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KE BD 15 001 EN N .pdf



Original filename: KE-BD-15-001-EN-N.pdf
Title: Employment and Social Developments in Europe 2015
Author: European Commission - Directorate-General for Employment

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ISSN 2315-2540

Employment and
Social Developments
in Europe 2015
Social Europe

Employment and
Social Developments
in Europe 2015

European Commission
Directorate-General for Employment, Social Affairs and Inclusion
Directorate A
Manuscript completed in December 2015

This publication is a Commission staff working document aimed to inform the public at large. It does not constitute an official position of the Commission on this subject nor in any way prejudges one. Neither the European
Commission nor any person acting on behalf of the Commission may be held responsible for the use that may be
made of the information contained in this publication.
ACKNOWLEDGEMENTS
The Directorate-General for Employment, Social Affairs and Inclusion would like to thank Eurostat and Eurofound
for their close collaboration and support in preparing the review.
Comments from other services of the European Commission are gratefully acknowledged.
Comments on the review would be gratefully received and should be sent to:
Directorate A
Directorate-General for Employment, Social Affairs and Inclusion
Office J-27 03/092
B-1049 Brussels
E-mail: EMPL-A4-UNIT@ec.europa.eu
Cover illustration: Alexandre Mitraros — © European Union
For any use or reproduction of photos which are not under European Union copyright, permission must be sought
directly from the copyright holder(s).

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More information on the European Union is available on the Internet (http://europa.eu).
Luxembourg: Publications Office of the European Union, 2016
ISBN 978-92-79-50128-9 (print)
ISBN 978-92-79-50127-2 (web)
ISSN 1977-270X (print)
ISSN 2315-2540 (web)
doi:10.2767/950897 (print)
doi:10.2767/42590 (web)
© European Union, 2016
Reproduction is authorised provided the source is acknowledged.
Printed in Italy
Printed on elemental chlorine-free bleached paper (ECF)

Foreword
The Employment and Social Developments Review presents evidence and analysis that will help policy
­makers identify challenges, set priorities and develop the most appropriate policy responses. This year’s
edition confirms that in many parts of the European Union, we still have a long way to go; the 2008 financial
crisis has taken a heavy toll on our economies and social fabric but we are now turning a corner.
There are some signs that the employment and social situation in the EU is slowly improving. Unemployment is
falling, and employment is rising, especially in those countries that were hit hardest by the crisis. After a slight
decrease in 2013, following three consecutive years on the rise, the proportion of persons at risk of poverty
or social exclusion in the EU in 2014 remains broadly stable. While these are first signs of a much needed
convergence in Member States’ employment and social performance restarting, discrepancies remain large.
Furthermore, we need to translate the more favourable macro-economic environment into more and better opportunities for people in
the EU. This is particularly the case for the 11 million long-term unemployed and the 4.6 million unemployed young people in the EU,
whose number is only now starting to go down. The Council adopted in December 2015 a recommendation on long-term unemployment
which represents a strong commitment by the Member States to offer better pathways into employment and out of poverty.
To build upon this nascent growth, Europe needs to invest more in the skills of people, facilitate mobility, modernise labour law and social
protection systems to be fit-for-purpose in the 21st century, as well as foster entrepreneurship and innovation. This is a broad reform
agenda, to which the Commission intends to make a significant contribution. Indeed, the Commission work programme 2016 foresees a
pillar of social rights, a new skills agenda, a fresh start to support working parents and people with care responsibilities, a labour mobility
package and proposals for a better management of migration, including their successful social integration.
This Review provides much of the evidence that will underpin our work on these ambitious initiatives. In addition, it highlights the important
role of social dialogue in tackling these challenges and achieving a well-functioning social market economy.
I hope that this edition of the Employment and Social Developments Review will prove a valuable tool for policy makers, social partners,
civil society, researchers and citizens and that it will enhance the quality of the public debate on employment and social issues in Europe.

Marianne Thyssen
Commissioner for Employment,
Social Affairs, Skills and Labour Mobility
3

Contents
Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Key Features. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2. Economic recovery is firming up, but growth remains moderate and in need
of higher investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3. Labour markets are gradually recovering but substantial differences remain
and a stronger economic recovery is needed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1. Employment levels and rates continue to increase following the 2013 recovery but are uneven
across Member States and population groups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2. Unemployment continues to decrease, albeit slowly, remaining high and close to historical highs
in a number of countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.3. Long-term unemployment and very long-term unemployment now make up a large
share of unemployment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4. Youth unemployment remains high but young people are slowly becoming more engaged
in either employment or in education and training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5. The average number of hours worked is now increasing but it is still below the pre-crisis levels. . . . . . . . . . . .
3.6. Nominal unit labour costs, which increased in some Member States before the crisis, are now declining. . . . .
3.7. Cumulative labour productivity growth varies substantially across the EU and has decreased
in recent years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20
24
25
27
28
29
30

