Labour market (Driving force)

The research project ‘Future scenarios of platform work’ explores the economic, labour market and societal impacts of two types of platform work – platform-determined routine work and worker-initiated moderately skilled platform work – by 2030. The project identified eight key driving forces deemed to substantially influence the development of these two types of platform work. These driving forces and associated hypotheses were used to derive potential platform work scenarios, and, from these, pointers were developed on what policy could do to make a desirable future happen and to avoid an undesirable one. This is the definition of one of the eight key driving forces identified.


The labour market is the situation of supply and demand for paid work, influenced by general macroeconomic developments, regulatory frameworks and societal developments. 

It has both quantitative and qualitative dimensions. The quantitative dimension includes the number of jobs available, created or destroyed, along with number of workers or job-seekers, while the qualitative dimension includes the characteristics of job profiles or tasks within jobs, as well as job and employment quality. Both dimensions jointly determine the opportunities and requirements for employers and workers in the labour market, notably as regards standard employment (generally understood as permanent full-time employment, according to labour law) as opposed to non-standard or atypical employment.

Labour markets are characterised by: 

  • types of paid work irrespective of employment status (including employed, self-employed or any other employment status)
  • employment form (including permanent, fixed-term, full-time and part-time)
  • type of employer (for example, public organisation, large company, small and medium-enterprise (SME), non-governmental organisation (NGO) and non-profit organisation (NPO))

Labour market developments are also important, including transitions between employment and other labour market statuses, transitions between types of employment contract and between employers, and entrance into and the exit from the labour market (hence also some ‘unused potentials’ like labour market slack, such as people who would be able and like to work (more), but for various reasons do not do so).


Megatrends and their impact on employment and unemployment levels

Structural change is an ongoing process in the labour market, which is impacted by megatrends including globalisation, technological developments, demographic change and climate change. Technological innovations and the greater proliferation of access to digital media, as well as the generally observed expansion of the services sector tend to favour new business models like platform work, online services and networked production or service provision. Other societal trends, such as the increased involvement of women in the labour market or greater demands for work–life balance, including through telework, also support the development of new forms of organising work.

Mobility across Member States and third-country migration present challenges regarding the integration of those arriving in a country. Suitable and sustainable labour market integration often takes time, and this can be particularly true for those who migrated as adults from certain third countries, and who are at significant disadvantage compared to nationals as regards their level of labour market integration, employment status and working conditions. These integration challenges contribute to the attractiveness of low-entry-barrier solutions like platform work for this population group.

Another challenge is the ageing population, which impacts the size of the cohort of younger workers entering the labour market and places pressure on pension and broader social insurance systems. Emphasis has therefore been placed on the extension of working lives up to retirement age (average retirement age continues to fall short of statutory retirement age). This requires the development of lifecycle approaches to ensure the sustainability of employment and prevent the degradation of work ability through skills obsolescence or the emergence of health issues. It can also be supported by the adaptation of workplaces and work organisation to cater for the needs of older workers and those affected by chronic diseases (which are more common among older workers). During the last decade, the activity and employment rates of older workers (55–64 years) have been continuously increasing. However, long-term unemployment rates among this age group remain high, as issues related to outdated skills, restrictions on geographic and occupational mobility, lack of suitable policy support and discriminatory perceptions vis-à-vis older workers can act as barriers to successful reintegration. This may lead workers in this age group to consider less common employment forms like platform work.

From an economic and labour market trend perspective, the last decade has seen significant shifts, largely impacted by a severe double-dip recession between 2008–2013. GDP declined by 4.4% in 2009 in the EU, and the employment headcount declined by 5.5 million during the peak years of the crisis. Mediterranean countries (Cyprus, Greece, Italy, Portugal and Spain) and the Western Balkan Member States (Bulgaria and Croatia) especially were seriously affected by the cyclical developments. The only Member States that stayed resilient and maintained positive GDP growth rates were the Baltic countries (Estonia, Latvia and Lithuania), Germany and Poland. Prior to the COVID-19 crisis, GDP had recovered to levels seen before 2008.

