Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - Employment and social policies: a framework for investing in quality
Date: 2001-06-21
Institutions: European Commission
Subjects: European social policy, anti-discriminatory measure, continuing education, employment policy, gender equality, integration into employment, occupational health, organisation of work, productivity, social dialogue

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 20.6.2001
COM(2001) 313 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL, THE EUROPEAN PARLIAMENT,
THE ECONOMIC AND SOCIAL COMMITTEE
AND THE COMMITTEE OF THE REGIONS

Employment and social policies: a framework for investing in quality

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL, THE EUROPEAN PARLIAMENT,
THE ECONOMIC AND SOCIAL COMMITTEE
AND THE COMMITTEE OF THE REGIONS

Employment and social policies: a framework for investing in quality

INTRODUCTION ................................................................................................................. 3

QUALITY IN WORK AND MODERNISING THE EUROPEAN SOCIAL MODEL ........... 5

DEFINING QUALITY IN WORK......................................................................................... 7

QUALITY IN WORK: EVIDENCE AND INDICATORS..................................................... 8

Dimension I – Characteristics of the Job Itself...................................................................... 11

Intrinsic job quality ........................................................................................................... 11

Skills, life-long learning and career development ............................................................. 11

Dimension II – The Work and Wider Labour Market Context .............................................. 11

Gender equality.................................................................................................................. 11

Health and safety at work.................................................................................................. 12

Flexibility and Security ...................................................................................................... 12

Inclusion and access to the labour market ........................................................................ 12

Work organisation and work-life balance......................................................................... 13

Social dialogue and worker involvement........................................................................... 13

Diversity and non-discrimination ...................................................................................... 13

Overall economic performance and productivity ............................................................ 14

QUALITY REVIEWS IN EMPLOYMENT AND SOCIAL POLICIES............................... 14

CONCLUSION.................................................................................................................... 16

ANNEXE I – GRAPHS ....................................................................................................... 17

ANNEX II DATA FOR QUALITY INDICATORS ............................................................. 22

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INTRODUCTION

Quality is at the heart of the European social model It is a key element
employment in a competitive and inclusive knowledge economy.

in promoting

Quality reflects the desire, not just to defend minimum standards, but to promote rising
standards and ensure a more equitable sharing of progress. It delivers results - embracing the
economy, the workplace, the home, society at large. It links the dual goals of competitiveness
and cohesion in a sustainable way, with clear economic benefits flowing from investing in
people and strong, supportive, social systems.

Social Policy Agenda

In its Social Policy Agenda, the Commission set the overall focus as the promotion of quality
as the driving force for a thriving economy, more and better jobs and an inclusive society:
'extending the notion of quality - which is already familiar to the business world - to the
whole of the economy and society [to] facilitate improving the inter-relationship between
economic and social policies'.

This Communication takes forward some of the key dimensions of the Social Policy Agenda,
and some aims of the Lisbon strategy as reinforced by Nice and Stockholm, and provides a
broad analytical basis and framework for the future.

Both the Social Policy Agenda and the Lisbon strategy emphasise the importance of ensuring
a positive, mutually reinforcing interaction between our economic, employment and social
policies. Hence, the Lisbon goal focuses on building a competitive, dynamic and cohesive
knowledge-based economy. It also set the overall goal of moving to full employment through
creating not only more but also better jobs.

Modernising the European social model and investing in people is one central part of
achieving the overall Lisbon economic and social goals. Creating active welfare states is one
element of this. As the Stockholm Council conclusions emphasised 'well designed and
functioning welfare systems should be seen as productive factors by offering security in
change. This requires continuous modernisation of the European social model on the basis of
the European Social Agenda '.

Addressing the challenge

The focus on quality in the Social Policy Agenda is a means to underpin this modernisation,
to ensure the dynamic positive complementarity of economic and social policy, and so to
the challenges of globalisation, enlargement and rapid technological, social and
meet
demographic change. The Nice Council conclusions stated that 'to meet these new challenges,
the (Social Policy) Agenda must .... place the emphasis on the promotion of quality in all
areas of social policy. Quality of training, quality in work, quality of industrial relations and
quality of social policy as a whole are essential factors if the European Union is to achieve the
goals it has set itself regarding competitiveness and full employment'.

As the Social Policy Agenda states: 'quality of work includes better jobs and more balanced
ways of combining working life with personal life. Quality of social policy implies a high
level of social protection, good social services available to all people in Europe, real
opportunities for all and the guarantee of fundamental and social rights. Good employment

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and social policies are needed to underpin productivity and to facilitate the adaptation to
change. They also will play an essential role towards the full transition to the knowledge-
based economy'. This approach is vital in the context of the enlargement of the Union: the
need for a modernised and improved social model is as important in the candidate countries as
in the existing Member States

Framework for action

This Communication provides a broad framework for addressing quality within the context of
the Social Policy Agenda, focusing here on the goal of promoting quality in work. The Nice
Council conclusions called for a greater focus on 'attaining quality in work and its importance
for growth as a significant attractive factor and as an incentive to work .... (in particular as
remuneration, gender equality, balance
regards working conditions, health and safety,
between flexibility and job security, social relations)'. The Nice European Council also
emphasised the need for wage developments to reflect productivity developments and to be
consistent with price stability.

The quality dimension was also underlined by the Stockholm conclusions: 're-gaining full
employment not only involves focusing on more jobs, but also on better jobs.... including
equal opportunities for the disabled, gender equality, good and flexible work organisation
permitting better reconciliation of working and personal life, lifelong learning, health and
safety at work, employee involvement and diversity in working life'. The conclusions went on
to call for quality of work 'to be included as a general objective in the 2002 employment
guidelines' and stated that 'the Council together with the Commission will develop indicators
on quality in work and will make quantitative indicators more accurate, to be presented in
time for the Laeken European Council'.

