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 May 2020.

Planned article update: June 2021.

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 a part of a set of statistical articles, which are based on the Eurostat publication ’Sustainable development in the European Union — Monitoring report - 2020 edition’. This report is the fourth 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.

SDG 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 opportunities for full employment and decent work for all alongside the eradication of forced labour, human trafficking and child labour, and the promotion of 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

While economic growth is an important driver of prosperity and society’s well-being, it can also harm the environment it depends on. Therefore, to ensure the well-being of future generations, the present generation needs to pursue sustainable economic growth in a manner that sustains natural resources and the environment. The indicators selected to monitor this objective show that over the past few years, Europeans have been enjoying continuous economic growth, which has also become more sustainable.

The EU economy has shown continuous growth over the past few years

Citizens’ living standards depend on the performance of the EU economy, which can be measured using several indicators. One of these is growth in gross domestic product (GDP). 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.

Real GDP per capita (GDP adjusted for inflation) in the EU in 2019 reached EUR 27 990, which was 18.1 % higher than in 2004. After the severe economic slump in 2009, real GDP per capita was slowly recovering, experiencing ups (from 2009 to 2011 and from 2013 onwards) and downs (from 2011 to 2013). Since 2014, per capita GDP has seen strong and continuous growth of 2.0 % per year on average. Both private consumption and investment have been the key drivers of economic expansion in the EU [1].

Investment is another indicator of economic growth as it enhances an economy’s productive capacity. In 2019, the total investment share of GDP in the EU was 22.4 %. The level of investment had experienced a setback during the economic crisis, which interrupted a period of steady growth observed between 2004 and 2007. After periods of decline and stagnation, the indicator has grown by 2.1 % on average per year since 2014. This growth is mainly attributable to an increase in business investment.

Figure 1: Real GDP per capita, EU-27, 2000-2019 (EUR per capita, chain-linked volumes, 2010)
Source: Eurostat (sdg_08_10)


Figure 2: Investment share of GDP, by institutional sectors, EU-27, 2002-2019 (% of GDP)
Source: Eurostat (sdg_08_11)


Economic growth in the EU has become more sustainable

Using natural resources more efficiently reduces pressure from production and consumption and increases an economy’s competitiveness. 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 29.6 % since 2003, reaching EUR 1.9 per kilogram in 2018. This favourable development can be attributed to GDP growth accompanied by a 4.8 % decrease in DMC, which reflects such factors as the EU’s long-term shift towards a service economy, globalisation and increasing reliance on imports [3]. However, the increase in resource productivity should be interpreted with caution and should not be contributed entirely to the success of environmental policy. It is likely that the observed trend was influenced by a number of other factors, such as a drop in DMC due to the economic crisis  [4]. Indeed, the past five years have seen a 6.8 % growth in the EU’s material consumption alongside the strong economic expansion reported above.

Employment

Decent employment for all — including women, people with disabilities, youth, the elderly and migrants — is a cornerstone of socio-economic development. Apart from generating the resources needed for decent living standards and achieving life goals, work provides opportunities for meaningful engagement in society, which promotes a sense of self-worth, purpose and social inclusion. Higher employment rates are a key condition for making societies more inclusive by reducing poverty and inequality in and between both regions and social groups.

Overall, the employment situation in the EU keeps improving

The economic recovery in the EU over the past few years has been reflected in improved employment prospects. Overall, the EU employment rate has exhibited a growing trend over the past 15 years (with some interruptions in the aftermath of the economic crisis): it has grown by 6.8 percentage points compared with 2004 and by 4.9 percentage points compared with 2014, reaching a record high of 73.1 % in 2019. Despite this improvement, the EU might still fall short on meeting the Europe 2020 employment target of 75 % [5]. 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].

Figure 3: Employment rate, by sex, EU-27, 2000-2019 (% of population aged 20 to 64)
Source: Eurostat (sdg_08_30)


Unemployment and long-term unemployment have decreased since 2014

The EU’s unemployment situation has also improved following the economic recovery. In 2019, the unemployment rate stood at 6.7 %, which is a 4.2 percentage point improvement from 2014 [7]. Long-term unemployment usually follows the trends in unemployment, but with a delay.

Long-term unemployment can have long-lasting negative implications for individuals and society by endangering social cohesion and increasing the risk of poverty and social exclusion. Beyond material living standards, it can also lead to a deterioration of individual skills and health, thus hindering future employability, productivity and earnings. In 2019, 2.8 % of the EU’s active population had been unemployed for a year or more, which is 2.7 percentage points less than at the peak of the long-term unemployment rate in 2014.

