Well-functioning and inclusive labour markets

07 September 2017

Well-functioning labour markets are a prerequisite for making full use of the job creation potential of the economy as it emerges from the financial and economic crisis. The crisis had very different labour market consequences across the EU Member States, and some groups such as young people and those with low education were particularly hard hit. The rapid ongoing structural change also presents new challenges as regards possible labour shortages and skills mismatches in various sectors and regions.

The EU’s main tool for promoting employment and social inclusion is the European Social Fund – helping people to get a job, integrating disadvantaged people into society and ensuring fairer life opportunities for all. There is also wide-ranging European legislation that regulates the rights of workers in the labour market. Moreover, in April 2017, the European Commission launched the European Pillar of Social Rights. The Pillar builds on, and complements, EU social and employment policy in order to guide policies in a number of fields essential for well-functioning and fair labour markets and welfare systems.

Eurofound's work

Eurofound’s research aims to deepen understanding of the dynamics of labour markets across Europe, while informing policy to improve their functioning. Given the persistently high unemployment levels in some Member States, policies to support the reintegration of unemployed people into the labour market and those geared towards specific groups – young people, migrants, women or older unemployed – are of particular interest. Eurofound has produced a large body of work in this area, focusing in recent years on youth issues, gender and work, new forms of employment, mobility and migration, as well as wages.

Key contributions

Eurofound has explored the employment and social challenges faced by young people. Studies have examined issues around social inclusion and the need to take account of the diversity of vulnerable young people when developing policies to support them. It has also looked at youth entrepreneurship and the types of measures that have been effective in supporting it.

Another research strand has highlighted the economic and social costs of the gender employment gap and assessed the effectiveness of policy measures promoting the labour market participation of women.

An ongoing research strand examines new forms of employment that are different from traditional standard or non-standard employment and looks at their implications for working conditions and labour markets. Initial research into the typology was followed up with in-depth reviews of specific new forms of employment such as strategic employee sharing and ICT-based mobile work.

Research on mobility has provided an up-to-date picture on the movement of labour within Europe and the effect on migration of the economic crisis.

Eurofound has also conducted in-depth analyses of various issues related to labour market transitions, including job tenure, temporary employment and transitions of young people from education into employment.

Ongoing work

Eurofound is currently conducting studies on the following themes related to the functioning of labour markets:

  • labour market segmentation, where the labour market is divided between workers who benefit from secure, relatively well-paid employment and good prospects and those who do not
  • measures in place in Member States to assist older employees who are made redundant to find a new job
  • the concept of a ‘living wage’ in Europe and how it is calculated in different countries and regions.

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