This Communication aims to take forward the Social Policy Agenda commitment to promote
quality in employment and social policy. In particular, it aims:

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–

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To define a clear approach to the policy goal of improving quality of work (and
to policy implementation).

To establish a coherent, broad set of indicators on quality in work to reinforce
the effectiveness and efficiency of policy in moving towards the goal of
increasing quality in work. This work will draw both on existing indicators and
will propose indicators to be further developed, which can be used within the
framework of the European Employment Strategy. Gender equality is a basic
horizontal principle in this approach.

To ensure that the goal of improving quality is fully and coherently integrated
in employment and social policy through a progressive series of quality
reviews.

By promoting higher quality objectives, and by investing in better quality policies, the
Commission aims to encourage and assist the Member States to improve the pace at which
the quality of life is improved within the Union, inside and outside of work, and to provide
appropriate aspirations for candidate countries.

the relationship between quality of work and the
The Communication first
modernisation of the European social model. It then considers how to define quality and goes

looks at

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on to consider the development of indicators of quality in work. It finally looks at applying
and using these definitions and indicators through a process of quality reviews.

QUALITY IN WORK AND MODERNISING THE EUROPEAN SOCIAL MODEL

Promoting quality in employment and social policy is a key element in reaching the goals of
building more and better jobs, creating a competitive and cohesive knowledge-based
economy, and ensuring a positive mutual interaction between economic, employment and
social policies. As such, quality can, and must, go hand in hand with improving efficiency,
especially as far as public finances and labour market incentives are concerned.

Social policies1 are not simply an outcome of good economic performance and policies but
are at the same time an input and a framework. In this context, the modernisation of the social
model means developing and adapting it
to take account of the rapidly changing new
economy and society, and to ensure the positive mutually supportive role of economic and
social policies.

Many aspects of the modernisation of the social model can be expected to impact positively
on the quality of work – including both social investments and social transfers. Hence the
pursuit of more and better employment and higher levels of economic performance cannot be
separated from the overall aims of the modernisation of the European Social model which, in
its diverse forms within the Union, has played a crucial role in helping maintain continually
rising productivity and living standards across the Union, while helping ensure that the
benefits are widely shared.

The European social model
is highly valued by the EU's citizens, and much admired by the
rest of the world, including the candidate countries. It has facilitated the adaptation to change
in the past, as it is now helping Europe make the transition to the knowledge-based economy.
It should be noted too, that citizens from candidate countries who are undergoing the difficult
process of transition, look to the European social approach as the most efficient way to build a
modern, socially inclusive, society.

At the moment, various modernisation processes are under way in order to support and
promote modernising the European social model, including the Luxembourg process on
employment, the open co-ordination processes on social exclusion and social protection, the
ongoing work on equal opportunities, and work on health and safety.

Characteristics of the European Social Model

The European social model is distinguished from others by its framework and design, and by
the nature, focus and distribution of the policies. It is not distinguished from social systems in
other countries by its levels of expenditure, but by its methods of funding. The main
differences in social spending between developed countries, notably between Europe and the
US,
is that funding is mainly public in Europe, and much more private in the US, although
part of private expenditure in the US is effectively mandatory. However, the benefits appear
to be much more evenly spread in Europe than they are in the US, where, for example, 40 per
cent of the population does not have access to primary health care, even though spending per
head is actually higher as a proportion of GDP than it is in Europe.

1 Covering expenditures on pensions, health and disabilities, family, unemployment, housing and inclusion

policies, plus education and training.

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Estimates of the real resource costs of social policies have frequently been distorted by failing
to take account of such factors as whether transfers are taxed or not, or the existence of
mandatory private spending on insurance and health. The evidence from recent detailed
analyses of social expenditures2 show that most developed economies – including most EU
Member States and the US - spend very similar amounts (around 24 per cent of GDP in net
terms) on social investments, savings and transfers (see graph 3) and something over 5 per
cent on education (see graph 6)3.

Social policies perform economic as well as social functions with employment and incomes
as the essential links between the two. Hence many social policies are in the form of social
investments - notably education and health - which directly impact on and input into the
economic system and employment. At the same time social transfers are important, not only
in reducing the incidence and costs of social exclusion, but also in facilitating adaptability and
responsiveness to change i.e. in allowing an effective combination of flexibility and security
at the workplace and in the labour market generally. Modernising the way in which the social
model delivers investments and passive support can therefore impact positively on the quality
of work.

Well designed social investments can, like other forms of investment, contribute to rising
productivity, rising living standards and growth. This is apparent at a macro-economic level
where a positive correlation between investments in education and overall economic
performance is well established4 and analytical work on the determinants of economic growth
and rising living standards generally highlight the growing importance of human resource and
knowledge investment5.

of

Basic and higher level skills are fundamental to the pursuit
quality in work, and
productivity growth especially when they embrace modern labour market needs such as the
capacity to undertake complex tasks in a flexible way in a modern work environment, not just
the ability to perform routine machine-related tasks. Recent surveys of literacy – which seek
to measure such capacities in a variety of ways - indicate substantial differences between
OECD countries, not only in overall levels of achievement, but in the degree of literacy
‘inequality’ across the population6, with ‘inequality’ in the distribution of such skills being
highly correlated with ‘inequality’ in the distribution of incomes7 – further evidence of the
close relationship between skill levels and levels of remuneration (see graph 7).

The relation between low or no skills and job prospects, low pay and poverty is important. A
shortage of highly skilled people tends to push up wages at the top end of the income scale,
while a surplus of people with few or no skills tends to push down wages at the bottom. The
result is to increase the scale of social transfers needed in order to bring low-wage household
incomes up to minimum, socially accepted, levels.

2 Net total social expenditure report, OECD 1999
3 Graphs in annexe I illustrate key points – see Conference proceedings, 'Social and labour market policies –

investing in quality, February 22/23, 2001, Europa website.

