.9 %, compared to 5.4 % for people with less than primary, primary and lower secondary education and 6.0 % for people with upper secondary or post-secondary non-tertiary education [18].

Employment opportunities are lower for migrants and people with disabilities

In 2014, the employment rate of people with disabilities at the European level was 23.8 percentage points lower compared to people without disabilities. Only 48.7 % of people with disabilities were employed in that year, compared to 72.5 % of those without disabilities. For women with disabilities the rate was 45.7 %, while for men with disabilities it was 52.3 %. The degree of disability is also an important factor affecting the employment rate. At the EU level, the employment rate for people with a severe disability was 28.3 %, while for people with a moderate disability it stood at 56.7 % in 2014 [19].

Country of citizenship also affects the labour market prospects of individuals in the EU. Migrant workers from countries outside the EU not only tend to occupy low-skilled and insecure jobs with temporary contracts and poorer working conditions, they also show lower employment rates than EU citizens [20]. In 2017 their employment rate was 57.4 %, 14.8 percentage points lower than the total employment rate. Migrants were particularly affected by the economic crisis, being among the first to lose their jobs: during the post-crisis recovery the gap between the total EU employment rate and those of non-EU citizens widened from 7.7 percentage points in 2008 to 14.7 percentage points in 2017 [21].

The risk of being unemployed in 2017 was also highest for migrants from outside the EU, at 16.3 % compared to the total unemployment rate of 7.5 % [22]. Young migrants from outside the EU (age group 15 to 29) are at the highest risk of being neither in employment nor in education and training compared to the total EU population: the NEET rate for this group of the population in 2017 was 25.6 %, which is almost twice as high as the total NEET rate in the EU [23]. The risk of falling into the NEET category for young migrants from outside the EU rises with age: in 2017, the NEET rate for 15 to 17 year olds was only 4.9 %, in comparison to 26.1 % for 25 to 29 year olds.

Women’s participation in the labour market is increasing but gender differences persist

Over the past 15 years, the employment rate of women in the EU has been increasing and reached a new record high of 66.5 % in 2017. This development was mainly driven by a strong increase in the employment rate of women in their late career paths, aged 55 to 64. However, despite a decline of 5.8 percentage points since 2002, the gender employment gap persists. In 2017 it amounted to 11.5 percentage points, with employment rates of 78.0 % for men and 66.5 % for women. This is despite the fact that women are increasingly well qualified and are even out-performing men in terms of educational attainment. In 2017, 44.9 % of women aged 30 to 34 had attained tertiary education, compared to only 34.9 % of men (see the article on SDG 4 ‘Quality education’).

Young women aged 15 to 29 are also at higher risk than men of being neither in employment nor in education and training. The NEET rate for women in 2017 was 15.4 %, compared to 11.5 % for men.

The lower employment rates for women might be related to the fact that women of working age are more likely than men to be economically inactive. In 2017, 31.0 % of inactive women aged 20 to 64 were in this situation due to caring responsibilities for children or incapacitated adults, compared to only 4.5 % of men. This gender gap has increased since 2005.

Long-term unemployment has decreased since 2013

Figure 6: Long-term unemployment rate, by sex, EU-28, 2005–2017 (% of active population)
Source: Eurostat (sdg_08_40)

Long-term unemployment can have long-lasting negative implications for individuals and society by endangering social cohesion and increasing the risks of poverty and social exclusion. Beyond material living standards, it can also lead to deterioration of individual skills and health, thus hindering future employability, productivity and earnings. At a societal level, prolonged unemployment can have negative fiscal implications because of higher social transfers. In 2017, 8.3 million people or 3.4 % of the active population in the EU had been unemployed for a year or more, 1.7 percentage points less than at the peak of long-term unemployment in 2013.

Long-term unemployment usually follows strong growth in unemployment but with a delay. This means it can be considered to be the main legacy of the crisis, with the proportion of long-term unemployed people among all unemployed rising from 38.9 % in 2008 to 46.5 % in 2017 [24]. Strong declines in long-term unemployment only started being observed in 2014, after the economic recovery kicked off in 2013 [25].

Decent work

For a society’s sustainable economic development and well-being it is crucial that economic growth generates not just any kind but ‘decent’ employment. This means that work should deliver fair income, security in the workplace and social protection, and allow flexibility.

Over the past few years, work in the EU has become safer but less economically secure

Figure 7: People killed in accidents at work, EU-28, 2008–2016 (number per 100 000 employees)
Source: Eurostat (sdg_08_60)

A prerequisite for decent work is a safe and healthy working environment, such as without fatal accidents. Over the past few years Member States have put considerable effort into ensuring minimum labour standards. In 2016, the rate of fatal accidents at work amounted to 1.52 fatal accidents per 100 000 employed persons. The rate has fallen considerably since 2008, indicating progress towards safer working places.

Agriculture, forestry and fishing, manufacturing, construction, transportation and storage appear to be the most dangerous activities in the EU. In 2016, the number of fatal accidents in these activities combined represented 67.5 % of all fatal accidents. These economic activities are mostly male-dominated, and in 2016 the incidence rate of fatal accidents for men was more than 30 times higher than for women [26]. The risk of fatal accidents also rises with age, with the risk for workers aged 55 and above more than twice as high as for younger workers [27].

