Draft Joint Employment Report 2001 [SEC (2001) 1398]
Date: 2001-09-12
Institutions: European Commission
Subjects: EU employment policy, equal treatment, integration into employment, member country, report

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12.9.2001
COM(2001) 438 final

Draft

Joint Employment Report 2001

(Presented by the Commission)

{ SEC (2001) 1398 }

INTRODUCTION

Title VIII of the Treaty establishing the European Community lays down the principles and
procedures towards developing a co-ordinated strategy for employment. Article 128
specifically details the steps leading to the formulation of such a strategy including, on an
annual basis, guidelines for employment, recommendations to the Member States and a joint
report by the Council and the Commission to the European Council on the employment
situation in the Community and on the implementation of the guidelines. Each Member State
is to provide the Council and the Commission with an annual report on the principal measures
taken to implement its employment policy in the light of the guidelines for employment. The
European Employment Strategy which has been developed according to the above
institutional framework is a major contribution to the wider political agenda defined for the
European Union at the Lisbon Summit in Spring 2000, and since confirmed by the Nice and
Stockholm European Councils.

The present Joint Employment Report provides an overview of the employment situation and
a political assessment of the progress made by Member States in the implementation of the
2001 Employment Guidelines1, and highlights the remaining challenges for the Member
States.

It contains both an analysis of progress across the EU under the major agreed objectives and
guidelines, and a brief country by country review. Key common indicators underpin the
analysis and are summarised in the annexes.

A more detailed analysis of recent developments under each guideline and for each Member
State is provided in a supporting document of the Commission services2.

Both reports underpin the other two elements of the Employment Package, which are the
Recommendations and the Employment Guidelines for 20023.

1

2

3

Council Decision on Guidelines for Member States' employment policies for the year 2001 (2001/63/EC); OJECL 22 of
22.01.2001.
SEC (2001) 1398.
COM (2001) 512 final and COM (2001) 511 final.

2

TABLE OF CONTENTS

INTRODUCTION ................................................................................................................. 2

Executive Summary ............................................................................................................... 5

1.

2.

2.1.

The political and economic context........................................................................... 9

Implementation of the 2001 Employment Guidelines and Recommendations:
Assessment of performances and policies across the European Union..................... 12

The overall policy framework: reflecting the horizontal objectives of the 2001
Guidelines .............................................................................................................. 13

2.2.

Assessment of the progress made under the four Pillars of the 2001 Guidelines...... 19

2.2.1.

Employability......................................................................................................... 19

2.2.2.

Entrepreneurship .................................................................................................... 27

2.2.3. Adaptability............................................................................................................ 33

2.2.4.

Equal opportunities................................................................................................. 36

3.

Implementation of the 2001 Employment Guidelines and Recommendations:
Assessment of performances and policies per Member State................................... 42

BELGIUM........................................................................................................................... 42

DENMARK ......................................................................................................................... 45

GERMANY ......................................................................................................................... 48

GREECE ............................................................................................................................. 51

SPAIN ............................................................................................................................... 54

FRANCE ............................................................................................................................. 57

IRELAND............................................................................................................................ 60

ITALY ............................................................................................................................... 63

LUXEMBOURG ................................................................................................................. 66

THE NETHERLANDS ........................................................................................................ 69

3

AUSTRIA............................................................................................................................ 72

PORTUGAL........................................................................................................................ 75

FINLAND............................................................................................................................ 78

SWEDEN ............................................................................................................................ 81

UNITED KINGDOM........................................................................................................... 84

4.

The way forward .................................................................................................... 87

Annex 1: Overview of the 2000 key indicators..................................................................... 92

Annex 2: Overview of the common agreed indicators on prevention and activation

for 2000.................................................................................................................. 98

4

EXECUTIVE SUMMARY

The European Employment Strategy is a major contribution to the wider political agenda
defined for the European Union at the Lisbon Summit in Spring 2000, and since confirmed by
the Nice and Stockholm European Councils. In line with the general economic performance,
the employment performance in the European Union was exceptional in 2000. GDP growth of
3.3% and labour productivity growth of 1.6% were accompanied by the creation of 3 million
new jobs and a reduction in unemployment to 8.3%, a level close to that prevailing in the
early 1990s. At the same time, the results of structural reforms of European labour markets
are becoming apparent in particular with respect to the increasing employment intensity of
growth, stronger job creation in high-tech and knowledge intensive sectors - reflecting the
move to a knowledge-based economy - and a strong inflow of women into the labour market.
Important structural weaknesses remain, however, especially with respect to the still high
unemployment levels, in particular amongst young people, significant remaining gender gaps
and the low employment rate of older workers. Although progress is being achieved towards
the Lisbon and Stockholm employment
is clear that structural reforms and
targets,
macroeconomic policies agreed under the Broad Economic Policy Guidelines (BEPGs) need
to be pursued, in particular in view of a less supportive economic and employment outlook.

it

The improving quality of the National Action Plans on employment and the involvement of an
increasing number of partners in their preparation and follow-up reflects the continuing
momentum created by the European Employment Strategy.

Despite this encouraging progress the horizontal objectives introduced in the 2001 Guidelines
have not yet all been fully integrated into national employment strategies. Few Members
States present a global approach as to how they intend to contribute to the attainment of the
Lisbon and Stockholm employment targets and only those already closest to or above the
European targets set national objectives in this respect. The objective of raising quality is
taken up mainly in relation to labour supply, while quality in work is only considered in a
limited way4. Clear progress has been achieved in terms of developing lifelong learning,
which is now an established policy priority throughout the European Union. Comprehensive
lifelong learning strategies are now in place in about half of the Member States, but such
strategies remain at an early stage of implementation. In addition, in the majority of Member
States there is insufficient evidence of co-ordination and synergy between the competent
Ministries. Also few Member States set targets for increases in human resource investment or
participation in further learning. In relation to the elaboration of NAPs the partnerships

4

The relevant aspects of quality in work are spelled out in Commission Communication COM(2001)313, 20.06.2001.

5

between public authorities and social partners has developed. However,
contributions of the social partners is difficult
information.

the specific
to identify given the lack of available

the Employability Pillar,

The move towards a knowledge-based society – which underpins the whole Lisbon strategy –
is reflected in many respects in the NAPs, especially in relation to lifelong learning issues and
entrepreneurship. With respect to the four pillars of the Employment Strategy, the policy mix5
remains tilted in favour of actions under
followed by the
Entrepreneurship Pillar. Actions under the Adaptability and Equal Opportunity Pillars remain
relatively weak. The regional and local dimension of the strategy is more strongly reflected
but regional disparities remain a serious problem in several Member States. Significant
progress has been achieved with respect to the definition of common indicators, but a more
effective and streamlined use is now called for. In the framework of the Employability Pillar,
Member States are generally pursuing and consolidating their efforts with regard to the
prevention of long-term unemployment. With regard to the target that at least 20% of the
unemployed should benefit from active labour market measures, only one Member State does
not comply. The on-going modernisation of the Public Employment Services supports both
the preventive approach and more tailor-made measures in favour of the re-integration of the
long-term unemployed. More attention is paid to lifelong learning, with stronger coverage of
adult learning than initial education. The development of basic skills raises widespread
concern. The common e-learning targets in terms of school internet coverage and teacher
training in information and communication technology (ICT) seem generally within reach.
Different policy responses - with the main emphasis on occupational mobility - are given by
Member States to labour and skills shortages, which are still largely limited to certain
occupations/sectors, except also for a small number of Member States which experienced
general recruitment difficulties in 2000.

On the other hand, serious doubts remain as to the capacity of five Member States to comply
with the 2002 target for full implementation of the preventive approach as defined in the
Guidelines giving a new start to all young and adult unemployed before they drift into long-
term unemployment. Monitoring of the effectiveness of active measures is generally
inadequate. Progress in reforming benefit systems and incentives structures appears often
insufficient to promote participation and the interaction between tax and benefit systems
requires more attention. A comprehensive approach towards active ageing policies is lacking
in most Member States and measures taken remain limited in their scope and impact. The
NAPs fail to give a full picture of measures taken to promote the integration of disadvantaged
groups into the labour market and to promote social inclusion. Only half of the Member

5

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

6

States set national targets to increase the employment levels of disabled people and only
Denmark and the Netherlands set targets for ethnic minorities. Further efforts in all these
respects would be necessary in order to contribute to the quality of public policy and to sound
public finances.

Under the Entrepreneurship Pillar, Member States put a strong emphasis on simplifying the
regulatory and administrative environment for business creation and development. New
information technologies are widely used to reduce burdens for enterprises especially in the
start-up phase. The fight against undeclared work is stepped up by several Member States.
The territorial dimension of the European Employment Strategy has developed considerably,
with stronger local partnerships, including Local and Regional Action Plans for Employment.
The social economy seems to be developing more rapidly since 1999, although its potential
could still be better utilized. Many Member States are making progress in delivering more
employment-friendly tax systems. Progress in reducing the tax burden on labour is relatively
slow overall, but more substantial in respect of low-paid/low-skilled labour.

The reluctance of Member States to simplify rules for hiring new staff remains an impediment
to job creation which is not outweighed by efforts presented in the plans to ease social
security or tax provisions. With the main focus on simplifying the business environment, not
enough emphasis seems to be put on creating an entrepreneurial culture, which would require
a more comprehensive and strategic approach covering several interrelated policy actions.

In the context of the Adaptability Pillar, many initiatives have been taken in relation to
working time issues and flexible forms of work both by public authorities and by the social
partners. More attention has been given, and some innovative actions taken, with respect to
health and safety at work. The social partners have been involved in a number of initiatives
and agreements in relation to training and lifelong learning but an assessment of impact is
missing.

Other aspects related to work organisation and to quality in work have received little
attention. Partnership between Governments and the social partners has generally improved,
but little is known about actions by the social partners to the implementation of measures
related to work organisation, especially as they have not
taken up the opportunity of
autonomous reporting offered by the Guidelines. Little response from the social partners was
for example found in the NAPs on the target to give every worker the opportunity to achieve
information society literacy by 2003.

As part of actions under the Equal Opportunities Pillar, progress can be noted on gender
mainstreaming in terms of co-operation mechanisms and gender impact assessment. The issue
of reducing gender segregation has been addressed in several Member States and there are

7

some good examples of innovative approaches to diminish the gender pay gap. Moreover,
many interesting initiatives to reconcile family and professional life have been reported.

However, a comprehensive approach on mainstreaming is lacking in most Member States and
most of them fail to set national targets for female participation in employment, in line with
the Lisbon conclusions. Measures to reduce the persistently high gender pay gaps are limited
and there are hardly any new initiatives to promote women in decision making. Childcare
services remain insufficient in many Member States and there is no clear approach yet to the
issue of care for the elderly or other dependants. In all, it appears that many Member States
have taken a "wait and see" attitude to initiatives they have taken under earlier guidelines.

The above assessment of employment performances and of progress achieved in
implementing the 2001 Guidelines in combination with a less favourable economic outlook,
shows that structural labour market reforms should be pursued without complacency. In
particular, an appropriate policy mix based on all four Pillars of the strategy should be defined
with a view to increasing employment rates. Actions should better take into account the
objective of promoting quality in work as a factor of promoting participation on the labour
market as well as increased competitiveness. More forceful policies are needed to address
gender gaps in the labour market, and in particular the gender pay gap. The potential of older
workers should be better exploited with more comprehensive approaches to prevent early
withdrawal from the labour market.

Investing in human resources remains an utmost priority in the move to a knowledge-based
to tackle the emerging labour and skills shortages. The
economy and in particular
contribution of the Employment Strategy to the fight against social exclusion need to be
defined more clearly. Regional disparities need to be addressed and fuller use should be made
of the Structural Funds, especially the European Social Fund, to support the Employment
Strategy. Finally, the contribution of social partners, which is an essential condition for the
success of the strategy, needs to be better integrated in the process and better evaluated. The
work on developing and using precise and comparable indicators must continue. This
concerns particularly indicators capable of catching the quality and effectiveness of policies.

8

1.

THE POLITICAL AND ECONOMIC CONTEXT

The European Employment Strategy is part of a wider political agenda defined by the Lisbon
European Council in Spring 2000. In Lisbon, the objective was set of making the European
Union the most dynamic and competitive knowledge-based economy of the world, capable of
sustainable economic growth together with more and better jobs and a greater social cohesion.
The objective of achieving an employment rate as close as possible to 70% overall and
exceeding 60% for women on average in the EU by 2010 was agreed. A global strategy was
defined, aiming at preparing the transition to a knowledge-based economy, modernising the
European social model and sustaining a healthy economic outlook and favourable growth
prospects. The Göteborg European Council completed the above political commitment with a
sustainable development strategy and added the environmental dimension to the Lisbon
strategy, recognising the link between environment, economic growth and employment.

Confirming the Union and the Member States' commitment to the goal of full employment,
the Stockholm European Council in March 2001 set intermediary employment targets of 67%
overall and 57% for women by 2005, as well as a target of 50% employment for older
workers (aged 55 to 64)by 2010.

Good employment performances…

The year 2000 saw the strongest employment growth for ten years, with 3 million new jobs
created. The employment rate thus increased from 62.3% in 1999 to 63.3% in 2000, bringing
the EU closer to the Lisbon target.

For the third year in a row, more full time jobs than part-time jobs were created in 2000. Full
time jobs accounted for almost 70% of the net jobs created, up from 60% in 1999 and 54% in
1998.

The unemployment rate came down from 9.1% to 8.2% in 2000 and the number of
unemployed people fell by 1.5 million - the largest decrease for a decade - bringing down the
total number of unemployed people to 14.2 million. Long-term unemployment decreased even
faster than overall unemployment, reaching 3.6%.

9

…associated with a favourable economic context overall in 2000

Recent developments with respect to the employment performance in the EU have to be seen
against the background of improved economic performance overall in 2000. In its fourth year
of recovery, the EU experienced the most favourable economic situation for many years. GDP
growth reached 3.3%. Growth rates ranged between 10.7% (Ireland) and 2.9% (Denmark and
Italy). Public finances continued to improve in most Member states. Only inflation developed
negatively and rose by 2.1% compared to 1.2% in 1999.

A number of uncertainties for economic developments in the near future

However, GDP growth is forecast to slow down in 2001 and 2002, and the EU economy will
not offer the same supportive environment for improvements on the employment front.

Signs of structural changes on European labour markets

Beyond the past overall improvements in employment performances, a closer analysis reveals
the structural changes which European labour markets are undergoing.

A striking feature of recent developments is the parallel increase in employment and labour
productivity. Labour productivity grew at 1.6% in 2000. For some Member States, by contrast
to the 1980s,
there is evidence in the last decade that a high productivity growth is
accompanied by high employment growth. This may reflect spillover effects from the recent
strong job creation in high technology and knowledge-intensive sectors of the economy.
Indeed, the pattern of job creation clearly reflects the move towards a knowledge-based
economy. High-tech and knowledge-intensive sectors drove job creation, contributing to more
than 60% of total job creation between 1995 and 2000. This benefited not only highly skilled
workers, but also low and medium-skilled people employed in these sectors.

More than 1.6 million of the new jobs were taken by women, whose employment rate grew
from 52.8% in 1999 to 54% in 2000.

Remaining structural weaknesses

Improvements on the EU labour market have however not eliminated important remaining
structural weaknesses.

First, the unemployment level remains high, twice that in the US for example. The high
unemployment of young people, in particular, remains a feature of the EU, representing
16.3% of active young people - or 7.8% of all young people aged 15 to 24.

The low employment rate of older people is a serious concern, with an EU average of 37.7%
for people aged 55 to 64, a long way from the Stockholm target.

Finally,
occupational segregation.

important gender gaps remain in terms of employment, unemployment and

10

Graph 1: Overview of employment and unemployment performance in the European
Union, 1996 and 2000

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
60.1
63.3
36.2
37.7
50.2
54.0
1.7
3.3

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Female Employment rate

Unemployment Indicators

Unemployment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
10.8
8.2
5.2
3.7
10.2
7.8
12.4
9.7

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

Section 3 presents the diamonds per Member State.

11

2.

IMPLEMENTATION
AND
RECOMMENDATIONS: ASSESSMENT OF PERFORMANCES AND POLICIES ACROSS THE
EUROPEAN UNION

EMPLOYMENT GUIDELINES

2001

THE

OF

The 2001 Guidelines had been substantially modified compared to the previous sets of
Guidelines, as a result both of the mid-term evaluation performed in 2000 and of the new
policy agenda decided by the Lisbon Summit. A number of horizontal objectives underlying
the overall Employment Strategy were spelt out. In addition, some new Guidelines were
added and existing Guidelines modified to emphasise certain priorities,
for example
bottlenecks in the labour market, discrimination, undeclared work, the common target for
workers' ICT literacy by 2003 and national targets for increased employment of women and
care facilities.

The 2001 National Actions Plans for Employment (NAPs) provide a much clearer and more
coherent presentation of Member States' employment policies than in previous years. This
seems to reflect not only the continued commitment of Member States to the European co-
ordination of national employment policies, but also the strengthening of the preparation
process at national level. The elaboration of the NAPs involves an ever increasing number of
actors at different levels – national, regional or local – and of different origins – different
Ministries but also social partners – in a strong partnership approach. This trend is a positive
factor for the better integration of employment policies with other related policies.

A close examination of the NAPs reveals a move in the right direction in many areas covered
by the Guidelines. This can be seen in graph 1, where the EU as a whole is moving towards
union benchmarks across all key indicators highlighted. Yet,
the desired strength and
coherence of approaches often appears to be lacking in many vital areas such as - for example
– actions with a view to raise the employment rates, accompanying the move to a knowledge-
based society, promoting active ageing and equal opportunities, or reforming the tax-benefit
systems. The stepping up of these efforts appear even more vital now that the global economy
is faced with more uncertainties than in the year 2000.

The move towards a knowledge-based society – which underpins the whole Lisbon strategy –
is reflected in many respects in the NAPs. This is especially so in relation to lifelong learning
issues – where special emphasis is put on e-skills and e-learning – and to entrepreneurship –
where ICT is used as a means to simplify the business environment. However, a clear
presentation of how national information society strategies contribute to the Luxembourg
process is not often made.

12

2.1.

