More and more people are in work. Do growing employment rates indeed correspond with more people in employment?

The employment rate across the EU in 2018 was significantly over the value of 2008; an in-depth analysis however demonstrates that in reality the development of employment rates (the proportion of employment within the population) has in the European Union member states, Island and Norway taken quite differentiated courses and has not shown a growing trend in all countries by any means. When we then look at the actual number of employed in the respective member states of the PES network, then the enormous challenges attributable to migration movements in and within the EU as well as demographic developments become quite apparent.

In the last decade continuously growing employment and employment rates in the EU contrasted with a population decline of 1.3%.

The EU population in the age group between 15 and 64 – often referred to as the working age – declined in this decade on average by 1.3% despite growing employment (+2.3%) and increasing employment rate (+2.9 percentage points). The cause of the increasing employment rate in the EU is primarily the clearly growing proportion of individuals from older age cohorts in labour participation; the number of employed in the age group between 55 and 64 was 45.1% above that of the year 2008; the population in this age group grew by 12.8% and the employment rate by 13.3 percentage points.

The fact that analysis of population numbers, employment development and employment rate should be indeed differentiated across the individual countries is clearly demonstrated looking at some examples (analysed cohort of age group between 15 and 64):

In Poland the population reduced by 5.1% between 2008 and 2018; the increase of the employment rate by a noticeable 8.2% led however to an increase of the number of employed by 3.7% despite the declining population.

In Norway in contrast the population increase of 10.3% during this period was higher than the employment increase of 5.3% resulting in the employment rate declining by 3.2 percentage points despite growing employment. Similar developments could be observed in both Ireland and Cyprus.

In Latvia, Lithuania, Portugal and Romania both the population and the number of employed reduced. Since the decrease in population was however significantly higher than the decline in employment, the employment rate increased in all four countries when compared with 2008.

In comparison 2008 – 2018 the population (between 15 and 64) in Greece and Spain decreased, and their employment rate also declined, leading to a clear reduction in the numbers of employed.

The following interactive table depicts the development across the 30 member states of the PES network and the EU in total and can be sorted by the respective column:

Table 1: Population, employment and employment rate – development between 2008 and 2018 – Source: Database – Eurostat lfsi_emp_a and demo_pjangroup

The overwhelming majority of all countries within the PES network report reducing young populations and a decline in employment in the age group between 15 to 24 over recent years

The majority of European member states and their enterprises face a particular challenge looking at the development of the young population in gainful employment, i.e. persons in the age group between 15 and 24: virtually all countries within the PES network reported a decline in the young population (15 to 24 years) in gainful employment over recent years. The only exceptions are Luxemburg, Denmark, Norway, the Netherlands, Island and Belgium. On average across the EU member states the population in this age group declined since 2008 by a distinct 10.4%, and their employment by 15.5%. The employment rate however only decreased by 1.8 percentage points – which conveys an impression of a “rather stable” development in this age group.

Two examples of this development – in The Netherlands the young population grew by 6.8%, the employment rate of 0.4 percentage points represented however a decline attributable to the increase in employment of just 5.6%, this being below the aforementioned demographic development.

In Lithuania the young population shrank dramatically by 35.4%, employment however only dropped by just 21.6% resulting in the employment rate of 6.4 percentage points over the value of 2008.

The population between 55 and 64 years grew across the 25 countries of the PES network in the last decade with the employment of older persons increasing in all member states

 The population between 55 and 64 grew by over 20% in nine countries of the network, in Luxemburg by even 41.7%. The employment increase was over 50% in eleven countries, the employment rate growing in virtually all countries, only employment rate development in Island and Greece could not keep up with the population increase.

The proportion of women in employment also continued to grow over the last decade

Since 2008 both the employment numbers and the employment rate of women (+5.3% respectively +4.6 percentage points) increased over the EU 28 average significantly more than the equivalent values for men (-0.1% respectively +1.3% percentage points). The most apparent difference in the development was observed in Malta with a women’s employment increase of 77.4% (versus 29.5% for men). The female population between 15 and 64 only grew by 12% in Malta compared with a male population increase of 18.1%, indicating growing participation of women in gainful employment.

In Bulgaria, Greece, Croatia, Latvia, Lithuania, Romania and Finland employment of both men and women declined. The population in employable age declined most strongly within the PES network in Latvia and Lithuania accompanied however by significantly growing employment rates.

The strongest increase in employment of men in comparison between 2008 to 2018 was observed in Malta, Luxemburg and Hungary, in these three countries the numbers of employed women in the annual average for 2018 were also the most distinct above the level of 2008; population also grew in Luxemburg and Malta over recent years, as well as the employment rates, except for the rate of employment of men in Luxemburg because in Luxemburg the demographic development outperformed the increase in employment.

Over the 10 year comparison the number of employed between 15 to 64 per 100,000 population (overall population) has been declining in 19 countries of the network

 In conclusion we would like to draw your attention to an interesting comparison of the employed (number of employed with residence in the surveyed country) per 100,000 population and development of these numbers along with ratios with potential relevance for any analysis of financial feasibility of our social security systems across the EU.

Source: Database – Eurostat lfsi_emp_a and demo_pjangroup

Note regarding the definition of employed: number of employed with residence in the surveyed Country