The rate of non-fatal accidents at work has also decreased since 2008 [28]. In 2016, there were 1 403 incidents per 100 000 people employed in the EU compared to 1 940 in 2008. As a result of these accidents, 46.7 % of injured workers were out of work for up to one month and 3.7 % became permanently incapable of work or were out of work for more than half a year [29]. In 2016, 19.1 % of all non-fatal injuries happened in manufacturing activities.

Besides safety at work, fair income and social protection are further important components of decent work. Poverty is often associated with the absence of a paid occupation. However, low wages can also push some workers below poverty line. Since 2005, the share of the so-called ‘working poor’ (aged 18 and over) in the EU has increased by 1.4 percentage points, affecting 9.6 % of employed people in 2016 [30].

Factors influencing in-work poverty rates include, among others, type of contract, working time and hourly wages. While a fixed-term or part-time contract may provide greater flexibility for both employers and workers, it is not always a personal choice for an employee and can thus significantly influence their well-being. In 2017, 7.7 % of European employees were involuntarily working on temporary contracts, corresponding to 57.7 % of all temporary employees. This share has increased slightly over the past decade [31]. Similar to involuntary temporary employment, the share of involuntary part-time employment in total employment in the EU also increased, from 4.4 % in 2008 to 5.1 % in 2017 [32].

Context

Economic growth and decent employment are of key importance for the development and prosperity of European countries and for the well-being and personal realisation of individuals. For economic growth to be sustainable, it needs to be accompanied by eco-efficiency improvements, social inclusion policies and sustainable economic models such as a social economy, in order to avoid harming the natural environment it depends on, damaging the social fabric of European countries or undermining the well-being of future generations. Sustainable economic growth thus also means generating employment opportunities for all and improving working conditions for those already in employment.

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More detailed information on EU SDG indicators for monitoring of progress towards the UN Sustainable Development Goals (SDGs), such as indicator relevance, definitions, methodological notes, background and potential linkages, can be found in the introduction of the publication ’Sustainable development in the European Union — Monitoring report - 2018 edition’.

Notes

  1. European Commission (2018), European Economic Forecast Winter 2018 (Interim), Institutional Paper 073, p. 1.
  2. Resource productivity is defined as GDP per unit of domestic material consumption (DMC), measured in EUR per kilogram. Part of these materials are directly consumed by households, which means that they are not used as an input to production activities. Thus, resource productivity is not directly comparable to concepts such as labour or capital productivity.
  3. European Environment Agency (2016), More from less – material resource efficiency in Europe. 2015 overview of policies, instruments, and targets in 32 countries, EEA report No. 10/2016, Copenhagen: EEA, p.38.
  4. Source: Eurostat (online data code: (env_ac_egss2))
  5. Source: Eurostat (online data code: (env_ac_egss1))
  6. European Commission (2017), Employment and Social Developments in Europe 2017, p.10.
  7. Source: Eurostat (online data code: (lfsa_ergan))
  8. Source: Eurostat (online data code: (lfsa_urgaed))
  9. Source: Eurostat (online data code: (lfsa_pganws))
  10. Source: Eurostat (online data code: (yth_empl_140))
  11. Source: Eurostat (online data code: (lfsa_etgar), (lfsa_epgaed) and (lfsa_epgar))
  12. Source: Eurostat (online data code: (yth_empl_150))
  13. European Commission (2017), Employment and Social Developments in Europe 2017, p. 36.
  14. European Commission (2016), Employment and Social Developments in Europe 2015, p. 300.
  15. Source: Eurostat (online data code: (lfsa_urgaed))
  16. Source: Eurostat (online data code: (lfsa_ergaed))
  17. Source: Eurostat (online data code: (lfsa_urgaed))
  18. Source: Eurostat (online data code: (yth_empl_160))
  19. Academic Network of European Disability experts (2017), European comparative data on Europe 2020 & People with disabilities, pp. 61–72.
  20. European Commission (2016), Employment and Social Developments in Europe 2015, p. 177.
  21. Source: Eurostat (online data code: (lfsa_ergan))
  22. Source: Eurostat (online data code: (lfsa_urgan))
  23. Source: Eurostat (online data code: (edat_lfse_23))
  24. Source: Eurostat (online data code: (une_ltu_a))
  25. European Commission (2017), Employment and Social Developments in Europe 2017, p. 29.
  26. Source: Eurostat (online data code: (hsw_ph3_01))
  27. Source: Eurostat (online data code: (hsw_ph3_01))
  28. Source: Eurostat (online data code: (hsw_n2_01))
  29. Source: Eurostat (online data code: (hsw_n2_04))
  30. Source: Eurostat (online data code: (ilc_iw01))
  31. Source: Eurostat (online data code: (lfsa_etgar))
  32. Source: Eurostat (online data codes: (lfsa_epgar) and (lfsa_epgaed))