The overall policy framework: reflecting the horizontal objectives of the 2001
Guidelines

The new horizontal objectives featuring in the 2001 Guidelines set
the overall policy
framework for implementation of the European Employment Strategy, reflecting the Lisbon
Summit's ambition of achieving full employment in a knowledge-based society.

Member States make diverse responses to Objective A in terms of how to maximise
employment rates in view of the Lisbon targets of an overall rate of 70% and a female
employment rate of 60% by 2010. Assessment of progress should also take into account the
intermediary targets set at the Stockholm European Council of Spring 2001 for employment
rates of 57% for women and 67% overall by 2005 and 50% for the 55-64 years old in 20106

The facts on employment rates (see table 1)
• The overall employment rate in the EU increased in 2000 to 63.3% and for women to 54%. As in
1999, the gains in employment rates reached 1% overall and 1.2% for women. The best performing
countries, with employment rates above 70% were, as in the previous year, Denmark, Sweden, the
Netherlands and the UK. Spain, Greece and Italy were at the lower end of the scale (each around
55%).

• Employment rates have increased across all age groups in 2000, reaching 40.3% in the 15-24 age
group, 76.6% in the 25-54 age group and 37.7% in the 55-64 age group. While differences across
Member States are narrowing in the prime-age group, differences for the young and older workers
persist or are increasing. The low employment rates for young people reflect an increase in the
proportion of young people in further or higher education, but the low employment rates for older
workers give more cause for concern.

6

For older workers see section 2.2.1.

13

Table 1: Employment rate targets

MEMBER
STATES

EMPLOYMENT RATES IN
2000

NATIONAL TARGETS IN
NAPS 2001

COMMENTS

OVERALL

WOMEN

OVERALL

WOMEN

Austria

68.3

Belgium

Denmark

France

Finland

Germany

Greece

Italy

Ireland

60.5

76.3

62.2

67.5

65.4

55.6

53.5

65.1

Luxembourg

62.9

Netherlands

73.2

59.4

51.5

71.6

55.3

64.4

57.9

40.9

No

No7

Yes

No

No

No

Overall and women's rates close to EU
target.

Both rates exceed EU targets. National
target of further 1.3% increase in
overall rate by 2010

Yes (62.8)

Yes (55.8)

National targets only for 2001

Yes (70)

No

Both rates close to or exceed EU
targets. National target for overall rate,
mid-term, 2005

No

Yes (61.5)

39.6

Yes

54.0

50.3

63.7

No

No

No

National target for overall rate, mid-
term, 2005

National targets for overall rate: 58.5%
in 2005 and 61.3% in 20108

No

No

No

No

No

Yes (65)

Both rates exceed EU targets. National
target for women refers to participation
rate, 2010

Portugal

68.3

60.3

No

Yes

Spain

Sweden9

55.0

73.0

40.3

71.0

No

Yes (80)

No

No

United
Kingdom

71.2

64.6

Yes (75)

Yes (70)

Both rates close to or exceed EU target.
National target for women: reduce
gender gap by 25% by 2003

Both rates exceed EU targets. National
target for overall rate refers to ages 20-
64 by 2004

Both rates exceed EU targets. National
target for women refers to lone parents
only

7

8

9

Belgium subscribes to the Lisbon targets without making explicit commitments for national targets apart from the remark that to
reach such targets it would require current employment rates to grow by 1 percentage point per year.
Based on complement to NAP, June 2001.
The national target of 80% for the age group 20-64 is comparable with about 76% for the group 15-64 years old.

14

Few Member States present an overall approach on how to contribute to these overall targets.
While the Guidelines invite Member States to consider setting national employment targets,
those Member States which set fairly ambitious longer-term targets10, such as Denmark,
Sweden, the Netherlands and the UK, already have employment rates in excess of the Lisbon
targets. Other Member States either do not set targets (though in some cases referring or
subscribing to the Lisbon targets) or set less specific, less ambitious or shorter-term targets.

The parallel objective of better quality jobs also set out in Objective A is reflected as a cross-
cutting concern in a number of NAPs (Portugal, Belgium, Denmark, Ireland and France) or is
referred to under particular Guidelines. A common focus is on improving the labour supply,
with links to lifelong learning, preventive/active labour market policies and the fight against
undeclared work. In contrast, although a few initiatives are cited, the issue of quality of
employment itself is not developed in detail.

Under Objective B and in response to relevant Recommendations made last year to some two-
thirds of Member States, progress has been made on lifelong learning with significantly
higher profile being given to the issues in the 2001 NAPs. However, in general, there is a lack
of evidence of co-ordination between the relevant Ministries.The enclosed table shows that
half the Member States now have comprehensive and coherent strategies (Denmark, the
Netherlands, Finland, Sweden, the UK, France and Germany, with the latter two being in the
process of refining some final stage elements). Table 2 gives broad criteria for such strategies
as well as 'state of play' assessments of each Member State. In terms of comprehensiveness,
Member States tend to cover the formal education and training sectors best, sometimes
integrating recognition of non-formal learning. But
if Member States are to succeed in
mobilising more non-learners, better promotion and exploitation of non-formal learning,
including in the workplace, is needed, as well as concrete measures for disadvantaged groups
including individual funding schemes. More
and greater attention to investment
attention should also be given to measures such as advice and guidance services and cross-
sectoral learning pathways which improve the overall coherence of available learning. Impact
evaluation of established measures is generally premature as Member States are at a
development or early implementation phase. Investing in human recourses is essential for the
success of the employment strategy and is required for the implementation of several
Guidelines, notably to promote the employability and adaptability of the workforce. Yet, only
few Member States set targets for increases in human resource investment (Belgium on in-
company training) or participation in further
learning (Netherlands, France, Belgium
(Flanders), Portugal and Germany), which raises questions as to the monitoring of progress in
the other Member States.

issues,

10

These sometimes refer to particular age groups or to participation rather than employment rates.

15

Table 2: Member States' positions on developing lifelong learning strategies11

CHARACTERISTICS

BE

DK DE

EL

ES

FR

IRL IT

LUX NL

AU

PT

FIN SW UK

COMPREHENSIVENESS OF STRATEGIES

Compulsory education

Formal adult education/training

Workplace/other non-formal/ recognised prior
learning

Focus on disadvantaged groups

Overall investment / funding schemes

COHERENCE OF STRATEGIES

System development
(policy needs, planning, targets, implementation,
monitoring)

Partnership working
(social partners, public authorities, learning
providers, civil society)

Cross-cutting aspects
(advice/guidance services, education/training
mobility)

P

P

P

P

P

P

P

P

A

A

A

P

A

A

P

A

P

P

P

P

P

A

I

A

P

P

P

A

I

A

P

P

P

P

P

I

P

P

P

P

A

P

A

P

P

A

P

A

P

P

P

P

P

A

A

P

A

P

P

I

P

I

P

P

P

P

I

P

P

P

P

P

A

A

P

P

A

A

P

P

P

P

P

P

P

P

P

I

P

P

P

P

P

P

P

I

A

A

A

A

P

A

A

A

A

A

A

A

A

A

A

P

P

P

P

A

A

A

P

A

Notes:
A = Adequate. 'Adequate' denotes that a particular criterion is given appropriate priority within both the Member State's strategy and concrete actions.
P = Partial. 'Partial' indicates that some attention is given to the criterion in both the strategy and actions or that it given appropriate priority in one or the other.
I = Insufficient. 'Insufficient' refers to when the particular criterion is absent from both the strategy and the actions or is given some attention in one or the other.

11

The assessment is indicative and mainly based on the NAPs 2001, but also on other relevant information available. Further explanations can be found in the Commission Services' Supporting Document to
the Joint Employment Report.

16

All Member States recognise the crucial role of social partners in lifelong learning, though the
nature/extent of their
involvement varies and little information is provided on their
autonomous initiatives. While limited partnership working by/with public authorities is
reported,
the involvement of civil society appears marginal. Indeed, better articulation
between actors and levels of intervention should be developed.

Objective C calls upon social partners to play a key role in developing and implementing
policies at national and European level. In general, the NAPs reflect a trend towards the
desired strengthening of co-operation, but on the whole contributions of social partners still
lack visibility and concreteness both at European and at national level. This is partly due to
the specific, decentralised and also diverse situations of social partners in European and
national contexts which seem to make it difficult for them to make the most of their role
within the EES, participating in the process which they basically support, but at the same time
trying to maintain their autonomy and independence.

the national

level social partners have in many cases been better involved in the
At
development of the NAPs, mainly within tripartite bodies (Germany, Sweden, Ireland,
Belgium, Greece, Italy, Portugal and Spain). However, a comprehensive contribution of social
partners at national level in all phases of the Luxembourg process and all areas which address
them directly is not yet convincingly developed. In only a few Member States, such as
Belgium, do the social partners appear to have created mechanisms to evaluate their actions.

In the context of the European social dialogue, the social partners made contributions at both
level. At cross-industry level negotiations concentrated on
cross-industry and sectoral
temporary agency work and telework. At sectoral level progress has been made in the
telecommunications industry,
the commerce sector, civil aviation, agriculture and the
construction and tanning industry. These activities were accompanied by a first attempt to
contribute to the process of reporting and assessment within the EES.

The policy mix within the NAPs (Objective D) should reflect how the overriding aim of more
and better jobs is pursued in accordance with national circumstances. As previously, the
NAPs generally continue to place most emphasis on the Employability and, to a lesser extent,
the Entrepreneurship Pillars. Despite progress in involving social partners at least in the
development of the NAPs,
the Adaptability Pillar remains the least developed due to
insufficient information about the actual achievements of the social partners and their impact
on employment. Less emphasis is placed by Member States on the Equal Opportunities Pillar
compared to 2000, especially in those Member States where gender equality has been
weakest.

17

In terms of the regional aspects of Objective D, regional disparities remain a serious problem
in many Member States (see graph 2). Disparities in unemployment continue to be most
serious in Italy, Spain, Germany and Belgium and are even worsening considerably in the
latter two cases. That improvements are possible is demonstrated by reductions in disparities
in Finland and the Netherlands.
Graph 2: Unemployment rates in NUTS212 regions in 200013

NUTS3 for DK and IRL.

Highest

Av

Lowest

Ceuta y Melilla

Halle

Corse

Calabria

Rég. Bruxelles-Cap.-
Brussels Hfdst. Gewest

Dytiki Makedonia

Ribe

Border

Wien

Friesland

Alentejo

Sønderjylland

Ionia Nisia

Navarra

Oberbayern

Alsace

Lux

Dublin

Trentino-Alto Adige

Vorarlberg

Noord-Brabant

Centro

DK

D

GR

E

F

IRL

I

L

NL

A

P

Vlaams
Brabant
B

30%

25%

20%

15%

10%

5%

0%

Pohjois-Suomi

Inner
London

Övre
Norrland

Stockholm

Berkshire, Bucks
and Oxfordshire

S

UK

EU15

Äland

FIN

Source: Calculations on the basis of Eurostat Labour Force Survey.

In response to persisting regional disparities, Member States are taking more account of the
regional dimension of employment policies, with regional authorities tending to move from an
implementation role to active involvement in developing policies and action for employment
or broader development. Indeed, some Member States (Finland, Portugal,
the United
Kingdom) are developing regional action plans (RAPs) based on the EES which may in turn
lead to local action plans (LAPs). In addition, national programmes are increasingly designed
in such a way as to allow for flexible implementation at regional/local level, sometimes in
parallel to separate regional programmes which complement the policies and/or financing

12

13

Refers to territorial units in European statistics, the nomenclature of Territorial Units for Statistics.
Disparities in unemployment are measured by the coefficient of variation, which is obtained by dividing the Standard Deviation
by the average-weighted mean value (weighted average of the employment/unemployment rate in a country).

18

emanating from national level. The European Union Structural Funds can be used at both
levels and so play an important role in supporting this development, as well as, through
national/regional objectives set in the programmes, providing an otherwise rare quantifiable
dimension to monitoring progress.

Close co-operation between the Commission and the Indicators Group of the Employment
Committee has led to some 20 new indicators to assist the monitoring of the Guidelines
(Objective E), specifically in relation to lifelong learning, adaptability and work organisation,
regional disparities, exclusion and discrimination.
taxation and tax/benefits systems,
Following the Stockholm Summit, priority areas for the further development of indicators are
quality of work and equal opportunities (gender pay gap and care services for children/other
dependants).

2.2.

Assessment of the progress made under the four Pillars of the 2001 Guidelines

2.2.1.

Employability

The main aim of this Pillar is improving the employability of workers and the unemployed in
order to contribute to the prevention and the reduction of unemployment and to support the
general objective of raising the overall employment rates in the European Union. The Pillar
covers tackling youth unemployment and preventing long-term unemployment, promoting
active labour market policies for the unemployed and inactive,
tax-benefit reforms and
developing skills for the new labour market
in the context of lifelong learning. Two
Guidelines have been added since last year: one on developing policies for active ageing and a
second on active policies to develop job matching and to prevent and combat emerging
bottlenecks.

Consolidation of approaches on prevention of long-term unemployment and a stronger
focus on effectiveness

The facts on long-term unemployment

• In 2000, long-term unemployment decreased both for young people and adults. The decrease in

long-term unemployment was slightly larger than the fall in overall unemployment.

• However, 1.7 million young people, representing 51.6% of the unemployed aged 15-24 years, had

been unemployed for 6 months or more.

• Around 5 million adults, representing 50% of the adult unemployed, had been unemployed for 12

months or longer.

• The rates of inflows into long-term unemployment vary greatly between Member States, ranging

from around 1% (Sweden and Austria) to above 40% (Belgium for young people).

19

In 2000, no major changes have been made to the overall design of the preventive approaches.
Apart from their further extension in several Member States, efforts generally focused on
improving the quality and the effectiveness of prevention. Main lines of action in that respect
consisted in bringing forward the point of intervention (Ireland and the United Kingdom),
strengthening the individualisation of services (Germany, Spain and Belgium), intensifying
intervention during the first stages and the support for job-search (Finland and the United
Kingdom) and better tailoring the employability measures offered to the unemployed, in
particular training measures, to labour market needs (Finland, the United Kingdom and
Portugal).

Further progress in the implementation, but little change regarding compliance with the
EU-wide targets on prevention14

Despite the progress observed in 2000, Portugal is the only new Member State that can join
the former group of five countries (Austria, Sweden, the United Kingdom, Luxembourg and
Finland) considered to be closest to compliance with the EU-wide target of cutting the inflow
into LTU of young people and adults. Concern remains as to the capacity to achieve the target
by 2002 of five Member States, either due to insufficient quantitative evidence (the
Netherlands) or to uncertainties and delays in the completion of the PES modernisation
(Germany, Italy and Greece) or in the full scale implementation of the preventive approach
(Belgium). Improvements are needed concerning the monitoring systems and in particular the
provision of commonly agreed indicators. Although almost all Member States provide data on
the indicators, they do not always enable the assessment of effort and results for the latest
period and in general fail to provide information regarding the effective integration.

Eight Member States had received a Recommendation related to their preventive policies
and/or their monitoring system, most of them for the second time. Responses are encouraging,
since further steps have been taken either to improve or step-up the implementation of
preventive approaches or to develop a suitable monitoring system. However, as far as
prevention is concerned results still fall short of significant progress towards compliance with
the Guideline and monitoring systems still need further development.

14

Guideline 1: By 2002 Member States will ensure that every unemployed person is offered a new start before reaching six months
of unemployment in the case of the young, and twelve months of unemployment in the case of adults.

20

Modernisation of the PES is progressing, but monitoring and staff adaptation should be
improved

The modernisation of the Public Employment Service (PES) is progressing in all Member
States and confirms the crucial role of PES for an effective delivery of employability policies,
in particular for activation and prevention. Modernisation projects also reflect the changing
situation in the labour market by putting more emphasis on supporting job search in the open
labour market, improving jobseekers' skills in accordance with demand and increasing the
the extension of modern ICT
flexibility in service provision. In most Member States,
facilities, as well as intensified co-operation with other market actors are a crucial support to
the new PES service model. Many Member States (in particular France and Germany) provide
comprehensive information about their strategy and actions to adapt the organisation and
working methods of their PES to the new requirements as well as clear timetables for their
modernisation process, but fail to give information on measures taken to adapt the staff and to
ensure the monitoring of progress.

Continued emphasis on activation

In 2000, fourteen Member States achieved an activation rate above the 20% target15. The
United Kingdom only achieved a rate slightly over 12%. The average of the three most
advanced Member States (Sweden, the Netherlands and Ireland) was 44%. In most Member
States the activation rate increased, due to both an increased emphasis on active labour market
measures and a declining number of registered unemployed. The number of participants in
activation measures also increased, mainly in terms of various types of training programmes,
even though some countries saw a significant decline in participation rates. Expenditure on
active labour market programmes slightly increased. The diversification and targeting of
activation measures continued and work-related training programmes, start-up initiatives and
similar increased in number. In some countries ICT training has started to be incorporated to a
larger extent. There is also more co-operation with employers to design the active measures.

Inadequate monitoring of the effectiveness of active measures

In terms of effective integration on the labour market, only a few Member States (Sweden,
Denmark and Finland, and to some extent Germany, Austria, Spain and the United Kingdom)
provide figures. It appears that business start-up incentives and various types of job training
are more efficient than traditional labour market training and wage subsidies in especially the
public sector. In general, women tend to be better integrated than men are. Work on

15

See overview in Annex 2.

21

improving indicators on integration should be pursued in most Member States. There is only
scarce information on outcomes, outputs and cost effectiveness of measures. There is a need
to further enhance the efforts to regularly evaluate the effectiveness of active labour market
programmes. A critical note is that in most Member States the coverage of inactive persons in
activation measures is insufficient.

