Communication from the Commission to the Council - Draft Joint Employment Report 2002 {SEC(2002) 1204}
Date: 2002-11-13
Institutions: European Commission
Subjects: EU employment policy, European Employment Strategy, employment statistics, labour market, report

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 13.11.2002
COM(2002) 621 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Draft Joint Employment Report 2002

{SEC(2002) 1204}

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL

Draft Joint Employment Report 2002

INTRODUCTION

Title VIII of the Treaty establishing the European Community  lays  down  the principles  and
procedures  for  developing  a  co-ordinated  strategy  for  employment.  Article  128  sets  out  the
specific  steps  leading  to  the  formulation  of  such  a  strategy  including,  on  an  annual  basis,
guidelines  for  employment,  possible  recommendations  to  the  Member  States  and  a  joint
report  by  the  Council  and  the  Commission  to  the  European  Council,  which  describes  the
employment  situation  in  the  Community  and  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  EU  political  agenda
defined at the Lisbon Summit and subsequent 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
Employment Guidelines in the year 20011. The remaining challenges for the Member States
are also highlighted.

The Joint Report 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.

1

2

Council  Decision  on  Guidelines  for  Member  States'  employment  policies  for  the  year  2002  (2002/178/EC);  OJECL  60/70  of
01.03.2002.
SEC(2002) 1204

2

                                                
TABLE OF CONTENTS

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

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

1.

2.

2.1.

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

Implementation of the 2002 Employment Guidelines and Recommendations:
Assessment of performances and policies across the European Union ..................... 15

The overall policy framework: reflecting the horizontal objectives of the 2002
Guidelines .................................................................................................................. 18

2.2.

Assessment of the progress made under the four Pillars of the 2001 Guidelines ...... 28

2.2.1.

Employability............................................................................................................. 28

2.2.2.

Entrepreneurship ........................................................................................................ 39

2.2.3. Adaptability................................................................................................................ 46

2.2.4.

Equal opportunities .................................................................................................... 50

3.

Implementation of the 2002 Employment Guidelines and Recommendations:
Assessment of performances and policies per Member State.................................... 59

BELGIUM................................................................................................................................ 59

DENMARK.............................................................................................................................. 62

GERMANY.............................................................................................................................. 65

GREECE .................................................................................................................................. 68

SPAIN ...................................................................................................................................... 71

FRANCE .................................................................................................................................. 74

IRELAND ................................................................................................................................ 76

ITALY...................................................................................................................................... 79

LUXEMBOURG...................................................................................................................... 83

3

THE NETHERLANDS ............................................................................................................ 86

AUSTRIA................................................................................................................................. 89

PORTUGAL............................................................................................................................. 92

FINLAND ................................................................................................................................ 95

SWEDEN ................................................................................................................................. 98

UNITED KINGDOM............................................................................................................. 101

4.

The way forward ...................................................................................................... 104

Annex 1: Overview of the 2001 Performance and key indicators ......................................... 111

Annex 2: Overview of the common agreed indicators on prevention and activation for 2000

and 2001................................................................................................................... 113

Annex 3: Indicators: sources and definitions ......................................................................... 117

4

EXECUTIVE SUMMARY

After  five  years  of  implementation,  the  European  Employment  Strategy  is  at  a  crossroads.
Launched  in  1997,  with  the  fight  against  unemployment  as  a  priority,  its  focus  has
progressively  shifted  to  support  the  wider  Lisbon  Strategy  commitment  towards  more  and
better  jobs  in  an  inclusive  society.  Achieving  the  agreed  employment  targets  and  raising
labour  force  participation  has  become  a  central  concern.  A  major  evaluation  of  this  first
period has been conducted at EU level, which has reported encouraging findings.

EU employment performances in 2001 must be seen in the context of a sharp deterioration in
the economic climate, with GDP  growth halved compared to 2000 and serious  uncertainties
about the future. In spite of these less favourable conditions,  performances  both  in  terms of
employment (+0,6%) and unemployment  (-0,6%) continued to improve,  albeit more slowly.
While  the  EES  five  year  evaluation  pointed  to  structural  improvements  in  the  EU  labour
market,  serious  weaknesses  remain  in  terms  of  unemployment  levels,  participation  and
employment  rates,  gender  gaps,  quality  of  employment,  productivity  growth  and  regional
disparities. These weaknesses need to be addressed as a matter of urgency to prepare the EU
labour market for challenges ahead.

The  overall  clarity  and  coherence  of  the  NAPs  has  improved.  However,  the  use  of  national
targets,  reporting  on  the  impact  of  measures  on  the  labour  market,  budgetary  information,
evidence  of  the  use  of  structural  funds  to  support  the  EES  and  the  involvement  of  key
stakeholders all appear largely insufficient.

The response to the horizontal objectives has improved compared to last year, particularly as
regards efforts to raise employment rates. While encouraging progress was made towards the
Lisbon and Stockholm EU targets overall and for women, reaching the overall target for 2010
will require -particular efforts in those Member States which have not contributed enough so
far  to  the  overall  improvement  in  employment.  The  wide  gap  between  the  current  situation
and the 50% employment rate target for older workers raises serious cause for concern and a
stronger focus on the gender dimension of the ageing problem is crucial. The issue of quality
in  work  is  still  dealt  with  in  a  piecemeal  way,  focussing  largely  on  aspects  such  as  job
flexibility, health and safety and education and training while insufficient attention is given to
other dimensions, such as the intrinsic quality of jobs and the quality of social dialogue. The
development of lifelong learning strategies is progressing, all Member States have now laid
the  groundwork  for  comprehensive  strategies,  although  full  implementation  will  take  time.
Some  progress,  though  at  a  slower  pace,  can  be  seen  on  making  these  strategies  more
coherent, in particular the transitions within and between education and training systems and
the  labour  market  are  not  addressed  in  a  comprehensive  manner.  A  growing  number  of

5

Member States are setting targets for educational participation and attainment and the increase
in expenditure on human resources visible in the majority of Member States testifies to their
strengthened commitment, despite the continuing lack of national targets on investment. The
widening gap in the take–up of education and training opportunities between those with low
and high skills and between older and younger age groups gives cause for serious concern.

In a majority of Member States the social partners have played a stronger role in the NAPs
this  year,  although  little  progress  has  generally  been  made  -on  the  social  partners'  own
process  of  implementing  the  European  Employment  Strategy.  The  social  dialogue  at
European  level  has  produced  a  number  of  important  initiatives.  These  include  the  joint
declaration of the European social partners to the European Council in Laeken underlining the
need to further develop the  autonomous social dialogue, the  planned submission of a  multi-
annual social partner work programme and the social partners' framework for action on skills
and competencies development, which was submitted to the Barcelona Summit. Despite this,
the  contribution  of  the  social  partners  to  the  Strategy  in  a  more  coherent  and  visible  way
remains to be developed.

The NAPs reflect a better policy mix, with  more  emphasis  given to the  Equal Opportunities
and  the  Entrepreneurship  pillars  compared  to  previous  years.  Regional  disparities  remain  a
serious  issue.  The  use  of  indicators  based  on  national  sources  is  uneven,  with  particular
weaknesses  in  relation  to  disadvantaged  groups,  employment  transitions,  care  provision
(quality at work indicators), labour market bottlenecks and mobility, and the effectiveness of
activation policies.

Under the Employability Pillar, Member States have worked on consolidating and improving
the quality and coverage of measures. Preventive approaches are now in place in the majority
of the Member States, and are being better tailored to personal needs. Far-reaching reforms of
Employment Services are continuing, with a clear trend towards a mixed public/private market
for employment services. The target of 20% of the unemployed benefiting from active labour
market  measures  has  generally  been  far  exceeded.  There  is  evidence  of  a  greater  emphasis
being placed on basic skills, especially adult literacy. The main e-learning targets are close to
being  met.  More  attention  has  been  given  to  preventing  and  combating  bottlenecks  from  a
long-term perspective. More integrated  inclusion  policies  are  being  put  in  place  and  greater
synergy is being developed between the Employment and Social Inclusion NAPs.

On  the  other  hand,  only  five  Member  States  have  so  far  successfully  implemented  the
preventive  approach,  in  the  sense  that  they  have  substantially  reduced  flows  into  long-term
unemployment.  There  is  also  a  general  need  to  improve  information  on  the  effectiveness  of
activation  measures.  The  school  drop-out  rate  is  decreasing  only  very  gradually  and  it  is
doubtful whether the common target of halving the rate by 2010 can by achieved. Only a few

6

Member  States  are  pursuing  comprehensive,  employment-friendly  tax-benefit  reforms  and
insufficient  attention  has  been  given  to  addressing  the  interaction  between  tax  and  benefit
schemes.  National  active  ageing  strategies  are  largely  lacking  and  working  capacity  and
incentives  for  employers  to  recrute  or  to  retain  older  workers  in  particular  are  inadequately
inclusion,  demand-side  measures,  such  as  non-
addressed.  With  regard 
discrimination,  are  generally  neglected  and  the  number  of  Member  States  setting  specific
national targets continues to be very low. The failure of the majority of Member States to use
the  commonly  agreed  employment  indicators  in  this  area  has  hampered  the  analysis  of  the
relevant policy measures.

to  social 

Most NAPs have given a higher profile to actions under the Entrepreneurship Pillar than in
previous  years,  although  employment  growth  in  small  businesses,  in  services  and  in  self-
employment  was  adversely  affected  in  2001  by  the  general  economic  slowdown.  Particular
emphasis has  been placed on  measures  to  facilitate  business  registration,  to  encourage  self-
employment  and  to  develop  an  entrepreneurial  culture,  notably  amongst  women.  New
initiatives  were  taken  to  create  job  opportunities  in  knowledge-based  services  and  the
environment sector. Most Member States have implemented or announced new initiatives to
combat  undeclared  work.  In  spite  of  these  positive  developments,  more  targeted  support  is
called for to make entrepreneurship a driver for growth and employment. More action would
seem to be necessary with respect to promoting start-ups, notably through improved access to
finance.  The  upward  trend  in  the  tax  burden  on  labour  has  been  reversed  but  labour  taxes
remain  high,  even  for  low-paid  workers  and  insufficient  attention  has  been  given  to  the
employment impact of social security contributions.

The development of the territorial dimension of the EES has entered a phase of consolidation.
In addition to the NAPs, regional action plans are in place in four Member States. Territorial
Employment Pacts remain important in a few Member States, but much could still be done to
develop the partnership approach at local level.

Under the  Adaptability  Pillar,  a  more  balanced  approach  between  flexibility  and  security  in
employment relationships is being sought in a number of Member States. The trend towards
increased flexibility of working time and work organisation is continuing and steps are being
taken  to  ensure  the  equal  treatment  of  workers  under  different  working  arrangements.
Improvements are also reported in the field of health and safety at work. There are interesting
initiatives  in  the  field  of  work  organisation  which  deserve  wider  dissemination.  The  social
partners  are  playing  an  increasingly  important  role  in  promoting  lifelong  learning  in  the
workplace, but a comparative lack of visibility of their actions remains, which might be partly
due to the unstructured reporting. Some progress is being made towards meeting the objective
of  all  workers  achieving  ICT  literacy  by  the  end  of  2003.  However,  more  information  is
needed on measures to promote workers' ICT literacy to assess progress more accurately.

7

Under the Equal Opportunities Pillar, clear progress has been made towards the employment
rate targets for women, even though there are still a few countries lagging behind and greater
efforts are needed  to retain  women longer on the  labour market. The implementation of the
gender mainstreaming approach has progressed but remains incomplete. Although initiatives
have been introduced to reduce the gender pay gap by addressing the underlying factors, these
still tend to be inadequate and insufficient commitment is demonstrated by the social partners
in this respect. Gender segregation continues to  be  addressed,  especially  by  those  countries
with high levels of segregation, but results are difficult to assess in the short-term. Efforts to
reconcile work and family life have been intensified, but adequate, high quality and affordable
childcare services are still not sufficiently accessible to reach the targets set by the Barcelona
European  Council.  Leave  arrangements  have  been  expanded  in  many  Member  States,  even
though there are only a few countries  specifically  encouraging the take-up of  parental leave
by men.

The assessment of national employment performance and policies in 2001 confirms the main
outcomes of the evaluation for the period 1997-2001, and provides a strong basis to design the
next  generation  of  the  European  Employment  Strategy.  While  structural  labour  market
reforms  have  paid  dividends  so  far,  major  weaknesses  remain.  Faced  with  the  current
economic  slowdown  Member  States  should  intensify  structural  reforms  including  those  of
labour markets in order to support adaptation to change of workers as well as firms. There is
already a broad consensus on a number of elements for an effective new EES, including the
focus on the Lisbon objectives, a stable strategy over the medium term, a reduced number of
guidelines more focussed on results to be achieved, and an improved co-ordination with other
relevant processes, in particular the Broad Economic Policy Guidelines.

In  the  light  of  remaining  weaknesses,  the  future  generation  of  guidelines  should  explicitly
address  the  three  key  priorities  of  raising  employment  and  participation  rates,  improving
quality and productivity at work and promoting an inclusive labour market. In all these areas
much progress is still required if the overall goals of the Lisbon strategy are to be reached.

8

1. 

THE POLITICAL AND ECONOMIC CONTEXT

The EES at a crossroads after 5 years

Since its launch at the Luxembourg Jobs Summit in 1997, the European Employment Strategy
(EES)  has  undergone  a  number  of  changes  to  take  account  of  the  evolving  political  and
economic situation. Following the mid-term review of the first three years of implementation,
the  Employment  Strategy  was  strengthened  at  the  Lisbon  European  Council  (2000)  and
integrated  into  a  broader  political  agenda  with  the  aim  of  making  the  European  Union  the
most  dynamic  and  competitive  knowledge-based  economy  of  the  world,  capable  of
sustainable  economic  growth  while  providing  more  and  better  jobs  and  greater  social
cohesion.

The Lisbon European Council agreed 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. A
global  strategy  was  defined,  aiming  at  preparing  the  transition  to  a  knowledge-based
economy,  modernising  the  European  social  model  and  sustaining  favourable  growth
prospects.

The Nice European Council of December 2000 introduced the issue of quality as the guiding
thread of the Social Policy Agenda, and in particular quality in work as an important objective
of  the  EES.  It  stressed  the  multidimensional  character  of  the  quality  issue,  concerning  both
job characteristics and the wider labour market context, and stated that it should be promoted
through actions across all the pillars.

Confirming the Union and  the  Member  States'  commitment  to the goal  of full employment,
the Stockholm European Council in 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. Responding to the Stockholm request, the Commission and Council jointly
examined the conditions required to raise labour force participation in the EU, and submitted
corresponding proposals to the European Council of Barcelona3.

The  Göteborg  European  Council  completed  the  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.

3

Increasing labour force participation and promoting active ageing Council document N° 6707 of 8 March 2002, adopted on the
basis of COM(2002)9 final, 24.01.2002.