Despite the significant decline in employment and rise in unemployment during the economic crisis, overall employment rates increased between 2008 and 2018 from 70.5% to 73.2%. In the same period, the unemployment rate declined from 7% to 6.8%. EU average unemployment peaked in 2013 at 10.9%, with young people particularly severely affected. In 2018, the lowest unemployment rates were in Czechia (2.2%) and Germany (3.4%), while the highest rates persisted in Greece (19.3%) and Spain (15.3%). 

Nevertheless, there remains a substantial – albeit declining – level of labour market slack in the EU. According to the measurement used by the European Commission in the 2019 report Labour market and wage developments in Europe, this comprises the unemployed as well as individuals available to work but not seeking work (including discouraged workers), those seeking work but not immediately available and involuntary part-time workers. In 2018, this broad measure of labour market slack fell to 13.7% – a lower level than prior to the economic crisis (European Commission, 2019).

The dependency of the European labour market on endogenous developments has most recently been highlighted by the outbreak of the COVID-19 pandemic. Despite this being a health crisis and not specific to Europe, it had an immediate effect on the economy and labour market. For 2020, GDP in the EU is expected to decrease by 8.3%, and while unemployment has increased only slightly so far – mainly cushioned by measures like short-time working schemes – it is expected to rise, particularly in countries where it was already high before the pandemic (European Commission, 2020). 

Types of employment

While standard employment relationships (SER), characterised as open-ended, full-time employment, remain by far the most common form of employment in the EU in the period 2008–2018 (with only a small decline from 60% to 59% of employment), there have been differing trends across the Member States. Sharper falls in SER occurred in countries such as Estonia and Slovakia, whereas this share increased markedly in Romania and Portugal (Eurofound, 2020).

Part-time work

Within non-standard employment, the increase was most significant in relation to part-time work. In 2018, part-time work accounted for 20% of employment, compared with 18% in 2008. Most of the increase occurred over 2008–2014, with a subsequent small decline, showing that part-time employment is anti-cyclical. Women continue to represent the majority of part-time workers, but the gender gap has narrowed over the last decade. The rise in part-time work was particularly notable among younger workers (up to 34 years). Central European Member States tend to have more part-time employees. Specifically, the part-time employment rate amounted to 46.9% in the Netherlands in 2013. However, the biggest proportional increases in part-time employment during the economic crisis occurred in the most affected European economies (Greece, Italy, Spain, Portugal and Ireland) (source: Eurostat). Despite the gradual recovery of EU labour markets, part-time employment has risen. This holds particularly true for involuntary part-time employment in the Member States most affected by crisis (Cyprus, Greece, Italy, and Spain), whereas involuntary part-time employment decreased to pre-crisis levels in the continental and Baltic countries (source: Eurostat). 

Another significant trend in relation to part-time work was the increase in short-hours part-time work (work of 20 hours or less), which can impact the adequacy of overall household income. In all, 4% of EU workers were working 10 or fewer hours per week in 2018 and 12% were working 20 or fewer hours per week. Overall the low-hours gender employment gap was 11 percentage points (17% of female workers work on this basis compared to 6% of male workers) in 2018 but had contracted by 2 percentage points since 2008. The rise of low-hours part-time work has been most observed amongst male workers. Low-hours part-time work is characteristic of service sectors such as household activities, arts and entertainment, accommodation and food services, and administrative and support services.

In 2018, 25% of part-time workers indicated that they would prefer more or full-time hours. In terms of the desired length of working hours, a large share of women (50.1%) seems to prefer an increase in working time, and a transition from short part-time (20 hours or less) to long part-time (21 to 34 hours) and from long part-time to standard hours. Men, however, seem to favour a transition from long hours to standard hours (Eurofound, 2017e). 

Multiple-job holding

Holding more than one job is becoming more common in EU labour markets. The share of multiple-job holders increased somewhat to 4% of the EU27 and UK total workforce 2018. The largest shares could be found in advanced labour markets of central European Member States (8.2% in the Netherlands) and the Nordic countries (including 9% in Sweden and 7% in Denmark). On the other hand, eastern European countries such as Bulgaria (0.4%) and Slovakia (1.2%) along with Croatia (1.2%), Italy (1.4%) and Romania (1.5%) had the lowest share of multiple-job holders (source: Eurostat). Multiple-job holders are more likely to have a higher education and to work in public services or knowledge-intensive services. A large majority of multiple-job holders (71%) work 10 hours or less per week in their second job.