Efforts mainly focus on tax reforms, much less on benefit systems

Recent reforms concentrate more on making the tax system more employment friendly than
on benefits. Progress on reforming benefit systems is insufficient with several measures
undertaken in a piecemeal approach and reforms implemented at a slow pace. A few Member
incentive
States address comprehensive tax-benefit
structures, reinforcing control systems and tightening eligibility conditions (Denmark, the
Netherlands and the United Kingdom). France also took measures to reduce the marginal
effective tax rate. Others focus on enhancing the interaction of tax and benefit systems,
notably in tackling the problem of unemployment and poverty traps, and promoting the
overall structural
reforms particularly by tackling the persistent and high structural
unemployment (especially Belgium, France, the Netherlands and the United Kingdom).

reforms through improving their

More attention is needed on facing the problem of reducing the still large number of benefit
recipients and tackling more effectively the problem of invalidity benefits, mainly to facilitate
reintegration into the labour market. Moreover, Member States need to consider the gender
reforms and avoid disincentives that may discourage female
impact of
participation. A positive step towards enhancing work incentives and addressing the problem
of the "working poor" is the tendency to introduce or increase in-work or employment-
conditional benefits, such as back-to-work schemes and employment premiums or tax credits
on earned income.

tax-benefit

Lack of comprehensive approaches on active ageing

The relevance of the new Guideline 3 on active ageing has been highlighted by the Stockholm
Summit conclusions setting the objective of raising the average European Union employment
rate of 55-64 year olds to 50% by 2010.

The facts on older workers

• Employment rates in 2000 in the age group of 55-64 year olds remain low and vary considerably
around the EU average of 37.7%,
from 66.4% in Sweden to less than 30% in Belgium,
Luxembourg, Italy, Austria and France. Only a modest increase can be seen from the level of 36%
in 1995.

• Given the ongoing changes in employment policies for older workers, strong labour demand and
regional mismatches related to specific skills, the current high employment rates among 45-54 year
olds (EU-average 73.7% in 2000) could be well translated into significantly higher employment
rates for the next age group up a decade from now (see graph 3).

22

Graph 3: Employment rates of workers aged 55 to 64 (compared to workers aged 45 to
54)

90

80

70

60

50

40

30

20

10

SE

DK

PT

UK

IE

FI

GR

NL

EU

DE

ES

FR

AT

IT

LU

BE

1996 age 55-64

1996 age 45-54

2000 age 55-64

2000 age 45-54

Source: Eurostat, Labour Force Survey.

Several Member States have acted on their concern at the demographic challenge. This
implies reforming benefit and pension schemes, promoting sustained participation and
reducing incentives for early retirement in order to raise the effective retirement age, which is
currently substantially lower than the statutory retirement age in most Member States.
However, comprehensive approaches towards active ageing policies are generally lacking,
with most Member States focusing on treating older workers as a further 'disadvantaged
group' in the labour market and failing to address the issues early enough in individuals'
careers. Only a couple of Member States respond to the challenge with strategic targets (the
Netherlands and Sweden) or sufficient attention to capacity-enhancing policies for older
people such as workplace training and development, including for the unemployed or inactive
(e.g. Denmark and the United Kingdom). Most Member States adopt a piecemeal approach to
benefit reform with little monitoring of progress, and committed action by the social partners
is generally lacking.

23

Lifelong learning implementation improves, but varying progress on e-learning

The facts on lifelong learning

• Educational attainment: over 60% of 25-64 year olds in the EU had attained at least upper
secondary level education in 2000. Significant disparities between Member States are closing due
to progress in successivel cohorts of young people; the gap between the highest and lowest rates
amongst 25-34 year olds decreased from 40.4% to 30.4% in the period 1995 to 2000.

• Participation in education and training continues to be low. The participation rate of 25-64 year
olds in the EU increased only marginally in 2000 to 8% from 7.8% in 1999 compared to 6.7% in
1997. Participation of older workers is limited whilst women are more likely, and younger people
are far more likely, to participate.

• Early school leaving: in 2000, 18.5% of people aged 18-24 left the education system prematurely,
with only lower secondary education – in several Member States this rate is almost 30% or worse.
The percentage of early school leavers is significantly higher amongst males. Moreover, they have
a higher risk of unemployment.

increasingly in the framework of comprehensive strategies. In general,

Member States have paid greater attention to lifelong learning, activating a broad range of
initial
measures,
education and training is less well covered than adult learning but Member States have now
started voicing widespread concern for basic skills in their NAPs. Most Member States
promote basic adult education (literacy, numeracy and sometimes ICT and social skills),
including in non-formal settings. All Member States aim to encourage more young people to
stay on in learning. Where early school leaving rates are acute, Member States promote
flexible secondary education curricula and second chance schooling. More encouragingly,
disparities in educational attainment in the EU are generally closing, fuelled by particular
progress amongst young people.

Member States often emphasise the need to increase adult learning participation rates, but
tend not to set overall targets for such increases. More attention is needed to ensuring that
NAPs report about progress towards targets, overall or more specific, set in previous years.
Increasingly common measures focusing on individuals (e.g. learning accounts/vouchers) will
help raise participation rates. However, more emphasis on making adult learning diverse,
accessible and attractive, as well as provision of information, advice and guidance services
and local learning centres, would help reach more non-learners and ensure progress into
further learning. Member States should further develop non-formal and informal learning,
including via the recognition of prior learning and pay attention to the gender dimension. The
involvement of social partners in lifelong learning policies and measures is strengthened in

24

most Member States, most commonly in relation to access and funding. However, there is an
on-going lack of information about their autonomous initiatives, especially at enterprise level.

Most Member States report on measures to promote ICT skills, often with priority for
disadvantaged groups and as part of a crosscutting e-learning strategy. Many Member States
also prioritise development of e-learning content. Taking all elements together, there is a
broad three-way split between the most advanced Member States (Denmark, the Netherlands,
Sweden, Finland and the United Kingdom), those with measures well underway (Belgium,
Ireland, Germany, France, Luxembourg and Austria) and those where efforts will have to be
increased (Spain, Greece, Italy and Portugal). On the common e-learning targets, almost all
Member States can be expected to have 100% school internet coverage by end 2001.
However, slower progress in a few Member States will require efforts to be redoubled
including those actions highlighted in the eLearning and eWorking dimensions of the eEurope
2002 initiative. Progress reported on having all teachers in need of ICT skills trained by end
2002 is encouraging, but insufficient data precludes firm conclusions.

Emerging labour and skills shortages lead to differentiated policy responses

Most Member States anticipate the problems of bottlenecks on the labour market becoming
more serious in the short and mid-term future, based on combined economic and demographic
forecasts. Some Member States assess this development as a threat to economic and labour
market performance, others as an opportunity to facilitate the re-integration of certain
categories of workers into the labour market. At present, in most Member States the problems
are limited to a few occupations/sectors (e.g. the ICT sector, construction industry, health
care, education and social services, hotel and catering and highly skilled technical areas).
Some, however, find themselves in a very tight labour market, featuring both specific skills
and overall labour shortages (both at high and low skill occupations). Apart from general
measures taken to reduce unemployment,
increase labour force participation and raise
employability and skills, a number of specific initiatives are taken to deal with labour and
skill shortages and to facilitate the transition to a knowledge-based economy. These include
monitoring, occupational mobility, matching people and jobs, geographic mobility and
partnerships.

The facts on mobility

• While geographic mobility between EU Member States remains relatively low - with only 225,000
people changing residence between two European Union Member States in 2000 - geographic
mobility between regions and commuting are already of considerable size and increasing. About
1.2% of the EU population changed residence to another region within one European Union
Member State in 1999. About 600,000 persons work in a country different from the country of main
residence.

• While occupational mobility and job turnover in the EU clearly remain lower than in the US, at
least in the group of high-skilled employed, job-to-job mobility has been increasing over the past
years. Between 1998 and 1999, around 10% of all high-skilled employed changed jobs, ranging
from 12% or more in the UK, Denmark, Finland and Spain to less than 5% in Italy.

25

The linkage between the employment process and the new social inclusion process needs
more attention

Although the Commission had asked Member States to cover the labour market related
measures aiming at social inclusion in the NAPs on employment, this is not sufficiently
visible for most Member States. This could be due to differences in approach among Member
States: some stress that employment policy is the best means for achieving social inclusion,
whereas others make a clear distinction between both policies. Some Member States perceive
(general) labour market policy as the key instrument to promote social inclusion. Others
emphasise the specific needs of socially excluded people and that the different target groups
might require tailor-made measures, e.g. France, Finland, the Netherlands and Italy. The
majority of Member States put, as last year, more emphasis on integration than on anti-
discriminatory measures. However, some Member States try to apply a more balanced
approach. The impact of the Article 13 anti-discrimination package approved by the Council
in 2000 is evident and sometimes explicitly mentioned.

Concerning ethnic minorities and disabled people, only half (France, Spain, Portugal,
Germany, Austria, the United Kingdom and Ireland) of the Member States set national targets
to increase the employment levels of the latter, whereas only Denmark and the Netherlands
set targets for the former group.

A key contribution of the NAPs to the fight against exclusion is related to measures to
promote the re-integration of the long-term unemployed into the labour market. A number of
Member States have already started or are starting to introduce personalised individualised
approaches similar to the ones used for prevention, while others are reviewing existing
employment schemes and measures to make them more supportive to the reintegration of
long-term unemployed. While the reintegration of long-term unemployed into work is seldom
seen as a means to solve the bottlenecks problems, it is an important element of the overall
strategy to fight social exclusion, especially in those Member States enjoying low levels of
unemployment and where long-term unemployment tends to concentrate on specific groups
that are difficult to reintegrate.

26

2.2.2.

Entrepreneurship

This Pillar is about providing conditions which favour the creation of new jobs. It aims at
facilitating the creation of an environment favourable to start-ups, to business growth and
consequently to employment creation. This in particular through reducing administrative
compliance costs and tax burdens. It aims at exploiting effectively the employment potential
of the knowledge society and of the services sector. Its objective is also to stimulate action for
employment at regional and local
level. The few new elements this year include the
the promotion of entrepreneurial
encouragement of the fight against undeclared work,
education and the promotion of assessments of the impact of new regulations for business.
The table below present the overview of key measures reported in the NAPs 2001.

Table 3: Objectives of key measures reported in NAPs 2001 for Entrepreneurship

AU BE

DK FIN FR

DE

EL

IRL

IT LUX

NL

PT

ES

SW UK

X

X

X

X

X

X

X

X

X

X

Assessing im-
pact of new
legislation

Less burden
for business

Less obstacles
to start-ups

X

X

X

Better access
to finance

Combat unde-
clared work

Job creation
in services,
environment,
knowledge
society

Easing
procedures on
hiring addi-
tional staff

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X X

X

X

X X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

27

Facts related to sectoral job creation in 2000

• In 2000, high-technology and knowledge-intensive sectors created 1.5 million net jobs in the EU.
As in previous years, employment growth generally continued to be strongest in the service sector
and in high-skilled non-manual occupational groups. The employment rate in the service sector
continued to increase and almost one million new jobs were created in industry. Job losses
continued to be marked in the agricultural sector.

• The sectors with the strongest current employment growth at EU-level are all characterised by
either high technology and high shares in ICT-related jobs ("high-tech sectors") or a high
knowledge intensity as reflected in high educational levels of the workforce ("high-education
sectors"), or both. Employment growth in these sectors also continues, however, for workers with
lower skill levels, while actually stagnating or even declining for this subgroup in other sectors of
the economy.

• While Ireland, Finland, Spain and the Netherlands are experiencing employment growth in all
sectors of the economy, albeit strongest in the high-education sectors, in other countries such as
Germany, Austria and Sweden, employment growth has been positive only in high-education
sectors while actually negative in other sectors.

• This is further evidence that the employment dynamics in the high-education sectors contribute

decisively to the overall employment dynamics of the European labour markets.

Using new technologies to reduce burdens for enterprises

Many Member States report on the use of electronic systems for on-line registration and
information provision as a common way to simplify compliance with formal procedures
However, making documents and information available on line does not per se provide
simplification, and needs to be complemented with a clear strategy for simplification of the
different procedures that enterprises face in their contacts with governments (c.f. information
sharing within the different government departures, simpler forms), and of the regulation on
which they build. Single Access Points (“one-stop-shops”) are proving very useful
in
providing better information, assistance and advice in the pre-start-up stage.

Austria, Germany, Spain, Greece, Ireland, Luxembourg, Sweden, Finland and the United
Kingdom have made substantial efforts to ensure that enterprises (and small firms especially)
integrate ICTs into their everyday operations and to encourage the broader fabric of the
economy to adapt to the demands of the knowledge society.

28

Incomplete approach to facilitating the hiring of new staff

The reluctance of Member States to simplify rules for hiring new staff is an impediment to job
creation which is not entirely outweighed by efforts presented in the plans to ease social
security or tax provisions. Indeed, while lowering the cost of personnel for small enterprises
will strengthen the willingness of self-employed people to create new jobs, simplification of
rules for hiring new staff will allow a small business to grow faster and create employment in
particularly critical sectors.

Progress towards creating an entrepreneurial culture

Member States appear
the teaching of
to give genuine priority to initiatives
entrepreneurship. There is no overall evidence about the impact of such measures on the
image of self-employment which, with the exception of some professions, remains largely
negative. As a result self-employment trends are rather static when one would expect a
significant general increase of the self-employed particularly in the service sector. Apart from
training for entrepreneurship, steps to raise social recognition of entrepreneurs are less
prominent or missing. Such recognition may entail more rewards for successful entrepreneurs
and consequently more involvement of young people with such activities.

for

While a number of measures have been taken by Member States to promote female
entrepreneurship, concrete data on their impact is still lacking.

The facts on SMEs and self-employment

• The employment rate in firms with less than 50 employees has been stable over the past few years

at around 27%;

• The average rate of self-employment in the European Union has gone down from15.4% to 14.8%

overall between 1998 and 2000;

• Self-employment is twice as high among men as among women, with 17.6% and 10.9% respectively

in 2000.

29

Combating undeclared work

The fight against undeclared work can create conditions for higher quality jobs and more
healthy competition among enterprises. This issue has become a major preoccupation and
there is a promising commitment in the NAPs of 11 Member States (Austria, Belgium,
France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Sweden and the
United Kingdom). Most of them focus on simplified procedures for the declaration of new
jobs, increased inspection and penalties for offenders. Others reinforced tax administration
attempts to prevent businesses being exposed to harmful competition from those that use
illegal workers. One goes even further by refusing benefits and public contracts to businesses
sued for undeclared work. It is rather early to expect reporting of results from all the
initiatives taken.

More emphasis on regional and local development

The territorial dimension of the European Employment Strategy has developed considerably.
Strengthened inter-regional co-operation can be observed and, in some cases, elements of the
open co-ordination method have been introduced in the relationship between national and
regional authorities and the "professionalisation" of territorial management is developing. The
forms of co-operation are quite diverse depending on the different institutional contexts. In
general, the territorial dimension is still very much confined to the regional level, where
progress is most visible, but
is also developing positively. The Public
Employment Services are increasingly developing a diversified territorial dimension to their
activities and are becoming actively involved in local and regional partnerships. In order to
better meet the particular needs of local and regional labour markets, they have increased
flexibility in implementing services and active labour market policy programmes.
Development of the social economy is still slow but has been speeded up since 1999; most
Member States provide specific support in terms of advice or funding. Particularly important
are steps towards equal treatment of organisations belonging to the social economy and other
enterprises in terms of e.g. taxation or access to financial instruments of economic policy.

the local

level

30

Some progress on reducing the tax burden on employed labour, especially on low paid/low
skilled labour

The facts on overall and labour taxation

• The overall tax burden16 increased from 42.4 to 43.3% over the period 1996-1999 with a tendency
to stabilise in 2000 (43.1%). In several Member States including Belgium, Denmark, France,
Luxembourg, the Netherlands, Finland and Sweden the overall tax rate as a percentage of GDP is
still high, exceeding 45% (see graph 4);

• The tax burden on labour17 in the EU was reduced by 0.8% over the period 1996-2000 to 40.6%
but it continues to be high in several Member States. Tax reductions on low paid labour were more
substantial. Such reductions are observed in almost all Member States (except Luxembourg,
Netherlands) exceeding on average 2 percentage points over the period 1996-2000 for a single
person earning 50% or 67% of the average wage, to 35.2% and 39.2% respectively in 200018.

Tax reforms in the last three years vary among Member States both in coverage and depth.
Most Member States aim at reducing the overall tax burden mainly through reductions in
direct taxation on personal and corporate income or capital taxes aimed at improving business
competitiveness and stimulating growth and employment, although only four Member States
(Austria, Finland, Germany, the Netherlands) have set national targets for the reduction of the
overall tax burden.

Graph 4: Rate of total tax revenue (% of GDP)

60

50

40

30

20

10

SE

DK

FR

NL

BE

FI

LU

AT

EU-15

IT

DE

GR

UK

PT

ES

IE

1996

1999

Source: Commission Services DG TAXUD.

16

17

18

Measured as a percentage of GDP.
Indicates the average effective tax burden on labour income, and is calculated as a percentage of total compensation received by
employees plus the pay roll taxes.
Data is based on tax indices that are constructed for hypothetical households.

31

An increasing number of Member States are committed to the objective of reducing the tax
burden on employed labour. The responses to Recommendations addressed to two-thirds of
Member States last year have shown some progress, varying among Member States, towards
reducing the tax burden on labour. A graph 5 shows progress is more substantial for low paid
labour (good examples are Belgium, France Ireland and Italy). Efforts need to be continued or
intensified to obtain more visible results. However, no Member State has set a quantified
target19 for reduction, as called for by the Guidelines. A gradual reduction of labour taxation
is more visible on low paid/low skilled labour. The most important component in these tax
rates remains the social security contribution and other charges (i.e. payroll taxes) paid by the
employers, accounting on average for more than half of such taxes. In some Member States
the reduction in labour taxation was accompanied by green tax reforms, whilst tax incentives
to individuals and enterprises, aiming to stimulate investment in human capital, are limited.

Graph 5: Average tax rate for low paid single earner20

60

50

40

30

20

10

BE

SE

DE

IT

FI

DK

NL

AT

EU

FR

GR

ES

PT

LU

UK

IE

1996 (50% APW wage level)

2000 (50% APW wage level)

1996 (67% APW wage level)

2000 (67% APW wage level)

AWP=average wage production earnings

Source: Commission Services DG TAXUD, based on OECD database.

19

20

However, Germany sets a partial target of reduction of social security contributions to 40% of gross wages (currently estimated at
about 41%).
EU average is a weighted average (weighted by the number of persons working in the manufacturing sector in each Member
State).