4 The Well-being of Nations – the role of human and social capital – OECD 2001
5 As reflected in the Commission contribution to the Lisbon European Council – An agenda of Economic and

Social Renewal – of 28 February 2000

6 OECD and Statistics Canada (2000). Literacy in the Information Age. Final report of the International Adult

Literacy Survey.

7 The distribution of incomes is much wider in the US than in the EU, but there is evidence of a recent widening
in several EU countries – Social Policy and Economic Performance, The Hague, 2000; forthcoming
OECD Employment Outlook, 2001.

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Despite the above evidence, and despite continued widespread popular public support for
Europe’s social systems, the benefits of Europe's high quality social policies and their
relationship to quality in work are often taken for granted, or under-valued. In general there is
a tendency to forget or overlook the ‘counter-factual’ alternative - the cost of not having such
social policies in place. There is also a tendency to under-estimate the need for increased
short-term social support and investment in times of rapid social, economic and industrial
change, in order to avoid 'wastage' and under-use of human resource capacities – underlining,
again, the potential benefits of the modernisation of social policies.

DEFINING QUALITY IN WORK

Quality in work – better jobs – means not only looking at, or taking account of, the existence
of paid employment but also looking at the characteristics of that employment. It is a relative
and a multi-dimensional concept. In its broadest definition, it involves taking into account:

–

–

–

–

the objective characteristics related to employment, both the wider work
environment and the specific characteristics of the job;

worker characteristics - the characteristics the employee brings to the job;

the match between worker characteristics and job requirements;

and the subjective evaluation (job satisfaction) of these characteristics by the
individual worker.

Hence, a broad approach to quality in work implies not only pay and minimum standards but
rising standards generally. This encompasses both the characteristics of individual jobs and
the characteristics of the wider work environment including how the labour market works as a
whole - particularly with respect to movement between jobs, and in and out of the labour
market. Given its relative and multidimensional nature, there can be no one single measure or
index of employment quality. Moreover, the importance attached to different dimensions will
vary according to circumstances and aspirations.

There is no standard or agreed definition of quality in work in the academic and expert
literature. Given the lack of a single composite measure, most studies adopt and suggest
various key dimensions of job quality. These frequently include a focus on both the specific
characteristics of the job (e.g. pay, hours of work, skill requirements, job content) and on
aspects of the wider work environment (e.g. working conditions, training, career prospects,
health insurance coverage etc)8. Some studies focus entirely on subjective job satisfaction as
summary measures of the overall job quality as perceived by the worker9.

Both national and EU policies do already take account of elements of the quality of work. But
the goals of the Social Policy Agenda and of the Lisbon Strategy indicate the need to look for
a more coherent approach and to obtain more consensus on the main elements of quality in
work. This can then allow a coherent assessment of the extent to which both national and EU

8 Clark (1998), Measures of job satisfaction, What makes a good job? Evidence from OECD countries, OECD,

Paris.
Leontaridi and Sloane (2000), Measuring the quality of jobs: Promotion aspects, career and job
satisfaction, Centre for European Labour Market Research, University of Aberdeen.

9 Hamermesh (1999), The changing distribution of job satisfaction, National Bureau of Economic Research.

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policies focus on, and contribute to, achieving quality goals together with an assessment of
the economic and social impact of achieving different aspects of the quality goals.

It is proposed, in order to: provide a framework of analysis of quality in work, identify clear
policy objectives and standards, and develop appropriate indicators to measure performance
against those objectives, that the main elements of quality in work can be grouped under two
broad dimensions:

job satisfaction,
Job characteristics: objective and intrinsic characteristics,
remuneration, non-pay rewards, working time, skills and training and prospects for career
advancement, job content, match between jobs characteristics and worker characteristics;

including:

The work and wider labour market context: gender equality, health and safety, flexibility
and security, access to jobs, work-life balance, social dialogue and worker involvement,
diversity and non-discrimination.

While some of these elements can be quite precisely assessed, others are more complex to
evaluate. Moreover it is difficult to weight or balance the importance of the two dimensions
and the elements within them. However, opinion survey evidence suggests that both
dimensions are important. What this categorisation does allow is a coherent framework and
approach. It is one that implies the use of a wide range of policy instruments and the
participation of a wide range of actors in the development of a consensus on this framework.

The promotion of quality in work, the goal of better jobs, is not simply about aiming to
increase positively all the above elements. It is about increasing quality in order to meet our
intermediate and ultimate economic and social objectives. Thus, increasing quality in work by
increasing skills and/or by increasing job satisfaction may increase productivity. Increasing
quality by providing a better work-life balance, and by increasing the attractiveness of work,
may contribute to increasing the overall employment rate and the employment rate of women
and older workers. Increasing quality may contribute to increasing employability and
it may facilitate organisational change and increase access. In this way,
adaptability,
increasing quality in work can form part of a virtuous circle of increasing productivity, rising
living standards and sustainable economic growth.

QUALITY IN WORK: EVIDENCE AND INDICATORS

Measuring quality

Taking account of quality does not mean neglecting, or discounting, existing more
conventional, methods of measuring success. Conventional economic statistics – such as
productivity per hour or income per head – are widely used to measure economic and social
outcomes and relative performance, as reflected in the Community's structural indicators.

However, concern about quality implies extending the range of elements taken into account –
generally seeking to quantify, where possible, the more qualitative elements.

Although real, practical, difficulties remain, progress is being made. For example, it is now
possible to modify national income accounting frameworks to some extent to take account of
externality costs and benefits, notably in relation to sustainable development and the
environment, and it is also possible to take better account of quality changes in products and
services in order to improve the measurement of productivity.

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Progress in improving quality in work

Recent years have shown a positive labour market performance not only in quantitative terms
but also in qualitative ones, as analysis of labour force and household survey data shows10.