Casual work

Another trend is the increasing proliferation of casual work contracts. Casual work is defined as work that is not stable and continuous, where the employer is not obliged to provide the worker with work on a regular basis. Eurofound (2015; 2018a; 2019) distinguishes between intermittent work and on-call work. Intermittent work involves an employer approaching workers on a regular or irregular basis to conduct a specific task. Such work tends to be either seasonal or project-based and is limited to a fixed-term period. Accordingly, it can be considered a special form of temporary employment. On-call work involves a continuous employment relationship. However, the employer does not provide the employee with work on an ongoing basis, but rather has the option to call the employee in as and when needed. Some of these employment contracts indicate a maximum or minimum number of hours but can also refrain from doing so, in which case they are usually termed zero-hours or no-guaranteed-hours contracts, with no obligation at all for the employer to provide workers with any work. The development of casual work is difficult to measure as there is no common definition at Member State level. However, where data are available, these point to a trend increase in these precarious forms of work (Eurofound, 2019).

Temporary work

Although the share of temporary employment was the same in 2008 and 2018 (14%), there is significant variation across countries, and there has been a particular expansion in the use of such contracts for new entrants to the labour market (especially younger workers). The highest share of temporary workers can be found in Spain (27%) and the lowest share in the Baltic countries and Romania (less than 3%). Temporary employment is cyclical, declining during periods of economic downturn and subsequently rising again.

Overall, the length of temporary contracts is declining, making employment and career trajectories less predictable, particularly where transition rates into open-ended employment remain limited. In Spain, for example, fewer than one in six temporary contract workers moved to a permanent contract between 2015 and 2016. The share of involuntary temporary employment is high at 60%.


European labour markets are not only composed of employees; self-employment also needs to be considered when discussing the general labour market situation. According to the European Union Labour Force Survey (EU-LFS), 14% of the EU27 and UK total workforce was self-employed in 2018, and this share has been rather stable over time. Greece (29%) had the highest share of self-employed, while Denmark (8%), Germany, Estonia, Luxembourg and Sweden (all 9%) had the lowest shares. There has been a significant shift in the composition of self-employment, with a significant decline in agriculture and an increase in higher- and lower-skilled service sectors (for example, consultants and professionals, on the one hand, and household service providers, on the other). 

In addition, the share of self-employed without employees has risen, with a corresponding decline in self-employed with employees. Some workers work as self-employed in a second job. According to data from the European Working Conditions Survey (EWCS) 2015, 7% of the self-employed with employees and 9% of the self-employed without employees had another job (Eurofound, 2017a). Most of the workers with a second job (58%) had an occasional job rather than a permanent one. The EWCS 2015 does not state clearly whether this activity was carried out as a self-employed worker or as an employee (Eurofound, 2017a). 

These developments hint towards substantial heterogeneity among self-employed workers in Europe. Eurofound found five ‘clusters’ of self-employed, with considerable differences as regards their motivations, security and sustainability of activity, level of dependency and precariousness, and similar. Based on these data, it can be concluded that 25% of the self-employed can be considered precarious workers (Eurofound, 2017a). Similarly, self-employed workers are more likely to face in-work poverty than employed workers (Eurofound, 2017b).

Compound non-standard employment

Although the change between SER and atypical contractual forms has been relatively marginal over the last decade, there was an increase on what Eurofound terms ‘compound non-standard employment’ (such as combinations of different atypical forms) (Eurofound, 2020). These forms of employment are arguably more precarious. According to Olsthoorn (2014), there are three elements of precarious employment: insecure employment (for example, fixed-term contracts and temporary agency work); unsupportive rights (that is, few rights to income support when unemployed); and vulnerable employees. Eurofound (2018b) defines precarious work as ‘the intersection of these three characteristics, leading to vulnerable employees who have an insecure job and few entitlements to income support’.

This is important because individuals on non-standard contracts and the self-employed are less likely to have access to employment rights, social protection and representation. Important wage gaps remain between standard and non-standard employment, and there are also differences in terms of access to training. The risk-of-poverty rate is consequently higher among atypical workers. The most recent developments related to the COVID-19 pandemic also hint towards non-standard workers being more affected than those on standard contracts (European Commission, 2020). 