32

2.2.3.

Adaptability

Under the Adaptability Pillar, social partners and Governments are called on to improve,
through a partnership approach, the level and quality of employment and to enhance the
competitiveness of the European economy in order to facilitate job creation. Efforts are
focussed on identifying a sound balance between flexibility and security which is needed to
reconcile employees and enterprises needs. The Employment Guidelines 2001 introduced
some new aspects which broadened the scope of the Adaptability Pillar,
in particular
references to health and safety at work, quality and lifelong learning, a target for information
society literacy to be achieved by 2003; furthermore, social partners have been invited to
report annually on their own activities.

Strong focus on working time issues …

Policies are still largely focused on working time issues. Both Governments and social
partners are clearly giving priority to this aspect of working life reform. But the formerly
prevailing focus on working time reduction is increasingly complemented by arrangements
enabling flexibility. Most innovations were launched with regard to implementing more
flexible working time systems. Recent developments in this area focused on two aspects:
duration and flexibility, e.g. by extending the reference periods or by the introduction of long-
term working time accounts. Part-time work, as the most important form of flexible work in
the EU, was the subject of legislation and/or agreements.

Graph 6: Part-time employment as a share of total employment, 1995-2000

45

40

35

30

25

20

15

10

5

0

NL

UK

SE

DK

DE

EUR15

BE

AT

FR

IE

FIN

PT

LU

IT

ES

GR

Source: Eurostat Labour Force Survey

1995

1997

2000

33

… and flexible forms of work

There is a general trend towards new and flexible forms of work, facilitating the introduction
and use of fixed-term contracts, temporary work and part-time work (for the latter see the
graph above) through collective agreements. Governments, often in co-operation with social
partners, are also reacting to this trend and are developing - or adapting - their legal
framework accordingly. Temporary agency work is now regulated in all Member States
through legislation which is often applied through social partner agreements. The same
applies to most initiatives regarding fixed-term contracts; their number is increasing at EU
level, but the situation between Member States differs considerably. Only in a few Member
States (Austria, Denmark, Ireland, Germany and Sweden) was teleworking the subject of
specific actions or collective agreements.

Flexibility of work and working time

• Non-standard employment21 is increasingly common and now represents 29.8% of all contracts (up
from 29.0% in 1999); the highest proportions can be observed for the Netherlands (54.3%),
Sweden (35.5%), Spain (33.7%) and France (32.2%), the lowest for Greece (12.3%), Luxembourg
(14.4%), Italy (16.1%) and Austria (23.8%); the number of people employed part-time with fixed-
term contracts remained stable below 3% over time.

• In most Member States part-time employment

is the most common form of non-standard
employment, exceptions being Finland, Greece, Portugal and Spain where fixed-term employment
prevails.

• Over the last five years, the share of part-time jobs in total employment increased steadily to 18%.
However, for the third year in a row, more full-time jobs (more than 2 million) than part-time jobs
(around 1 million) were created. Full-time jobs thus accounted for almost 70% of all net jobs
created, against only 54% in 1998 and 60% in 1999. A third of all employed women and 6% of all
employed men are in part-time jobs.

• The average weekly number of hours worked remained almost stable between 1995 (36.6 hours)
and 1999 (36.5) but declined to 36.2 hours in 2000. The difference between weekly working times
of men and women remained stable at 7.7 hours.

21

Non-standard employment encompasses part-time employment (on the basis of a self-assessment) and fixed-term employment
(which by definition includes seasonal work, temporary agency work and casual work).

34

A narrow approach to work organisation and little focus on quality in work…

Perhaps as a result of the prevailing concentration on working time and legal issues (in
particular aiming at more flexible types of contracts), other aspects in the context of work
organisation have not received much attention e.g. the links between the introduction of new
technologies and the need to adapt the organisational environment within an enterprise, new
management techniques, teamwork, flattening down of hierarchies, involvement of employees
in decision-making processes or participation in the results of enterprises activities etc. are not
systematically covered by the NAPs.

In addition few initiatives relating specifically to the objective of improving the quality of
employment are introduced under the Adaptability Pillar this year.

…except for health and safety at work

In the field of health and safety in the workplace, many Member States (e.g. Austria,
Denmark, Ireland and Spain) have developed new approaches in order to ensure a better
application of existing legislation and to promote measures for the reduction of occupational
accidents and diseases. The preferred instrument for this approach is the extension of
guidance mechanisms. These efforts aim at enhancing the quality of work, an issue that has
otherwise not received appropriate attention under the Adaptability Pillar. In several Member
States (e.g. Denmark, the Netherlands and Portugal) social partners are directly or indirectly
involved in the bodies responsible for the development, implementation and monitoring of
health and safety regulations at national, regional and enterprise level.

Challenges of training and lifelong learning have not been comprehensively taken up

The commitment of the social partners to lifelong learning has increased. But although
Member States report consultation or participation of social partners in the development of
lifelong learning strategies, qualitative data provided in the NAPs and social partners' own
assessments are not sufficient to draw general conclusions on the scope and degree of this
involvement, particularly in the implementation phase. The social partners emphasised,
however,
through collective agreements or other joint forms of
initiatives increased since last year. Concerning the promotion of training in SMEs, only scant
information is given. Most actions, based on agreements and joint or tripartite initiatives,
focus on the individual access of workers to training, training funds and risk group training.
Advanced actions link working time with training through instruments such as long-term

their commitment

that

35

working time accounts. The target
information society literacy in 2003 was hardly touched upon in the 2001 NAPs.

to give every worker the opportunity to achieve

Social partners are better involved, but contributions still lack visibility and concreteness

In general - and in line with a number of last year's Recommendations in relation to
employment - the involvement of social partners in the development and implementation of
the visibility of their
national employment strategies has clearly improved. However,
contributions is still unsatisfactory; social partners have not used the opportunity provided for
them under Guideline 13 which invited them to report annually on the modernisation of work
organisation; no such process has been launched in any of the Member States.

2.2.4.

Equal opportunities

The aim of this Pillar is to strengthen equal opportunities policies for women and men in the
labour market, in order to reinforce the impact of policy under the other three Pillars. This is
sought through a gender mainstreaming approach across all four Pillars, reducing gender gaps
(unemployment, employment, gender segregation and pay) and policies oriented at
reconciling work and family life. New elements in the fourth Pillar this year concern gender
mainstreaming in particular: consultative systems with gender equality bodies should be
developed, procedures for gender impact assessment applied, and indicators on gender
equality for each Guideline should be developed. Moreover, access of women to lifelong
learning and ICT training should be facilitated and national targets on female employment and
care services for children and other dependants should be considered.

Gender equality weakens in the policy mix

issues,

Whilst in previous years there has been a positive trend in the way in which Member States
have addressed gender
in 2001 less emphasis has been placed on the Equal
Opportunities Pillar, especially compared to last year. This is especially the case in those
Member States where gender equality has been weakest and the challenge of female
participation in the labour market is highest. A re-balancing of policies is essential to actively
encourage women's participation in the labour market, not only at the point of entry, also
especially at mid-career, to help women stay in the labour market for longer. Fundamental in
this respect are the issues of equal pay, adequate care facilities combined with reconciliation
of work and family life, and lifelong learning. The social partners should do more to improve
gender equality.

36

Uneven responses to Recommendations on gender equality

The 2001 NAPs represent the second opportunity for Member States, where relevant, to
respond to Council policy Recommendations on gender equality. The responses are uneven.
Ireland, Denmark, Finland, Sweden and the United Kingdom have launched some interesting
initiatives. However, as some are still at an early stage of implementation, results need to be
carefully monitored and evaluation of the policy impact is premature. Germany, Austria,
Portugal and Luxembourg have responded partially to the requests. Italy, Spain and Greece
have introduced some actions but, given the difficult starting points and the extent of the
challenges, policies need to be strengthened.

Increasing female participation – few targets

The facts on employment and unemployment gender gaps

• As in previous years, women have been the main beneficiaries of job creation. As a result, in 2000,
the gender gap in employment in the EU declined slightly to 18.5 percentage points. However, wide
differences across countries exist with extremes in Sweden (3.8 points), Greece and Spain (around
30 points). The full-time equivalent employment gender gap in the EU in 2000 was 25.7 percentage
points.

• Of the more than 1.6 million jobs taken up by women in 2000, the most were part-time. Over the
period 1995-2000, the share of part-time jobs in total employment increased to 18%, covering one
third of all employed women and 6% of all employed men.

• Unemployment rates have decreased for both men and women in 2000, giving an EU average
female unemployment rate of below 10%. However, with EU average male unemployment now at
7%, the unemployment gender gap only decreased by 0.2 to 2.7 percentage points. Spain continued
to have the highest unemployment gender gap in the EU. Other countries showing a marked divide
between male and female unemployment rates are Greece, Italy, France and Belgium.

Achieving the long-term full employment objective set at the Lisbon Summit is dependent
upon the further integration of women into the labour market. Even though employment rates
for women have increased since 1999, there still exists a substantial gender gap of over 18
percentage points. Measures to promote gender equality are numerous but the majority are
isolated measures without a strong impact on the overall situation. Most initiatives relate to
facilitating reintegration of unemployed and inactive women to the labour market, increasing
opportunities for training and education, reviews of tax and benefit systems and measures to
reconcile work and family life. The Employment Guidelines for 2001 invited Member States
to consider setting targets for increasing women's employment but, with the exceptions of
France, Portugal and the Netherlands, Member States have not set such national targets. It

37

should be noted in particular that the countries with low female employment rates have not set
national targets and have introduced only limited actions to improve the current employment
situation for women (Spain, Greece and Italy).

Progress on gender mainstreaming, but comprehensive approach lacking

Some progress has been made on implementing gender mainstreaming in terms of co-
operation mechanisms and gender impact assessment tools, but a comprehensive approach22 is
still lacking in most Member States. Generally, Member States have not implemented gender
impact assessment for each Guideline and have not developed adequate indicators to measure
progress. However, countries that have recently embraced the gender mainstreaming objective
are continuing to make progress, for example by extending policies to regional levels and
introducing training programmes on gender for staff in public administrations (e.g. France and
Ireland). The Nordic countries confirm their commitment to mainstreaming gender equality.
On the other hand some countries which received a policy Recommendation on the need to
promote or continue gender mainstreaming efforts (Greece, Germany, Italy, Spain, and
Luxembourg) have not taken decisive action to improve the situation.

Gender equality objectives are still not properly integrated into employment policies under the
other three Pillars. Little attention has been given to gender issues in the policies aimed at
improving ICT skills and realising a knowledge-based society. Very few initiatives are
reported on reducing the negative impact of tax and benefit systems.

Gender pay gap persistently high

The facts on the gender pay gap (see also graph 7)

• According to the most recent data at EU level (source: European Community Household Panel,
hourly earnings for employees at work for 15 hours or more), the gender pay gap decreased by 2
percentage points between 1996 and 1997, but was still around 14%.

• The situation was worse in the private sector where wage gaps were as high as 19 percentage
points, compared to 10 percentage points in the public sector. Gender pay gaps decreased or
remained stable in all Member States, except in Spain and Austria where slight increases could be
noted.

22

Comprehensive here refers to measures covering consultative systems with gender equality bodies, including at regional level,
gender impact assessment procedures for new legislation, provision of indicators and statistics, awareness raising in the form of
information, training, surveys and other innovative approaches.

38

Graph 7: Gender pay gap in 1997: overall, public and private sectors

)

%

'

(
s
n
e
m
o
t
n
o
i
t
a
l
e
r
n

i

i
s
g
n
n
r
a
e
s
n
e
m
o
W

'

120

100

80

60

40

20

0

Overall

Private

Public

PT BE FR IT DA GR UK ES FI NL EU LU IE AT DE

Source: Eurostat, European Community Household Panel (ECHP). No data available for Sweden.

Despite the high profile given to the issue of the gender pay gap at the Stockholm Summit,
measures to reduce the pay gap and to reduce the differentials in incomes between women and
men are limited. Initiatives mainly refer to reviews of job classification systems, various
legislative measures and study reports. Where new initiatives are taken they are at an early
stage of implementation and often lack concrete actions. Much more effort needs to be
devoted to tackling this problem by Member States. Even more important is the role and
responsibility of the social partners. They have not addressed this issue specifically, especially
in labour markets where demand is high, which runs counter to their public statements and
declared positions. However, there are some good examples of innovative approaches, e.g.
increasing wage transparency and facilitating equal pay cases before the court in Denmark,
and the introduction of a legal obligation for employers to annually review wages to detect
any unjustified pay differences in Sweden.

39

Some positive actions to tackle gender segregation

The facts on gender segregation

• Employment across sectors remains highly segregated by gender, with men over-represented in
agriculture,
industry and financial services, and women over-represented in other services,
including healthcare, education and private households. Over the period 1995-2000, segregation
declined only in a few sectors such as wholesale and retail sales and financial intermediation.
Employment in the expanding high-tech sectors tends to be gender-biased, with men accounting for
almost two-thirds of total employment.

• Gender segregation in sectors and occupations remains stable from last year (17.8% in sectors and
25.2% in occupations23). By occupation, Finland, Sweden and Denmark have the highest
segregation, ranging from 28% to 30%. By sectors, Finland, Sweden, Portugal, Ireland and
Austria have the highest segregation, with more than 20%.

Gender segregation has a negative effect on labour market efficiency and functioning. This
issue has been addressed by most of the countries that have high levels of occupational and
sectoral segregation and that have received a policy recommendation in this field. Initiatives
range from changing educational choices, setting recruitment targets for under-represented
professions and training for women in entrepreneurship. However, changes in gender
segregation are slow and closely linked to other structural changes in the economy. There are
some new – though still very modest – initiatives to promote women's participation in
decision-making.

Lack of childcare limiting participation

The facts on the impact of parenthood on employment

• The presence of children influences the full participation of women in the labour market. In 2000,
in the 11 Member States for which data are available, 72% of the women aged 20-50 without
children were in employment, as opposed to only 59% of women with children under 6 years. In
contrast, men tend to increase their participation in employment with the presence of a young
child. 94% of men aged 20-50 with children are in employment compared to 89% without children.

23

Gender segregation is measured by applying the national share of employment for women and men to each sector/occupation. The
differences are added up to produce a total amount of gender imbalance. This figure is then presented as a proportion of total
employment.

40

This year there are many initiatives to help working parents in terms of more flexible work
organisation, better and more flexible care services and tax and benefit reforms. Moreover,
there are many positive initiatives in the NAPs to encourage women to return to employment
after an absence.

Although Belgium, the United Kingdom, France, Greece, Portugal and Ireland have set
targets for increasing the provision of care services, for the most part childcare services are
not sufficient to deal with the scale of demand. Countries with a low level of childcare
services, especially for 0-3 year olds, have not set quantitative targets and have taken only
limited actions to improve the situation (Italy, Spain, Austria, Germany and the Netherlands).

Care for the elderly needs attention

An important new area, which will become ever more challenging,
is care for other
dependants, particularly the elderly. The majority of Member States have not yet started to
give this issue serious attention and consequently have no clear approach, much less targets.
However, a few Member States (France, Luxembourg, Greece, Portugal and Spain) have
introduced some new initiatives in their 2001 NAPs.

41

3.

IMPLEMENTATION
AND
RECOMMENDATIONS: ASSESSMENT OF PERFORMANCES AND POLICIES PER
MEMBER STATE

EMPLOYMENT GUIDELINES

2001

THE

OF

BELGIUM

General appreciation Strong economic growth (4.0% in 2000) had a positive impact on
labour market developments: the employment growth was 1.8%,
the employment rate
increased to 60.5% and the unemployment rate decreased to 7.0%. But the long-standing
weaknesses of the Belgian labour market are only gradually being challenged: high inflows
into long-term unemployment, low labour market participation of older people, an increasing
number of labour shortages, a high tax and non-tax burden on labour. In addition there are
substantial regional and sub-regional disparities in labour market performance.

Policy-mix24 The Belgian NAP gives a good overall view of how the different Belgian
authorities define the policy mix in order to implement the European Employment Strategy.
Efforts to increase the coherence of the Belgian NAP are strengthened, but the total number
of labour market instruments is still high. The budgets devoted to each of the four Pillars
show that the two first Pillars constitute the bulk of the NAP. As regards the Adaptability
Pillar, Belgium has a fairly good record as regards flexibility, so that there is less need for
new measures in this area. Equal Opportunities is a horizontal guideline incorporated in
various other policies discussed in the NAP. Social partners have actively been involved in
the preparation and the follow-up of the NAP at national and regional level.

Response to the 2000 Council Recommendations Measures have been taken to increase
preventive action for the young unemployed, but an appropriate early-intervention system for
unemployed adults is not yet proposed. As regards the labour market participation of older
people, several measures have been taken to provide positive incentives to stay at work, but it
remains to be seen whether they suffice to reduce early exit from work. Co-operation between
the different labour market authorities has improved, as illustrated by several co-operation
agreements, although results at the operational level are awaited. The tax system has been
made more employment-friendly through a comprehensive reform package. Improvement in
the benefit system needs to be pursued. A multitude of initiatives are taken in order to build a
more solid foundation for the knowledge-based economy and society, but a comprehensive

24

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

42

lifelong learning strategy is not yet available, mainly caused by the high number of players
involved.

Challenges ahead Belgium needs to examine the most effective strategies to meet the targets
set for the overall employment rates, as well as for women and older workers. Concerning the
increased participation of older workers, initiatives are called for in order to curb early
retirement schemes, combined with further (employer and employee) incentives enhancing the
capacity of older workers to remain at work, putting emphasis on targeted training.
Intensified preventive action for adults is urgently required together with activation
programmes for the (very) long-term unemployed, in order to avoid exclusion. The different
authorities and the social partners should co-operate to develop a more coherent strategy for
lifelong learning, and assess the relative effectiveness of current
instruments for the
promotion of lifelong learning among different groups. Belgium is faced with acute labour
shortages in some segments of the labour market. To tackle this problem, further measures
are needed to raise the attractiveness and quality of technical and vocational education and
to pull down regional, linguistic and ethnic barriers on the labour market.

