Labour force participation

Labour force participation measures the proportion of a specific population (such as women or older workers) considered to be either working or actively looking for a job. The declining number of people active in the labour market makes labour force participation an issue of growing significance in the EU and this has been the primary driver behind the European Employment Strategy.

The Essen European Council of 10 December 1994 first identified priorities for job creation that have become increasingly elaborate in the annual employment guidelines beginning in 1997. The current European employment strategy is enshrined in the Europe 2020 Strategy, which was adopted by the European Council on 17 June 2010. This strategy sets out a range of targets to be met over the 10 years to 2020; in the area of employment, the target is a 75% labour force participation rate for those aged 20-64.

Labour force participation in the EU has been eroded by the economic crisis that began in 2008. However, over the slightly longer term, during the past 15 years, labour force participation in the EU has improved in the EU28, growing from 66.9% in 2001 to 71.1% in 2016. There is now hope that the Europe 2020 target of 75% by 2020 will be met. However, labour force participation rates vary between EU Member States, from 81.2% in Sweden and 77.5% in the UK to 56.2% in Greece and 61.4% in Croatia.

The labour force participation of women is another challenge for the EU. In recent years, a range of policies have been put in place to increase women’s presence in the labour market, in order to ensure that they fulfill their potential and that the EU benefits from their participation. Policy efforts have focused on work–life balance, childcare and eldercare provision and other measures to encourage women to enter and re-enter the labour market. Accordingly, the labour force participation of women in the EU28 has increased from 57.9% in 2001 to 65.3% in 2016.

The labour force participation of older workers (55-64 years) is another specific focus for the EU, in the context of the ageing population. Although there is no concrete Europe 2020 target for the labour force participation of older workers, the rate has nevertheless improved significantly in the EU28 over the past 15 years, from 37.7% in 2001 to 55.3% in 2016, according to Eurostat data.

The most recent Joint Employment Report, issued in 2017, states that the social and employment situation in the EU is improving, in the context of a modest economic recovery – the 2016 figures for overall labour force participation are, for the first time, higher than at the time of the economic crash in 2008.

However, it also notes that significant challenges remain: levels of poverty are still high and employment and social outcomes vary significantly across countries. There is a gradual convergence in labour market conditions continues although wide differences between Member States persist.

See also: Employment rate; Europe 2020; European Employment Strategy.