Improvements in the quality of the European labour supply have been met to a large extent by
an increasing demand for high-quality jobs characterised by high educational and skill
requirements,
relative job security, better work-life balance, access to training and
possibilities of career development, high productivity and relatively high pay.

Fears that trends of increasing employment in the service sector would lead to a proliferation
of dead-end jobs of bad quality have not materialised. As in the case of the US, there is
evidence for the creation of both high and low skill jobs11,with 'non-standard' forms of
employment, such as part-time work or fixed-term contract work, seeming to be - in many,
but not all, cases - the outcome of individual choices12.

Concerns about job quality and social exclusion persist, however. The increasing importance
of new and flexible employment patterns may conflict with some of the main dimensions of
job quality like job security, possibilities of further training and career prospects. The
challenge is to combine flexibility with security in ways that benefit workers and companies
alike. Appropriate training, lifelong learning and investment in human resources are central
here. New forms of work can, where chosen voluntarily by workers, also offer positive and
welcome flexibility in meeting individual and family needs and interests. However, in terms
of working conditions in the workplace, notably health and safety, there is room for further
improvement. While the overall risk to health and safety at work has declined in recent years,
new risks and pressures related to changing forms of employment and ever tighter rhythms of
work have emerged 13.

Concerns about job quality are strongly related to concerns about labour market segmentation
and social exclusion. While paid employment is the best safeguard against poverty and social
exclusion, there is a close link between the level of job quality and social exclusion. Persons
employed in jobs which combine low or no skills, with temporary or precarious work and lack
of career development opportunities, are also at much higher risk of becoming unemployed or
of dropping out of the labour force. Together with the ongoing loss of
low-skilled, low-
productivity jobs, this points to increasing difficulties of integrating individuals with low
skills into the labour market at all.

A majority of Europeans report high levels of satisfaction with their work activity status in
general, although almost one quarter of the European workforce considers itself to be in jobs
of low quality. However, there is significant upward and downward mobility on the job
quality ladder with, on average, one third of all persons employed in jobs of poor quality
changing to a better job from one year to the next, although almost one in four also becomes
unemployed or leaves the labour force.

10 Employment in Europe 2001 forthcoming, Low-wage and high –wage employment, earnings, mobility and job

quality report. LoWER Network 2001

11 See successive recent (annual) Economic Reports of the President (US), Employment

in Europe, and

forthcoming Employment in Europe 2001 and forthcoming OECD, Employment Outlook, 2001

12 Employment in Europe report 2001forthcoming
13 European Survey on Working Conditions (1990, 1995, 2000)

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On the other hand, new technology appears to have contributed to making jobs intrinsically
that
more interesting and satisfying with greater autonomy, and there is some evidence
women are beginning to achieve better access to more highly qualified jobs with, for
example, similar levels of participation in appropriate training14.

Quality in work indicators

Various elements of quality are already included in the European Employment Strategy and a
number of indicators that could be used to measure quality exist already. To address quality in
work in a full, coherent and structured manner, however, it is necessary to establish an
appropriate set of indicators within a framework based on consensus on our quality in work
goals. This involves bringing together existing indicators with some indicators to be (further)
developed. This will allow an assessment of the current degree of success in meeting policy
objectives with respect to quality and of how, and whether, policy needs to change or develop.

The Commission therefore proposes a set of indicators covering 10 main elements of quality
within two broad dimensions – the characteristics of the job itself; and the work and wider
labour market context.

The role of the indicators is to allow an assessment of how successful Member States and EU
policies are at reaching quality in work goals across these 10 areas. As the overall aim is to
provide a more coherent approach to incorporating quality in employment and social policies
through existing instruments and processes, this section also sets out, with the indicators, the
most likely existing policy instruments for addressing the quality goals. This will ensure a
structured, systematic approach to policy objectives, instruments and indicators.

While some of the indicators already exist – as both structural indicators and as existing
employment guideline indicators – others need to be developed from existing data sources
(see annex).The Commission underlines the importance of avoiding interpreting indicators in
a simplistic way15 and of relating indicators clearly to policy objectives and standards, and to
policy instruments.

Outside of these measures, however, macro-economic data remains important since the
continuous upgrading of quality in work contributes to Europe's economic performance,
productivity and dynamism. It is therefore reflected in the quality of goods and services
produced within the Union. Hence improvements in quality in work will be measured
alongside increases in numbers of people in employment,
though conventional national
income accounting as part of increases in GDP.

This reflects the positive, dynamic, inter-relationship between economic, employment and
social policies – the Social Policy Agenda 'triangle'.

In all cases, a gender breakdown should be a standard feature of indicators as well as a
regional breakdown where appropriate, and especially in relation to inclusion and access to
the labour market, and to overall economic performance and productivity.

14 Eurobarometer data, 1996 and European Community Household Panel data.
15 Structural indicators, Commission 2000 (594 final) para. 8

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Dimension I – Characteristics of the Job Itself

Intrinsic job quality

Key policy objectives and standards: To aim to ensure that jobs are intrinsically satisfying,
compatible with persons' skills and abilities, and provide appropriate levels of income.

Main instruments: EU and Member State economic and social policies generally; Broad
Economic Policy Guidelines; Employment Guidelines; social partners.

Possible indicators:

• Job satisfaction among workers, taking account of job characteristics, contract type and

hours worked, and level of qualification relative to job requirement

• Proportion of workers advancing to higher paid employment over time

• Low wage earners, working poor and the distribution of incomes

Skills, life-long learning and career development

Key policy objectives and standards: to help people develop their potential abilities to the full
through appropriate support for life-long learning.