43

BELGIUM

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
56.3
60.5
21.9
26.3
45.4
51.5
1.2
4.0

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)
(2010 target, Stockholm summit)
(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
LTU rate
Youth unemployment ratio
Female unemployment rate

2000 1996
9.7
7.0
6.0
3.8
7.8
6.5
12.7
8.8

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

44

DENMARK

General appreciation The Danish economy continues to perform strongly, with economic
growth at 2.9% in 2000. Although there was only a small rise in the overall employment rate
to 76.3%, it is still the highest in the EU, both for men (80.8%) and women (71.6%).
Unemployment has further decreased to 4.7%, particularly for women, youth unemployment
has gone down to 5.3%, and long-term unemployment is 1%. The labour market remains
tight, with indications of shortages in some regions and sectors. Demographic trends also
show long-term reduction in the natural growth of the labour force.

Policy-mix25 Denmark is responding positively to the need to increase the labour force by
targeting pools of potential workers such as those over 55 and migrant workers, encouraging
increasing the quality of education, and upgrading
a more inclusive labour market,
qualifications of
those at work. The long-term challenge is being met by a truly
comprehensive strategy for lifelong learning, increased use of ICT, and by keeping taxes
stable and reducing public debt, to ensure the financial burden does not become too heavy.
Supporting actions are being taken under all the Pillars, although the NAP gives little
information on access to employment for those facing social exclusion. Although the inflow to
long-term unemployment is low, delays have occurred in ensuring that all receive action
plans before the 6 and 12 month thresholds. A new industrial strategy aims to increase the
number of new enterprises and ease administrative burdens on SMEs. Company tax is being
reduced in 2001. Innovative actions are proposed to reduce gender pay gaps and segregation.
The social partners play an active role in policy formation and implementation at all levels,
including the introduction of increased flexibility in work organisation.

Response to the 2000 Council Recommendations On-going reforms to reduce the overall
fiscal pressure on labour have led to some reduction in the marginal tax rate, though not by
as much as expected due to increases in local taxation. The small differences between benefits
and low wage incomes furthermore implies limited effects from tax reforms on work
incentives for low income groups, where the incentives for work continue to depend heavily
on strict availability rules and eligibility criteria together with more efficient labour market
policies. Efforts to make the labour market more inclusive have been continued and the
reform of the voluntary retirement scheme is showing some results in keeping people at work.
New initiatives to improve the working environment seek to reduce the flows out of work
caused by health problems. Although there has been a sharp drop in the numbers of
unemployed on training leave,
fallen markedly.
those on parental
Considerable effort has been put into gender mainstreaming, where the principle has now

leave have not

25

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

45

become established by statute. New initiatives have been launched to tackle the problem of
gender segregation and wage differentials.

Challenges ahead The main challenge remains to increase both the quality and quantity of
labour supply, in part through raising participation rates and improving productivity. There
will continue to be a need to closely monitor and assess the effects of the reforms in place,
particularly tax-benefit reforms, to see if they will be sufficient to bring more people into the
work force. In this context, more attention needs to be paid to the integration of ethnic
the new initiatives to tackle gender segregation and wage
minorities. The effects of
differentials also need to be monitored,
including the measures to diminish bottleneck
problems. Future NAPs should include better information on those not covered by
unemployment insurance.

46

DENMARK

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
73.8
76.3
49.1
55.7
67.4
71.6
2.5
2.9

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
6.8
4.7
1.8
1.0
7.9
5.3
8.3
5.3

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

47

GERMANY

General appreciation At 3%, real GDP growth in 2000 was the highest rate in the last 10
years, as was employment growth, at 1.5%. Unemployment (7.9%) continues its downward
trend, but job creation in the Eastern part of the country is stagnant and unemployment
remains high. The youth unemployment ratio continues to be far below the EU average, but
the stock of long-term unemployment, while gradually decreasing, at 4.0% remains above the
EU average, and inflow remains the same. The employment rate for older workers (55-64
years), while being roughly at EU average level, has not increased in the last few years.

Policy mix26 The challenges are being addressed by a panoply of measures in the framework
of an overall stability- and growth-oriented macroeconomic policy, wage moderation and
longer-term sustainability of public finances. Actions under the Employability Pillar are
being progressively strengthened, but need more sharpening and coherence. Though lifelong
learning is on the political agenda,
implementation, with
partnership between the Federal Government, the Governments of the Länder, as well as all
other actors in education and training and the social partners. Equally, while policy efforts by
and with the social partners in the Jobs Alliance proceed, many of them need to be followed
up more intensively in collective agreements and, where appropriate, with public financial
support. A number of specific actions to foster entrepreneurship and notable income and
corporate tax reforms, are improving the business climate for investment. Gender
mainstreaming remains strongly on the agenda, but needs more concrete output.

it requires further forceful

Response to the 2000 Council recommendations While measures have been taken to
strengthen the preventive approach, the instruments so far deployed have not yet come to
grips with the aim of reaching the 2002 targets of GL1 and substantially reducing long-term
unemployment. The challenge to improve general employment prospects, which, in the light of
the Stockholm targets, is particularly relevant for older persons, has been clearly recognised
by all labour market actors and constitutes a major item in the Jobs Alliance process. For
overall and women's employment rates there is gradual progress towards the Lisbon targets.
Building on further successful developments in the dual training system as well as on a
number of actions to improve continuing training, lifelong learning has become a major
policy issue. While the Federal Government has developed a set of focused and innovative
actions in the framework of an action plan on lifelong learning, this has not yet translated
into a fully comprehensive strategy supported by all actors including those of the Jobs
Alliance and with relevant quantitative targets. Few concrete actions have resulted so far,
notably with regard to various innovations and qualitative reforms in training, including ICT

26

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

48

training. The continued reduction of income tax and the recent lowering of the corporate tax,
as well as the stepping-up of the eco-tax, continue to decrease the overall tax burden. Model
projects have started to reduce wage costs at the lower end of the pay scale. The double-
pronged approach concerning both gender-mainstreaming and specific action for women has
been continued. The Government is committed to taking action to address the impact of the
tax and benefit system on women's employment and to reduce the gender pay gap on the basis
of a report to be submitted in Autumn 2001.

Challenges ahead A large job deficit continues to exist, notably in the Eastern part of the
country. At the same time skill shortages, particularly in ICTs, are clearly apparent. The
preventive approach needs to be consolidated, especially for ethnic minorities and migrant
workers and in East Germany. Employment amongst older workers must be increased.
Lifelong learning needs more human capital investment, a clearer engagement from the
social partners, and appropriate qualitative and quantitative targets. Improvement of social
inclusion through better employment for the low-paid continues to be a challenge. Providing
more and affordable (child)care facilities and all-day schools and enabling family-friendly
working times, reducing fiscal disincentives and eliminating discriminatory pay differentials
remain important issues. The economic catch-up process in East Germany needs to be
reinvigorated through coherent regional and structural policies in order to substantially
reduce underemployment. The development of relevant targets and progress indicators in all
Pillars should be speeded up.

49

GERMANY

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
64.1
65.4
37.9
37.3
55.3
57.9
0.8
3.0

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
8.9
7.9
4.3
4.0
5.0
4.6
9.8
8.3

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

50

GREECE

General appreciation: In 2000 the Greek economy grew by 4.1%, faster than the EU average
(3.3%) for a fifth consecutive year. Greece is now a member of the Euro zone. Labour
productivity improved, as did total employment growth and the overall employment rate.
However, the main structural problems of the Greek labour market persist: lower employment
rate (55.6%) than the EU average (63.3%) and the high unemployment rate which, despite a
reduction for the first time in several years from 11.6% in 1999 to 11.1% in 2000, remains
higher than the EU average, in particular for young people and women. The gender gap in
employment is still the highest in the EU and that in unemployment the second highest.

Policy-mix27: Greece responded to the above challenges with a series of measures aiming at
combating labour market rigidities, fostering entrepreneurship, encouraging adaptability,
raising employment, reducing unemployment and modernising work organisation. Their
implementation must be accelerated and monitored, if concrete results are to be achieved. A
the social security system is under consideration.
major rationalisation and reform of
Employability remains the most important Pillar, although there is a gradual shift towards
the other Pillars. The reform of the Public Employment Services is underway but further
efforts will be needed to speed up the process. Measures have been taken to enhance
entrepreneurship. New essential measures to promote gender equality are required. The
social partners have actively participated in discussions regarding these measures. Efforts
must continue towards their more active and constructive involvement in policy conception
and implementation, encouraged by the Government. Measures are planned for lifelong
entrepreneurship and equal
knowledge-based society,
learning and training,
opportunities. While progress is visible, more efforts are needed for the development and
monitoring of indicators, quantitative targets and benchmarking.

the

Response to the 2000 Council Recommendations: The Greek NAP 2001 is presented in a
more comprehensive and strategic way. Certain measures need to be better focused on the
Guidelines. The restructuring of the Public Employment Services is underway. The main part
of the reform should be carried out by the end of 2003, while complementary measures will
continue until
the end of 2005. This, however, should not pose obstacles to the full
implementation of the preventive and individualised approach and compliance with the EES.
The special action undertaken to improve flow statistics is welcome but the need for a
comprehensive statistical monitoring system remains. The measures taken to reduce taxes and
encourage labour market participation are in the right direction. Greater involvement of
women in the labour market is anticipated through mainstreaming and special actions, but

27

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

51

there is ample room for further progress. A comprehensive lifelong learning strategy is still in
an initial phase. Measures to reduce administrative burdens involved in setting up new
business are positive but efforts should continue. Although most new jobs were created in the
services sector, the full job creation potential of this sector should be further exploited. There
have been positive developments in the partnership approach, but efforts should continue, in
particular from the social partners.

Challenges ahead: Despite some improvement, structural deficiencies in the labour market
persist. Therefore, Greece should continue and intensify efforts to develop a strategic
framework and a set of well co-ordinated and balanced policies; speed up the reform of the
individualised and activating
Public Employment Services and implement preventive,
policies; upgrade the statistical monitoring system;
further encourage labour market
participation, in particular of women and young people; further develop and implement a
comprehensive lifelong strategy and improve the quality of education and vocational training,
strengthening links with labour market needs, and further encourage the social partners to
adopt a more active and constructive attitude, in particular for the modernisation of work
organisation. In addition, Greece will need to reinforce monitoring and evaluation of
measures already adopted in order to take corrective action if necessary.

52

GREECE

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
55.0
55.6
41.2
39.2
38.7
40.9
2.4
4.1

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
9.6
11.1
:
:
:
:
15.2
16.7

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

53

SPAIN

General appreciation The year 2000 in Spain was accompanied by strong growth. GDP and
employment grew by 4.1% and 3.3% respectively, well above the EU average, and
unemployment decreased, though less than in the previous year due to a strong increase of
the labour force. However, unemployment rates, at 14.1%, remain much higher than the EU
average and employment rates (55%) much lower, especially among women and young
people. A high share of fixed-term contracts and a low share of part-time work, well below
the EU average, are still worrying features of the Spanish labour market. Finally, important
regional disparities with respect to unemployment rates co-exist with increasing labour
shortages in some sectors and occupations.

increase and the 60% employment rate in 2004 forecast

Policy-mix28 The Spanish employment strategy contained in the 2001 NAP can be said to be a
continuation of that adopted in previous years. It relies on improving the employability of the
labour force, through the development of active measures, and also on fostering labour
demand, namely through reducing fiscal and administrative costs on enterprises and stable
job creation. The goal of full employment has been brought to the debate but, in spite of the
employment
in the Stability
Programme, no fixed targets have been set. Positive measures have been introduced in work
organisation but as yet without significant results. As concerns equal opportunities, the
emphasis has been on specific measures rather than on gender mainstreaming or female
employability strategies. Though both Trade Unions and employers' associations have been
actively involved in the elaboration of the NAP, they have not backed up all the measures
proposed. No agreement was reached with the social partners on the proposed new Law on
the Reform of the Labour Market prior to its adoption.

Response to the 2000 Council Recommendations Although the measures proposed cover the
recommendations, not all of them have been explicitly addressed in the 2001 NAP. The
employment policy focuses on activation of unemployment benefits and, due to the reduced
number of unemployed, on the intensification of budgetary efforts. The efforts to better co-
ordinate the regional Employment Services are important, but the completion of the system
has still been delayed. In spite of a continued increase in the female employment rate and
recent legal measures for positive actions, the mainstreaming of equal opportunities must be
reinforced. Measures to guarantee a significant increase of female labour force participation
are still insufficient, especially in the field of childcare for 0 to 3 year olds and other
dependant care, and no quantified targets have been set. The draft of the new law on
Vocational Training has been advanced and the III National Agreement on Continuous

28

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

54

Training was signed in December 2000 with the social partners. However, no specific targets
have been proposed regarding the implementation of a coherent strategy for lifelong
learning. The new Law on the reform of the labour market introduces more flexibility in
contracts. It aims to foster stable hiring, to promote part-time jobs and give special attention
to people with particular difficulties in entering the labour market. Some measures have been
adopted concerning disincentives to work arising through the benefit system and to reduce the
tax burden on labour.

Challenges ahead Spain must intensify efforts to ensure the provision of a sufficiently skilled
and flexible labour force, reinforce the use of ICT and promote a knowledge based society.
The adoption of the Law for Vocational Training should be part of an overall strategy for
lifelong learning which must cover the integration of the three subsystems of vocational
training and implement an enhanced coherence with educational policy and non formal
learning at all levels. Further action should be taken to promote specific measures for active
ageing. To increase co-ordination between regional employment services and ensure an
adequate balance between regional development and occupational and geographical
mobility, the reform of these services must be completed, and its impact monitored. The
quality of the NAP indicators needs to be improved. In this framework, the development of the
new statistical monitoring system (SISPE) is expected to play an important role. A reduction
in fixed-term contracts and a greater use of part-time contracts remain important challenges.
The aim of increasing female employment rates needs the urgent implementation of critical
efficient measures, especially to promote the reconciliation of family and work and, in
particular, childcare and other dependant care.

55

SPAIN

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
47.1
55.0
33.0
36.8
32.3
40.3
2.4
4.1

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
22.2
14.1
11.7
5.9
17.3
11.4
29.5
20.6

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

56

FRANCE

General appreciation The French strategy, which focused on increased growth which was
more employment-intensive and benefited everyone,
is now being realigned with the
objectives set by the Lisbon and Stockholm European Councils. The focus is now on quality in
work: more stable, better-paid jobs which are more knowledge-intensive and which have the
best organisational conditions and job security. The increase in domestic demand has led to a
growth in employment of 2% and a reduction in unemployment (-1.7%). Initiatives such as
jobs for young people or, to a certain extent, the reduction in working time have had a
positive effect on employment. In this context, the negotiations between the social partners on
working time have had a positive effect by promoting wage moderation and an increase in
productivity by means of the reorganisation of work. However, the overall unemployment
rate, and the female unemployment rate, are still above the European average. The activity
rate for the over-55s is one of the lowest in the EU.

Policy mix29 The NAP covers all the guidelines and horizontal priorities well. The number of
people benefiting from the preventive actions of the “new start” is increasing, although it is
still below the targets. Policies on integration and combating exclusion have led to a decrease
in the female and long-term unemployment rates. However, there are still imbalances, which
show that there is a hard core of unemployment which will take a long time to reabsorb. In
other respects,
the
unemployment rate remains high. The “New services, jobs for young people” programme has
had an immediate and significant effect on youth employment, with the challenge now being
to consolidate these jobs. Finally, the pace of ICT penetration has quickened.

labour shortages are beginning to appear in some sectors whilst

Response to the 2000 Council Recommendations Progress has been made on reducing the
administrative burden for companies, on modernising the organisation of work and assessing
the impact of employment measures for young people. The implementation by small
enterprises of legislation on the reduction of working time is nevertheless a major challenge.
The negotiations with the social partners on improving the system and quality of education
and training are continuing. The results in 2001 with regard to increasing individualised and
preventive measures for unemployed people fall short of expectations. The Personalised
Action Plan for a New Start, a new measure aimed at all unemployed people, has been in
operation since 1 July 2001. Measures proposed to stem the early retirement of older workers
do not appear to go far enough to tackle the issues. Progress has been made in terms of
reducing the fiscal pressure on labour.

29

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

57

Challenges ahead Measures aimed at the active ageing of workers over 55 years of age
should be strengthened. Efforts must be made to raise awareness amongst the social partners
and public opinion about the implications of the use of early retirement schemes. Efforts must
continue to reduce the tax burden on labour, which, despite the progress achieved, remains
above the European average. The policy of prevention as part of the implementation of the
Personalised Action Plan for a New Start must be closely monitored. Lifelong learning must
be promoted and the social dialogue on reforming the continuing training system must be
pursued. The effects on employment and the labour market of reducing the statutory working
week to 35 hours in small enterprises must be assessed.

58

FRANCE

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
59.6
62.2
29.0
29.7
52.3
55.3
1.1
3.1

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
12.4
9.5
4.8
3.8
10.4
7.1
14.5
11.5

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

59

IRELAND

General appreciation The year 2000 saw another substantial increase in employment by
4.7% and a further fall in unemployment to an historic low of 4.2%. Despite this, some
structural challenges remain. Whilst long-term unemployment has fallen to under 2%, there
remain high numbers of people economically inactive and/or on subsidy schemes. The total
employment rate is 65.1% and employment rates for both men and women across most age
cohorts are exceeding EU averages and moving towards the Lisbon and Stockholm targets.
The labour market is characterised by skills and labour shortages and the risk of wage
inflation remains. This needs to be managed carefully through increasing the volume of the
labour force and the participation rates, drawing from all available sources. Labour
productivity should be further improved through investment in skills and lifelong learning as
should be the quality of the jobs created.

