Commission employment report reviews active labour market policies

In October 2005, the European Commission published its annual employment report, which reviews recent developments in the labour markets of the enlarged EU, concentrating in particular on the results of active labour market policies.

On 19 October 2005, the European Commission published the 17th edition of its annual Employment in Europe report. The report reviews the achievements of the European Employment Strategy, examining developments in the context of the strategy’s three main objectives: full-employment; quality and productivity at work; and strengthening social cohesion and inclusion.

The report also presents recent data on earnings differentials and analyses earnings distribution in the EU as well as examining the inactive population and where measures to increase participation could most effectively be targeted.

The report states that although economic growth alone does not increase employment, the right mix of employment and active labour market policies is critical to increasing employment rates. In 2004, the EU’s employment rate doubled to 0.6%, while its unemployment rate stabilised at around 9%.

Most specifically, it looks at active labour market policies. This type of policy concentrates on encouraging people to return to the labour force and includes elements such as lifelong learning, investing in skills and training, and personal career coaching. The report stresses that Member States that have invested in active labour market policies have experienced shorter periods of unemployment, a more rapid filling of vacancies, higher and better targeted expenditure on training and pay that is more responsive to market conditions. Additionally, they have seen an increase in flexible working arrangements, such as part-time or fixed-term employment. The report states that successful active labour market policies, including youth placement and vocational training, have been effective in the Netherlands, Denmark, Ireland, Sweden and Belgium, where expenditure on such measures has increased and is better targeted towards those in need.

Nevertheless, it notes that progress across the EU has varied widely, particularly between old and new Member States, and also within countries.

In terms of specific labour market performance statistics, the report found that:

  • between 1995 and 2004, the sharpest falls in structural unemployment rates in the EU15 were in the UK (3%), and in Greece, Spain, France, Italy and Finland (2%).This contributed to a moderate overall reduction of the unemployment rate within the EU15;
  • between 1997 and 2004, the rate of unemployment in the new Member States increased by more than 5.5%. The increases in Lithuania, Poland and Slovakia were higher than 8.5%;
  • between 1997 and 2004, the sharpest falls in long-term unemployment - of more than two percentage points - were in Spain, Ireland, Italy, Latvia, Hungary and Finland;
  • comparing the mid-1980s with 2004, reforms have helped make labour markets more efficient, especially in Denmark, Spain, Ireland, the Netherlands Hungary and the UK; and
  • since 1997, the sharpest falls in the number of low-income workers have been in France, Ireland, Italy, Hungary, Finland and Sweden.

Overall, in 2004, some 92 million people in the EU were inactive and 19 million were unemployed. Of the former group, the findings show that at least 14% (or 13 million people) were willing and able to work.

Vladimir Spidla, the European Commissioner for Employment, Social Affairs and Equal Opportunities, welcomed the positive findings in the report but also acknowledged that they highlight the employment challenges facing the EU, and he called on Member States to keep up the momentum: 'These figures show active labour policy has a direct positive effect on employment on the ground. Member States now must keep up the momentum'. He also pointed out that even though employment growth in the EU had doubled, reaching 0.6%, it was still lagging behind the US rate of 1.1%.

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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