Main instruments: education and life-long learning,
recognition of qualifications.

legal framework,

including mutual

Possible indicators:

• Proportion of workers with medium and high levels of education

• Proportion of workers undertaking training or other forms of life-long learning

• Proportion of workers with basic or higher levels of digital literacy

Dimension II – The Work and Wider Labour Market Context

Gender equality

Key policy objectives and standards: To promote equality of opportunity between women and
men in respect of equivalent value jobs, and in terms of life-time careers

Main instruments: EES, legislation, social partners, ESF, action programmes

Possible indicators:

• Gender pay gap, appropriately adjusted for such factors as sector, occupation and age

• Gender segregation – extent to which women and men are over or under-represented in

different professions and sectors.

• Proportion of women and men with different levels of responsibility within professions and

sectors, taking account of factors such as age and education

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Health and safety at work

Key policy objectives and standards; To ensure that working conditions are safe, healthy and
supportive – in both physical and psychological terms

Main instruments: new health and safety strategy, including legislation backed by monitoring
and benchmarking, social partners.

Possible indicators:

• Composite indicators of accidents at work – fatal and serious – including costs

• Rates of occupational disease, including new risks e.g. repetitive strain

• Stress levels and other difficulties concerning working relationships

Flexibility and Security

Key policy objectives and standards: To encourage positive attitudes to change at
the
workplace and in the labour market generally and ensure there is appropriate support for those
who lose their jobs or are seeking alternative. And to encourage full use of abilities and
flexible career choices through appropriate support
for occupational and geographical
mobility, including within the new European labour markets.

Main instruments: open method of co-ordination,
transferability of supplementary pension rights, information and agency support.

taxation,

legislation, social partners;

Possible indicators:

The effective coverage of social protection systems – in terms of breadth of eligibility and
level of support – for those in work, or seeking work.

• Proportion of workers with flexible working arrangements – as seen by employers and

workers

• Job losses – proportion of workers losing their job through redundancies, and proportion of

those finding alternative employment in a given period.

• Proportion of workers changing the geographical location of their work.

Inclusion and access to the labour market

Key policy objectives and standards : To increase access to and inclusion in labour markets,
that is : the extent to which it is easy to enter and stay in the labour market, to re-join it after
periods of absence, or use it to find alternative employment

Main instruments: European Employment Strategy (EES), Public Employment Services at EU
level, European Social Fund (ESF), Communication on Corporate Social Responsibility as
well as work on local development

Possible indicators:

• Effective transition of young people to active life

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• Employment and long-term unemployment rates by age, educational level, region

• Labour market bottlenecks and mobility between sectors and occupations

Work organisation and work-life balance

Key policy objectives and standards: To aim to ensure that working arrangements, especially
concerning working time,
together with support services, allow an appropriate balance
between working life and life outside work.

Main instruments: social partners, legislation, EES.

Possible indicators:

• Proportion of workers with flexible working arrangements

• Opportunities for maternity and parental leave, and take-up rates

• Scale of child-care facilities for pre-school and primary school age group

Social dialogue and worker involvement

Key policy objectives and standards: to aim to ensure that all workers are informed about and
involved in the development of their companies and their working life.

Main instruments: social partners co-operation, legislation.

Possible indicators

• Coverage of collective agreements and number of EU-wide companies with EU works

councils with employee representatives

• Proportion of workers with a financial interest/participation in the firms where they are

employed

• Working days lost in industrial disputes

Diversity and non-discrimination

Key policy objectives and standards; To ensure that all workers are treated equally without
discrimination in terms of age, disability, ethnic origin, religion, sexual orientation

Main instruments; EES, social partners, action programmes, ESF (Equal)

Possible indicators:

• Employment rates and pay gaps of older workers compared with average

• Employment rates and pay gaps of persons with disabilities, and persons from ethnic

minorities, compared with average

• Information on the existence of labour market complaints procedures, and of successful

outcomes

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Overall economic performance and productivity

Key policy objectives and standards: to achieve high levels of labour productivity and high
living standards across all regions of the Community.

Key instruments: economic policy and structural policies

Possible indicators

• Average hourly productivity per worker

• Average annual output per worker

• Average annual living standards per head of population – taking account of the rate of

employment and the dependency ratio

The main sources of data from Eurostat are harmonised or standardised across Member
States.

• The European Labour Force Survey

• The European Community Household Panel

• Other ad hoc surveys on health and safety, working conditions, etc.

including

Eurobarometer surveys.

In some cases, the indicators outlined above are already used within existing processes in the
same, or similar, format although, in some other cases, the exact choice of statistics is still
open, and some recourse to national data will be necessary (see annex on detailed data
sources). The development of these indicators should take account of the need to avoid
imposing additional administrative or financial burdens on Member States, notably applicant
countries.

QUALITY REVIEWS IN EMPLOYMENT AND SOCIAL POLICIES

Quality goals, instruments and indicators are already, to some extent and in various ways,
incorporated in the European Employment Strategy. This is most notable in relation to the
employment guidelines. Promoting employability of individuals (pillar 1 of the guidelines) is
about
improving the prospects of finding a job and upgrading skills, while promoting
adaptability (pillar 3) focuses on the modernisation of work organisation through a process of
dialogue between the social partners and the government. Moreover the promotion of equal
opportunities ('tackling gender gaps') had been one of the key dimensions (pillar 4) from the
start of the Luxembourg process.

Strengthening the quality dimension does not imply any new processes, or even a radically
new approach to policy, at European level. What it does require, however, is a broader, and
deeper, policy development encompassing, not only the effectiveness of individual policy
instruments in achieving their goals, but the coherence, in each policy area, between policy
goals, the instruments that are available, and the indicators used to judge success in achieving
the overall policy objectives.

14

In order to continue to improve policy performance within the employment and social policies
fields, there is a need to address a series of basic questions :

– Is the mix of policies right across the full range of employment and social policies?

– Are all policies coherent with one another?

– Are resources allocated correctly across different policy areas?