Policy-mix30 This year's NAP continues with the cautious shift of emphasis from
labour
Employability to the other three Pillars. It sets out the results of
mobilisation introduced in 1999, complementing the preventive strategy. Unfortunately, the
NAP does not contain figures on the inflows into unemployment making an assessment of the
strategy deployed difficult. Efforts to increase the quality of
labour through education,
training and lifelong learning require systematic continuation. The tripartite Programme for
Prosperity and Fairness provides the framework for many employment-related actions which
need now to be implemented by all players. Last year's commitments to Equal Opportunities
and gender mainstreaming are beginning to yield initial results as the National Development
Plan is put into action. With the implementation of the NPD, equitable regional and local
development should become more important for future labour market policies.

the policy of

Response to the 2000 Council Recommendations Ireland again saw increased female
employment rates which now equal the European average. However, Ireland still ranks only
10th in the EU and employment rates for women over 35 are below EU averages. Ireland's tax
reform and actions to improve the provision and quality of childcare are being rolled out. The
supply of affordable childcare is not sufficient. Concrete progress in efforts to close the
gender pay gap and gender segregation generally still needs more time to materialise. Labour
productivity increased substantially in 2000. The NAP reports on widespread initiatives in the
area of skills and lifelong learning. However, these initiatives should be reinforced in order to
bridge the divide between the education and training sectors. Although the NAP contains a
set of education targets, it fails to deliver overall lifelong learning targets. In particular, the
area of continuing vocational training for workers remains underdeveloped. The National

30

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

60

Training Fund – already announced in last year's NAP – had a slow start but should now be
used to increase investment in continuing training for workers.

Challenges ahead Ireland should continue to strive for balanced and sustained employment
growth exploiting increased participation, especially of women and those economically
inactive, inward migration and natural growth of the labour force. In addition, efforts to close
the gender pay gap and gender inequalities generally through childcare and tax reforms need
to be pursued actively. A comprehensive, all embracing lifelong learning strategy is under
preparation and synergy between the different building blocks should be ensured. Special
attention should be paid to in-company training. The future success of the Irish employment
strategy will also be measured by the extent to which labour market policies achieve a more
balanced regional and local development in the context of Ireland's forthcoming spatial
strategy.

61

IRELAND

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
55.4
65.1
39.7
45.3
43.2
54.0
7.7
10.7

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
11.7
4.2
7.1
1.7
8.0
3.3
11.7
4.2

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

62

ITALY

General appreciation Significant improvements in labour market outcomes were registered in
2000: employment growth was 1.5% in full-time equivalents (FTE) while by January 2001 the
unemployment rate had fallen below 11%. Significantly,, the female employment rate grew at
a faster rate (1.3%) than the males rate (0.8%). Faster economic growth (2.9%), fiscal
incentives aimed at favouring hiring, and new flexible arrangements were relevant for this
result. Despite this, the overall employment rate (53.5%) remains the lowest in the EU and
low youth employment ratios; wide gender
traditional structural difficulties persist:
differentials in employment and unemployment rates; regional imbalances. The end of the last
Parliament and difficulties in the social dialogue contributed to the limit ambitions, content
and quantitative targeting of the NAP. The new Government set overall employment targets of
58.5% by 2005 and 61.3% by 2010, and described its future strategy aimed at modernising
the labour regulatory framework,
liberalising the Employment Services and combating
undeclared work.

Policy mix31 Steps forward in the implementation of established policies, rather than
innovations in the policy mix, can be reported. The Italian NAP focuses on the Employability
Pillar with fiscal incentives for new employment which also favoured the regularisation of
irregular work in the South, some measures for lifelong learning and incentives to extend
working life. In the Enterpreneurship Pillar, support to depressed areas was extended while
difficulties in the social dialogue slowed the on-going modernisation of work organisation.
Actions for Equal Opportunities remained too marginal. Limitations persist
in the
development of policy monitoring and evaluation systems.

Response to the 2000 Council recommendations Improvements in the implementation of the
policy mix outlined in the NAP 2000 can be acknowledged but do not constitute a
comprehensive reorganisation. The review of the pension system is planned for this year,
while the general reform of the social benefit system was postponed once more. Fiscal
incentives for hiring disadvantaged workers or for shifting from “precarious” into more
stable employment conditions, were reinforced. No new action to prevent the inflow of young
people into long-term unemployment was reported, while measures for the adult unemployed
mostly centred on incentives to hiring. The local structuring of the PES is on-going, but
difficulties were experienced in the distribution of resources to local administrations; this
delay hindered a preventive approach to long-term unemployment and the availability of
administrative data within an Employment Information System (SIL). Thus, the NAP does not
provide input or output indicators. Marginal actions to promote female employment were

31

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

63

taken, but these are insufficient to make up a comprehensive strategy for the enhancement of
equal opportunity. A quantitatively defined strategy on lifelong learning was not developed,
but specific improvements and actions were undertaken, also involving the social partners.

Challenges ahead The coherence of the policy mix and its compatibility with the Lisbon
targets should be further pursued, paying particular attention to the wide regional
disparities; data from the statistical monitoring system should be provided in order to allow
an evaluation of the country's efforts. Actions to reduce gender gaps should move from spot
measures to a broader strategy encompassing the four Pillars, devoting, for example, more
attention to the provision of care services for children and other dependants. With the labour
market characterised by high youth and long-term unemployment, the PES reform and the
lack of implementation of the SIL continue to be critical factors hindering the preventive
approach. Due to these weaknesses, the promised general reform of the benefit system is more
than ever required. Particular attention should continue to be paid to reducing the tax burden
on labour, especially to low-paid workers. Sharper efforts are also required to design and
implement a quantitatively planned strategy on lifelong learning particularly aimed at
increasing the employment rate of women, older people and other disadvantaged groups.

64

ITALY

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
50.9
53.5
28.8
27.8
36.0
39.6
1.1
2.9

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
11.7
10.5
7.7
6.4
12.2
11.8
16.1
14.4

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

65

LUXEMBOURG

General appreciation Strong economic growth (8.5%), a preventive and active employment
policy which is periodically reviewed in cooperation with the social partners, and the
individualisation of employment services are factors which explain the virtual absence of
unemployment in Luxembourg (2.4%). This economy is characterised by being very open to
the outside world for its supplies of goods, services and also labour. Immigration and
extensive use of border workers have traditionally made up for the shortage of local labour.
This external availability of labour has enabled the economy to grow without calling on the
pool of local labour, which is limited in number and which would not have been able to meet
the needs, in terms of quality and quantity, of the growth over the past few decades. The result
is that the domestic employment rate exceeds the national employment rate.

Policy mix32 The policy to combat unemployment remains focused on prevention, based on
the early identification of needs, the personalised supervision and monitoring of jobseekers,
and also on the activation of unemployed people and others not in work, by means of
employment placement or training measures and the introduction of new measures aimed at
increasing the flexibility of jobseekers. Increasing the employability of the workforce is a
major aspect of Luxembourg’s strategy which has been well developed, and successfully, in
the past. The “entrepreneurship” pillar is the most prominent aspect in the 2001 NAP, with a
large number of technical, fiscal and financial measures and also measures relating to access
for SME to continuing training. The social economy is soon to have new regulations and it is
interesting to observe the development of this new link between the economic and the social.
The adaptability of workers focuses in particular on the NICT. Equal opportunities between
women and men are becoming a firm feature of all policies.

Response to the 2000 Council recommendations The recommendations for Luxembourg have
been implemented to varying degrees. The social dialogue, which is a well-established feature
of economic and social life in this country, met with some difficulties when the 2000 NAP was
being drawn up. It has since been resumed, particularly for the purposes of the 2001 NAP.
Continuing training has become a reality and is contributing to the collective effort to make
Luxembourg a knowledge-based society. The targets for investment in human resources still
need to be set. Finally, with regard to the recommendation regarding older workers, the
response has been generally unsatisfactory and this should be one of the future priorities of
the employment strategy.

32

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

66

Challenges ahead Policy reforms should be implemented aimed at active ageing and
significantly increasing the activity rate of workers over 55 years of age. Technical and
vocational education aimed at preventing young people from leaving school without job
qualifications is a priority in order to create better coherence between the different sectors of
lifelong learning, including apprenticeships and the contribution of civil society. Raising
awareness in the economic and social sectors regarding access for women, and regarding
wage differentials between men and women, as well as any other measures to increase the
activity rate should be continued. In view of its specific characteristics, efforts should be
made to strengthen regional cooperation at Saar-Lor-Lux level with a view to improving the
management of the whole labour catchment area of the Luxembourg metropolis.

67

LUXEMBOURG

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
59.2
62.9
22.9
27.4
43.8
50.3
2.9
8.5

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
3.0
2.4
0.8
0.6
3.4
2.5
4.3
3.3

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

68

THE NETHERLANDS

General appreciation There are clear signs that the longest postwar boom of the Dutch
economy is coming to an end. The performance of the Dutch economy and labour market in
the coming years is expected to remain above the EU average. Expected employment growth
in full-time equivalents (FTE) for 2001 is 1.75%. The unemployment rate is expected to stay
around 3%. Consequently there is also no change in the high level of demand for labour will
undoubtedly help to raise the employment rates of women and people over 55. It is also
significant that employment measured in full time equivalents is currently growing faster than
employment in persons. Even disadvantaged citizens with a minority ethnic background are at
last benefiting from the booming labour market. A prolonged period of skills shortages
increases the risk of a wage-price spiral. Inflation reached a record level of 4.3%. The Dutch
economy may have started to cool off just at the right time.

Policy-mix33 Traditionally the Netherlands has focused on increasing effective labour supply
through activation and prevention and on measures to make the tax and benefit system more
employment friendly. At the same time the Government, together with the social partners, has
re-emphasised real wage increases in line with productivity, flexible labour relations and the
modernisation of the organisation of work to allow for the reconciliation of work and care.
This year more attention is given to adaptability and social exclusion which has improved the
balance between the four Pillars of the European Employment Strategy. Entrepreneurship
remains the least visible Pillar mainly because it is implemented through more general
measures in the area of taxes and competition. In the Dutch Polder model the social partners
have their own responsibility for areas such as work organisation, remuneration and lifelong
learning. They have been well involved in the drafting of the NAP.

Response to the 2000 Council Recommendations The Dutch authorities have introduced a
general tax credit for all workers plus the possibility for local authorities to reward long term
benefit claimants with a substantial bonus if they accept paid work. The Donner Commission
has proposed a solution to avoid the number of (partially) disabled passing the one million
mark. There has been a clear improvement in the statistical monitoring of the comprehensive
approach. For the first time information is provided by all three bodies responsible for the
reintegration of the short term unemployed. But as there are still technical problems to be
resolved, providing evidence that the 2002 deadline will be met remains a major undertaking.

Challenges ahead In order to reduce the poverty trap more attention should be paid to the
cumulation of welfare and unemployment benefits with other low income subsidies. The

33

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

69

emerging consensus on how to solve the disability problem pays much more attention to the
inflow than to the outflow side. It should not be forgotten that, in view of the size of the stock,
greater efforts are also needed to increase the outflow. Particularly significant are the efforts
to reduce the risk of a possible wage-price spiral, especially the implementation of measures
to post workers in vacancies which are difficult to fill. Efforts to raise the employment rates of
the over 55 year old and women have to be continued. In spite of considerable progress there
continues to be a short-term shortage in the supply of childcare. The new Childcare Basic
Provision Act will come into force by the year 2003. Productivity needs to be strengthened by
paying more attention to the quality of labour supply in a knowledge based economy.

70

NETHERLANDS

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
65.9
73.2
30.3
38.3
55.3
63.7
3.0
3.9

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
6.3
2.7
3.1
0.8
7.3
3.6
8.1
3.7

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

71

AUSTRIA

General appreciation The year 2000 was another year of very favourable economic and
employment performance with a real GDP growth of 3.2% and an unemployment rate of
3.7%, one of the lowest in the EU. At 68.3%, the employment rate nearly reach the Lisbon
target (77% for men and 59.4% for women). However, efforts to reduce structural labour
market problems have not yet had the expected result: the employment rate for older workers
remains far below the EU average figures and has decreased further in 2000, there is still a
the newly introduced
significant gender gap in employment and the positive effects of
childcare allowance still need to be demonstrated.

Policy-mix34 Austria is responding to the overall challenges with a coherent strategy and a
large range of initiatives under all Pillars to develop the job potential of the knowledge based
economy. Actions under the Employability Pillar appear to be consolidated at a high level.
Inflow into long-term unemployment is very low, in spite of a slight reduction in activation
rates. Gender mainstreaming is strongly on the agenda but with a range of measures which
should be turned into a more concise strategy . Efforts to sharpen lifelong learning activities
have been stepped up but still fall short of an adequately comprehensive and integrated
strategy.

Response to the 2000 recommendations The objectives for the PES are clearly orientated
towards those aspects of the EES and the recommendations for Austria which fall within its
remit, particularly as concerns groups who face problems in the labour market. There has
been a strong decrease in unemployed disabled people. The clear gender objectives of the
PES could stimulate other private and public institutions to implement a comprehensive
medium-term strategy. This is particularly obvious with respect to the reduction of
the
sizeable pay gap. No progress has been made in reducing the heavy tax burden on labour,
which is particularly high for the low-paid/unskilled labour. Some amendments to labour
legislation have been made, and in view of the good employment performance a small
reduction of the unemployment insurance is planned. It seems that the reduction of the budget
deficit commands greater support than the reduction of the 'tax-wedge'. In order to persuade
older people to stay in work longer the Austrian Government raised the statutory age for
early retirement from 55 to 56.5 for women and from 60 to 61.5 for men, and new regulations
under invalidity pension schemes and measures facilitate a gradual transition to retirement. It
also provides several incentives to employers encouraging them to keep older workers at
work longer. The social partners have supported these policies for older workers by
the still decreasing
expanding collective agreements for part-time work.

In view of

34

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

72

employment rate of older workers this appears insufficient and further efforts need to be
undertaken which must also focus on the effectiveness of measures.

Challenges ahead With near-full employment in Austria the focus must continue to be on
target groups through active labour market policies. More effort must be put into tackling
structural problems in the employment system (f.e. the tax burden on labour), especially to
enhance the employment rates for women and older workers. Policies are needed for the
integration of migrant workers. The Government and the social partners, each in its own field
of competence, should agree on a comprehensive and coherent lifelong learning strategy
which integrates ICT skills and vocational training within the whole range of education and
training sectors. More action is needed from all those responsible, Government (Bund and
Länder) and social partners, to reduce the gender pay gap and increase the care service
provision.

73

AUSTRIA

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
67.7
68.3
29.1
28.9
58.2
59.4
2.0
3.2

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)
(2010 target, Stockholm summit)
(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
LTU rate
Youth unemployment ratio
Female unemployment rate

2000 1996
4.3
3.7
1.1
1.0
3.7
2.9
5.2
4.3

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

74

PORTUGAL

General appreciation The Portuguese economy grew 3.3% in 2000 at a higher rate than in
1999. Labour market indicators in general show continued good performance, with an
improvement in the employment rate (68.3%) and a decrease in the unemployment rate to
4.2%. However some structural weakness continue to jeopardise the future development of
the labour market. Most important among these are: low productivity and low skills level of
the workforce, low participation in continuous training, high levels of early school leaving
and an under-developed service sector.

Policy mix35 Portugal is responding to these problems by focusing on the Employability
Pillar. A comprehensive and ambitious plan for lifelong learning is presented. The objectives
of the plan covering the development of the training and education systems will require strict
implementation and close monitoring and evaluation. At the same time the unemployed are
being activated in the framework of national measures that put into practice GL1 and GL2.
initiatives were presented with regard to Entrepreneurship. Concerning
No major
Adaptability there is an effort to involve the social partners through sectoral agreements,
namely on labour market and employment policy, education and training. Under the Equal
Opportunities Pillar the objective of achieving a balanced share of men and women
participating in work and family life will be mainly supported by the enlargement of the
childcare facilities network at pre-school level.

Response to the 2000 Council Recommendations A wide-ranging plan on lifelong learning
has been developed aimed at improving initial vocational training through the diversification
of paths within and outside the formal education system, especially among adults. The role
that new technologies will have in the near future was taken into account. The growth of the
service sector will be promoted through the increase of employees' skills and the creation of
more employment. Concerning the social partners, an important step was taken with the
signing of two tripartite agreements. The strategy to reconcile family and working life is
concentrated on the enlargement of the pre-school childcare network with no major new
measures to promote male participation in family life although Portugal plans to adopt new
legislation recognising the indispensability of the right to paternity leave.

Challenges ahead. Portugal will have to modernise its productive structure in order to meet
the future requirements of a more global and competitive market. To this end it is necessary
to create more good jobs in the services sector and improve labour productivity. These goals
could be achieved through a correct implementation of a comprehensive lifelong learning

35

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

75

plan, upgrading the skills level of the workforce and the adoption of new technologies in the
framework of concrete commitments from social partners. At the same time young people
should enter the labour market with the appropriate skills and much emphasis should be
placed on further reducing early school leaving. The mismatch between job offers and
demand needs to be better addressed, particularly as regards the provision of appropriate job
opportunities for the high skilled part of the labour population. Additional impetus is needed
to address the gender sectoral imbalance.

76

PORTUGAL

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
62.8
68.3
46.3
51.0
54.7
60.3
3.6
3.3

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
7.3
4.2
4.0
1.7
7.2
4.2
8.3
5.2

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

77

FINLAND

General appreciation The labour market situation in Finland continued to be characterised
by a higher than EU average economic growth (5.7%) and employment rate (67.5%). There is
also a higher than average unemployment rate (9.8%) with strong regional variations. At the
same time, shortages of labour and bottleneck problems are emerging in some sectors and
growth centres.

Policy-mix36 The NAP 2001 is a more strategic continuation of NAP 2000 and aims at
improving employment growth, the supply of labour and the functioning of the labour market
by investing in skill development and expertise. All Pillars are well represented, but emphasis
is put on the first Pillar. The target is to raise the employment rate to 70% by 2005, though
this is dependant on a continuation of favourable economic growth and support from effective
labour market and training policies, workplace reforms and reductions in taxes as well as
moderate wage agreements. In spite of an improvement in offering early action plans, the rate
of inflow into long term unemployment showed little improvement. In raising the employment
rate, special attention is devoted to measures aimed at older people. The NAP includes a
comprehensive life long learning strategy mainstreamed in all Pillars. The reform of active
labour market measures continues with a view to preventing inflow into long-term
unemployment and ensuring availability of labour including the promotion of employer
services in PES. Supporting the adaptability and quality of working organisations,
reinforcing entrepreneurship and alleviating the gender-based segregation are linked to the
knowledge-based growth strategy. More attention is given to the regional dimension of
employment policy. Social partners are involved in the NAP process.