Figure 4: Long-term unemployment rate, by sex, EU-27, 2005-2019 (% of active population)
Source: Eurostat (sdg_08_40)


Labour market prospects for young people have improved since 2014 but still remain precarious

The economic recovery has also strengthened the labour market situation of younger people, with the employment rate of 20- to 24-year-olds steadily growing since 2014. Nevertheless, their employment perspectives remain precarious. People of this age group were the hardest hit by the economic crisis and are still underrepresented in the job market, with only 51.5 % of 20- to 24-year-olds being employed in 2019, which is 1.3 percentage points below their pre-crisis level [8]. Despite the strong decrease in youth unemployment since 2014, the unemployment rate of 20- to 24-year-olds amounted to 14.0 % in 2019, which is still significantly higher than for older age groups [9].

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 may 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. Between 2004 and 2019, the NEET rate for 15- to 29-year-olds in the EU closely followed the economic cycle, improving from 15.6 % to 12.6 % over the period.

Figure 5: Young people neither in employment nor in education and training (NEET), by sex, EU-27, 2002-2019 (% of population aged 15 to 29)
Source: Eurostat (sdg_08_20)


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 67.3 % in 2019. However, despite declining by 4.7 percentage points since 2004, the gender employment gap continues to persist and has stagnated over the short term since 2014. In 2019 it amounted to 11.7 percentage points, despite women increasingly becoming well qualified and even outperforming men in terms of educational attainment (see the article on SDG 4 ‘Quality education’).

The lower employment rates for women might be related to the fact that women of working age are more likely to be inactive than men. In 2019, 32.2 % of inactive women aged 20 to 64 were in this situation because they were caring for children or incapacitated adults, compared with only 4.5 % of men. This gender gap has increased by 1.2 percentage points since 2006.

Decent work

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

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

A prerequisite for decent work is a safe and healthy working environment, without fatal accidents. Over the past few decades, the EU and its Member States have put considerable effort into ensuring minimum standards in occupational safety and health. In 2017, the rate of fatal accidents at work amounted to 1.8 fatalities per 100 000 employed persons. While there has been a significant decrease since 2010, the gender gap persists. In 2017, the rate of fatal accidents at work for men was 13.7 times higher than for women.

Besides safety at work, fair income and social protection are other 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 the poverty line. The recent economic expansion and increase in employment have hardly been reflected in wage developments at the EU level [10]. Wage growth remains subdued, below what could be expected given the positive labour market and economic performance, and lagged behind average productivity growth in most Member States [11]. Furthermore, the share of the so-called working poor’ (aged 18 and over) increased almost continuously from 2010 to 2016 in the EU. However, the share has declined since then, affecting 9.2 % of employed people in 2018, which is only slightly above the 2013 level of 9.1 %.

Figure 6: People killed in accidents at work, EU-27, 2010-2017 (number per 100 000 employees)
Source: Eurostat (sdg_08_60)


Context

Inclusive green economic growth and decent employment are of key importance for the development and prosperity of European countries and for the well-being and personal fulfilment of individuals. For economic growth to be truly sustainable, it needs to be accompanied by eco-efficiency improvements, climate action and resilient measures, alongside active labour market and social inclusion policies, in order to avoid harming the natural environment it depends on or damaging the social fabric of European societies. 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 - 2020 edition’.

Notes

  1. European Commission (2019), Employment and Social Developments in Europe, Annual review 2019, Publications Office of the European Union, Luxembourg, p. 31.
  2. Resource productivity is defined as GDP per unit of domestic material consumption (DMC), measured in EUR per kilogram. Some of these materials are directly consumed by households, which means 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, EEA Copenhagen, p. 38
  4. European Commission (2014), Study on modelling of the economic and environmental impacts of raw material consumption, Publications Office of the European Union, Luxembourg, p. 5.
  5. European Commission (2019), Employment and Social Developments in Europe, Annual review 2019, Publications Office of the European Union, Luxembourg, p. 14.
  6. European Commission (2017), Employment and Social Developments in Europe 2017, Publications Office of the European Union, Luxembourg, p. 10.
  7. Source: Eurostat (online data code: (lfsa_urgaed)).
  8. Source: Eurostat (online data code: (lfsa_ergan)).
  9. Source: Eurostat (online data code: (lfsa_urgaed)).
  10. European Commission (2018), Employment and Social Developments in Europe, Annual review 2018, p. 27.
  11. Ibid.