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- Changes in employment are unevenly distributed across the European territory.
- Most severe changes can be seen in the European periphery whereas most regions without any employment losses are located in the European core.
- Policies need to balance between long-term and short-term perspectives on employment. Besides long-term challenges to boost and keep Europe’s employment level, immediate challenges refer to a joint approach of reforms and measures to put the EU on a path of recovery by making up for the recent losses and boosting productivity.
Observations for policy
High losses in employment were observed in the European periphery while most regions without any employment losses are located in Poland, Germany, Switzerland and the Benelux countries. Even in the Nordic countries, usually showing comparatively good employment values, most regions were affected by employment losses of more than 2%. One has to consider that most regions of the Nordic countries showed higher basic values, though, so that their employment rates are still comparatively high. Yet, the map illustrates that most areas in Europe were affected by employment losses and that joint strategies to tackle this challenge are thus necessary.
Policy context
According to the Europe 2020 Strategy, Europe is faced with challenging choices. Besides long-term challenges like globalisation, ageing or the use of resources, the immediate challenge refers to a joint approach of reforms and measures to put the EU on a path of recovery by making up for the recent losses and boosting productivity. Alternatively, uncoordinated reforms might results in permanent losses in wealth and leading to high levels of unemployment and social distress. Consequently, the Flagship Initiative ‘An Agenda for new skills and jobs’ of the Europe 2020 Strategy aims at modernising the labour market in order to raise the employment levels and ensure the sustainability of EU’s social model.
The 6th Cohesion Report highlights that all less developed Member States of the EU experienced losses in employment between 2008 and 2012 but also gained productivity. Only Romania and Hungary were affected by the opposite development. In some countries, productivity growth even compensated for the losses in employment so that GVA per capita remained unchanged. In contrast, GVA per capita declined in all other Member States. While productivity remained unchanged in moderately and highly developed Member States, they were also affected by employment losses. In total, these developments resulted in a decline in GVA per capita. In order to avoid widening disparities, a main challenge thus consists in promoting both productivity and employment.
Map interpretation
Overall, Europe experienced losses in employment in most of its regions. Only a limited number of regions recorded no loss, and these are located in Poland, Germany, Benelux countries and Norway. The hardest-hit were the Iberian Peninsula, the Baltic States, Ireland, Iceland and Southeast Europe, whose regions lost between 4.5 to 24.1% of employment. Weak macroeconomic labour policies on national level might have had a considerable impact in countries where all regions drastically lost jobs, such as Spain, Portugal, Greece, and Bulgaria. In Greece, for instance, the massive loss in employment is due, to a large extent, to the unsustainable budget deficit of the national government, and not so much due to the poor economic structure of individual regions.
Differences in job losses between regions can also hint at sectorial resilience during the crisis. Most notably, the construction sector and the real estate sectors were the largest losers of jobs during this “property bubble“ crisis. Manufacturing and primary industries were considerably affected as well, while ICT, technical and scientific services registered a growth. In other words, regions whose economies are largely dependent on a certain sector (lack of economic diversification) were more affected than others. Spain, for instance, whose regional economies largely relied on construction and primary industries (agriculture), experienced large losses, while the more industrial regions in Bavaria, Hamburg region and around the Polish capital region were able to counteract the housing bubble with increases in employment in ICT and technical sectors.
Concepts and methods
According to Eurostat, employment is defined as the number of people engaged in productive activities in an economy. The concept includes both employees and the self-employed. The employment rate is the percentage of employed persons in relation to the comparable total or working-age population.
The map displays whether employment figures were rising between the peak year of the crisis, which may differ between regions, and 2012. Five classes were used to distinguish different developments. The first class is for regions without any loss in employment during the crises. The four other classes range comprise marginal loss (0.0 to -2.0%), low (-2.1 to -3.4%) and medium (-3.5 to -8.1%) loss and high loss (-8.2 to -24.1%).