9

                                                
The  Barcelona  European  Council  in  March  2002  identified  "Active  policies  towards  full
employment:  more  and  better  jobs"  amongst  the  three  areas  requiring  a  specific  impetus.  It
underlined that the goal full employment in the EU is at the core of the Lisbon strategy and
constitutes  the  essential  goal  of  economic  and  social  policies.  In  light  of  the  above,  the
European  Council  called  for  a  reinforced  Employment  Strategy  and  provided  directions  for
the  future  of  the  EES.  It  welcomed  the  Commission's  Action  Plan  on  skills  and  mobility
which was followed up by a Council Resolution4.

The  present  Joint  Employment  Report  reviews  progress  made  in  2001  –  an  important
milestone  since  it  marks  the  5th  year  of  implementation  of  the  European  Employment
Strategy. An evaluation of the impact of the Strategy between 1997 and 2001 has been jointly
carried  out  by  the  Commission  services  and  the  Member  States5  to  prepare  for  the  future
development of the EES.

Less favourable economic context in 2001: a test for the EES

In stark contrast to the positive climate in 2000 which saw the strongest employment growth
for ten years, the first half of 2001 was characterised by economic uncertainties followed by a
general slowdown after the events of September 11.

Between  2000  and  2001  GDP  growth  and  labour  productivity  growth  fell  drastically  from
3.3% to 1.6% and from 1.6% to 0.3% respectively. Between the first and the second halves of
2001 employment growth slowed down from 1.5% to 1%. The economic slowdown that was
initially  deemed  to  be  short-lived  has  developed  into  a  sluggish  performance.  Economic
recovery has failed to gain momentum and is not expected before 2003, and there has been an
increase in major lay-offs within the Euro zone. Public finances have improved further, with
several Member States having achieved or sustained sound budgetary positions. However, in
the current period of weak growth the budgetary framework is strained and credibility put into
question, with  some Member States having failed to fully meet  the  budgetary  commitments
under the Stability and Growth pact. Inflation increased from 2.1% in 2000 to 3.4% in May
2001 and subsequently declined to 2% by the end of the  year and is expected to increase to
2.2% in 2002.

4

5

9614/02, 03 June 2002.
COM(2002)416,17 July 2002.

10

                                                
Slower pace of improvement in employment performances …

Assessment  of  performances  must  be  seen  in  the  above  context  of  the  deterioration  in  the
economic climate. Although the employment rate increased only marginally (from 63.3% in
2000 to 63.9% in 2001, adding 2.06 million people to total employment) it is still in reach of
the  EU  target,  although  achievement  will  require  specific  and  sustained  efforts.  The  total
unemployment  rate  fell  by  0.6%,  compared  with  the  starting  level  in  2001  but  the  rate
increased slightly over the first few months of 2002 (from 7.4% to 7.6%). Overall, youth and
long-term unemployment rates decreased in 2001, with the highest decrease for women.

Since  1997  the  employment  gender  gap  has  slowly  declined  by  almost  2  percentage  points
reaching an employment rate of 54.9% for women, in sight of the EU target. The employment
rate for older workers rose to 38.5% in 2001 (37.7% in 2000), but still falls far short of the
EU target of 50% by 2010.

…in a context of structural changes in European labour markets

In  recent  years,  the  EU  employment  performance  has  visibly  improved,  with  more  than  10
million new jobs created since 1997 (6 million of which have been taken up by women) and 4
million less unemployed, while the active population continued to grow by 5 million people.
The  evaluation  of  the  European  Employment  Strategy  confirms  the  structural  character  of
these  improvements,  through  reductions  in  levels  of  structural  unemployment,  a  more
employment-intensive pattern of economic  growth and a more rapid labour market response
to  economic  and  social  changes6.  The  implementation  of  structural  labour  market  reforms
paved the way for these improvements. The overall good performance in the 90s suggests that
the  rise  in  employment  rates  and  decreases  in  unemployment  rates  are  sustainable  and
structural  in  nature.  These  positive  outcomes  are  not  explained  by  cyclical  improvements
alone.  Since  1997  the  decline  in  structural  unemployment  has  accelerated  and  has  been
accompanied  by  intense  job  creation.  The  European  Employment  Strategy  created  the
conditions  for  these  improvements  to  be  sustainable,  by  its  commitment  to  fully  utilise  the
potential labour supply with more and better jobs. The social partners also made an important
contribution 
in  particular  by  pursuing
the 
employment-friendly wage agreements.

improved  employment  performance, 

to 

6

'Taking stock of five years of the European Employment Strategy', COM(2002) 416 – Employment in Europe 2002.

11

                                                
Remaining structural weaknesses need to be addressed

Although progress has been made, a number of key structural weaknesses persist:

– 

– 

– 

Stubbornly  high  levels  of  unemployment  and  long-term  unemployment  need  to  be
further reduced in order to  achieve an inclusive labour market; the inclusiveness of
labour  markets  needs  to  be  better  developed;  in  spite  of  the  progress  made,  the
employment  position  of  disadvantaged  people  remains  weak.  This  calls  for  better
tailored  policies,  comprehensive  approaches  involving  both  the  supply  and  the
demand side and a close link with the wider policies for social inclusion;

Sustained commitment will be needed to achieve the EU employment rate targets, in
particular the target for older workers. The Joint Report7 on increasing labour force
participation  estimated  the  necessary  increases  in  employment  between  2002  and
2010 at 15,4 million, of which 9,6 for women and 7,4 for older workers;

Differences in productivity between the US and the EU are still continuing to widen,
but are much more pronounced for labour productivity per person employed than for
labour productivity per hour worked, for the latter even a slight decrease is forecast8.
As  stated  in  the  recent  Commission  communication  "Productivity:  the  key  to
Competitiveness  of  European  Economies  and  Enterprises9,  productivity  growth
depends  on the quality of physical  capital,  upgrading  the  skills  of  the  labour  force,
technological  advances  and  new  ways  of  organising  these  inputs.  The  positive  link
between job quality and productivity should also be exploited to bridge this gap, but
quality  of  employment  has  not  yet  received  sufficient  attention.  Progress  here  can
only be clearly identified with regard to participation in training and gender gaps in
employment, whereas in other areas much remains to be done; and;

– 

Regional  differences,  both  in  terms  of  employment  and  unemployment,  remain  a
problem in several Member States.

It  is  vital  that  reforms  to  address  these  weaknesses  are  pursued  vigorously  in  the  coming
period  so  that  the  EU  labour  market  can  absorb  the  medium-term  challenges  in  terms  of

7

8

9

'Increasing labour force participation and promoting active ageing' Council document N° 6707 of 8 March 2002, adopted on the
basis of COM(2002) 9 final, 24.01.2002.
Where as the labour productivity (GDP in PPS per person employed) of the US was 116.1 in 1997 (EU-15 = 100), it increased to
117.5 in 2000 (forecast 2001: 117.7); the respective figures for labour productivity in PPS per hour worked were 102.6 in 1997
and at 103.2 in 2000 (forecast 2001: 103.0).
COM(2002)262 final.

12

                                                
demographic  trends,  emerging  bottlenecks,  ongoing  economic  and  social  restructuring,
globalisation and enlargement.

13

Graph  1:  Overview  of  employment  and  unemployment  performance  in  the  European
Union, 1997 and 2001.

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

Employment Indicators

2001 1997
60.5
63.9
36.3
38.5
50.6
54.9
2.5
1.6

EU Benchmark

70
50
60
3

(2010 target, Lisbon summit)

(2010 target, Stockholm summit)

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

Employment rate

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
10.1
7.4
5.1
3.3
9.2
7.1
11.7
8.7

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

Section 3 presents the diamond per Member State.

14

2.

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

2002  EMPLOYMENT  GUIDELINES 

THE 

OF 

Taking  account  both  of  the  time  needed  to  implement  the  substantial  changes  which  were
introduced into the Employment Guidelines for 2001, following the mid-term review and the
Lisbon European Council, and of the fact that the Strategy was due to be revised for 2003 on
the basis of the evaluation of the experience of the first five years, it was decided to maintain
as  much  stability  as  possible  in  the  Employment  Guidelines  for  2002.  Only  two  main  new
elements  were  introduced  concerning  respectively  the  adaptation  of  the  employment  rate
targets  to  take  account  of  the  objectives  set  at  the  Stockholm  European  Council,  and  the
introduction  of  a  new,  cross-cutting  objective  on  job  quality  following  the  intense  political
debate  at  European  level  on  the  various  dimensions  of  quality  in  work  culminating  in  the
adoption of a list of indicators at the Laeken European Council in December 2001.

The 2002 NAPs

The  2002  National  Action  Plans  for  Employment  (NAPs)  continue  the  trends  towards
improved clarity  and  comprehensiveness in  the presentation of  Member  States'  employment
policies. They also reveal a more balanced coverage of the policy-mix across the four pillars
of the European Employment Strategy. Most Member States continue to be reluctant to take
up the Guidelines' invitation to set national targets. Although Member States have developed
many employment measures, assessment of their impact is generally lacking. The budgetary
dimension  of  policies  (especially  the  contributions  of  the  Structural  Funds)  should  also  be
made more transparent. In spite of an overall improvement in information provided, it is still
not  easy  to  identify  the  extent  to  which  Member  States  have  used  the  Structural  Funds  to
support  their  activities  under  the  four  pillars.  This  difficulty  exists  not  only  with  regard  to
quantitative aspects but also with regard to whether the Funds have been used strategically to
provide  added  value  (for  example  to  explore  new  active  labour  market  policies  beyond
traditional  national  policies  and  procedures).  The  new  role  for  the  Structural  Funds  to
underpin the EES objectives introduced in the revision of the Regulations in 1999 needs to be
taken  up  much  more  vigorously.  As  regards  process,  although  the  social  partners  are
increasingly involved in the preparation of the NAPs, their role in implementation and follow-
up  is  still  often  not  visible.  The  integration  of  other  potential  stakeholders,  such  as  the
regional and local levels and representatives of civil society, has not improved.

15

In  line  with  the  Lisbon  Strategy  Knowledge  based  society  issues  have  become  a  central
element in all Pillars. In addition to the considerable efforts undertaken in the context of the
Employability  Pillar,  more  attention  to  ICT  is  evident  in  the  2002  NAPs  within  the
Entrepreneurship Pillar.

Encouraging, although uneven, responses to Recommendations

The table below shows that the response to the 2002 policy Recommendations varies across
countries.

Most  Member  States  have  introduced  or  announced  policy  initiatives  in  response  to  the
Recommendations concerning prevention and activation, labour supply, lifelong learning, the
tax burden on labour, regional imbalances and the policy mix.

Recommendations  made  on  the  issues  of  older  workers  and  migrants  have  not  generally
elicited sufficient policy changes.

Reactions  to  the  recommendations  concerning  equal  opportunities  differ  greatly  between
Member  States.  In  most  cases  political  decisions  have  been  taken,  but  remain  to  be
implemented.  No  policy  changes,  or  only  marginal  changes,  have  been  introduced  in
Germany,  Austria  and  Finland  (on  the  pay  gap);  Greece,  Spain  and  Italy  (on  gender
mainstreaming); Luxembourg and Portugal (on gender segregation).

The  response  to  recommendations  concerning  the  social  partners  is  also  generally  weak.
Greece  and  Portugal,  in  particular,  need  to  introduce  and  implement  policy  changes  and
Austria, Italy and Spain should strive to get the partnership with the social partners back on
track.

16

Table 1: Response to the 2002 Recommendations by Member States, by theme

BE

DK

DE

EL

ES

FR

IE

IT

LUX

NL

AU

PT

SF

SW

UK

PREVENTION/ACTIVATION POLICY

Prevention
Reform of PES
Effective Active labour market policies

LABOUR SUPPLY

Tax-benefit system (including gender
issue)
Women
Older workers
Disabled
Migrants

LIFE LONG LEARNING

TAX BURDEN ON LABOUR

EQUAL OPPORTUNITIES

Gender mainstreaming approach
Improving childcare facilities and
reconciliation of work and family life
Pay gap
Gender segregation

REGIONAL IMBALANCE

SOCIAL PARTNERS

Work organisation
Balance flexibility and security

POLICY MIX

+/-

+/-

-

+/-

-

+

+

-

-

+/-

-

+

+/-

+/-

-

-

+/-

+/-

+/-
-

+

-
+

+/-
+/-

+/-

+/-

+/-

-

+

+

+

+

+/-

+/-

+/-

+/-

+

-
+/-

-
+/-

+/-

+/-
+/-
+/-

+/-

+/-

-

+/-

-
+/-

-

-

+/-
-

+

+/-
-

+/-

+/-

+/-

+/-

+/-
-

+/-

+/-

-
-

+/-

+

+/-

+/-

-

-

+

+

+

-
+

+/-

+/-

+

+
+/-

+/-

blank = no recommendation; + = significant policy change +/- = policy change introduced, impact still to be demonstrated - = marginal or no
policy change.

17

2.1.

The  overall  policy  framework:  reflecting  the  horizontal  objectives  of  the  2002
Guidelines

The horizontal objectives featured in the 2002 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.

Moving closer to the Lisbon and Stockholm targets

Horizontal  Objective  A  calls  on  Member  States  to  enhance  job  opportunities  and  provide
adequate  work  incentives  so  as  to  raise  employment  rates  in  line  with  the  Lisbon  and
Stockholm  targets.  The  NAPS  show  that,  despite  the  economic  slowdown,  progress  is
continuing. Member States' relative situations remain mixed but the EU overall rate is within
just over three percentage points of the 2005 target of 67% and the women's employment rate
is within just over 2 percentage points of the 2005 target of 57%. The rate for older workers
has  increased  by  nearly  one  percentage  point  since  2000,  but  nonetheless  remains  over  11
percentage points off the 2010 target of 50%.

The facts on employment rates (see table 2)

(cid:1)  Between 2000 and 2001 the overall employment rate in the EU increased to 63.9% (+0.6 percentage points),

for women to 54.9% (+0.9pp) and for older workers to 38.5% (+0.8 pp).

(cid:1)  Significant  differences  exist  between  Member  States  in  terms  of  the  levels  reached  and  the  pace  of
improvement.  The  best  performing  countries,  with  employment  rates  above  70%,  as  in  the  previous  year
were:  Denmark,  the  Netherlands,  Sweden  and  the  United  Kingdom.  Lowest  rates  are  again  registered  for
Greece, Italy and Spain.

(cid:1)  Employment rates have increased across all age groups in 2001 by 0.4 percentage points in the 15-24 age

group and by 0.5 percentage points in the 25-54 age group.

(cid:1)  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.

Based on current scenarios, the Lisbon target of 70% overall employment rate is only within
reach  if  the  recent  structural  improvements  in  the  working  of  the  European  labour  markets
and  if  increases  in  female  participation  are  sustained  up  to  2010  and,  where  necessary,
strengthened.  It  is  necessary  for  employment  performance  in  those  Member  States  with
relatively weak contributions in the past to improve significantly before the end of the decade,
in  particular  in  Greece  and  Italy  among  the  low  employment  level  countries,  Belgium  and
France in the middle group and Austria and Germany among those above average but below
the 70% target.

