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Employment and Social Developments in Europe 2014
Europe 2020 mid-term review Against this backdrop, the European Commission launched earlier this year its mid-
and new European Commission. term review of the Europe 2020 Strategy, in the first phase through a broad public con -
sultation. The results of the review will feed into discussions on the Strategy’s future
direction by the new Commission appointed in the wake of the June 2014 European
Parliament elections. This Review aims to contribute to this process by providing a
longer term analysis of employment and social trends and presenting the policy chal -
lenges, and possible ways to improve the delivery of the Europe 2020 headline targets.
The crisis had a deep impact In many countries long-term unemployment has more than doubled, especially
on people and societies… among the young. The review documents the potential ‘scarring’ effects on people
facing unemployment early in their careers, while underlining the opportunity that
the recession presents to step up investment in developing and maintaining skills in
order to contribute to a more solid and socially sustainable future growth.
Unlike in past recessions, activity rates have continued to increase, with the rise in
the participation of women and older workers, partly due to the fact that supportive
policy measures were maintained. At the same time, the crisis has increased financial
distress and debt levels among households, exacerbated poverty and social exclusion,
weakened social ties and led many families and individuals to rely on informal support.
The deterioration of the social situation for a prolonged period of time had a negative
impact on the public belief and trust in the ability of governments and institutions to
address such problems.
… while cross country differences Looking back to the experience of the crisis, different Member States showed different
in their resilience to the economic shock levels of resilience to the economic shock of the recession, which can be linked to both
can be explained by several factors. their initial institutional and policy setting, and the policies implemented during the
recession years. Here the review finds, inter alia, that the transmission of economic
shocks to employment and income was smaller in countries in which there were more
open and also less segmented labour markets; more efficient social protection sys-
tems, a greater availability and use of short-time working arrangements; a stronger
investment in lifelong learning and activation; as well as unemployment and other
social benefits that were widely available, linked to activation, and responsive to the
economic cycle, in other words policy and institutional setups focused on providing
stronger employment security over working life, rather than in a single job.
The review also finds that a number of Member States are progressively moving towards
a social investment model that helps people achieve their full potential throughout their
lifetime and supports wider labour market participation. It likewise notes that the effec -
tiveness of automatic financial stabilisers depends on their ability to provide sustained
support even in a case of a prolonged labour demand weakness, while not creating
work disincentives in times of growth. Moreover, the structure of financing arrange-
ments influences the sustainability of social expenditure in that a shift from financing
from social security contributions toward financing through general taxation may lead
to a more inclusive system, provided the benefit systems are appropriately adjusted.
Structural trends underline the need The combination effects of an ageing and declining population in the Union as against
for investment in human capital demographic growth in much of the rest of the world, and increasing global produc-
to support productivity. tion, trade and competition, highlights the need to recognise investment in human
capital as the main approach needed in order to support productivity gains and ensure
that future growth is both job-rich and inclusive. Here the review underlines the fact
that effective human capital investment requires not only the forming of the right
skills through education and training, but also the creation of policy and institutional
frameworks that help individuals to maintain, upgrade and use their skills throughout
their working lives.
Policy support to formation, Among the key elements of a supportive policy and institutional mix for the forma-
maintenance and use tion of human capital are accessible, affordable and quality early childhood care
of human capital… and education, which can help reducing the generation-to-generation transmission
of poverty and persistence of social inequalities, and support female participation in
the labour market. At the same time there is a need to reduce early school leaving,
which contributes to breaking the cycle of deprivation that leads to social exclusion,
and ensure that higher education and vocational education and training systems
respond to future needs of the labour markets.
10
Europe 2020 mid-term review Against this backdrop, the European Commission launched earlier this year its mid-
and new European Commission. term review of the Europe 2020 Strategy, in the first phase through a broad public con -
sultation. The results of the review will feed into discussions on the Strategy’s future
direction by the new Commission appointed in the wake of the June 2014 European
Parliament elections. This Review aims to contribute to this process by providing a
longer term analysis of employment and social trends and presenting the policy chal -
lenges, and possible ways to improve the delivery of the Europe 2020 headline targets.
The crisis had a deep impact In many countries long-term unemployment has more than doubled, especially
on people and societies… among the young. The review documents the potential ‘scarring’ effects on people
facing unemployment early in their careers, while underlining the opportunity that
the recession presents to step up investment in developing and maintaining skills in
order to contribute to a more solid and socially sustainable future growth.
Unlike in past recessions, activity rates have continued to increase, with the rise in
the participation of women and older workers, partly due to the fact that supportive
policy measures were maintained. At the same time, the crisis has increased financial
distress and debt levels among households, exacerbated poverty and social exclusion,
weakened social ties and led many families and individuals to rely on informal support.
The deterioration of the social situation for a prolonged period of time had a negative
impact on the public belief and trust in the ability of governments and institutions to
address such problems.
… while cross country differences Looking back to the experience of the crisis, different Member States showed different
in their resilience to the economic shock levels of resilience to the economic shock of the recession, which can be linked to both
can be explained by several factors. their initial institutional and policy setting, and the policies implemented during the
recession years. Here the review finds, inter alia, that the transmission of economic
shocks to employment and income was smaller in countries in which there were more
open and also less segmented labour markets; more efficient social protection sys-
tems, a greater availability and use of short-time working arrangements; a stronger
investment in lifelong learning and activation; as well as unemployment and other
social benefits that were widely available, linked to activation, and responsive to the
economic cycle, in other words policy and institutional setups focused on providing
stronger employment security over working life, rather than in a single job.
The review also finds that a number of Member States are progressively moving towards
a social investment model that helps people achieve their full potential throughout their
lifetime and supports wider labour market participation. It likewise notes that the effec -
tiveness of automatic financial stabilisers depends on their ability to provide sustained
support even in a case of a prolonged labour demand weakness, while not creating
work disincentives in times of growth. Moreover, the structure of financing arrange-
ments influences the sustainability of social expenditure in that a shift from financing
from social security contributions toward financing through general taxation may lead
to a more inclusive system, provided the benefit systems are appropriately adjusted.
Structural trends underline the need The combination effects of an ageing and declining population in the Union as against
for investment in human capital demographic growth in much of the rest of the world, and increasing global produc-
to support productivity. tion, trade and competition, highlights the need to recognise investment in human
capital as the main approach needed in order to support productivity gains and ensure
that future growth is both job-rich and inclusive. Here the review underlines the fact
that effective human capital investment requires not only the forming of the right
skills through education and training, but also the creation of policy and institutional
frameworks that help individuals to maintain, upgrade and use their skills throughout
their working lives.
Policy support to formation, Among the key elements of a supportive policy and institutional mix for the forma-
maintenance and use tion of human capital are accessible, affordable and quality early childhood care
of human capital… and education, which can help reducing the generation-to-generation transmission
of poverty and persistence of social inequalities, and support female participation in
the labour market. At the same time there is a need to reduce early school leaving,
which contributes to breaking the cycle of deprivation that leads to social exclusion,
and ensure that higher education and vocational education and training systems
respond to future needs of the labour markets.
10
