EurWORK European Observatory of Working Life

Employment rate

Definition

The employment rate is the percentage of employed persons in relation to the comparable total population. While the unemployment rate takes into account only people actively looking for a job, the reference for the employment rate is all the people of a certain age (normally aged between 15 and 64 years), including those who are not able to work or are not looking for employment.

Background and status

One major EU policy objective in recent decades has been to combat unemployment and raise the employment rate, as set out in the European Employment Strategy (launched in 1997). Since then, higher targets for overall employment – and, in particular, higher labour force participation among women and elderly people – have been the main objectives of EU policy. Increasing the employment rate of the active population has become an important focus, as it helps to counterbalance the effects of demographic change, which in turn has a positive impact on the sustainability of pension systems.

At the Lisbon European Council (March 2000), the EU set a new strategic goal for the next decade, designed to restore the conditions for full employment and to strengthen cohesion. The aim of these measures was to raise the overall EU employment rate to 70% and to increase the number of women in employment to more than 60%.

The Stockholm European Council (March 2001) added two intermediate targets and one additional one: the employment rate should be raised to 67% overall by 2005, 57% for women by 2005 and 50% for older workers by 2010. The Barcelona Council (March 2002) confirmed that full employment was the overarching goal of the EU and called for a reinforced employment strategy to underpin the Lisbon Strategy in an enlarged EU.

Building on its experience and in tandem with the mid-term review of the Lisbon Strategy, the Commission launched a new social agenda for the period 2006–2010, which included full employment as one of its two priorities. In its Europe 2020 strategy (2010–2020), the European Commission increased the target for the employment rate of the population aged 20–64 years from 69% (which was achieved in 2009) to 75% in 2020, prioritising the increased participation of women and older workers and the better integration of migrants in the workforce.

The employment rate of the population aged 20–64 years became one of the 35 indicators included in the Social Scoreboard, which was published by the European Commission to monitor the implementation of the European Pillar of Social Rights in the framework of the European Semester. The Scoreboard was used for the first time to help inform and deepen the analysis in the 2018 Joint Employment Report and the indicators were used to back up the analysis of the 2018 country reports.

Commentary

The EU employment rate reached 70.2% in 2008 following a constant increase since 2002, when it was 66.8%. The 2008 global financial crisis stopped its progression and, in 2009, it fell under 70% to 68.9%. The employment rate did not pass the 70% threshold again until 2015. Since then, the employment rate again increased at a constant rate, reaching its highest point in 2018, at 73.1%. However, due to the falling rate in the aftermath of the crisis, the 2020 target of 75% will not be reached.

Nevertheless, this average masks large differences between countries. In 2018, 14 EU Member States had a rate equal to 75% or above: the three Nordic Member States (Sweden, Denmark and Finland) and the three Baltic Member States (Estonia, Lithuania and Latvia), as well as Czechia, Germany, the Netherlands, the United Kingdom, Austria, Portugal, Slovenia and Malta. At the other end of the scale, the employment rate was far below the EU target (below 70%), in six Member States: Romania, Belgium, Spain, Croatia and Italy, with Greece recording the lowest rate (59.5%).

Related dictionary terms

Access to employment employability European Employment Strategy European Semester labour force participation Lisbon Strategy Social Scoreboard women in the labour market work–life balance.

 

Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.

 

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