Response to the 2000 Council Recommendations As regards the incentives, some changes to
pension schemes were made in 2000 in order to reduce incentives to take up an early pension.
In 2001, some new initiatives for those most hard to place were made and the potential for
further incentive improvements will be reviewed in 2001. Several measures will also be
devoted to older people for updating their skills and working capacity. Finland has a
comprehensive strategy to ease the tax burden on labour by 1.5% of GDP from 1999 to 2003.
The income tax and social security contributions of the labour costs of the average employee
are estimated to be 46.7% in 2001. In order to alleviate gender-based segregation, several
actions are being implemented in co-operation with the social partners. New initiatives were
taken for alleviating parental responsibilities and distributing the parental costs incurred by
employers.

36

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

78

Challenges ahead are the immediate bottleneck problems, together with the need to ensure an
adequate labour supply for the future in the context of the ageing labour force, early
retirement, and strong regional disparities as well as structural unemployment. The hard-
core of long-term unemployment especially calls for increasing the efficiency and quality of
labour market programmes.. Attention needs also to be given to high youth unemployment.
Occupational segregation still needs to be tackled, particularly in the context of solving
bottleneck problems, and creation of viable enterprises and entreprenerial culture also needs
further efforts. The results of tax-benefit reforms need to be monitored, and efforts to reduce
the high tax burden on labour, especially the high marginal effective tax rates on low wage
earners, should be continued.

79

FINLAND

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
62.8
67.5
36.2
42.7
59.5
64.4
4.0
5.7

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
14.6
9.8
5.1
2.8
12.0
11.2
14.9
10.6

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

80

SWEDEN

General appreciation The Swedish labour market has improved markedly during the last few
years. Employment grew last year by 2.2%. The 2000 employment rate was 73%. GDP
continued to develop very well with an increase of 3.6% last year. The unemployment rate
continued to fall, to 5.9%. Some signs of bottlenecks in the labour market can be found,
mainly in the ICT sector but also in the health and care sector, but there is no general
scarcity of labour yet. The employment rate among older workers remains very high in
comparison with the EU average.

Policy-mix37 The overall aim of employment policy in Sweden is to reach full employment. As
an ambitious mid-term goal, 80% of the population 20 - 64 years old should be employed by
2004. According to estimates in the Spring Budget, the goal will not be reached with current
GDP growth. Labour market policy has been reinforced with the aim of having an efficient
labour market with full employment and high economic growth. The policy put in place has
managed to reduce the inflow into long-term unemployment for adults, and for young people
the inflow remains low. Industrial policy is aimed at stimulating the business climate so that
new businesses are established and existing ones expand but also at increasing skills in and
accessibility of new information technology. The regional growth agreement aims to use
existing resources in a more efficient way and can be seen as an important instrument for
regional enterprise policy. Under its educational policy the Swedish Government emphasises
the importance of giving the right prerequisites for lifelong learning and believes in making
investments in education at all levels. The social partners also have a large responsibility in
ensuring that individuals can engage in lifelong learning. Furthermore, they played an active
role in preparing this year's NAP with several
text contributions, mostly under the
Adaptability Pillar. The equal opportunities policy aims at making it possible to combine
work and family life. In the light of demographic changes it is also necessary to increase
women's labour force participation. Efforts have been made, but the target to halve the
number of people working part-time has yet to be reached.

Response to the 2000 Council recommendations The efforts made to reduce the high tax on
labour are a follow-up of the tax reform presented last year. No new measures have been
reported that reduce the taxes on labour. Although reduced, taxes remain higher than in other
Member States. Sweden has taken strong action to increase the incentives to take up a job. It
is no longer possible to qualify for a new period of unemployment benefit by participating in a
labour market scheme and the unemployment insurance is limited to 600 working days. After
the first 100 working days an unemployed person will be obliged to have both geographical

37

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

81

and occupational mobility and the ceiling of the benefit level will be reduced. Beyond this an
activity guarantee has been introduced which aims to break the vicious circle between
unemployment and labour market programmes. The introduction of the activity guarantee has
also reduced the usage of unemployment insurance as an early retirement pension. A target to
halve the number of people dependent on social welfare between 1999 and 2004 has been
introduced. The monitoring and assessment of current levels of occupational and sectoral
segregation has been addressed in the past but no new main initiatives can be found. As a
consequence of the Council recommendation, the Government instructed the National Labour
Market Board to report on initiatives taken to overcome the gender based nature of the
labour market. Results are still awaited from this report.

Challenges ahead Taxes have been cut but the tax burden on labour remains high in an EU
context. In spite of improvement in the labour market situation for ethnic minorities and
migrant workers, their situation remains difficult in comparison to people born in Sweden,
and needs to be addressed. While the social partners are responsible for much of the third
in encouraging, monitoring and
Pillar, more active involvement by the Government
evaluating the progress made by the social partners is desirable. While efforts are being
made to intervene at an early stage to break occupational and sectoral segregation, it is still
high, and calls for further action. The securing of a sufficient labour supply in the long-term
is also a key challenge for Sweden as well as ensuring the efficiency of the active labour
market programmes.

82

SWEDEN

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
70.3
73.0
63.4
65.1
68.7
71.0
1.1
3.6

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
9.6
5.9
2.9
1.3
9.5
5.5
9.0
5.8

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

83

UNITED KINGDOM

General appreciation Strong labour market performance delivered a further year of
employment growth and an overall rate of 71.2%. Despite this some structural challenges
remain. One in five employers say they have a significant gap in their workers skills. Inflows
into long term unemployment of the young and adults (16% and 10% respectively) declined
slightly in 2000 and still exceed those of the best performing Member States, although out-
flows from long-term unemployment are amongst the highest. Inactivity and remaining long-
term unemployment are concentrated in jobless households, within deprived areas, and
amongst disadvantaged groups (certain ethnic minorities, the disabled, male older workers
and lone parents). 40% of benefit claimants have literacy or numeracy problems.

Policy mix38 The UK's employment strategy places emphasis on trying to make increased
employment more inclusive. Additional measures in the Entrepreneurship Pillar further
strengthen the balance between Pillars. Local employment initiatives are important for the
Government and the devolved administrations in addressing geographical variations in job
creation. The Adaptability Pillar illustrates current flexible working practices but measures to
increase security of workers would provide more balance to the strategy. Recent initiatives
under Equal Opportunities should improve the work life balance.

Response to Recommendations This year's NAP further illustrates the strong role of
partnership in the UK at the local level. Local partners have been given a more flexible role
in the delivery of policies for lifelong learning and social inclusion. At the national level there
are examples of the increasing role of the UK's two major national social partners but there
is no general approach as their involvement is restricted to a number of specific issues.

The National Childcare Strategy continues to improve the provision and affordability of
childcare places. Its impact should be closely monitored. Special attention is devoted to
encouraging more lone parents to move into work. The pay gap for full time working women
narrowed slightly to 18% but remains one of the largest in the EU. The UK have declarations
of intent, but less specific policy and no target for its reduction. The UK accepts the need for
a more balanced gender representation in all sectors but could increase policy intervention to
realise this.

Under the common definition of the indicator for Guideline 2, 12.4% of the unemployed
participated in an active measure falling well short of the 20% target. Reform of the New
Deal for Adults which now intervenes earlier is a partial answer to the Recommendation. The

38

In the context of the implementation of the Employment Guidelines, the term "policy mix" refers to the balance between the four
pillars of the Guidelines.

84

rationale for bringing forward the point of intervention to 18 rather than 12 months is not
justified in the NAP. With unemployment so low, those reaching the New Deal at 18 months
are the most hard to help and less able to compete in the labour market. It is unclear how
many of the long-term unemployed finding work retain this work.

As part of the lifelong learning strategy, the NAP illustrates the priority given to improving
low levels of basic skills by encouraging access to and participation in learning. Much of the
strategy described in earlier NAPs is now operational with emphasis placed on the role of
non-formal learning. The NAP displays the further impetus provided by the new Adult Basic
Skills Strategy, involving an overhaul of the learning infrastructure and considerable new
resources targeted towards those in greatest need.

the
Challenges ahead To address workforce skill gaps and low labour productivity,
Government, Employers, and Unions have an important role in encouraging work based
training within a comprehensive life long learning framework (particularly amongst small
firms). Especially important are policies for those with poor basic skills (literacy and
numeracy). Although more intensive support for the adult unemployed is now offered at 18
months through the New Deal for Adults, the UK could further reinforce earlier activation by
intervention for more people at 12 months. With non-employment increasingly concentrated
amongst disadvantaged groups, additional support would help to close the gap in employment
between these groups and the rest of the workforce. The gender pay gap remains one of the
largest in the EU. The Government and Social Partners both have important roles in
addressing the issue. It is important to build upon the increasing role of the social partners in
the delivery of policy at national level.

85

UNITED KINGDOM

Note:

The bigger the area the better the performance. The graphs are constructed in such a way
that the higher employment rates and the lower unemployment rates are further away from
the centre.

Employment rate
Empl. rate 55-64 years old
Female Employment rate
GDP growth

2000 1996
69.3
71.2
47.8
50.8
62.7
64.6
2.6
3.0

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

(2010 target, Lisbon summit)
(base line scenario, Lisbon summit)

Employment Indicators

Employment rate

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2000

1996

EU Benchmark

2000

1996

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
Long term unemployment rate
Youth unemployment ratio
Female unemployment rate

2000 1996
8.2
5.5
3.3
1.5
10.2
8.3
6.5
4.9

EU Benchmark

2.9 (average of 3 best performers:LU,NL,AT)
0.8 (average of 3 best performers:LU,NL,DK)
2.9 (average of 3 best performers:LU,AT,IE)
3.8 (average of 3 best performers:LU,NL,IE)

86

4.

THE WAY FORWARD

The assessment outlined above of both performances and policy developments gives cause for
some optimism. Performances are
and
unemployment. Policies are broadly developing in support of the Employment Guidelines and
Recommendations, although not always with the systematic approach that would be required.

improving in terms of both employment

However, the analysis also indicates that serious structural weaknesses remain in the EU
labour markets. These need to be addressed as a matter of urgency in order to ensure the
success of the Lisbon strategy.

Increasing employment rates

The recent downwards revision of growth forecasts compels the EU Member States
rigorously to pursue policies to facilitate job creation and to increase labour
force
participation, in order to secure progress towards the Lisbon objectives and full employment.

An across-the-board implementation of the Employment Guidelines provides solid ground for
a comprehensive strategy to increase employment rates.

On the supply side, investments in preventive and active measures to accelerate re-entry of the
unemployed to the labour market must not be relaxed. All Member States should make sure
that they can comply with the targets for prevention concerning young people and adults by
2002 as agreed at the Luxembourg Summit in 1997. Increased attention must be paid to
measuring the effectiveness of active labour market policies and their adequacy to the specific
needs of the unemployed and those of the employers in a changing labour market
environment. More should be done in the field of tax and benefit reforms in particular to
remove financial disincentives to take up work and to discourage early retirement. The
rigorous implementation of the emerging lifelong learning strategies is equally important.

On the demand side, measures to promote an entrepreneurial culture and to remove obstacles
to the creation and running of small- and medium-sized businesses must be pursued. The
development of better indicators and benchmarks could contribute to policy developments in
this respect. The recent and still modest trend in the reduction of labour taxation needs to be
reinforced, with particular emphasis on low paid work.

A balanced policy mix backed by concrete national targets to increase employment rates is
thus called for.

87

Quality in work

Quality in work is a multi-dimensional question reflecting both the intrinsic characteristics of
individual jobs and the wider work environment and characteristics of the labour market. The
quality of employment must be improved in such a way as to attract and maintain more
people in employment.

Better working conditions and better facilities to reconcile work and family lives are key to
increasing the participation of older people, women and the disabled. Securing better quality
in work can help to solve emerging recruitment difficulties in a number of sectors, both public
and private. Better career and development prospects are important to prevent drop-out from
the labour market and consequent social exclusion. Quality in work is also a factor of
increased productivity, just as higher productivity promotes quality.

As a policy area which links the twin objectives of competitiveness and social inclusion,
quality is a centre piece of the European social model and a key to the success of the Lisbon
strategy. National authorities and the social partners have a shared responsibility in delivering
quality in work.

More determined action in favour of equal opportunities

A remarkable feature of the European labour market over the last few years has been the
increase in women's participation. However, this high level of growth has been built on part-
time jobs, a pay gap in the private sector of around 20%, and persistent glass ceilings in terms
of career development and management positions. Unless policies redress this imbalance, the
objective of the Lisbon Summit (60% female employment rate by 2010) will not be
achievable. This means that Member States should put more effort to increase actions under
the Equal Opportunities Pillar, also in view of the weakened attention in the 2001 NAPs
compared to previous years. More determined action to address gender gaps, especially the
pay gap, is necessary. Closing the gender pay gap is an investment in a productive factor. Not
only does it address a major source of inequality between women and men, but it also
improves motivation for women workers, which can lead to increased labour productivity,
and helps desegregate the labour market and change traditional roles.

Improving the capacity and exploiting the potential of older workers

The cohort of workers aged 55-64 is one with particularly low employment rates requiring a
more determined set of measures, with a view to reaching the target set by the Stockholm
Summit of an employment rate for this age group of 50% by 2010. An analysis of recent
NAPs indicates that Member States fully recognise the importance of the issue and have

88

initiated some reforms related to retirement and particularly pre-retirement regimes. However,
there appears to be some reluctance to take rigorous measures to discourage early retirement,
especially on the side of the social partners.

Beyond such reforms, a wider set of measures is needed to maintain older workers in or
attract them to work, based in particular on a preventive approach and a profound cultural
change.

Investment in human resources, lifelong learning, tackling labour and skills shortages

local or sectoral

Employment rates can be constrained by an inadequate matching of labour demand and
supply. The emerging tensions between demand and supply in a number of markets (at
level) require increased attention for both occupational and
national,
geographical mobility of workers. Efforts to make a reality of lifelong learning should
improve overall skill and qualification levels – amongst the unemployed and those already in
employment, as well as successive cohorts of new entrants into the labour market. Just as
importantly in the increasingly knowledge-based economy, measures designed to reach non-
learners, the development of more flexible forms of learning and the promotion of 'a learning
habit' amongst adults will be critical in enabling the workforce to continue to up-skill and re-
skill in response to changing labour market needs. Improvements in the jobmatching capacity
of employment services are important in this context and the on-going modernisation efforts
should be pursued vigorously. The progress achieved in setting up a Europe-wide database of
jobs and learning opportunities, as requested by the Lisbon Summit, should be built on as a
means to increase the transparency of the European labour market.

Fighting social exclusion

The current economic conditions must be fully exploited to fight social exclusion by opening
new labour market opportunities to weaker groups in society. Participation in the world of
work is a key element of social inclusion. Active measures should be increasingly opened to
those concerned and adjusted to the characteristics of harder-to-place people. Transition from
supported jobs and from the informal economy to the mainstream labour market should be
actively supported, as should transition from low quality to higher quality jobs, which are
proven to secure better employment prospects. To do so, it is paramount to provide the people
at risk of exclusion with adequate access to skills and competences.

In pushing forward the complementary employment and inclusion agendas, Member States
should aim at a de-segmentation of measures as well as of labour markets. This should be
achieved in particular through strong co-operation between the institutions concerned at all
levels – from policy design to on-the-ground implementation.

89

Social partners

The invitation made to social partners in the 2001 Guidelines to develop their own process to
support the European Employment Strategy has not been taken up to a significant extent. The
support of the social partners' organisations for the European Employment Strategy expressed
for example in their declaration to the Stockholm European Council – is therefore not
matched by a visible contribution to the process. Given the key role of the social partners in
the success of the European Employment Strategy, and with due respect to their autonomy, it
is necessary to ensure stronger involvement of the social partners in the future.

Regional disparities

Employment disparities between regions are still unacceptably high in the European Union.
Whereas disparities between Member States are tending to decrease, those between regions
are tending to become more pronounced. This calls for strengthened efforts to achieve a better
balanced employment situation across European regions. Such efforts include financial
transfers but must be based on the need to strengthen regional competitiveness. Investment in
physical and human capital must remain the key objective of European as well as of national
and regional policies. The European Employment Strategy provides an appropriate strategic
framework.

European Social Fund (ESF)

The ESF has been established as an important instrument for Member States' employment
policies. However, ESF operations can seem rather detached from the Employment Strategy
and it is not always easy to specify the contribution of the ESF makes to the EES. Although
the intensity of ESF funding varies between Member States, renewed attention is needed in
order to ensure on a permanent basis the coherence between the ESF and the European
Employment Strategy. Now that the 2000-06 programmes have been launched, renewed
attention should also be given to procedures and institutional arrangements. Moreover,
flexibility is needed in order to maintain the ability of the ESF to adapt to changing
circumstances, including in the context of the EES objectives. The community initiative
EQUAL should also provide a significant contribution in combating discrimination in access
to and participation in the labour market.

90

Follow-up

The Commission and the Council will continue to develop and implement the European
Employment Strategy through:

• the determined implementation of the Employment Guidelines and Recommendations

under all Pillars and taking the horizontal objectives into account;

• the strengthening of the Employment Guidelines to reflect the above evaluation of policies

and challenges. In particular, provisions will be strengthened with respect to:

• employment rate targets for older workers

• the promotion of jobs of better quality

• the reduction of gender pay gaps

• an in-depth examination of

force
participation and active ageing based on a Joint Report from the Commission and Council,
as requested by the Stockholm European Council;

the conditions for promoting increased labour

• an Action Plan on Skills and Mobility to support the development of new European labour
markets, based on the findings of the High Level Group constituted following the
Stockholm Summit, in time for the Spring 2002 Summit;

• an Action Plan on Lifelong Learning following a wide-ranging consultation in 2001 of
Member States, other EU institutions, the Social Partners, NGO's and others, based on last
year's Memorandum39, and a detailed work program on the follow-up of the concrete future
objectives of the education and training systems, as requested by the Stockholm European
Council;

• the continued development of indicators to assess progress under the Employment
Guidelines, with particular emphasis on gender pay gaps and care services for children and
other dependants, as well as the issue of quality (see below);

• a proposal to the European Council in December 2001 regarding the development of
indicators on quality at work, taking as a basis the Commission Communication on
Investing in Quality40; and

• an in-depth evaluation of the impact of the European Employment Strategy in terms of
policies and performances over the years since its introduction, to be concluded in 2002.