18

Table 2: Employment rates

EMPLOYMENT RATES IN 2001

Overall Women

68,4
59,9
65,8
76,2
56,3
63,9
68,1
63,1
55,4
65,7
54,8
62,9
74,1
68,9
70,9
71,7

60,1
50,5
58,8
72,0
41,9
54,9
65,4
56,1
40,9
55,0
41,1
50,9
65,2
61,1
69,4
65,1

Older
Workers
Overall
28,6
24,1
37,7
58,0
38,9
38,5
45,7
31,0
38,0
46,8
28,0
24,4
39,6
50,3
64,9
52,3

Older
Workers
Women
17,9
14,3
29,5
49,8
21,8
28,8
44,8
26,7
22,5
28,8
16,2
14,0
28,0
40,6
62,2
43,1

Older
Workers
Men

40,0
34,4
46,1
65,5
57,4
48,6
46,7
35,4
55,0
64,7
40,4
34,8
51,1
61,6
67,7
61,7

AT
BE
DE
DK
ES
EU-15
FI
FR
GR
IE
IT
LUX
NL
PT
SE
UK

Source: Eurostat, Labour Force Survey (QLFD).

(PERCENTAGE  POINTS)

GROWTH 
COMPARED TO 1997
Overall Women

Older  Workers
Overall

0,6
3,0
2,1
1,3
8,1
3,4
4,8
3,6
0,3
8,2
3,6
3,0
6,1
4,9
3,6
1,7

1,5
4,0
3,5
2,9
8,3
4,3
5,1
3,7
1,6
9,1
4,7
5,6
7,8
5,0
3,8
1,9

0,1
2,0
0,4
6,3
5,4
2,2
10,0
1,9
2,9
6,5
0,1
0,5
7,8
3,0
4,7
4,0

Gaps in employment rates within Member States  are  gradually closing. However,  important
gender  gaps  remain,  despite  the  fact  that  employment  rates  for  women  are  increasing  at  a
faster pace than the overall rate. When looking at changes over time (1997 - 2001), the main
sources of growth differ, but women have contributed most to overall growth. The growth rate
for  women's  employment  has  exceeded  the  overall  growth  rates  in  all  Member  States.
However, the employment rate for older women is a cause of particular concern (28.9%, 9.6
percentage points lower than the overall rate for the age group).

Member  States  appear  to  be  adopting  a  more  strategic  approach  to  the  challenge  of  raising
employment  rates  through  the  identification  of  labour  reserves  and  subsequent  targeting  of
actions on the groups with the most potential. The priority given to this issue is reflected in
new  institutional  arrangements  (for  example  the  "Equal  Studies  Unit"  within  the  "Equality
Authority"  in  Ireland,  an  "Older  Workers  Task  Force"  in  the  Netherlands,  the  "Cellule  de
consolidation  de  l'emploi"  in  Belgium).  Only  a  few  Member  States  are  pursuing
comprehensive, employment-friendly tax-benefit reforms.

19

The  NAPs  show  that  all  Member  States  consider  older  workers  to  be  the  most  important
source of labour potential, and efforts are being undertaken either to discourage early exit or
to  provide  incentives  for  staying  longer  in  the  labour  market,  and  sometimes  to  create  a
framework  which  facilitates  a  gradual  phasing  out  from  working  life  combining  the  two
approaches.  However,  policies  addressing  the  particularly  low  employment  rate  for  women
belonging  to  the  critical  age  group  have  not  been  put  in  place  and  a  gender  dimension  of
active ageing policies remains to be developed. For older workers as a whole, the ability of
the EU to reach  the  target  set  is  seriously  called  into  question  by  the  combination  of  a  low
employment  rate  plus  moderate  employment  rate  growth,  only  slightly  above  the  overall
growth rate.

Table 3: Employment rate targets in NAPs 2002

MEMBER
STATES

Austria
Belgium

Denmark
France
Finland

Germany
Greece
Italy
Ireland
Luxembourg
Netherlands

NATIONAL TARGETS (%)

COMMENTS

TOTAL

WOMEN

OLDER
WORKERS

No targets set.

Flanders 67 (2004) and 70
(2010)

of

Wallonia:
increase 
employment
rate  for  women
by 2004 by 30%
more 
the
overall  rate  of
increase.

than 

75.7 (2010) 10
65.1 (2006)
69 (2005) and >70 (2010)

59.1 (2006)
Above 
(2010)

68

.

35 (2006)
53  (2005)  and
55 (2010).

58.5 (2005), 61.3 (2010)

46 (2005)

40 (2005)

65 (2010)

No targets set11.
No targets set.

No targets set.
No targets set.
Increase  of  participation  of  older
people by 0.75% per year.

10

11

According  to  Eurostat  the  total  employment  rate  is  already  76.2%  in  2001.  The  target  set  is  based  on  national  figures  and  is
aiming at a 0.5% increase between 2000 (75.3% according to national data) and 2010.
However, on 17 April 2002, the German government approved a national sustainability strategy ("Perspectives for Germany. Our
Strategy for Sustainable Development"), in which an overall employment rate target is set (70% by 2010, page 122).

20

                                                
Portugal

Spain
Sweden

80 (2004)

United Kingdom >75 (2010)

Quality in work not yet adequately prioritised

rates 

reached 

for  2002  all 

The  Government  objective  is  to
three
maintain 
employment 
in
2001.
In addition, target of reducing the
unemployment  gender  gap  by
25% (2003).
No targets set.
Target  for  2004  and  age  group
20-64.
Completed by other targets12.

Horizontal Objective B seeks to ensure that Member States policies lead to an improvement in
quality  in  work.  In  general,  although  progress  has  been  made  under  a  number  of  relevant
aspects, quality in work still tends to be dealt with in a piecemeal way which does not reflect
the  multi-dimensional  character  of  the  concept  set  out  in  the  European  Commission
Communication  of  June  200113.  The  ten  dimensions  of  quality  in  work  defined  by  the
Commission, and used by the Council as a basis for the definition of appropriate indicators,
are unevenly covered by Member States' policies. The response to this new objective focuses
strongly on the relative merits of different contractual relationships, particularly regarding the
balance between flexibility and security. Whilst health and safety, education and training and
reconciliation of  family  and working life  are  also generally  well  covered, other dimensions,
such as the intrinsic quality of jobs or the quality of social dialogue are not yet integrated into
an overall approach to quality at work.

As regards performance, trends which are unambiguously positive can only be identified for a
few  areas  (increasing  participation  in  education  and  training  and  decreasing  gender  gaps  in
employment).  In  other  areas  there  is  evidence  of  stability  or  stagnation,  which  is  partly  the
result of changed circumstances, for  example  the  recent  low  increase  in  labour  productivity
due  to  the  cyclical  downturn  in  2001.  Data  do  not  yet  permit  an  in-depth,  comprehensive
assessment of developments over time, particularly since for some of the indicators no time
series is available.

12

13

To ensure by 2004:
- the gap in employment rates is closed for the over 50s, ethnic minorities, disabled people and other disadvantaged groups and
areas.
To ensure by 2010:
- a higher percentage of people in employment than ever before - taking account of the economic cycle, at least three quarters of
people of working age in work;
- an increase to 70% in the proportion of lone parents (95% of whom are women) in work.
Employment and social policies: A framework for investing in quality, Communication from the Commission to the Council, the
European Parliament, the Economic and Social Committee and the Committee of the Regions, COM(2001)313 final. European
Council (2001), "Indicators of Quality in Work", Report by the Employment Committee to the Council, 14263/01.

21

                                                
Table 4: Main facts on quality in work

Quality in work: dimensions and
indicators

Intrinsic job quality

Indicators:  Transitions  between
non-employment  and  employment
and within employment.

Skills, 
career development

lifelong 

learning  and

Indicator:  %  of  adult  population
participating 
in  education  and
training.

Gender equality

Indicators: ratio of women's hourly
gross  earnings  to  men's;  gender
employment  and  unemployment
rates gaps.

Main facts (based on most recent available data)

The  transition  from  fixed-term  to  permanent  contracts  is  not
automatic: only 34% of those  employed  in  fixed-term  contracts
in  1997  had  a  permanent  contract  in  1998  and  24%  became
unemployed  while  92%  of  those  with  permanent  contracts
remained  in  permanent  contracts.  Only  11%  of  non-employed
persons in 1997 became employed with a fixed-term or part-time
contract in 1998. Compared to unemployment, a fixed term job
reduces the probability of being in inactivity and unemployment
after  two  years  by  about  2/3,  and  increases  the  probability  of
moving  to  a  high  quality  job  within  two  years  by  a  factor  of
more than 3.

Significant  increase  in  the  participation  rate  for  the  25-64  age
group  (from  5.8%  in  1997  to  8.4%  in  2001).  It  is  higher  for
women (9%) than for men (8%) and very low for the 55-64 aged
group  (3%)  and  for  those  with  a  low  educational  or  skill  level
(2%). Best rates in 2001: the United Kingdom, Sweden, Finland,
Denmark and the Netherlands.

Gender  pay  gap  remains  high:  16.2  percentage  points  in  1998
(23.7  p.p.  in  the  private  sector).  Highest  gaps:  the  United
Kingdom, Austria, the Netherlands, Germany and Ireland.

High gender employment gap (18 percentage points in 2001). It
was highest in Greece, Spain, Italy, Luxembourg and Ireland.

Gender  unemployment  gap:  2.3  percentage  points  in  2001  with
significant  differences  across  countries  (highest  gap:  Greece,
Spain, Italy and France).

Health and safety at work

Indicator:  number  of  accidents  at
work  per  100.000  persons 
in
employment.

High  incidence  rate:  4.87  million  accidents  resulting  in  more
than  3  days'  absence  from  work  occurred  in  EU  as  a  whole  in
2001.  It  increased  in  recent  years  in  some  of  the  MS  (Sweden,
Denmark,  the  United  Kingdom,  the  Netherlands,  Belgium,
Luxembourg, Portugal and Spain).

Flexibility and security

Indicator: % of employees working
part-time  and  with 
fixed-term
contracts.

Part-time employment: 17.9% in 2001 as EU average, of which
around  80% 
is  voluntary  part-time.  Highest  rates:  The
Netherlands,  the  United  Kingdom  and  Denmark.  Lowest  rates:
Greece,  Italy  and  Spain.  Significant  gender  differences  in  part-
time rates (one third of women against 6% of men).

13.4% of employees in 2001 worked under fixed-term contracts.

22

Inclusion  and  access 
labour market

to 

the

between
transitions 
Indicator: 
employment,  unemployment  and
inactivity.

Highest rates: Spain and Portugal.

Relatively poor performance on transitions  from  unemployment
to employment: only 30% of unemployed in 1997 found a job in
1998.  Better  performances  can  be  found  in  Denmark,  Greece,
Spain, Portugal, Austria and the United Kingdom.

Work organisation and work-life
balance

Indicator:  employment  rates  with
or without any 0-6 aged children.

Negative  effect  of  parenthood  on  women's  employment  rates.
Positive  effect  of  parenthood  on  men's  employment  rates.
Average employment rate in 2001 for women with a child aged
0-6  was  12.4  percentage  points  below  that  of  women  without
children.  The  corresponding  figure  for  men  was  9.5  percentage
points higher rates with a child than without.

Social  dialogue  and  worker
involvement

Indicators: the number of days lost
and  %  of  employees  covered  by
collective agreements.

Coverage by collective agreements: highest (more than 90%) in
2000 in Austria, Belgium, France and Finland and lowest in the
United  Kingdom.  The  highest  rates  in  days  lost  by  strikes  in
2000 were found in Spain, France, Denmark and Finland and the
lowest  rates  in  Austria,  the  Netherlands,  Luxembourg,  Sweden
and Germany.

Diversity and non-discrimination

Indicators: employment rate of  55-
64 years.

Overall work performance

Indicator:  Growth 
productivity.

in 

labour

Employment  rate  of  55-64  years  olds:  38.5%  in  2001.  Lowest
rates: Belgium, Luxembourg, Italy, Austria and France. Highest
rates: Denmark, Portugal, the United Kingdom and Sweden.

Decrease  of  average  growth  in  labour  productivity  per  hour
worked: from 1.6% in 2000 to 0.3% in 2001. It was negative in
Belgium, Finland, France.

Better developed lifelong learning strategies

Some  promising  progress  has  been  made  in  the  areas  of  education  and  lifelong  learning
covered  by  horizontal  Objective  C.  Since  1997  there  has  been  a  gradual  increase  in  the
percentage  of  the  adult  population  participating  in  education  and  training  and  all  Member
States  are  in  the  process  of  designing  their  education  and  training  systems  in  a  more
integrated way to cover the whole life  cycle. Lifelong learning is seen not only  as a way to
improve workers’ employability and the adaptability of the labour force but also as a policy
instrument to increase both labour supply and the participation of groups underrepresented in
the labour market and to tackle social exclusion. However, lifelong learning is still far from

23

being  a  reality  for  all  and  there  are  signs  of  a  widening  gap  in  the  take-up  of  learning
opportunities between those with low skills and the higher educated and between younger and
older age groups. Measures to broaden access and increase participation levels therefore need
to be vigorously pursued, with particular attention paid to those adults least inclined, or with
the least opportunity to learn.

The  Recommendations  issued  to  the  majority  of  Member  States  on  the  development  of
lifelong learning strategies for the past two years have resulted in an improvement in overall
performance, with the most visible strides being made in some of the Member States which
previously  had  the  least  developed  comprehensive  approaches  (see  table  5).  Last  year’s
assessment  was  that  half  of  the  Member  States  had  comprehensive  and  coherent  strategies
whilst this year all have now laid the groundwork for comprehensive strategies covering the
whole  spectrum  of  learning  -  from  compulsory  education  to  workplace  training,  and  steps
towards  better  recognition  and  validation  of  non  formal  learning.  Incremental  progress  on
improving the coherence of lifelong learning strategies is also visible, although moving at a
slower pace since it requires more far-reaching reforms of systems and practices. Institutional
arrangements to improve co-operation between the various Ministries concerned are emerging
in  many  Member  States  but  the  question  of  how  best  to  facilitate  transitions  within  and
between  education  and  training  systems  and  the  labour  market  is  not  yet  addressed  in  a
comprehensive  manner.  The  quality  and  labour  –market-relevance  of  lifelong  learning
provision also need to be further improved.

In  spite  of  the  fact  that  Member  States  again  failed  to  set  targets  on  investment  in  human
capital,  public  expenditure  on  human  resources  has  generally  risen  and  there  is  also
increasing  evidence  of  shared  responsibility  for  financing,  including  through  a  rise  in
businesses'  expenditure  on  continuing  training.  However,  an  increase  in  the  overall  rates  of
public and private investment needs to be combined with a redistribution of resources across
the  learning  spectrum  and  with  the  further  development  of  fiscal  and  other  incentives  for
learning.  Moreover,  investment  in  education  and  training  needs  to  be  accompanied  by  an
evaluation  of  the  efficiency  of  the  education  systems  and  training  programmes  and,  where
necessary, measures to improve it.

The  pace  of  change  taking  place  now  and  in  the  future  will  require  more  action  from
Governments,  enterprises, individuals,  social  partners  and  the  Commission  to  raise  the  both
the  quality  and  the  levels  of  investment  in  human  resources  and  to  bring  about  a  cultural
change to promote ongoing investment in people over a lifetime.

24

Table 5: Member States' positions on developing lifelong learning strategies

BE

P
P
P
P
P

CHARACTERISTICS
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 STRATEGY
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)
Notes:
A
P
I
Letters in bold and grey cells indicate changes compared to last year.
+ indicates improvements compared to last year.