4. Boosting knowledge-based capital and skills is key to responding to demographic
ageing, technology development, globalisation and the greening of the economy. . 31
4.1. EU investment in knowledge-based capital lags behind world competitors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.2. Investment in skills is crucial to reducing unemployment and increasing EU competitiveness . . . . . . . . . . . . . . 31

5. Intra-EU mobility contributed to labour market adjustments during
the crisis but remains limited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

5

EMPLOYMENT AND SOCIAL DEVELOPMENTS IN EUROPE 2015

6. Household disposable income is increasing gradually, but poverty and exclusion
remain high, fuelled by unequal opportunities and rising market inequality. . . . . . . . . 33
6.1. Poverty and exclusion reduction will depend on the quantity and quality of jobs and who benefits. . . . . . . . . . 33
6.2. Unequal opportunities and rising market inequalities put a strain on welfare systems, especially
in the countries hit hardest by the crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

7. Social protection systems in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.1. Social protection expenditure grew more strongly in 2014 in most EU countries, after the slow growth
in 2013 and the 2010-2012 decline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

8. The economic crisis impacted on social dialogue practices in different ways
across the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Part I – Promoting Job Creation
Chapter I.1 – Boosting job creation through self-employment
and entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2. Entrepreneurship and self-employment create jobs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.1. Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

3. Ensuring the right framework conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.1. Towards a more entrepreneurial culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2. Improving access to finance and capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.3. Well-designed taxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.4. Stronger social protection arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.5. Strengthening business development services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.6. Cost-effective access to product markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.7. Less red tape and more red carpet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8. Ensuring macro-economic stability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.9. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

49
49
51
52
52
53
54
54
54

4. Gearing labour market and social policies to boost self-employment
and entrepreneurship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.1. Smarter use of ICT as an enabler of entrepreneurship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.2. Supporting business exploitation of spin-offs and networking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
4.3. Greening small businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.4. Innovating through social enterprises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.5. Giving a second chance after (honest) failure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.6. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

5. Targeting under-represented groups. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.1. Supporting start-ups by the unemployed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2. Tackling the gender deficit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3. Helping young people into self-employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4. Encouraging self-employment transitions prior to retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.5. Promoting self-employment among ethnic minorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.6. Promoting self-employment among disadvantaged and disabled people . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.7. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58
59
59
60
60
61
61

6. Labour market and social policies to foster job creation through
self-employment and entrepreneurship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.1. Labour market and social characteristics affecting start-up survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.2. Shaping drivers of additional job creation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.3. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

7. Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

6

Contents

Chapter I.2 – Labour legislation in support of job creation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
2. Labour legislation: scope and purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
2.1.
2.2.
2.3.
2.4.
2.5.
2.6.

Labour law and fields of application. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Alternative ways of regulating labour market interactions: the role of collective agreements. . . . . . . . . . . . . . .77
A brief history of labour law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
Why does labour law exist? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Differences across Member States. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Labour regulation and legislation at EU level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

3. Contractual relationships and segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
3.1.
3.2.
3.3.
3.4.

What is a contract and what is an employment/labour contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Types of contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The potential drivers of new forms of employment and respective contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract segmentation: recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84
84
86
87

4. Employment Protection Legislation (EPL). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
4.1.
4.2.
4.3.
4.4.

Definition and rationale for EPL and challenges identified. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Measuring EPL across Member States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent developments in EPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EPL in a broader context: other labour market institutions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90
91
94
96

5. The role of civil justice and other litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
5.1.
5.2.
5.3.
5.4.

The efficiency of civil justice and the enforcement of EPL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
EPL and employment litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Civil justice efficiency and perceived EPL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Impact of EPL on job finding and separation rates: the effectiveness of the judicial system . . . . . . . . . . . . . . 100

6. Health and safety at work – how it can support better jobs,
productivity and growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
6.1.
6.2.
6.3.
6.4.

Implementation of the EU Strategic Framework on Health and Safety at Work 2014-2020. . . . . . . . . . . . . . .
Ex-post evaluation of 24 EU health and safety at work directives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Addressing the ageing of the EU workforce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Protection of workers from the risks related to chemicals: new term of office of the Scientific
Committee on Occupational Exposure Limits (SCOEL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102
102
103
103

7. Summary and conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Annex 1: Overview of EU labour law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Annex 2: Employment Protection Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Annex 3: World Bank ‘Doing Business’ indicators of labour market regulation. . . . . . . . . . . 115
Annex 4: World Bank Doing Business indicators on contract enforcement. . . . . . . . . . . . . . . . 121
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

7


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