Labour market trends in the euro area in the last decade

Esther Moral and Carlos Vacas

Economic Bulletin, 2008, issue JUL, No 4, 125 pages

Abstract: Between 1998 and 2007 total employment in the euro area increased by more than 18.5 million, representing total employment growth of 15.7% for the whole period. This entailed a 6.7-percentage-point (pp) rise in the employment rate (defined as the percentage of the population aged 15 to 64 with a job) to approximately 66% last year. As shown in Chart 1, most of this increase was possible due to the favourable performance of the working-age population’s participation in the labour market: the participation rate climbed by more than four points in the period analysed to 70.9%. However, changes in the unemployment rate also made a positive contribution since there was a decrease in the proportion of those participating in the labour market who cannot fi nd work, which in 2007 reached its lowest level since the creation of the euro area. This favourable performance of the labour market in the euro area seems to show that the various reforms undertaken in the last decade, especially in recent years, have borne fruit. However, the employment rate targets set for 2010 in the framework of the Lisbon strategy have not yet been achieved in the area as a whole or in most of the euro area countries. The purpose of this article is to analyse labour market trends in the euro area – and in its member countries – in the last decade with data from the Labour Force Survey (LFS) published by Eurostat (based on national surveys). Consequently, the performance of employment, the labour supply and unemployment will be described in the sections below, both at aggregate level (for the population aged between 15 and 64) and by different groups of individuals (classified on the basis of characteristics such as gender or age), in order to examine European labour market trends in recent years and to see the extent to which the results achieved are approaching or falling short of the Lisbon targets for 2010. Also, since the trends were not uniform throughout the period of analysis, their behaviour in the various stages will be studied.

Date: 2008
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