P+

P

P

DK

DE

EL

ES

FR

IRL

IT

LUX

NL

AU

PT

SF

SW UK

A
A
A
A
A

A

A

A

A
A
A
P
P

P

A

P

P
P
P
A
P

P

I+

P

P
P
P
P
P

A

P

P

A
P
A
P
P

A

P

A

P
A
P
P
P

P

A

P

A
P
P
I
P

I+

P

P

P
P
P
P
P

P

P

P

A
A
A
P
A

A

A

P

P
P
P
P
P

P

P

P
P
P
P
P

P+

P+

I+

P

A
A
A
A
A

A

A

A

A
A
A
A
A

A

A

A

A
A
A
P
P

P+

A

A

Adequate. 'Adequate' denotes that a particular criterion is given appropriate priority within both the Member State's strategy and concrete actions.
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.
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.

25

Stronger social partner role at both national and European level

Horizontal  Objective  D  highlights  the  importance  of  comprehensive  partnerships  with  the
social partners. The 2002 NAPs show that in a majority of Member States the social partners
are  more  strongly  involved  in  the  NAPs.  The  strongest  degree  of  partnership  is  still  to  be
found  in  Ireland,  Belgium,  Luxembourg,  Portugal,  Finland  and,  to  a  lesser  extent,  in  the
Netherlands,  Greece  and  Germany.  In  other  Member  States  like  Denmark  and  Sweden  the
social partners themselves continue to play an important role in implementing the guidelines
especially  addressed  to  them.  While  tensions  between  the  governments,  and  notably,  the
Trade Unions emerged in Italy, Austria and Spain, and created a context less favourable for
co-operation  in  the  NAP  process,  bilateral  or  trilateral  agreements  have  nevertheless  been
concluded  which  deal  with  a  number  of  important  issues  addressed  in  the  Guidelines.
However,  in  Spain  relationships  have  improved  recently.  The  contribution  of  the  social
partners  was  mainly  on  quality  in  work,  lifelong  learning,  the  increased  labour  market
participation of older people and the promotion of gender equality. In the latter case, however,
a  higher  policy  priority  needs  to  be  given  to  this  area  and  concrete  action  needs  to  be
intensified.

The reinvigorated social dialogue at European level has led to several initiatives which have
helped take forward the European Employment Strategy in a number of areas. For example,
the  report  concerning  the  future  of  industrial  relations  in  Europe,  a  joint  declaration  of  the
European  social  partners  to  the  European  Council  in  Laeken  underlining  the  necessity  to
further develop the autonomous social dialogue, the planned submission, in Autumn 2002, of
a  multi-annual  work  programme  drawn  up  by  the  social  partners,  the  social  partners'
framework  for  action  on  skills  and  competencies  development  submitted  to  the  Barcelona
Summit and an agreement on telework signed by the European social partners.

A more balanced policy-mix but regional disparities remain a serious problem

Horizontal Objective E urges Member States to respect the integrated nature and equal value
of  the  Guidelines  across  the  four  pillars  and  to  give  adequate  attention  to  the  regional
dimension.  Compared  to  previous  years,  more  emphasis  has  been  given  to  the  Equal
Opportunities  and  Entrepreneurship  Pillar,  redressing  the  balance  somewhat,  although  the
main  focus  continues  to  be  on  the  Employability  Pillar.  The  coverage  of  the  Adaptability
Pillar  tends  to  under-report  the  efforts  undertaken  by  the  social  partners.  A  rebalancing  of
the policy mix is particularly visible in Spain, Austria, Luxembourg and Ireland.

Belgium, Germany, Spain, Italy and Finland are the Member States most seriously affected by
regional  disparities.  Disparities  are,  in  general,  more  pronounced  for  unemployment

26

(measured  by  the  coefficient  of  variation14)  than  for  employment.  More  Member  States
experienced  deterioration  (Germany,  Greece,  Italy,  the  Netherlands,  Austria  and  the  United
Kingdom) in unemployment than in employment (Germany, Austria and  Finland). Germany
and Austria are the only Member States where disparities are widening for both employment
and unemployment (although in Austria, it is still at a very low level). The priority given to
this  issue  varies  widely  from  one  Member  State  to  another.  However,  all  continued  to  give
increased attention to the territorial dimension of employment policies and the need to design
policies  and  instruments  in  a  way  which  facilitates  flexible  adaptation  to  specific  needs  at
regional, and, in some cases, also local level.

Graph 2: Employment rates in NUTS2 regions in 2001 (% of population 15-64)

90%

85%

80%

75%

70%

65%

60%

55%

50%

45%

40%

35%

 NUTS3 for DK and IRL.

Highest

Av

Lowest

Frederiksborg

Oberbayern

Vlaams
 Brabant

Fyn

Kriti

Baleares

Dublin

Île de
France

Emilia-
Romagna

Berkshire, Bucks
and Oxfordshire

Äland

Stockholm

Utrecht

Centro

Salzburg

Zeeland

Övre Norrland

Halle

Hainaut

Sterea Ellada

Midlands

Luxembourg

Kärnten

Itä-Suomi

Merseyside

Açores

Andalucia

Corse

Campania

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

EU15

Source: Labour Force Survey NUTS2 level, Eurostat. DK and IRL NUTS3 from national LFS15.

14

15

The  Coefficient  of  Variation  is  obtained  by  dividing  the  Standard  Deviation  by  the  average-weighted  mean  value  (weighted
average of the employment/unemployment rate in a country).
Data  for  Ireland:  Central  Statistics  Office  Ireland.  Employment  from  Quarterly  National  Household  Survey.  Working-age
population from 'Population and Migration Estimates April 2001'.
Data for Denmark: Provided by Arbejdsministeriet. Danmarks Statistik, Labour Force Survey 2001. Employment rates defined as
persons in employment aged 16-66 in their working-age population.
Data for France do not take into account the French Départements d'outre-mer (DOM).

27

                                                
Improved monitoring, but more development needed on a number of national sources

Horizontal  Objective  F  stresses  the  importance  of  strengthening  indicators  to  evaluate
progress  under  all  four  pillars.  Significant  improvements  have  been  made  in  most  Member
States in developing and using common indicators to be provided in the NAPs, especially on
prevention and activation.

The situation is unsatisfactory as regards several indicators based on national sources which
are  necessary  to  monitor  progress  in  quality  in  work.  Thus  common  indicators  on
disadvantaged groups  (ethnic  minorities,  migrant  workers  and  disabled  people)  are  lacking,
and  only  three  Member  States  have  provided  indicators  on  transitions  between  non-
employment  and  employment.  More  data  have  been  submitted  on  childcare  provision  and
some data on care facilities for other dependant persons, even though they are still lacking for
many Member States and in most cases they only partially comply with the agreed indicators.

Most  Member  States  have  not  submitted  either  the  necessary  information  allowing  an
assessment about labour market bottlenecks or of the impact of active labour market measures
in terms of effective integration into the labour market.

2.2.

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

2.2.1.

Employability

The recent increases in unemployment and widespread company restructuring, combined with
emerging bottlenecks, highlight the relevance of the concept of employability. Whereas, at the
launch of the  EES,  employability  was  mainly  seen  as  a  way  of  helping  unemployed  people
back  into  work,  it  has  progressively  developed  into  a  broader  approach  covering  the  whole
life-cycle and is key to facilitating adaptation to change. Raising the employment rates to the
ambitious levels set at Lisbon and Stockholm requires not only action to prevent and combat
unemployment but also to mobilise untapped potential to increase participation in the labour
market.  In  this  context,  preventing  early  school  leaving,  increasing  access  to  an  inclusive
labour market, enhancing the capacity of workers to remain active, reforming tax and benefit
systems  to  make  them  more  employment  friendly  and  promoting  the  continued  updating  of
skills and tackling bottlenecks are particularly important.

Thus,  Member  States  have  often  concentrated  on  the  consolidation  and  improvement  of  the
effectiveness of measures under this Pillar in 2001 through such a wider approach.

28

The facts on unemployment

(cid:1)  Unemployment  decreased  in  2001  both  among  young  people  and  among  adults.  The  overall  rate  of
unemployment  fell  from  7.9%  in  2000  to  7.4%  in  2001  and  that  of  women  from  9.7%  to  8.7%.  The
unemployment  ratio  for  young  people  dropped  from  7.4%  to  7.1%16.  However,  in  the  first  four  months  of
2002 the overall unemployment rate climbed back up to 7.6%.

(cid:1)  The overall long-term unemployment rate decreased more than the total unemployment rate; from 3.7% in
2000  to  3.3%  in  2001.  For  women  it  declined  0.5  percentage  points,  from  4.4%  to  3.9%.  There  are  wide
variations  between  Member  States,  with  rates  of  less  than  1%  in  Austria,  Denmark,  Luxembourg  and  the
Netherlands and more than 5% in Greece, Spain and Italy.

(cid:1)  The share of long-term unemployed amongst all unemployed dropped from 46% in 2000 to 42% in 2001.

(cid:1)  The inflow to long-term unemployment also varies considerably ranging from 2.1% in Sweden to 36.2% in
Belgium  concerning  young people and  from  0.6  %  in  Austria  to  23%  in  the  Netherlands  concerning  adult
people.  The  rate of  women's  entry  into  long-term  unemployment  is  higher  than  that  of  men  in all  Member
States, except for Denmark, Finland, Sweden and the United Kingdom.

Shifting from  passive to  active labour  market  measures  and  from  a  curative  to  a  preventive
approach in the fight against unemployment were key guiding principles of the Employment
Strategy from its inception. Two targets were set at the Luxembourg Summit: a) by 2002, to
offer  all unemployed people  a new start before reaching 6 months of unemployment, in the
case of young people, and 12 months for adults; and b) to achieve a minimum level of 20% of
unemployed  people  benefiting  from  active  measures.  These  aims  have  been  met  with  only
mixed success.

More active labour market policies …

As regards activation the target of 20% had already been surpassed by all Member States in
2000 except for the UK, and the average of the three most advanced Member States reached
51% in 2001. Activation rates have continued to increase. This is the combined result of the
declining number of  registered unemployed  and the  increased  number  of  persons  benefiting
from active measures. Moreover, the share  of  spending on  active measures has increased in
relation  to  total  labour  market  policy  expenditure,  reflecting  a  continued  emphasis  on
activation.

16

The unemployment ratio for young people is the total amount of unemployed young people (15 - 24 years) as a share of the total
population in the same age bracket.

29

                                                
Training  is  the  most  common  tool  to  integrate  unemployed  people  into  the  labour  market.
More than half of the general increase in active measures is due to a rise in training initiatives.
These  initiatives  aim  to  combat  skill  shortages  and  the  tendency  towards  co-operation  with
employers  in  the  design  of  measures  has  been  consolidated  so  the  measures  are  gradually
becoming more demand led.

The facts on activation

(cid:1)  All Member States but the United-Kingdom exceed the 20% target. The three Member States with the highest

activation rates are Sweden (60%), Belgium (50%) and Ireland (38%).

(cid:1)  Compared  to  2000  the  activation  rate  increased  in  Austria,  Belgium,  Denmark,  Spain,  Ireland,  Italy,
Luxembourg, Portugal and Sweden. The rate remained unchanged in Germany and decreased in Finland and
in the Netherlands.

(cid:1)  The number of participants in all active measures compared to 2000 increased by 7%. In Austria, Belgium,
Denmark,  Germany,  Spain,  Ireland,  Italy,  Luxembourg,  Portugal and  Sweden  the  increase  was  8%.  There
was a decrease in Finland and the Netherlands.

(cid:1)  Between 1999 and 2000 the share of spending on active measures out of total LMP expenditure increased in
most  Member  States  (except  Denmark  and  Portugal).  The  highest  shares  are  in  Ireland,  Sweden  and
Denmark,  whereas  the  lowest  shares  are  in  the  United  Kingdom,  Portugal  and  Austria.  However,  LMP
expenditure on active measures in relation to GDP decreased slightly in 2000, averaging 0.9% in the EU.
Three countries have shares above 1% (Denmark, Sweden and Belgium). Lowest expenditure is in the United
Kingdom, Greece and Portugal.

(cid:1)  Training  measures  represent  about  half  of  the  total  measures  undertaken  and  in  general  the  number  of
participants in training measures rose by 4%. In Belgium, Denmark, Germany, Spain, Luxembourg, Austria
and Portugal the rise was around 6%. In Ireland, Finland and Sweden there was a decrease.

(cid:1)  Of the seven Member States (Austria, Belgium, Denmark, Finland, Sweden, Spain, Germany) which provided
activation rates by sex, in five (Austria, Belgium, Denmark, Finland, Sweden) the activation rate for women
is higher than that of men.

… but further emphasis is needed on prevention …

The  situation  with  regard  to  achievement  of  the  prevention  target  is  less  satisfactory.  The
agreed indicators to measure progress concern both the implementation of early intervention
policies  (the  extent  to  which  unemployed  young  people  and  adults  are  provided  with
individual action plans before reaching 6 and 12 months unemployment) and the achievement
of results (the  extent to which inflows  into  long-term  unemployment  are  cut).  Although  the
majority of Member States have put in place a preventive approach, it is not always effective
as revealed by insufficient levels of coverage of those at risk of unemployment (see annex 2:
indicator of effort), or by high levels for the indicator of non-compliance (see also annex 2).

30

On this basis, only five Member States - Austria, Sweden, Finland, the United Kingdom and
the  Netherlands  (for  young  unemployed)  -  can  be  considered  as  complying  fully  with  the
objective.  The  recent  surge  in  unemployment  makes  it  all  the  more  important  to  improve
performance on preventive policies.

The facts on prevention

(cid:1)  Austria, Sweden, Finland, the United Kingdom and the Netherlands (the latter for young people, but not for
adults)  have  satisfactory  results  both  as  regards  early  intervention  and  reduction  of  inflows  to  long-term
unemployment.

(cid:1) 

Italy and Greece are still in the process of adapting their structures to be able to intervene in time and to
systematically offer individual action plans.

(cid:1)  Denmark, Ireland, Spain and France have  succeeded  in  slowing  down  flows  into  long-term  unemployment
(because  their  labour  markets  are  sufficiently  strong  to  enable  the  majority  of  unemployed  people  to  find
employment  on  their  own  initiative  during  their  first  months  of  unemployment),  but  a  high  proportion  of
unemployed people are still not benefiting from early intervention policies.

(cid:1)  Germany, Luxembourg, Portugal and Belgium have increased the numbers of unemployed people reached by

preventive policies but without substantially slowing down the inflow into long-term unemployment.