– Are resources used as efficiently as possible within each policy area?

– Are issues being addressed at an appropriate level – the governance issue?

Such a systematic, cost-benefit, approach to employment and social policies will help focus
the policy debate in these areas more clearly by better measuring the costs and consequences
of different policy challenges – for example to addressing the problems of low pay and
inclusion, or to ensuring gender equality in a rapidly changing economic, social and
demographic environment – and by identifying better ways of strengthening policy co-
operation between various departments of government at all levels, and between governments
and other interested parties.

What
the current analysis of quality in work dimensions and indicators allows is the
establishment of an overall framework and toolset with which to undertake a full and coherent
review of the focus on quality in employment policy. This will also meet the Stockholm
objective of including the maintenance and improvement of the quality of work as a general
aim in the 2002 employment guidelines. This approach, encompassing quality goals,
instruments and indicators, provides a general means of pursuing the central focus of the
Social Policy Agenda on quality in all areas of employment and social policy.

Hence, the Commission intends to pursue these concerns through a series of 'Quality reviews'
which would be progressively undertaken, with appropriate pilot experiments, across the
range of social policy areas addressed in the Social Policy Agenda, while taking due account
of similar exercises in respect of related EU reform initiatives – notably the internal market,
the quality of public finances and the economy – and to incorporate its conclusions in its
inputs to the existing Europe-wide modernisation processes.

This work will help the Union pursue its goals of competitiveness and cohesion within a
framework of sustainable development and good governance, taking particular account of the
local and regional dimension – where the overall quality of life, and real differences between
areas, are most visible.

All appropriate policy tools need to be considered. This includes the identification of good
practice, benchmarking,
legislation, social partner agreements, NGO contributions, and
specific incentives. In this way the quality reviews – covering the coherence between policy
objectives and standards, indicators, and instruments – will play a valuable role in helping
define and implement the wide range of actions laid down in the Social Policy Agenda.

In support of this work, the Commission intends to encourage, and co-ordinate, further wide-
ranging research on the measurement of quality factors in the employment and social field,
paying particular attention to the dynamic benefits of a positive inter-action between social,
economic and employment policies.

15

'quality approach' will ensure that all

Such a horizontal
interested parties – notably
governments and public authorities at all levels, but also social partners and NGOs – can play
an active role, and be fully involved, in the development of this work. This should be a crucial
dimension of new and improved governance in the European Union.

Taking the work forward

The Commission's proposed Quality in Work Indicators will form the basis for discussion and
debate with the European Parliament, the Council and the Economic and Social Committee
and the Committee of the Regions, as well as with the social partners, NGOs and other
interested parties, in order that the Commission can finalise its presentation of indicators on
quality in work as part of its input to the Laeken European Council.

The Commission will include maintaining and improving the quality of work in the draft
employment guidelines for 2002, on the basis of the framework analysis of quality presented
in this Communication.

to the review of the quality dimensions in social policies generally,

the
With respect
Commission will
incorporate its findings into its inputs to the various modernisation
processes in place at the European level – including the Luxembourg process on employment,
the open method of co-ordination on social protection,
the on-going work on equal
opportunities, the work on health and safety.

CONCLUSION

In the context of the new economic and social agenda in Europe, with the emphasis on more
and better jobs, and on the modernisation of the European social model, the Commission:

•

proposes a framework for promoting the goal of improving quality in work, in particular
through the establishment of a coherent and broad set of indicators on quality in work
which can be used in order to strengthen the coherence between quality in work objectives
and policy instruments within the context of the European employment strategy.

• aims to ensure that the goal of improving quality is fully and coherently integrated in
employment and social policy through a progressive series of quality reviews for which the
Commission will present initiatives at the appropriate time.

The Commission intends to ensure that work on quality indicators in the employment and
social domain will continue to be developed and taken forward in the future, drawing fully on
the capacities of the European agencies working in these fields, and in co-operation with the
other institutions.

16

ANNEXE I – GRAPHS

Social and Labour Market Policies: Investing in Quality

Quality
-thelinkbetween-
CompetitivenessandCohesion

Social
socialquality-socialcohesion

Economic

Employment

competitiveness- dynamism

fullemployment-qualityofwork

Graph 1

Em plo ym en t & S o cia l Affa irs

Europ ean Co mmis s ion

667

Costs of strikes and accidents

Working days lost annually
30

m

25

20

15

10

5

0

Average annual
days lost in
1990s

Only >3 days.
Assumes 5 days
average
absence

Assumes loss
of half average
40 year working
life.

Strikes

Accidents

Death

Graph 2

Em plo ym en t & S o cia l Affa irs

Europ ean Co mmis s ion

634

17

Net social spending in Europe and the US

Net total social expenditure
(incl. ‘mandatory’ private expenditure)

Gross public social expenditure

40

%

35

30

25

20

15

10

5

0

D

SW

UK

NL

US

DK

IT

1995data:OECDcalculationsmadein1999-allfiguresexpressedaspercentageofGDP

Graph 3

Em plo ym en t & S o cia l Affa irs

Europ ean Co mmis s ion

637

18

Social transfers and unemployment

Social transfers

Unemployment rate

12

%

10

e
t
a
r

t
n
e
m
y
o
p
m
e
n
U

l

8

6

4

2

0

20

%

S
o
c
i
a
l

t
r
a
n
s
f
e
r
s
(

%
G
D
P

)

18

16

14

12

10

70

75

80

85

90

95

2000

1970-1999

Graph 4

Em plo ym en t & S o cia l Affa irs

Europ ean Co mmis s ion

Source:Eurostat

640

Impact of social transfers

s
r
e
f
s
n
a
r
t
al
ci
o
s
r
e
h
t
o
e
r
o
f
e
b
)
s
n
o
i
s
n
e
p
g
n
di
u
cl
n
i
(
s
e
m
o
c
n
I