Increasing diversity of employment

Overall, there is an increasing variety of contractual types and forms of employment in the EU labour markets. Some of these forms of employment modify the relationship between employer and employee (or client and worker), while others change work organisation and work patterns (for example, as regards the place or time or work, task assignment or cooperation). They often involve locations other than the usual employer’s site and offer extensive use of information and communications technology (Eurofound, 2015b; 2018a).

Platform work is one of the new types that are increasingly gaining importance. This is mainly to be attributed to the technological advancements, the rise of self-employment, an increasing need or wish for flexibility of employers and employees, as well as some societal trends (for example, higher demand for household services due to demographic trends or for convenience services like personal transport or food delivery). It is estimated that 1.4% of the workforce (in 16 selected Member States) do platform work as their main job, while another 10% do it at various levels of intensity and frequency next to another job (Pesole et al, 2019). Motivations to enter into platform work include the wish for flexibility and autonomy but also a lack of employment alternatives. 

The COVID-19 pandemic seems to have diverging impacts on platform workers. While some platform workers have experienced a drop in work and hence income – notably those conducting tasks involving physical proximity to clients, like person transport or home maintenance – others have seen increased demand (for example, food delivery) (Ustek-Spilda et al, 2020).


The project applied a foresight methodology to derive possible future scenarios. As part of this, at least two realistic and mutually exclusive hypotheses were drafted for each of the key drivers to depict their potential future development.

Three hypotheses were identified for this driver. 

1. Recovery of the economy, labour demand dominates

EU labour markets recover from the crisis, and workers benefit from other developments related to sectoral or societal shifts. As a result, full-time and permanent employment is generally offered to the workers. Labour demand meets or even exceeds labour supply, and average labour standards improve. Workers are positive in choosing platform work and are not driven to it out of necessity.

2. Labour supply exceeds labour demand

Due to a combination of various developments (for example, economic downturn, increased automation and migration), labour supply is higher than labour demand. Therefore, the share of standard employment decreases, and EU labour markets become very flexible. The platform economy becomes an attractive employment form for a large number of workers as an alternative to unemployment and inactivity.

3. Polarisation of labour markets

The European economy and labour market develop into a situation in which certain groups (such as the highly skilled) are high in demand and benefit from improved employment and working conditions and have little need for platform work (of the worker-initiated type). On the other hand, other labour market groups (notably the low-skilled) are confronted with a lack of demand and are looking for alternative employment options like platform work (the platform-determined type) to avoid unemployment or inactivity. This hypothesis can also lead to regional differences across and within Member States.

Information sources

  • Eurofound (2015), New forms of employment, Publications Office of the European Union, Luxembourg.
  • Eurofound (2017a), Exploring self-employment in the European Union, Publications Office of the European Union, Luxembourg.
  • Eurofound (2017b), In-work poverty in the EU, Publications Office of the European Union, Luxembourg.
  • Eurofound (2018a), Overview of new forms of employment – 2018 update, Publications Office of the European Union, Luxembourg.
  • Eurofound (2018b), Work on demand: Recurrence, effects and challenges, Publications Office of the European Union, Luxembourg.
  • Eurofound (2019), Casual work: Characteristics and implications, Publications Office of the European Union, Luxembourg.
  • Eurofound (2020), Labour market change: Trends and policy approaches towards flexibilisation, Publications Office of the European Union, Luxembourg.
  • European Commission (2019), Labour market and wage developments in Europe, Directorate-General for Employment, Social Affairs and Inclusion, Brussels.
  • European Commission (2020), European economic forecast: Summer 2020, European Economy Institutional Paper 125, Publications Office of the European Union, Luxembourg.
  • Olsthoorn, M. (2014), ‘Measuring precarious employment: A proposal for two indicators of precarious employment based on set-theory and tested with Dutch labor market-data’, Social Indicators Research, Vol. 119, No. 1, pp. 421–441.
  • Pesole, A., Brancati, U. and Fernández-Macías, E. (2019), Platform workers in Europe: Evidence from the COLLEEM II survey, Publications Office of the European Union, Luxembourg.
  • Ustek-Spilda, F., Heeks, R. and Graham, M. (2020), Covid-19: Who will protect gig workers, if not platforms?, Social Europe, London.
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