… and on effectiveness

Generally  not  enough  is  known  about  the  effectiveness  of  activation  measures  in  terms  of
sustained integration into a regular job and in terms of their relative efficiency. More attention
needs to be given to qualitative aspects, in particular monitoring sustained integration into a
regular  job.  The  same  seven  countries  as  last  year  (Austria,  Denmark,  Germany,  Spain,
Finland,  Sweden  and  the  United  Kingdom)  provide  figures  on  either  the  rate  of  return  to
unemployment  or  the  flow  into  employment  after  participation  in  an  active  measure.  It
appears that the rate of return to unemployment varies from 19% to 45% (after 3 months), and
from 29% to 61% (after 6 months). The flow into employment after participation in a measure
varies  from  50%  (after  6  months)  to  67%  (after  one  year).  The  available  evaluation  data17
suggests  that  combining  training  with  other  measures  such  as  work  experience  increases
success. Experience has also shown that, although different contexts lead to differences in the
effectiveness  of  the  measures,  individualised  active  policies  are  crucial.  The  activation
requirements need  to  focus  on  results,  rather  than  on  numbers  of  beneficiaries  in  preferred
types of measures, by taking into account both the characteristics of the individual and labour
market conditions.

17

In  particular  on 
http://europa.eu.int/comm/employment_social/empl&esf/ees.

the  evaluation  of 

the  basis  of 

the  European  Employment  Strategy  completed 

in  2002,  see

31

                                                
The current indicators on prevention do not capture differences in the quality of the approach
used.  The  impact  evaluation  of  the  Employment  Strategy  has  shown  that  the  concept  of  a
"new start" has been interpreted in very different ways between Member States, ranging from
an  interview  to  a  specific  ALMP,  through  individual  action  plans  of  varying  depth  and
quality.  Prevention  is  often  seen  as  early  activation  of  job  seekers  instead  of  early
identification of needs to prevent a drift into long-term unemployment making  it difficult to
distinguish  clearly  between  prevention  and  activation.  Cross-country  comparison  is  also
problematic because of variations in the way breaks in unemployment spells to take part in an
active measure are treated.

The  strong  focus  on  quantitative  targets  in  the  monitoring  process  for  both  activation  and
prevention, although effective in reorienting priorities in line with the Guidelines, may have
unwittingly contributed to a relative neglect of the dimension of effectiveness and efficiency.
The EES evaluation suggests that what is vital is making the right offer at the right time to the
right person based on an early identification of needs.

Central role of Employment Services

Effectiveness depends strongly on the national and economic context, and in particular on the
efficiency  of  Employment  Services.  The  impact  evaluation  confirmed  that  the  strategy  of
activation and  prevention has triggered a comprehensive  remodelling  of  Public  Employment
Services  operations.  The  movement  towards  more  of  a  partnership  approach,  with  the  PES
increasingly  a  main  integrating  player  in  a  wider  private  and  public  delivery  system  is
continuing. In 2001 a clear trend is discernible within several Member States (Italy, Austria,
Germany,  Belgium,  Denmark  and  the  Netherlands)  towards  a  mixed  market  of  public  and
private  employment  services.  Several  Member  States  are  further  liberalising  regulations  on
private  employment  agencies,  including  temporary  work  agencies  (Italy,  Austria,  Germany,
Belgium).  Others  (Germany,  Denmark  and  the  Netherlands)  are  introducing  procedures
whereby  private  employment  services  can  participate  in  the  delivery  of  public  service
programmes  and  some  are  increasingly  investing  in  more  and  better  services  to  enterprises
(the  United  Kingdom,  Finland,  the  Netherlands).  Almost  all  Member  States  are  using
information  and  communication  technologies  to  significantly  expand  electronic  self-service
facilities and many Member States are continuing developments to strengthen services at the
regional  or  local  level  (France,  Spain,  Greece,  Italy).  However,  reform  of  the  institutional
structures  for  implementing  active  labour  market  policy  and  redesigning  the  complex
methodology of employment service delivery need to be pursued.

32

Tax reductions and improving the interaction of tax and benefits

In 2001 most Member States further reduced taxes on labour income (personal income taxes
plus  employee’s  social  security  contributions)  particularly  for  those  at  the  lower  end  of  the
wage scale although tax cuts have not always been targeted strictly on low paid labour. Others
have undertaken tax reforms by introducing  modest general  tax reductions. A  small,  though
growing, number of Member States (Belgium, France, the Netherlands, the United Kingdom,
Denmark)  are  addressing  the  interaction  between  tax  and  benefit  schemes.  The  rapid
withdrawal of benefits as people earn income from taking up work is now widely recognised
as  a  major  disincentive  to  seek  employment  and  Member  States  implemented  a  variety  of
measures  to  address  this  issue.  However,  concerning  the  unemployment  benefits  a  more
effective  enforcement  of  eligibility  criteria  is  needed,  as  well  as  a  better  interaction  with
active  labour  market  policies  and  giving  more  attention  to  the  way  benefit  systems  are
administered. This would reduce work disincentives while preserving  an  adequate  degree of
social protection for the unemployed.

Incentives  to  take  up  work  have  been  improved  by  making  increasing  use  of  employment-
conditional  benefits.  Several  Member  States  (the  United  Kingdom,  Ireland,  Finland  France,
Belgium,  Italy  and  the  Netherlands)  are  extending  the  use  of  In-work  Tax  Credit  schemes.
Some  Member  States  have  implemented  targeted  measures  which  are  related  to  changes  in
minimum wages and child benefits structure (the United Kingdom, Ireland, Austria, Sweden)
or combine benefits with part-time work and training (Sweden, Denmark, Portugal, Austria).
Member States do not, however, address the possible gender effects of tax-benefit reforms.

Active ageing: comprehensive approach needed

In addition to the target agreed in Stockholm to raise the employment rate for older workers
to 50% by 2010, the Barcelona European Council called for a progressive increase of about
five years in the effective average exit age from the labour market by 2010.

The facts on older workers

(cid:1)  The employment rate for the 55-64 age group was 38.5% in 2001 compared to 74.7% for the 45-54 year olds,

77.1% for the 25-54 age group and 40.7% for the 15-24 year olds.

(cid:1)  The statutory retirement age has been increased in Finland, Denmark and Sweden and the age threshold for
women has been brought into line with that of men in Belgium, Germany, the United Kingdom and Portugal.
However  the  average  effective  exit  age  from  the  labour  in  the  EU  remains  low,  except  in  a  few  countries
where it has increased, such as Finland.

33

(cid:1)  The participation rate of 55-64 year olds in education and training was 3% in 2001 compared to 8.4% for
the  adult  working  age  population.  Sweden,  the  United  Kingdom,  Denmark  and  Finland  are  the  best
performers with an average older worker participation rate of 10.9%.

All Member States have given increased attention to promoting the issue of older workers in
2001 and are implementing a wide variety of policies.

Few  Member  States  (Finland,  Denmark,  the  United  Kingdom  and  Sweden)  have  developed
fully-fledged national active ageing strategies. Most promote some training and reskilling for
older  employed  and/or  unemployed  people.  Several  Member  States  are  promoting  more
flexible working arrangements and an improved working environments, including workplace
health  initiatives.  Some  are  implementing  awareness-raising  campaigns  for  employers  to
encourage more positive attitudes to the potential of older workers, but changes of this type
require sustained action over a long period of time.

Efforts are being made to discourage early exit or to provide financial and other incentives for
staying  longer  in  the  labour  market,  although  little  attention  is  given  on  promoting  flexible
forms  of  work  combining  gradual  retirement  with  part-time  work.  Overall,  Member  States
concentrate  on  reforming  the  regulatory  framework  for  benefits,  and  give  less  attention  to
improving working conditions or providing effective incentives for employers to retain or to
recruit older workers. The tendency is to cover a broader age group than those aged 55-64 and
to focus on older workers in employment rather than the unemployed (with the exception of
the United Kingdom, Denmark, Greece, Austria, and Belgium).

The continuing low employment rate for older workers coupled with the tendency to continue
to use early retirement schemes, which is visible in some Member States, are causes for real
concern.  There  is  also  a  risk  of  substitution  effects  between  different  sections  of  the  social
security systems, such as retirement and invalidity.

Based  on  current  employment  scenarios,  the  EU  employment  rate  target  for  older  workers
will  remain  out  of  reach  unless  Member  States  design  and  implement  comprehensive
strategies for active ageing. The Commission report on "Increasing labour force participation
and  promoting  active  ageing"18  outlined  the  elements  of  such  a  comprehensive  approach,
based  on  a  life  cycle  approach.  In  the  framework  of  four  objectives  (more  jobs  and  better
quality in work; making work pay; providing higher and adaptable skills at work; and making
work  a  real  option  for  all)  five  priority  actions  were  identified:  retain  workers  longer  in
employment; review tax/benefit systems; tackle gender gaps in pay and labour market access;
promote the participation of persons with care responsibilities; reduce school drop-out rates.

18

COM(2002)9 final, 24 January 2002.

34

                                                
When  developing  and  implementing  respective  policies,  the  gender  dimension  of  active
ageing  also  needs  to  be  addressed  better.  The  active  support  and  contribution  of  the  Social
Partners is crucial to success.

Encouraging progress in Life long learning policies

The facts on lifelong learning

(cid:1)  There  has  been  a  slowdown  in  educational  attainment,  the  adult  population  (25-64)  with  at  least  upper
secondary level education rose by only 0.2% in 2001 to 63.8% compared to a rise of 1.2% in 2000. The rate
for women has generally increased at a faster pace than that of men and the gender gap has been reduced to
just over 5 percentage points.

(cid:1)  The participation rate for the adult population in education and training continues to be low and has stayed
stable at 8.4%. Rates vary widely between the different age groups and attainment levels. Those aged 25-34
are nearly five times more likely to take part in education and training than those aged between 55-64 and
those with low skills are over 6 times less likely to participate than those with high skills. Women participate
more than men (9% compared to 7.9%).

(cid:1)  The  early  school  leaving  rate19  (those  aged  18-24  leaving  the  education  system  prematurely,  with  lower
secondary  education or  less)  fell  only  marginally  from  19.7%  in 2000  to  19.4%  in  2001.The  rate  remains
persistently high especially in Portugal (over 45%) and in Spain and Italy (over 25%). The EU average male
rate is considerably higher than for females (21.9% compared to 16.8%).

(cid:1)  E-learning:  The  EU  average  rate  of  access  to  the  Internet  for  all  educational  levels  was  93%  in  2002
compared to 89% in 2001. Over the same period the rate for secondary schools rose from 96% to 98% and
from 84% to 90% for primary schools. The ratio of students to on-line computers decreased from 15 in 2000
to 10 in 2002. While, in 2002, 74% of primary and 65% of secondary teachers of non-computer subjects use
computers regularly in the class room, 40% of primary and 47% of secondary teachers have not received any
ICT related training.

The  emergence  of  bottlenecks  and skills gaps  has underlined the importance of  competence
development throughout the whole life cycle and has encouraged Member States to reinforce
their  lifelong  learning  policies.  Increasing  attention  is  being  given  to  basic  skills  and
improvement  in  adult  literacy  has  emerged  as  a  particular  priority  area  in  some  Member
States.  The  social  partners  are  playing  an  ever  more  important  and  wide-ranging  role  in
lifelong learning in all the Member States. Many actions have been taken to promote a better
match between education and training supply and labour market demand, including through
steps  to  make  initial  education  more  vocationally  relevant,  to  expand  and  reform
apprenticeship systems and, in a few Member States, through mechanisms to better anticipate

19

The EU average excludes the United Kingdom due to the lack of comparable data. For Ireland after 1997 the results of that year
are used. Data for Sweden lacks comparability between 2000 and 2001 due to changes in the survey sample design. For France
the information is collected only if education or training is under way on the date of the survey.

35

                                                
skill needs. However, overall, provision remains supply-led and the responsiveness of systems
needs to be further enhanced and more account taken of mobility issues.

A stronger regional dimension in lifelong learning policy is apparent in a majority of Member
States (promoted through regional development strategies, learning partnerships and, in some
cases,  through  increased  budgets  for  regional  authorities)  and  many  have  expanded  local
learning centres to bring opportunities closer to people. Most Member States have reinforced
information,  advice  and  guidance  services  and  are  developing  financial  incentives  aimed  at
both  enterprises  and  individuals  to  encourage  take-up  of  learning  provision.  However,  the
continuing low participation rate in education and training and the slowdown in the upskilling
of the population highlights the necessity for sustained action. Two thirds of Member States
have now set national targets on participation and attainment. However, there is a tendency
to focus more on the younger age-groups and, whilst this is important, attention also needs to
be  given  to  how  to  better  reach  older  age  groups,  the  low-skilled,  vulnerable  groups,  SME
employees  and  those  on  atypical  contracts.  Equally,  more  attention  needs  to  be  given  to
promoting a broader culture which values learning.

Although  tangible  progress  has  been  made  in  the  development  of  national  lifelong  learning
strategies,  further  emphasis  needs  to  be  given  to  workplace  and  other  non-formal  learning,
disadvantaged groups, monitoring systems and better co-ordinated guidance services.

The school drop out rate has gradually decreased but the pace of progress calls into question
the feasibility of meeting the common target of cutting the rate in half by 2010. In addition to
intensifying support more individually tailored approaches and intervention at an earlier stage
are called  for.  The  problem  is  particularly  difficult  to  tackle  amongst  males  and  a  thorough
analysis of the situation and evaluation of the effectiveness of measures is needed.

Member States have intensified efforts to promote the development of ICT skills, in general,
and  e-learning,  in  particular.  Specific  efforts  are  being  made  to  equip  members  of  priority
groups, including older workers and unemployed people, with basic ICT skills to prevent the
development  of  a  digital  divide.  The  important  role  of  ICTs  in  supporting  learning  and
teaching is reinforced. E-learning is  used not only to improve access to learning  but  also to
improve the quality of the learning process. On the common e-learning targets the majority of
Member  States  are  close  to  achieving  an  internet  access  rate  of  100%  although  progress  in
primary  schools  is  lagging  behind  a  little.  The  ratio  of  students  to  on-line  computers  is
steadily  improving  but  there  is  cause  for  concern  regarding  ICT  training  of  teachers  since
nearly half of all secondary school teachers have still not received any training  even though
the use of computers by teachers is steadily rising. In general, there is little attention on the
gender dimension of lifelong learning, and especially on e-learning.

36

Stronger focus on the prevention of bottlenecks

The facts on occupational mobility

(cid:1)  Between 1997 and 2001 in the EU as a whole the change in the occupational structure (used as a proxy for
occupational  mobility)  went  up  from  1.9%  to  2.9%20.  The  change  was  higher  in  Denmark,  Greece,  Italy,
Austria, Sweden and the United Kingdom.

The facts on geographical mobility

(cid:1) 

In 2001 15.2% of the population who changed residence within the EU (including within the same city) did
so for occupational reasons21. Above average are Austria (18.3%), Germany (19.3%), France (21.1%) and
Greece (17.1%). Substantially below average are Belgium (9.3%), Ireland (10.9%), the Netherlands (8.5%)
and Portugal (8.9%).

(cid:1)  The  percentage  of  people  changing  residence  between  regions  (in  the  same  or  another  Member  State)
between  1997  and  2001  in  the  EU  as  a  whole  increased  from  1.2%  to  1.4%.  The  highest  increase  was  in
France  and  Austria.  The  greatest  downward  trend  can  be  observed  in  Italy  (1.1%  to  0.6%)  and  Belgium
(1.2% to 0.1%). The increase for males (0.2%) was somewhat higher than for females (0.1%).