36

%

34

32

30

28

26

24

22

20

Ireland

United Kingdom

Belgium

France

Portugal

Austria

Spain

Denmark

Luxembourg

EU13

Germany

The Netherlands

Greece

Italy

0

5

10

15

20

25

30

%

Afterallsocialtransfers

Percentageofpopulationwithincomes(includingpensions) 60%, orbelow,thenationalaverage

Em plo ym en t & S o cia l Affa irs

Graph 5

Europ ean Co mmis s ion

Source:Eurostat

639

19

Public expenditure on Education

9

%

8

7

6

5

4

3

2

1

0

EU average

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

TotalpublicexpenditureoneducationaspercentageofGDP1997

Graph 6

Em plo ym en t & S o cia l Affa irs

Source:Eurostat-UEO(Unesco,OECDandEurostat)

Europ ean Co mmis s ion

850

Literacy and income inequality

USA

IRL

UK

AUS

BE

CAN

CH

NOR

NL

DE

SWE

FIN

DK

1.20

1.30

1.40

1.50

1.60

1.70

1.80

1.90

2.00

LiteracyInequality-verbal,written,numerical

36

34

32

30

28

26

24

22

20

t
n
ie
ic
f
f
e
o
c
i
n
i
G
-
y
t
i
l
a
u
q
e
n
I
e
m
o
c
n
I

Source:InternationalAdultLiteracySurvey,1994-1998;OECD,TrendsinIncomeDistribution&PovertyinOECDArea1999

Em plo ym en t & S o cia l Affa irs

Graph 7

Europ ean Co mmis s ion

672

20

Poverty rates in jobless and working households

Jobless Households (Working age)

Working Households (Working age)

60

50

40

30

20

10

0

EU15

A

B

DK

D

GR

E

F

IRL

IT

L

NL

P

UK

Source:EurostatCommunityHouseholdsPanel-1996

Graph 8

Em plo ym en t & S o cia l Affa irs

Europ ean Co mmis s ion

687

21

ANNEX II DATA FOR QUALITY INDICATORS

DIMENSION

SPECIFIC STATISTICAL SERIES

SOURCE, PERIODICITY, STATUS

1. Intrinsic job quality

•

Job satisfaction among workers, taking account of
job characteristics, contract type and hours worked,
and level of qualification relative to job requirement

- Satisfaction with type of work in present job (PE033)

- European Community Household Panel, but only for 1994-97

- Skills need for current job given by a formal training or education (PE021)

- European Community Household Panel, but only for 1994-97

- Skills or qualifications to do a more demanding job than the current one
(overqualified)(PE016)

- European Community Household Panel, but only for 1994-97

• Proportion of workers advancing to higher paid

- Current monthly wage net (PI 211M)

- European Community Household Panel, but only for 1994-97

employment over time

•

Low wage
distribution of income

earners, working poor,

and the

- Proportion of employees earning less than 60% of median income16

- European Community Household Panel, but only for 1994-97

- Is the household able to make ends meet (HF002)

- European Community Household Panel, but only for 1994-97

- Income distribution as measured by S80/SS20 income quantile ratio

- European Community Household Panel, but only for 1994-97

2. Skills, life-long learning and career development

• Proportion of workers with medium and high levels

of education

- Persons in employment with Medium and High educational attainment level
(ISCED) as a percentage of their employed population

– Community Labour Force Survey, yearly

• Proportion of workers undertaking training or other

forms of life-long learning

- Participation rate in education and training' as defined by the percentage of
population participating in education and training by sex, age groups (25-34,
35-44, and 45-64 years old) and working status employed, unemployed,
inactive)

- Percentage of population aged 25-64 participating in education and training,

- Community Labour Force Survey, yearly, approved by the
EMCO Indicators Group

- Community Labour Force Survey, yearly, used in both the
Synthesis and the Joint Employment Report

16 To be developed in line with Eurostat definitions and usage in the Synthesis Report.

22

by sex

- Percentage of workforce participating in job-related training, by sex. Some
doubts about the notion of workforce

• Proportion of workers with basic or higher levels of

- currently not entirely available

digital literacy

3. Gender equality

- Ad Hoc Module on Continuing Vocational Training in
Enterprises, last 1993, next Autumn 2001, proposed by DG
EMPL

OECD data, national data, Eurobarometer surveys. To be
further developed

• Gender pay gap, appropriately adjusted for such

factors as sector, occupation and age

- Ratio of women's hourly earnings index to men's for paid employees at work
15+hours by job content and education

- European Community Household Panel, but only for 1994-97,
used as indicator in the Joint Employment Report

• Gender segregation – extent to which women and
men are over or under-represented in different
professions and sectors.

- The average national share of employment for women and men applied to
employment in each sector/occupation. The differences are added and put in
relation to total employment to obtain a figure of gender imbalance

- Community Labour Force Survey, yearly, NACE/ISCO
classifications, used as indicator in the Joint Employment
Report

•

Proportion of women and men with different levels
of responsibility within professions and sectors,
taking account of factors such as age and education

- Employment of women and men, by level of responsibility within firms and
by sector (adjustment for age and education)

- Community Labour Force Survey, yearly

- European Community Household Panel, but only for 1994-97

- Job status (supervisory,
industry (PE010)

intermediate, non-supervisory) by occupation or

4. Health and safety at work

•

Composite indicators of accidents at work – fatal
and serious – including costs

- The incidence rate, defined as the number of accidents at work per 100 000
persons in employment, by sex, calculated as: [number of accidents (fatal or
non-fatal) / number of employed persons in the studied population] x 100 000.
(HSW1)

- Total and mean number of days lost due to accidents at work, by sex (HSW2)

- Occupational diseases, by sex

- European Statistics on Accidents at Work (ESAW), yearly;
Commission proposes to use HSW1.