39

40

SEC(2000) 1832, 31.10.2000.
COM(2001)313 final, 20.6.2001.

91

ANNEX 1: OVERVIEW OF THE 2000 KEY INDICATORS41

Total Employment Rate

Employment Indicators

Males
Females
15-24
25-54
55-64

Full-time eq. Employment rate

Males
Females

Unemployment Indicators

Total Unemployment Rate

Males
Females

Youth Unemployment Ratio

Males
Females

Long-Term Unemployment Rate

Males
Females

Economic Indicators

Total Employment Growth
Real GDP Growth
Labour Productivity Growth
Change in Real Unit Labour Costs

BE

DK

DE

GR

ES

FR

IE

IT

LUX NL

AU

PT

SF

SW UK

EU15

60.5
69.5
51.5
29.1
77.4
26.3
60.5
74.4
46.6

7.0
5.7
8.8
6.5
5.9
7.0
3.8
3.1
4.8

76.3
80.8
71.6
66.0
84.2
55.7
69.3
76.9
62.2

4.7
4.2
5.3
5.3
5.0
5.5
1.0
0.9
1.2

1.8
4.0
2.2
-0.8

0.8
2.9
2.1
-1.8

65.4
72.8
57.9
46.1
79.5
37.3
58.6
71.1
46.1

7.9
7.6
8.3
4.6
5.3
3.9
4.0
3.7
4.3

1.5
3.0
1.4
0.2

55.6
71.1
40.9
26.8
69.5
39.2
55.3
71.5
40.0

11.1
7.3
16.7

1.2
4.1
2.9
-0.9

55.0
69.9
40.3
32.7
67.8
36.8
52.5
69.0
36.6

14.1
9.8
20.6
11.4
9.8
13.1
5.9
3.5
9.5

3.3
4.1
0.8
-0.2

62.2
69.3
55.3
29.0
78.8
29.7
58.7
69.2
48.7

9.5
7.8
11.5
7.1
7.0
7.3
3.8
3.0
4.7

2.0
3.1
1.1
-0.1

65.1
76.1
54.0
50.6
75.4
45.3
60.6
75.8
45.2

4.2
4.3
4.2
3.3
3.4
3.3
1.7
2.1
1.0

4.7
10.7
5.6
-3.8

53.5
67.5
39.6
25.9
67.9
27.8
51.7
67.0
36.7

10.5
8.0
14.4
11.8
11.4
11.9
6.4
4.9
8.8

1.5
2.9
1.4
-0.7

62.9
75.1
50.3
31.9
78.4
27.4
60.4
75.9
44.6

2.4
1.9
3.3
2.5
2.4
2.6
0.6
0.5
0.6

73.2
82.4
63.7
69.2
81.8
38.3
57.2
74.6
40.1

2.7
2.0
3.7
3.6
3.5
4.6
0.8
0.7
1.1

68.3
77.0
59.4
53.1
82.2
28.9
63.5
76.2
51.0

3.7
3.2
4.3
2.9
2.8
3.0
1.0
1.0
1.0

5.5
8.5
2.8
-1.8

2.5
3.9
1.3
-0.7

0.9
3.2
2.3
-1.4

68.3
76.6
60.3
43.5
81.9
51.0
66.6
76.6
57.1

4.2
3.4
5.2
4.2
3.5
4.8
1.7
1.4
2.0

1.7
3.3
1.6
0.8

67.5
70.6
64.4
40.2
81.5
42.7
64.9
69.3
60.5

9.8
9.1
10.6
11.2
10.9
11.4
2.8
2.8
2.7

1.5
5.7
4.1
-2.9

73.0
74.8
71.0
41.6
83.8
65.1
65.1
70.0
60.2

5.9
6.0
5.8
5.5
5.4
5.7
1.3
1.4
1.1

2.2
3.6
1.4
4.7

71.2
77.8
64.6
56.2
80.4
50.8
61.7
74.4
49.7

5.5
6.0
4.9
8.3
9.4
7.2
1.5
2.0
0.9

1.0
3.0
2.0
0.3

63.3
72.5
54.0
40.3
76.6
37.7
57.9
71.0
45.3

8.2
7.0
9.7
7.8
7.7
7.9
3.6
3.0
4.4

1.8
3.3
1.6
-0.2

41

For further explanation of the key indicators see below.

92

Other key indicators

Participation in training

Males
Females

Early School Leavers

Males
Females
Internet Coverage in Schools
Primary
Secondary

Rate of Self-Employment

Males
Females

Rate of Employment in Services

6.8
7.6
6.0
12.5
14.8
10.2

70
95
14.0
17.2
9.6
44.0

20.8
17.8
23.8
11.7
13.4
9.9

94
100
8.2
11.9
3.9
54.2

5.0
5.4
4.7
14.9
14.6
15.2

56
81
10.1
12.9
6.4
41.7

1.1
1.1
1.1
17.4
21.8
12.9

1
18
32.4
38.9
21.6
34.2

4.9
4.4
5.4
28.1
33.7
22.4

80
94.5
18.2
21.2
13.3
34.1

2.8
2.6
3.1
13.3
14.8
11.8

30
84
10.1
13.5
5.9
42.9

80
90
17.7
24.9
7.1
40.9

5.2
5.0
5.3
29.0
32.4
25.6

75
90
24.2
29.0
16.1
33.6

4.8
3.9
5.3
16.8
15.9
17.6

25
100
8.9
11.0
5.6
48.1

15.6
16.4
14.7
16.7
17.5
15.9

38
86
9.6
11.5
7.0
51.2

3.3
3.2
3.4
43.1
50.6
35.6

42
100
23.3
25.5
20.8
37.0

19.6
17.7
21.5
9.8
12.5
7.2

90
95
12.9
17.1
8.3
44.9

18.6
16.6
20.7
7.7
9.2
6.2

57
99
10.6
15.2
5.6
51.8

20.3
17.9
22.7
6.8
6.5
7.1

86
98
11.3
15.0
6.8
51.8

63
100
10.8
12.7
8.4
43.6

Marginal Tax Rate
Average Tax Rate single earners

54.1
50.0

50.7
41.3

51.0
46.1

20.1
34.3

26.4
32.9

48.6
39.2

22.0
18.1

32.8
43.0

34.1
30.0

45.8
40.5

37.1
40.3

25.0
30.4

42.7
42.4

38.3
47.8

32.0
25.6

Share of Employees in non-standard Employment 24.5
15.9
6.1

Parttime
Fixed-term

31.0
20.4
7.9

31.3
18.6
11.1

12.3
4.0
7.0

33.7
6.3
23.7

32.2
15.0
13.5

24.9
15.8
7.2

16.1
7.6
6.0

14.4
10.9
2.6

54.3
37.3
9.1

23.8
16.5
6.4

25.7
9.9
14.0

27.5
10.5
13.7

35.5
19.4
10.4

31.6
23.5
5.4

8.0
7.6
8.4
18.5
20.7
16.4

14.8
17.6
10.9
42

39.2

29.8
16.4
10.5

Gender Pay Gap42

93

91

76

89

87

92

83

92

86

81

95

87

88

86

42

Based on the most recent data, which is 1997.

93

Definition and source of the key indicators

The Eurostat Quarterly Labour Force Data (QLFD)

This series replaces last year's data set originating from the LFS and the Benchmark series on
employment, used in previous Employment in Europe reports and Joint Employment Reports. LFS has
drawbacks as a survey from a wide point of view. The second quarter is taken to represent the whole
year and the survey changes through time which impairs comparisons. In order to correct these
problems the Benchmark series on employment was created by DG Employment on contract. This was
a series compiled without Eurostat having overall responsibility. Basically the intention was to build a
good comparative time serie on employment using the best available source for each country. This
year Eurostat have compiled a similar concept, namely the QLFD. All
indicators apart from
unemployment rate, youth unemployment ratio, full-time equivalent employment rates and the
economic related indicators are based on this series. A detailed description is found below.

The Eurostat Quarterly Labour Force Data (QLFD) are made of two sets of quarterly series starting in
1991, updated every quarter and covering EU Member States, EU-15 and EU-12:

• population, employment and unemployment by genderand age, mainly based on the community

LFS results;

• employment by economic activity and employment status (mainly based on the economic accounts
ESA-1995 employment data), further broken down by gender and by some job characteristics.

A

Population, employment and unemployment by gender and age

The community LFS results (provided by the National Statistical Offices in accordance with Council
Regulation n° 577/1998) are made consistent over time (to eliminate breaks in the series) and
completed (by estimates based on national employment data from other sources) when quarterly
community LFS results are not available.

These data only include the population living in private households (collective households are
excluded) and refer to the place of residence (national concept).

The following age classes are used: less than 15, 15-19, 20-24, 25-29, 30-54, 55-59, 60-64, 65 and
over

The employment data by gender and age are further broken down by civilian employment and armed
forces.

The unemployment data by gender and age are further broken down by job search duration (less than 6
months, 6-11, 12-23, 24 or more).

B

Employment by economic activity and employment status

The ESA-1995 employment data (provided by the National Statistical Offices in accordance with
Council Regulation n° 2223/1996) are available by NACE, rev.1-A6 and by employment status
(employees/self-employed persons).

They are made consistent over time (where necessary) and completed (by estimates based on LFS
results or national employment data sources) when quarterly ESA-1995 data are not available.

They are further broken down by gender, full time/part time, permanent/temporary contracts (using a
top-down approach with LFS or other national data).

94

They cover all people employed in resident producer units (national concept), including people living
in collective households.

The key indicators: definitions and data sources

I

Employment rates by age groups (15-64,15-24,25-54,55-64) and gender

Definition: employed persons as a share of total population of same gender and age.

Source: Eurostat QLFD, part A.

II

Full time equivalent employment rates by gender in the age bracket 15-64

Definition: full time equivalent employment as a share of total population of same gender and age (full
time equivalent employment being defined as total hours worked divided by the annual average
number of hours worked in full time jobs).

Source: Labour Force Survey (spring data) - (Belgian figures adjusted by Eurostat).

III

Unemployment rates by gender

Definition: unemployed as a share of active population of same gender and age.

Source: Eurostat harmonised series on unemployment, yearly averages of monthly estimates.

IV

Long term unemployment rates by gender

Definition: long term unemployed (12 month's duration or more) as a share of active population of
same gender.

Source: Eurostat QLFD, part A.

V

Youth unemployment ratio by gender

Definition: unemployed people aged 15-24 as a share of total population of same gender and age.

Source: Eurostat harmonised series on unemployment, yearly averages of monthly estimates.

VI

Employment growth

Definition: annual change in population employed by resident producer units.

Source: QLFD, part B.

VII
Other economic related employment indicators (real GDP growth, labour productivity
growth and real unit labour costs) are provided by DG ECFIN (AMECO database), based on
national accounts (ESA-95 definitions) and on Spring forecasts. The data are average annual change
from previous year in percentage.

Other key indicators

VIII

Participation in education and training

Definition: Percentage of working age population participating in education and training by gender,
age group (25-34, 35-44, 45-54, 55-64 and 25-64), working status and educational attainment.

Source: Labour Force Survey (spring data).

95

IX

Rate of early-school leaving

Definition: Percentage of 18-24 year olds having achieved lower secondary education (ISCED level 2)
or less and not attending further education or training, by gender and working status.

Source: Labour Force Survey (spring data).

X

Internet coverage in schools

Definition: Percentage of primary and secondary schools having Internet access.

Source: Benchmarking Report following up the "Strategies for Jobs in the Information Society",
SEC(2001) 222 (7/2/01), based on national data provided to the High Level Group On the
Employment and Social Dimension of the Information Society.

96

XI

Rate of self-employment by gender

Definition: Share of self-employed in total employment by gender.

Source: Eurostat, Labour Force Survey.

XII

Rate of employment in services

Definition: Rate of employment in services for 1998-99-00: by age:15-64, by Gender: Male, female
and total and by NACES: Services.

Source: Eurostat, Labour Force Survey.

XIII Marginal Tax Rate

Definition: Ratio of increase in personal income tax plus increase in employee social security
contributions divided by the increase in gross compensation, by family status and wage level.

Source: OECD, "Taxing Wage- Taxes on wages and salaries, social security contributions for
employees and their employers, child benefits", various years. Commission services based on OECD
database 1996-1999/2000.

XIV Average tax rate for a low-paid single earner

Definition: Ratio of total
income, employees' and employers' social
contributions incl. payroll taxes) paid by a single person (full-time average prodution worker, APW)
with two children, where the earning 50% or 67% of the average wage to gross compensation. This
ratio can be further divided into its component taxes.

taxes (taxes on personal

The information is based on tax indices that are constructed for hypohetical households.

Source: :"Taxing wages – taxes on wages and salaries, social security contributions for employees and
their employers", Commission services based on OECD database 1996-1999/2000.

XV

Share of employees in non-standard employment

Definition: Number of employees in non-standard (wage) employment as a percentage of total number
of employees by gender.

Source: Eurostat QLFD.

XVI Gender pay gap

Definition: Ratio of women's net hourly earnings index to men's for paid employees at work 15+ hours
per week. Breakdown by private and public sectors. For France, gross hourly earnings have been used.

Source: Eurostat European Community Household Panel.

97

ANNEX 2: OVERVIEW OF THE COMMON AGREED INDICATORS ON PREVENTION AND ACTIVATION FOR 2000

Detail

BE

DK

DE

EL

ES

FR

IE

IT

LUX

NL

AU

PT

SF

SW

UK

EU15

Adult
people

unemployed

Effort(C/A)

Total

42.8

7.0

67.2

30.0

6.6

27.3

17.0

54.6

35.8

98.6

99.9

100.0

Male

42.5

6.0

68.2

19.9

29.0

5.3

Female

43.2

8.0

65.8

16.0

30.0

7.9

28.0

26.6

49.5

37.2

97.9

99.9

100

67.0

35.1

98.9

99.9

100.0

Non-compliance(D/B)

Total

38.7

73.0

23.6

62.0

50.6

38.2

66.0

16.9

11.6

14.1

0.8

Male

35.2

78.0

21.0

66.0

55.9

Female

41.3

70.0

26.3

59.0

45.9

41.0

35.2

18.7

11.4

14.6

0.7

15.3

11.8

13.6

0.8

0.0

0.0

0.0

Output(B/A)

Total

33.9

5.0

17.3

8.0

13.3

14.6

21.0

0.9

14.4

10.2

6.7

10.0

Male

31.2

4.0

15.0

41.8

7.0

12.1

Female

36.3

5.0

20.4

42.5

9.0

14.6

15.0

14.1

0.6

1.7

16.7

14.1

7.8

11.0

13.2

7.9

5.6

7.0

98

Young
people

unemployed

Effort(C/A)

Total

53.3

5.0

65.6

39.0

5.9

40.6

100

58.4

36.1

99.0

99.9

100.0

Male

53.2

5.0

66.5

10.6

42.0

5.2

Female

53.4

5.0

64.2

10.1

37.0

6.7

42.8

38.0

56.2

34.0

98.8

99.8

100

61.3

37.3

99.2

99.9

100.0

Non-compliance(D/B)

Total

21.7

81.0

18.5

37.0

59.9

11.8

0.0

15.2

6.8

10.9

9.6

0.0

Male

19.7

80.0

18.1

36.0

59.4

Female

23.6

81.0

19.1

38.0

60.3

6.5

18.8

18.5

7.5

11.0

10.3

0.0

12.8

6.4

10.7

8.5

0.0

Output(B/A)

Total

44.9

10.0

16.6

12.0

14.8

21.8

10.0

2.8

12.1

9.1

1.3

16.0

Activation rate (%)

Allmeasures

Training

Male

42.9

8.0

16.0

39.5

9.0

12.8

Female

46.9

11.0

17.5

44.7

15.0

16.8

Total

Male

45

42

Female

48

Total

Male

Female

6

9

5

30

26

32

21

17

23

34

34

33

21

22

20

29

32

39

26

10

12

10

23

24

15

3

3

3

36

21

11

14

39

21.8

21.7

30

34

25

25

25

24

2.2

3.6

20

17

22

12

10

13

9.5

10.8

1.6

16.0

13.8

7.8

1.1

15.0

22

7

22

19

26

12

11

11

56

54

58

24

19

30

12

13

11

12

13

11

99

Explanatory notes to the annex 2:

Indicator of effort (C/A) is defined as the share of young/adult unemployed people becoming
unemployed in month X and having started an individual action plan before reaching 6/12 months
unemployment.

Rate of non-compliance (D/B) is defined as the share of young/adult unemployed people becoming
unemployed in month X, still unemployed in months X+6/12 and not having started an individual
action plan.

Output indicator (Rate of inflow into long-term unemployment)(B/A) is defined as the share of
young/adult unemployed people who are still unemployed at the end of month X+6/12 without any
break.

Remarks on the prevention indicator specific to Member States:

• Belgium: Indicators are not comparable with those from other Member States as unemployment

breaks under three months are not counted as exits from unemployment.

• Germany: Indicator for adults might include all the unemployed.

• Denmark: Data cover insured unemployed people only.

• Greece: Figures for the adult unemployed people category refer to 1999. Calculations of the C/A
indicator are based on a proxy measure for the variable C covering the unemployed included in a
labour programme within 6/12 months for the young and the adults respectively.

• The Netherlands: Indicators based on newly unemployed people only. Young unemployed people:

indicators based on situation 12 months after registration.

The activation rate is defined as the annual average number of previously unemployed participants in
active measures (E) divided by the annual average number of registered unemployed persons (F) and
participants in active measures. The definition of the input indicator was changed in this year’s NAPs
to better reflect the fact that participation in most active measures in the majority of Member States
break the unemployment spell. It is now defined as E/(E+F) instead of E/F. Active measures are
defined in a broad sense to include training, job rotation and job sharing, employment incentives,
integration of disabled people, direct job creation and start-up incentives.

Remarks on the activation indicator specific to Member States:

• Belgium: 1999 data.

• Denmark: Data covers insured unemployed people only.

• France: Breakdown by gender refers to 1999 data.

100