Despite  the  fact  that  changes  in  the  economic  context  have  resulted  in  a  lessening  of  short
term tensions on the labour market, Member States have given greater attention to combating
bottlenecks than in the past. Aware that economic growth will increasingly become dependent
on a more active management of labour supply, and prompted by demographic changes, most
Member  States  have  stressed  the  development  of  monitoring  systems  to  better  identify  and
analyse labour market  developments  in order to prevent future  bottlenecks.  They also stress
the  need  for  intensified  active  labour  market  policies  (especially  for  disadvantaged  groups)
and education policies.

In all Member States vocational education and training of the employed and the unemployed
are  important  components  of  the  policy  to  reduce  bottlenecks  in  specific  sectors  (especially
ICT,  health,  care  and  education)  and  occupations  (higher  technical  staff).  Member  States
which foresee continued, or even worsening, bottlenecks in the years to come are seeking to
develop  pro-active  education  and  training  programmes,  in  many  cases  linked  with  the
development of a comprehensive system for life-long learning. There is also recognition that
resolving  bottlenecks  involves  more  than  recruitment  and  training  operations:  packages  of
measures to enhance the attractiveness of the public sector and action to reduce absenteeism

20

21

The percentage results from adding up all the absolute values of changes in the occupational structure in the Member States, eg
3% more office clerks, 2% less elementary occupations etc…For Sweden the data is only available for the period 1998 - 2000 and
for Finland only for the period 1998 - 2001.
Based on the outcomes of the Eurobarometer 54.2, February 2001.

37

                                                
are being implemented. However, only one country  (Denmark) sees the reduction  of  gender
segregation as a way to help solving the problem of bottlenecks.

Geographical  mobility  policies  are  also  given  a  higher  profile  this  year.  Some  of  these
policies  concern  inter-regional  mobility  within  the  national  labour  market,  which  Member
States encourage through various incentives (for example in Germany, France, Spain, Italy or
Belgium). Several Member States present labour immigration as part of the solution to labour
shortages,  thus  recognising  the  importance  of  a  better-integrated  European  labour  market.
Many  Member  States  have  taken  steps  to  improve  the  job-matching  capacities  of  their
employment  services.  Most  are  developing  electronic  databases  of  vacancies  and  CVs,
connected through EURES.

More integrated inclusion policies but reinforcement of demand-side measures needed

As  in  previous  years  a  majority  of  Member  States  considers  integration  into  the  labour
market as the best way to promote social inclusion. However, there is increasing recognition
that  this  is  not  an  immediate  option  for  all  disadvantaged  people  and  there  is  therefore  an
emphasis  on  a  broader  range  of  complementary  policies  contributing  to  social  inclusion
(housing,  health,  urban  and  rural  regeneration  policies).  The  influence  of  the  Inclusion
Process is evident in the development of this more global approach and half of the Member
States  make  an  explicit  reference  to  their  national  action  plans  on  social  inclusion  in  this
context.

The  gap  between  the  overall  employment  and  unemployment  rates  and  those  of  specific
groups  with  an  over-representation  of  disadvantaged  persons  such  as  the  disabled,  ethnic
minorities or immigrants continues to be high, despite the fact that most Member States have
intensified active labour market measures. This underlines the fact that, in addition to raising
employability and addressing broader social inclusion needs, the demand  side of the market
has  to  be  tackled  to  combat  discrimination  against  disadvantaged  persons.  Steps  are  being
taken in this direction as some Member States report initiatives which combine employability
measures for disadvantaged persons with an increased emphasis on encouraging recruitment
(awareness raising and anti-discrimination in general). These actions need to be expanded and
continued.  The  transposition  of  the  Article  13  anti-discrimination  directives  into  national
legislation underpins these efforts.

Evaluation of the effectiveness of measures to integrate disadvantaged persons into the labour
market and to prevent discrimination is severely hampered by differences in the definition of
the groups and a lack of statistical data.

38

2.2.2.

Entrepreneurship

Improving  conditions  for  entrepreneurship  is  essential  in  promoting  sustainable  growth  and
job  creation.  The  Entrepreneurship  Pillar  is  about  providing  conditions  which  favour  the
creation of new jobs. It aims at facilitating the development of an environment favourable to
start-ups and to business growth and at exploiting effectively the employment potential of the
knowledge society and of the services sector. It places an emphasis on employment friendly
taxation  which,  together  with  better  access  to  finance  for  start  ups  and  early  development
phases, is crucial in promoting a favourable entrepreneurial environment. Its objective is also
to stimulate action for employment at regional and local level.

More  targeted  action  is  needed  in  making  entrepreneurship  a  key  driver  for  growth  and
employment

Efforts  to  reduce  administrative  burdens  for  business  are  not  sufficiently  developed.  Policy
attention is being focused on  the  complexity and delays of business registration procedures.
There is a  focus on the  simplification  of  registration  procedures,  mainly  by  using  ICT,  and
some  Member  States  have  set  quantitative  targets22,  such  as  reducing  by  half  the  time  and
costs of setting up a company (Spain, Portugal), or reducing the overall administrative burden
by 25% by the end of the current legislative term (Belgium and Portugal). Assessment of the
respective  impact of legislation on business is  only made  with  regard  to  existing  legislation
and an ex-ante evaluation of new legislation is not considered in most Member States (except
in  the  United  Kingdom,  Sweden,  Luxembourg  and  Denmark).  Apart  from  the  growing
number  of  one-stop  shops  across  the  EU  is  complemented  by  the  progress  in  legislative
actions to facilitate start-ups, though there is scope for improvement in some MS. Access to
finance - a crucial factor for entrepreneurial performance - especially in stimulating the supply
of risk capital for the start up and early stage of the lifecycle of businesses has not received
much attention.

The  importance  of  self  employment  in  job  creation  is  recognised  by  all  Member  States.
Sweden  has  even  set  a  specific  target  concerning  the  number  of  self-employed  people.
However,  more  targeted  support  is  needed  to  exploit  the  potential  for  self  employment  by
encouraging existing employees or unemployed to become self-employed. The share of self–
employment on total employment decreased from 14.9% in 1997 to 14% in 2001, the decline
being  stronger  for  men  than  for  women.  This  development  might  simply  be  the  result  of  a
gradual structural change, i.e. traditional sectors in which self-employment is relatively strong
make  room  for  new  sectors  where  self-employment  is  a  less  characteristic  feature.  Cultural
reasons and relatively large actual and perceived difficulties in setting up a business seem to

22

Cf. COM(2002)610.

39

                                                
deter  people  from  becoming  entrepreneurs  in  several  Member  States.  Tax  levels  on  self-
employment and small businesses appear to be decreasing and steps have been taken towards
removing tax burdens from  potential self-employed,  and  several  Member  States  are  making
concerted and sustained efforts to promote female entrepreneurship.

The  positive  developments  in  education  for  entrepreneurship  need  to  be  strengthened.  The
education  of  potential  and  existing  entrepreneurs  sees  a  wide  number  of  initiatives  by  most
Member  States.  Promoting  entrepreneurship  within  the  education  system  is  an  important
development towards overcoming the cultural and attitudinal blocks against self-employment
but efforts need to be intensified and structured, and emphasis placed on training of teachers.
Member  States  offer  a  diverse  spectrum  of  training  opportunities  for  entrepreneurs  and
potential  entrepreneurs  outside  and,  to  varying  degrees,  inside  the  education  system.  Such
opportunities  have  been  created  by  various  institutions,  business  support  organisations  and
professional  organisations,  but  need  to  be  better  targeted  to  the  needs  of  users,  particularly
with  regard  to  sources  of  financial  support  while  paying  more  attention  to  training
opportunities for women and young people.

Despite the slowdown in the employment growth of the services sector, its full potential needs
to  be  exploited  with  particular  emphasis  on  knowledge-based  services.  The  employment  of
the  services  sector  continued  to  increase  in  2001  but  at  a  lower  pace,  1%  at  EU  average,
which  is  below  the  overall  employment  growth  (1.2%).  The  growth  rate  was  higher  for
women  than  for  men  in  most  Member  States.  The  employment  rate  in  services  increased
throughout the period 1997-2001 by almost 4 percentage points to 44.4% in 2001. This rate is
slightly  higher  for  women  (45.6%)  than  for  men  (43%).  Only  few  Member  States  have
detailed  their  efforts  in  the  removal  of  barriers  to  the  provision  of  services  (Denmark,
Germany),  but  most  of  them  are  concentrating  on  investment  in  knowledge-based  services.
This concerns not only support in the start-up phase, but also support to existing enterprises
with  a  view  to  developing  their  activities,  to  boost  innovation  and  to  create  new  job
opportunities. A range of new initiatives promoted in several Member States aim at creating
job  opportunities  in  knowledge-based  services  and  in  the  environmental  domain.  Some
Member  States  have  intensified  their  efforts  to  increase  employment  in  the  environmental
sector (Austria, Belgium, Denmark, Germany).

Some  progress  has  been  made  in  combating  undeclared  work  but  efforts  need  to  be
strengthened  and  the  monitoring  and  reporting  of  implementation improved. Member  States
are  addressing  undeclared  work  through  general  labour  market  reforms.  Their  efforts
concentrate on: simplifying procedures for the declaration of new jobs, increased inspection
and  control  campaigns;  combining  job  incentives  with  sanctions,  including  measures  to
combat tax and social insurance fraud; reduction of the VAT rate in labour-intensive services
enabling  more  equal  competition  with  the  same  services  provided  through  the  informal

40

economy; and developing legislation to control the undeclared or illegal work of immigrants.
Most  Member  States  have  implemented  or  announced  new  initiatives  in  these  areas  (the
United Kingdom, Portugal, Italy, Germany, France, Austria, Belgium, Spain, the Netherlands
and Greece).  More needs to  be done  by  pursuing  co-ordinated  efforts  involving  all  services
concerned in close co-operation with the social partners.

Despite reductions the tax burden on labour remains high

Key facts on taxation in the EU

(cid:1)  The overall tax burden in the EU, measured by the ratio of total tax revenues to GDP, increased from 41.5%

in 1996 to 41.9% in 1999, with a tendency to decline in 2001 just below its 1996 level (41.3%).

(cid:1)  The adjusted implicit tax rate23 on labour which relates to the evolution in the overall tax burden on wages in
the EU, after reaching its peak of nearly 37.8% in 1998 was subsequently reduced by 1 percentage point to
about 36.8% in 2001.

(cid:1)  The  reduction  in  the  tax  burden  on  low-paid  labour  appears  to  be  more  significant.  An  EU  average  tax
reduction  of  3  percentage  points  over  the  period  1997-2001,  to  37.8%  in  2001,  being  observed  for  all
Member States although to varying degrees.

The general tax environment should favour enterprise and encourage risk taking. The overall
tax burden increased over the period 1996-1999. Thereafter the trend was reversed for many
Member  States.  Nevertheless,  in  several  of  them  (Sweden,  Denmark,  Belgium,  Finland,
France and Austria) the tax rate remains high, exceeding 45% of GDP.

Positive  developments  in  reducing  the  tax  burden  on  labour  are  observed  in  all  Member
States.  Most  Member  States  are  committed  to  the  objective  of  reducing  the  tax  burden  on
labour, failing  though to set national  targets.  The  tax  burden  on  labour,  as  measured  by  the
adjusted implicit tax rate on labour, was reduced24 in the EU by 1 percentage point between
1996-2001,  to  36.8%  in  2001,  mainly  through  reductions  in  social  security  contributions
(SSC).  The  reduction  in  labour  taxes  is  most  visible  for  the  low-paid  (about  3  percentage

23

24

The adjusted implicit tax rate is defined as the total of direct- and indirect taxes on labour income (personal labour income tax
plus  payroll  taxes)plus  employees’  and  employers’  SSC  as  a  percentage  of  total  labour  costs,  including  pay  roll  taxes.  It  is  a
backward looking empirical measure of the actual tax burden  on  labour income  and therefore  relies  on  the  observed  aggregate
data on tax revenues and incomes.
The  figures  for  the  implicit  tax  rate  are  based  on  National  Accounts  and  additional  estimates  provided  by  the  Member  States
(source:  Commission  services,  DG  TAXUD).  The  "tax  wedge"  on  labour  measures  the  difference  between  the  wage  costs
incurred by the employer and the net pay received by the employee for a single worker earning 67% of the average production
worker's  wage  (source:  OECD  in  co-operation  with  Member  States).  The  data  is  based  on  tax  indices  that  are  constructed  for
hypothetical households.

41

                                                
points),  as  measured  by  the  tax  wedge  on  labour  for  the  single  worker  earning  67%  of  the
average production worker (APW) wage.

42

Graph 3: Adjusted implicit tax rate on employed labour

60

50

40

30

20

10

0

SE

FI

BE

AT

DK

IT

DE

FR

GR

EU**

PT

ES

NL

LU

IE

UK

* Provisional estimate
** Weighted by total compensation of employees

1997

2001*

Source: Eurostat, the structure of the taxation systems in the EU', updated by the Commission Services, DG TAXUD.

The picture by Member State is very uneven with substantial shifts in the composition of the
tax wedge on labour in recent years. Ireland and Italy recorded the highest cuts in the total tax
wedge  followed  by  the  United  Kingdom,  Finland  and  France.  Over  the  period  1997-2001,
most Member States have reduced the tax wedge on low- and/or average wage earners.

Most Member States report significant reductions in personal income tax and social security
contributions  in  2001-2002,  as  part  of  their  tax  reforms  to  reduce  the  tax  burden  on  labour
(France,  the  Netherlands,  Ireland,  Denmark,  Finland,  Sweden,  Germany,  the  United
Kingdom, Luxembourg and Belgium). Reductions in the statutory income tax rates have been
an  important  device.  Several  Member  States  have  at  the  same  time  raised  the  minimum
exemption thresholds. Most Member States give priority to reductions for the low-paid,  e.g.
special tax liability credits or tax base deductions on labour were introduced in many Member
States  (Belgium,  France,  Finland,  Sweden,  Ireland, 
the
Netherlands25). These instruments operate in the sense that the tax reductions normally phase

the  United  Kingdom  and 

25

The Netherlands is the exception to the rule that the tax credit phases out for higher incomes.

43

                                                
in  for  low-income  workers,  and  subsequently  phase  out  for  higher  incomes.  Targeted
reductions  in  SSC  (mainly  employers'  contributions)  have  also  been  introduced  particularly
for  the  low-paid,  for  hiring  new  staff  and  for  the  long-term  unemployed,  for  keeping  older
workers  on  the  payroll,  school  leavers  (Belgium,  Greece,  Spain,  France,  Ireland,  Italy,
Luxembourg, the Netherlands, Sweden, Denmark and Portugal).

Graph 4: Tax rate for a single person on 67% of the APW

50

40

30

20

10

0

BE

SE

DE

IT

DA

FI

AT

FR EU15 NL

GR

ES

PT

LU

UK

IE

1997

2001

Source: OECD, "Taxing wages-taxes on wages and salaries, social security contributions for employees and their employers, child benefits",
calculations by the Commission Services based on OECD database 1996-2001.