- LFS,
Occupational Diseases; Commission proposes to use HSW2.

'Ad Hoc' Module on Accidents at Work and

- LFS,
Occupational Diseases, due mid 2001.

'Ad Hoc' Module on Accidents at Work and

• Rates of occupational disease, including new risks

- Health problems related to making repetitive movements (Table 1)

- EIRO Foundation, to be developed yearly

e.g. repetitive strain

- Working at very high speed and its effects on health (Table 5.4)

- EIRO Foundation, to be developed yearly

•

levels and other difficulties concerning

Stress
working relationships

- Working to tight deadlines and its effects on health (Table 5.5)

- EIRO Foundation, to be developed yearly

23

5. Flexibility and security

•

•

•

•

The effective coverage of social protection systems
– in terms of breadth of eligibility and level of
support – for those in work, or seeking work

- Coverage of employed by social insurance, as measured by the total net
social/social insurance receipts in the year prior to the interview (as part of
income) (PI 130)

- European Community Household Panel, but only for 1994-97

Proportion of workers with flexible working
arrangements – as seen by employers and workers

- Satisfaction with working time in present job (PE035)

– European Community Household Panel, but only for 1994-97

Job losses – proportion of workers losing their job
those
through redundancies, and proportion of
finding alternative employment in a given period.

- Type of employment contract, by categories: permanent, fixed-term or short-
term, casual work with no contract, some other working arrangement (PE024)

– European Community Household Panel, but only for 1994-97

– European Community Household Panel, but only for 1994-97

- Full-time/part-time (PE005C)

- Reason for stopping in previous job (PJ004)

– European Community Household Panel, but only for 1994-97

- Main reason for leaving last job or business (Col. 71)

- Community Labour Force Survey, yearly

Proportion of workers changing the geographical
location of their work.

- Data available through Eurostat but in need of analysis and presentation

National Data
administrative sources

assembled

by Eurostat

from National

6. Inclusion and access to the labour market

•

•

Effective transition of young people to active life

- Activity rate 15-24 as % of population of 15-24

- Youth unemployment ratio: unemployed aged 15-24 as a percentage of the
population aged 15-24.

- Community Labour Force Survey, yearly, approved by
EMCO Ad-hoc group and used in JER.

- Community Labour Force Survey, yearly, approved by
EMCO Ad-hoc group and used in JER.

Employment and long-term unemployment rates by
age, educational level, region

- Employment rate by main age-group (15-24, 25-54, 55-64, 15-64) and
educational attainment levels (ISCED High, Medium and Low).

- Community Labour Force Survey, yearly

- Total long-term unemployment rate

- EUROSTAT harmonised series, yearly, used in the Synthesis
Report

24

•

Labour market bottlenecks and mobility between
sectors and occupations

- None currently available

- Occupation on current and previous job (PE006, PJ007))

- Sector of current and previous job (PE007, PJ008)

-To be developed. National data available for some countries.
Eurostat Vacancy Survey to be launched in 2002.

- On mobility: work in progress in Eurostat

7. Work organisation and work-life balance

•

•

•

Proportion of workers with flexible working
arrangements

- Share of employees with flexible working arrangements (flexible hours,
annualised hours contract, on-call work) in total employees, by sex (WT2)

- LFS 'Ad Hoc' Module on Working Time; Commission
proposes to use WT2

- Number of employees working involuntary part-time as a % of total number
of employees

- Community Labour Force Survey, yearly

Opportunities for maternity and parental leave, and
take-up rates

- Employed men and women on parental
proportion of all employed parents. Allocation of parental
employed men and women as a proportion of all parental leave.

leave (paid and unpaid) as a
leave between

- Various national sources,
French Presidency

indicator developed during the

Scale of child-care facilities for pre-school and
primary school age groups

- Children cared for (other than by the family) as a proportion of all children in
the same age group. Broken down by before non-compulsory pre-school
system, in non-compulsory or equivalent pre-school system, and compulsory
primary education.

- Various national sources,
French Presidency

indicator developed during the

8. Social dialogue and worker involvement

•

•

Coverage of collective agreements

- None currently available.

- ETUC, NAPs, Structure of Earnings Survey, to be further
developed.

of workers with

Proportion
financial
interest/participation in the firms where they are
employed

a

- Percentage of business units with more than 200 employees in each country
using financial participation schemes

- Dublin Foundation's Study on financial participation in
Europe. To be further developed.

• Working days lost in industrial disputes

- N° of working days lost (1000)

- Eurostat, Population and Social Conditions, Statistics on
Industrial Disputes

•

9. Diversity and non-discrimination

25

•

•

•

•

•

•

•

Employment rates and pay gaps of older workers
compared with average

- Total monthly wages net (PI 211M)

- Could be constructed by using for employment rates the
Community Labour Force Survey (yearly) and for pay gaps the
European Community Household Panel (for 1994-97)

Employment rates and pay gaps of persons with
disabilities, and persons from ethnic minorities –
compared with average

- None currently available but some employment data available concerning
non-nationals.

- To be developed. Not available in the Community Labour
Force Survey; national data.

Information on the existence of
complaints procedures, and of successful outcomes

labour market

- None currently available.

- To be developed; national data.

10. Overall work performance

Average hourly productivity per worker

- Average productivity per hour worked, calculated as the GDP divided by the
total number of hours worked during the year

- OECD

Average annual output per worker

- Annual labour productivity, calculated as GDP per person employed

- Eurostat; AMECO data base (DG ECFIN), twice a year

Average annual
population – taking account of
employment and the dependency ratio

living standards per head of
rate of

the

- GDP per head of population in purchasing power parities

- EUROSTAT, yearly or AMECO data base (DG ECFIN),
twice a year

- Economic dependency ratio, calculated as not employed aged 15+ as a
percentage of total employment

- EUROSTAT, yearly

26