Given the fact that the tax burden on labour has been continuously increasing since the early
1970s in most Member States, the recent reversal of the trend in the tax burden on labour in
most Member States is a significant result. However, despite this positive development labour
taxes  still  remain  high  in  a  number  of  Member  States,  particularly  in  comparison  to  labour
taxes in the USA and Japan. This underlines the need to step up efforts on reducing the tax
burden  for  the  low-paid  and  on  striking  a  balance  in  the  mix  of  the  various  tax  measures,
taking account of the labour market specificities.

The tax incentives for raising investment in human resources need to be strengthened. The tax
reforms  undertaken  by  Member  States  are  intended  not  only  to  promote  jobs  but  also  to
eliminate  financial  barriers  to  training  for  both  the  enterprise  and  the  individual.  An
increasing number of Member States are promoting investment in human capital through tax

44

incentives to  enterprises encouraging training  (Spain,  Austria,  the  Netherlands,  Sweden,  the
United  Kingdom).  Some  Member  States  promote  non  tax-related  measures  to  encourage
training for the individual or the enterprise, re-allocation of green tax revenues to individual’s
skills  development  or  innovative  funding  mechanisms  focused  on  individuals  such  as  skills
bonus  linked  to  skills  savings  accounts  (Sweden)  and  tax  credits  (the  United  Kingdom).
However,  as  the  geographical  mobility  of  workers  and  their  tendency  to  change  employer
more often increases, enterprises are discouraged from undertaking training initiatives.

Little  progress  is  made  in  shifting  taxes  from  labour  income  to  alternative  sources.  Some
Member  States  (Denmark,  Germany,  Netherlands,  Sweden  and  the  United  Kingdom)  have
introduced or  raised  green  taxes,  particularly  energy  taxes,  to  meet  primarily  environmental
objectives  rather  than  counterbalancing  labour  tax  reductions.  Several  Member  States
continue  to  implement  tax  measures  contributing  to  shifting  the  (indirect)  tax  burden  away
from labour intensive services through reduced VAT rates on such services (Belgium, Spain,
France,  Italy,  Luxembourg,  the  Netherlands,  Portugal  and  the  United  Kingdom).  This
provision initiated in 2000 for a 3-year period is to be extended for one more year, up to 2003,
to  allow  the  Commission  to  evaluate  its  effectiveness  on  the  basis  of  national  reports  and
allow a decision to be made for its extension to other Member States or its abolition.

The development of a territorial dimension of the EES has entered a phase of consolidation

Local  employment  strategies  must  be  framed  in  accordance  with  the  specific  circumstances
prevailing in the local situation. Member States have continued to implement measures and
policy  changes  initiated  earlier  and  only  few  have  introduced  new  measures  on  local  and
regional  actions  for  employment.  There  is  a  growing  tendency  towards  decentralisation  of
employment  policies,  in  many  cases  influenced  by  the  European  Employment  Strategy  and
the  Structural  Funds.  The  need  for  a  more  strategic  approach  in  developing  employment  at
local level seems to be widely accepted, and this is increasingly reflected in the NAPs. Such
an  approach  calls  for  increased  coherence  and  more  rigorous  design  and  evaluation  of
territorial employment policies.

The regional action plans have been further developed and are in place in four Member States
(Belgium, Portugal, Spain and the United Kingdom). In Finland, from 2002 onwards regional
plans  will  be  integrated  into  the  NAPs,  with  ministries  and  their  respective  regional  bodies
negotiating  annual  targets  and  resources  for  the  regions.  The  Territorial  Employment  Pacts
remain  important  instruments  for  the  implementation  of  employment  policies  at  local/
regional level in some Member States (Italy, Portugal, Austria).

The  partnership  approach  needs  to  be  strengthened.  Participation  of  local  and  regional
authorities  in  the  NAP  process  is,  in  most  Member  States,  limited  to  the  implementation

45

phase. The NAPs are prepared primarily by the central government in consultation, but rarely
in partnership with other actors. There is a  growing interest in Member States in the role of
territorially-based,  integrated  strategies,  and  in  partnerships  as  instruments  of  active  labour
market  policy;  strategic  partnerships  at  the  local  level  are  often  mentioned,  but  are  rarely
described  in  detail,  and  often  the  partnerships  mentioned  are  linked  with  Structural  Funds
programmes.  The  ongoing  processes  of  decentralisation  of  Public  Employment  Services
imply  increased  flexibility  at  local  level  and  autonomy  in  as  much  as  they  can  increasingly
select  measures  or  instruments, decided at national  or  regional  levels,  to  match  local  needs.
The role of social partners in employment creation at local level is not discussed in detail and
other  potential  actors  are  mentioned  even  more  briefly,  mainly  in  the  context  of  the  social
economy.

2.2.3.

Adaptability

Actions under this pillar of the European Employment Strategy  focus on the  joint  efforts of
governments  and  social  partners,  through  a  partnership  approach,  to  improve  the  level  and
quality  of  employment  via  an  adaptation  of  work  organisation  and  the  implementation  of
lifelong learning strategies at enterprise level. These actions aim at increasing the capacity of
the labour market and its actors to adapt to structural change, notably by making enterprises
adaptable,  reducing  barriers  to  employment  and  providing  the  appropriate  balance  of
flexibility and security. In addition to broadening of the scope of the Employment Guidelines
in  2001,  notably  in  respect  of  health  and  safety  at  work  and  in  terms  of  a  target  for
information society literacy to be achieved by 2003, the Guidelines in 2002 specifically insist
on a contribution to improvements in quality in work in the context of the modernisation of
work organisation.

Steps towards an improved balance between flexibility and security

Flexibility and security: building on synergies

As the notions of flexibility and security themselves evolve to reflect changes in our societies, the concept of a
balance between both – which is essential to the adaptability pillar – needs to be better explored.

(cid:1)  Flexibility,  or  the  capacity  for  firms  to  adjust  to  market  demand,  can  take  many  forms  in  relation  to
employment. External flexibility in terms of the capacity to "hire and fire" (including the use of temporary or
fixed term contracts) constitutes an immediate reaction and allows firms to adapt to unforeseen circumstances
and  changing  trends  such  as  changing  demands  or  skill  requirements  and  allows  firms  to  adjust  their
production  quickly.  Internal  flexibility,  implying  re-organisation  of  the  existing  workforce  (working  time,
working  methods,  training,  mobility)  constitutes  a  longer  term  approach  to  managing  change  and  to  the
development  of  skills  and  competencies,  with  clear  advantages  in  terms  of  productivity  and  capacity  to
adjust.  These  forms  of  flexibility  are  complementary  and  each  has  its  specific  advantages  and  costs  for
individuals, firms and society.

46

(cid:1)  Security, under a static approach, is focussed on the stability of the working relationship and the availability
of a safety net in case of job loss. In a more dynamic perspective, security encompasses non-discrimination
between forms of working contracts and arrangements, and the acquisition and preservation of employability,
so as to facilitate adaptation to change and mobility within and between jobs. In this light, access to training
and career development are essential aspects of job security.

Flexibility and security can be designed in a mutually re-inforcing way. A proper balance fosters the acceptance
of innovation and change, as well as diversity on the labour market. It is an important component of quality at
work. It serves the interests both of employers and workers.

Along with the moderate increase in part-time work and fixed-term contracts (see box below),
the  long-standing  trend  towards  the  increased  flexibility  of  working  time  arrangements
continued  in  2001.  In  Germany,  Greece,  Austria,  Italy,  Luxembourg  and  Belgium  working
time  corridors  and  extended  periods  to  calculate  average  working  time  have  been
implemented  in  a  large  number  of  collective  agreements.  Legal  and  collective  actions  to
reduce  overtime  are  being  undertaken  in  Luxembourg,  Belgium,  Germany,  Greece  and
Austria. The reduction in  working  hours  initiated  in  France  and  Belgium  has  been  pursued,
but in ways tailored to diverse needs through appropriate agreements. In that sense they also
often result in increased flexibility.

To respond to the specific needs of their labour market, several Member States are trying to
modify  the  current  balance  between  different  types  of  contractual  and  working  time
arrangements. Spain, for example, attempts to reduce the share of fixed-term contracts, while
Greece aims at increasing the attractiveness of part-time and Sweden to  encourage full time
work.  These  efforts  may  progressively  lead  to  greater  convergence  of  working  patterns
amongst EU Member States.

Flexibility of work

(cid:1)  There was a moderate but steady increase in the recourse to part-time work in the period 1997-2001. The
percentage of part-time employees as a share of all employees rose from 17.7% to 17.9%. In Member States
with high part-time rates, like Denmark and Sweden, a decrease can be found over time; the lowest part-time
rates continue to be found in Portugal and Greece, between 4.8% and 3.5%.

(cid:1)  The share of fixed-term contracts rose from 12.2% in 1997 to 13.2% in 2001. Spain has the highest share of
over 31%, with a declining trend in recent years; low rates are registered in Ireland (strongly declining) and
in Luxembourg with a slightly increasing trend.

(cid:1)  Whereas part-time work is a voluntary decision according to around 80% of people questioned on this point,

fixed-term employment is mostly involuntary (also 80%).

47

Balancing this trend towards increased flexibility, important steps to ensure equal treatment
have been undertaken by many Member States, largely based on the  relevant EU-Directives
on  part-time  work  and  fixed-term  employment  relationships  (Italy,  Greece,  Portugal,
Luxembourg,  Spain,  Germany,  Belgium).  In  Ireland,  Germany,  Sweden,  Luxembourg  and
Denmark part-time workers have obtained more rights. In Portugal, Greece, the Netherlands
and  Spain  measures  have  been  taken  to  make  part-time  work  more  attractive  and  in  France
involuntary part-time work has diminished as a result of working time reduction. With regard
to  fixed-term  contracts  action  has  been  undertaken,  notably  in  Greece,  Portugal,  the  United
Kingdom, Finland, Italy, Sweden, Germany and Spain, to improve working conditions and/or
to discourage short-term contracts. To reduce insecure jobs, certain restrictions on fixed-term
contracts have been introduced in France and Germany.

Both  legislative  and/or  collectively  agreed  improvements  in  health  and  safety  matters  are
reported in all Member States and are seen as a key element of quality improvement in work.
In many cases reforms are ongoing to strengthen preventive action, to enhance the coverage
and to disseminate best practice. The involvement of the social partners (notably in Finland,
Italy, France, Sweden, Spain, Austria and Portugal) has been on the increase as evidenced by
their  participation  in  preparing  and  implementing  measures.  A  fundamental  overhaul  of
existing legislation is planned in Ireland and Denmark focusing on the definition of new risks.
In  the  Netherlands  so-called  industry-level  covenants  have  been  concluded  and  more  are
envisaged  this  year  to  improve  prevention  of  exposure  to  major  risks.  With  regard  to
accidents  at  work  (covering  the  period  1994-99)  comparatively  high  figures  indicate  that
more preventive  action is required  especially in Sweden, Denmark, Spain,  Belgium,  Greece
and Ireland.

At  European  level  two  sectoral  (commerce,  telecommunication)  and  one  significant
overarching  interprofessional  agreement  on  telework  have  been  signed  between  the  social
partners.  The  implementation  of  these  agreements  at  national  level  sets  a  framework  for  a
socially responsible treatment of this form of work. Teleworking has been directly addressed
by social partners in Austria, Italy, the United Kingdom and Portugal.

Initiatives on modernising work organisation deserve wider dissemination

Modernisation of work organisation goes well beyond flexibility of contractual arrangements
and working hours. It encompasses a variety of workplace related initiatives which contribute
to an optimal use of resources and competencies. Modern work organisation can play a major
role in promoting quality at work, productivity and competitiveness of firms. More generally,
it can greatly facilitate the adaptation to change of individuals as well as organisations.

48

A  number  of  interesting  initiatives  have  been  taken  by  Member  States  to  encourage
innovation  and  dissemination  of  good  practices  in  this  field.  Finland  follows  a  holistic
approach  in  this  respect  notably  through  the  Workplace  Development  and  the  National
Productivity  Programmes.  Other  noteworthy  initiatives,  often  involving  local  actors  or  the
social  partners,  are  taken  in  the  UK  (eg  CBI  projects),  Portugal  and  Spain  (government
initiatives  aiming  at  promoting  the  implementation  and  dissemination  of  good  practices),
Ireland (National Center for Partnership and Performance) and Germany (Works Constitution
Act and Insti programme).

In spite of such initiatives, the dissemination of successful organisational innovation remains
weak  so  far  in  the  EU.  This  may  be  attributed  to  a  number  of  mutually  reinforcing  factors
including  low  levels  of  awareness  of  innovative  practice  and  its  benefits,  poor  access  to
evidence-based  methods  and  resources  capable  of  supporting  organisational  learning  and
innovation,  and  the  failure  of  training  systems  to  provide  knowledge  and  skills  relevant  to
new forms of work organisation.

Training of employees receives more attention …

Agreements on vocational training at cross-industry and/or at sectoral level exist in nearly all
Member States and very often collective agreements set the framework for continuing training
actions. More Member States are experimenting with various forms of financial incentives for
skills development including individual training accounts, vouchers, training levies and fiscal
reforms.  Initiatives linking  working  time with training  (for  example  working  time  accounts,
educational  and  training  leave  and  job  rotation  schemes  are  continuing.  Efforts  to  develop
accreditation systems for non-formal learning are being taken forward. There are some signs
of a movement towards a longer-term, more strategic approach to workforce development and
the  promotion  of  more  integrated  packages  of  measures  promoting  lifelong  learning  but
generally  little  attention  has  been  given  to  promoting  a  broader  culture  of  learning  in  the
workplace.  Entitlement  of  workers  to  individual  training  plans  is  becoming  more  common
(Belgium,  Denmark,  the  Netherlands,  Finland,  Sweden  and  the  United  Kingdom),  and,  in  a
few  cases,  a  broader  entitlement  to  a  minimum  number  of  hours  training  per  year  is  being
introduced (Portugal, Finland). However, it is too early to see the results. A concrete follow-
up of such entitlement schemes should be organised with a view to maximise their efficiency.

Few  Member  States  provide  data  on  the  numbers  of  workers  covered  by  agreements
(Belgium,  Germany,  Ireland,  Spain  and  the  United  Kingdom).  In  future,  more  systematic
information  needs  to  be  provided  on  the  coverage  and  budget  of  agreements  in  the  field  of
lifelong  learning.  The  recently  adopted  framework  for  action  on  skills  and  competences
developed  by  the  social  partners  at  EU-level  could  help  to  overcome  some  of  the  current
reporting shortcomings.

49

Some  Member  States  report  an  increase  on  expenditure  by  enterprises  on  continuing
vocational  training  (for  example  Ireland,  Belgium  and  the  United  Kingdom)  and  this  is
confirmed as a general trend by European data26. Some Member States also highlight a rise in
public  spending  and  overall,  an  upward  trend  is  visible  in  expenditure  and  with  some
movement  towards  greater  sharing  of  the  costs  between  all  the  actors  concerned.  The  ESF
often plays an important role in underpinning continuing training.

… but the objective of ICT literacy for all workers cannot be achieved without a redoubling
of efforts

Although  more  and  more  workers  are  using  computers  at  work,  Member  States  continue  to
give  little  attention  to  the  objective  of  giving  every  worker  the  opportunity  to  achieve
information society literacy by 2003. In many Member States it seems to be subsumed within
broader  action  aimed  at  promoting  ICT  literacy  for  all  citizens  (Belgium,  Finland,
Luxembourg, Sweden). Others, like the United Kingdom, Portugal, Greece and Ireland, report
on some more specific initiatives targeted at workers.

European data27shows that some progress is being made towards the achievement of the target
with  just  over  29%  of  the  total  workforce  having  received  basic  ICT  training  in  2001
(compared  to  just  under  23%  in  2000).  However,  training  efforts  are  largely  focused  on
management and white-collar workers whilst the vast majority of manual workers continues
to remain excluded from upskilling in ICT. Workers in small and micro enterprises also have
very  few  opportunities  to  benefit  from  training.  A  considerable  intensification  of  efforts  is
urgent if the objective of providing opportunities for all workers by the end of 2003 is to be
achieved.

2.2.4.

Equal opportunities

To help raise labour participation and achieve the employment rate targets for 2010 set out at
the Lisbon and Stockholm European Councils, governments and social partners are called on
to strengthen  equal opportunities  policies  for  women  and  men  in  the  labour  market.  This  is
sought through a  gender mainstreaming approach  across  all  pillars,  reducing  gender  gaps in
unemployment  and  employment  rates,  tackling  gender  segregation  and  pay  gaps,  and
promoting  policies  oriented  at  reconciling  work  and  family  life,  including  the  provision  of
childcare services.

26

27

CVTS data (Continuing Vocational Training Surveys 1 & 2 reference years 1993 and 1999) show that companies are increasingly
investing in continuing vocational training (CVT) but nonetheless levels remain generally low, ranging from just over 1% of the
labour costs of all enterprises in Portugal to 3% in Denmark.
Eurobarometer survey on ICT and Employment, 2000 and 2001.

50

                                                
Developments in this area should be examined  also in the  light of  the  Joint  report  from  the
Commission  and  the  Council  on  increasing  labour  force  participation28,  which  calls  for  a
strong initiative to reduce gender disparities in both the public and private sectors. Measures
would  include  tackling  the  gender  pay  gaps  and  facilitating  labour  market  access  by,  inter
alia, reviewing  constraints on labour market choices for women and men  and reviewing job
classification and wage formation processes.

The facts on gender gaps: decreasing, but only slowly
(cid:1)  In 2001 employment rates for women increased in all Member States (except Belgium and Greece)
and the gender gap in employment declined slightly. However, the employment rate for women in
the  EU  (54.9%)  is  still  18  percentage  points  below  the  male  rate  (73%).  Sweden,  Finland  and
Denmark have the narrowest gender gaps in employment rates. Greece, Spain, Italy, Luxembourg
and Ireland have the largest gender gaps, above 20 percentage points.

(cid:1)  In most Member States the unemployment rate remains higher for women than for men (except the
United  Kingdom,  Sweden  and Ireland).  In  2001, the  unemployment  gender  gap  decreased  to  2.3
percentage points. Greece, Spain, Italy and France have the largest gender gaps.

(cid:1)  Women's average gross hourly earnings (employees at work for 15 hours or more) in 1998 were
83.8  %  of  men's  (a  pay  gap  of  16.2  percentage points)29.  The  gender  pay  gap  was  higher  in  the
private  sector  (23.7  percentage  points)  than  in  the  public  sector  (10.7  percentage  points).  The
lowest  pay  gaps in  1998  were  in  Portugal,  Italy  and  Belgium.  The  highest  pay  gaps  were  in  the
United Kingdom, Austria, the Netherlands, Germany and Ireland.

(cid:1)  Gender  segregation  in  sectors  and  occupations  has  remained  stable  since  last  year  (17,7%  in
sectors and 25,2% in occupations)30. By sectors, Finland, Sweden, Portugal, Ireland and Austria
have the highest segregation, with an index above 20%. By occupation, Finland, Sweden, Austria
and Denmark have the highest segregation index which ranges from 27% to 30%.

(cid:1)  The presence of children influences differently the participation of women and men in the labour
market.  Data31  for  2001  show  that  the  presence  of  a  child  (0-6  years)  decreases  women's
employment rate by 12 percentage points on average in the EU, whereas men's employment rate
increases by 9 percentage points. The negative impact of parenthood on employment for women is
particularly  strong  in  Germany,  the  United  Kingdom  and  Spain  (more  than  20  percentage
points)32.

28

29

30

31

32

"Increasing labour force participation and promoting active ageing", joint report from the Commission and the Council.
Last year the indicator on gender pay gaps was based on net earnings. As comparison of net pay across countries is made difficult
by the variation of  tax  systems  between  countries, this  year  the  indicator is based  on  gross  earnings.  Therefore  no  comparison
with previous year is possible. No data available for Finland, Luxembourg and Sweden.
Gender segregation in sectors and occupations is measured as follows: the average national share of employment for women and
men is applied to each sector/occupation. The differences are added up to produce a total amount of gender imbalance. This figure
is presented as a proportion of total employment.
No data available for Denmark, Finland, Ireland and Sweden.
The impact of parenthood on employment is monitored by comparing the employment rate of men and women (aged 20-50) with
and without children (0-6 years).

51

                                                
Progress towards the employment targets, but efforts required for older women

Despite the progress observed in 2001 in women's employment rates and the fact that some of
the  Member  States  (Austria,  Denmark,  the  Netherlands,  Finland,  Portugal,  Sweden  and  the
United  Kingdom)  already  exceed  the  female  employment  rate  target  of  60%  for  2010,  the
employment rate in the EU as a whole is still 5.1 percentage points below the target and 2.1
percentage points below the intermediate target of 57% for 2005. Further growth in the female
employment rate is also critical to the achievement of both the objective of raising the overall
employment rate to 70% and the employment rate among older workers to over 50% by 2010
(see also section 2.1).

Measures  vary  between  Member  States,  but  generally  a  combination  of  efforts  to  reduce
female  unemployment and policies to encourage  participation  of  women  in  the  labour  force
are made. Initiatives vary from training of women returners (Ireland, Austria, the Netherlands
and  Luxembourg),  policies  aimed  at  active  ageing  (Sweden),  review  of  tax,  benefit  and
pension  systems 
the  Netherlands),  encouraging
entrepreneurship (Greece, Sweden and Luxembourg) and better care services for children and
other  dependants  (e.g.  Ireland,  Greece,  Italy,  Luxembourg  and  the  United  Kingdom).  There
are also examples of specific measures, such as reducing employers' contributions for hiring
women on permanent jobs (Spain), campaigns (Austria) and improvements of gender equality
at enterprise level (France).

Ireland,  Sweden  and 

(Belgium, 

Five countries  (Belgium,  Finland, France,  Italy and the Netherlands)  set  national  targets  for
increasing  women's  share  of  employment33  (see  table  3  in  section  2.1).  For  the  first  time
Belgium  (Wallonia),  Italy  and  Finland  set  employment  targets.  Achieving  the  employment
targets appears within reach, but more focused and target-based strategies are need in those
countries  with  low  female  employment  rates,  namely  Italy,  Spain  and  Greece.  Moreover,
particular attention is needed to encourage women to remain longer in the labour market.

Gender  mainstreaming:  from  political  statements  to  more  operational  measures,  but
implementation is still inadequate

Progress  in  implementing  gender  mainstreaming  is  evident,  but  its  implementation  remains
incomplete with most Member States focusing on a specific aspect or policy area and failing
to  promote  a  comprehensive  approach34.  Austria,  Belgium,  France  and  Germany,  which  do
not  have  a  long  tradition  of  implementing  gender  mainstreaming,  have  continued  to  put  in

33

34

The United Kingdom has also set a target for increasing the employment rate of lone parents (of which 95% are women). Portugal
will aim at keeping the employment rate in 2001 for 2002.
Successful  gender  mainstreaming  of  employment  policies  depends  on  the  implementation  of  co-ordinated  measures  covering
inter-institutional  co-operation  (including  gender  equality  bodies),  gender  impact  assessment  procedures  of  new  proposals,
provision of appropriate indicators and statistics, awareness raising in the form of information, training and surveys.

52

                                                
place interesting and integrated initiatives, especially in terms of co-ordination  mechanisms,
training  and  other  tools.  Ireland,  Finland,  Sweden,  Denmark  and  the  United  Kingdom  have
slightly extended their existing initiatives. Some small, but nonetheless positive  changes  are
visible  in  Spain  and  Greece,  although  most  of  the  initiatives  are  isolated  and  still  at  a  very
early stage of implementation. Italy and to some extent Luxembourg have paid little attention
to gender mainstreaming. In general, however, the effectiveness of the gender mainstreaming
initiatives and their full integration into the policy-making process is difficult to assess in the
short-term.

There  is  significant  variation  between  Member  States  in  the  treatment  of  gender
mainstreaming within policy areas under the first three pillars. Whilst there are signs of new
developments  in  the  policies  on  prevention  and  activation  (Sweden  and  the  Netherlands),
review  of  tax  and  benefit  systems  (Germany,  Ireland,  the  Netherlands  and  the  United
Kingdom),  reform  of  the  Public  Employment  Services  (Austria,  Denmark,  Italy  and
Germany),  entrepreneurship  (Ireland,  Spain,  Finland,  Germany,  Belgium,  Luxembourg,
Sweden  and  Greece)  and  working  time  arrangements  (Germany,  Ireland,  Denmark  and  the
Netherlands), other key policy areas have barely been touched by gender mainstreaming, such
as active ageing, combating bottlenecks, development of e-learning and lifelong learning.

More determination is needed to reduce gender pay gaps

The  gender  pay  gap  in  the  EU  is  still  wide  (16.2%)  and  important  pay  differentials  exist
between age groups and by levels of education. Gender pay gaps are wider for older workers
(30.6%) and highly educated persons (20.8%). There is a growing awareness that gender pay
gaps do not decrease as an automatic by-product of the growing female participation rate as
they are linked to structural gender inequalities in the labour market. Moreover, results need
to  be  monitored  and  assessed  in  the  medium-  and  long-term  and  in  relation  to  gender
segregation.

Although some initiatives have been introduced, they tend to be mainly research- or analysis
oriented rather than concrete and target-based measures. The United Kingdom, Denmark and
Sweden have further amended their legislation or fully implemented new legal provisions in
order to enhance transparency. Awareness raising and information campaigns are also popular
methods  for  addressing  pay  differentials  (Denmark,  the  Netherlands  and  the  United
Kingdom).  Whilst  in  some  countries  the  social  partners  have  started  addressing  the  issue
(Denmark,  Ireland  and  Spain),  reducing  gender  pay  gaps  is  not  a  priority  for  most  social
partners in the Member States.

53

Gender segregation is addressed, but not visible in the short-term

Generally, countries with high female employment rates tend to have highly segregated labour
markets,  whereas  the  opposite  can  be  observed  for  countries  with  low  female  employment.
While one of the main objectives of the Lisbon agenda is to increase the employment rate of
women,  gender  segregation  remains  a  structural  problem  in  the  labour  market.  Gender
segregation has a negative effect on labour market functioning, by excluding many well suited
and  skilled  people  from  working  in  sectors  and  occupations  where  they  could  be  more
productive.  Reducing  segregation  could  help  address  other  problems  on  the  labour  market,
such as bottlenecks and the  gender pay  gap. Many  factors  contribute  to  gender  segregation,
such  as  educational  choices,  stereotypes,  attractiveness  of  given  sectors  for  men  or  women,
including  possibilities  of  reconciliation  of  professional  and  family  life.  These  factors,  and
therefore the degree of segregation of the labour market, take time to influence.

Countries  with  a  highly  segregated  labour  market  are  continuing  to  implement,  and  also
reinforce, integrated measures aimed at reducing gender segregation (Denmark and Sweden).
However, results are more likely to appear in the medium- and long-term. Finland's strategy
aims at both influencing the educational and training choices of men and women, work place
culture and practice within the Public Employment Services.  In Denmark, the results of last
year's report on actions to be put in place to tackle gender segregation show that the  gender
equality  projects  which  have  been  initiated  in  the  Public  Employment  Services  can
significantly  contribute  to  dismantling  segregation  on  the  labour  market  and  to  preventing
bottlenecks. A positive development is that there are now many interesting examples of new
measures to increase the number of women in the decision-making process, for example via
recruitment  targets,  positive  measures  and  other  actions  to  ensure  equal  access  to  positions
with  responsibility  (Germany,  the  Netherlands,  France,  Italy,  Denmark,  Sweden  and  the
United Kingdom).

Childcare provision has improved, but is still far from the Barcelona targets

At  the  Barcelona  European  Council,  Member  States  agreed  targets  for  childcare  provision.
Childcare  should  be  provided  for  at  least  90%  of  children  between  3  years  old  and  the
mandatory  school  age  and  at  least  33%  of  children  under  3  years  by  2010.  Even  though  a
growing  number  of  Member  States  have  introduced  new  measures,  quantitative  targets  and
deadlines to improve childcare facilities, good and affordable services are still not sufficient to
meet  the  demand  or  to  reach  the  new  Barcelona  targets  (see  Table  6).  In  addition,  it  is
difficult  to  assess  the  effect  of  the  initiatives  because  of  the  lack  of  appropriate  and/or
comparable data. The issue of improving care for other dependants has, as last year, received
very little attention.

54

Table 6: Childcare and elderly care – data and targets set in 2002 NAPs

MEMBER
STATES

Austria

Belgium

Denmark

Finland

France

Germany

Greece

CHILDCARE INDICATOR

35

ELDERLY 
INDICATOR

36

CARE

TARGETS SET IN NAP 2002

in  day-care  facilities

Children 
(2000/2001):
0-1 years: 0.3%
1-2 y.: 6.1%
2-3 y.: 16.3%
3-4 y.: 57.9%
4-5 y.: 86.4%
5-6 y.: 90.1%
Children under 3 years (2001):
Flemish community: 31.4%
French community: 23.8%

Children cared for (2001):
0-2 years: 68%
3-5 y.: 93%
6-9 y.: 79%
Coverage  of  public  childcare
(2001):
0-5 years: 42.7%
6 y.: 63.8%
7 y. (outside school hours): 10.1%
-

for  children

Places  available 
(1998):
0-3 years: 7%
3-6.5 y.: 89.5%
6-10  y.  (outside  school  hours):
12.6%
Number 
establishments (2002):
0-6 years: 4392
Number of children covered:

childcare

of 

-

-

Persons over 75 years living
in  specialised 
institutions
(2001):
French community: 14.7%
Brussels region: 15.9%

-

-

-

-

2001 regional targets are confirmed:
Flanders  +2,500 places  per  year  2001-
2004,
Brussels double places by 2002,
German  community  double  childcare
places by 2004.
-

-

+32.000  places  by  2004;  +10.000
for
places  outside 
children 3-16 years old.
No target set in the NAP37.

school  hours 

Number  of  elderly  care
establishments (2002):
714

Detailed 
elderly.

targets 

for  children  and

35

36

37

Children cared for (other than by the family) as a proportion of all children of the same age group. Breakdown by: before entry
into the non-compulsory pre-school system (during the day); in the non-compulsory or equivalent pre-school system (outside pre-
school hours); and in compulsory primary education (outside school hours).
Dependant elderly men and women (unable to look after themselves on a daily basis) over 75 as a proportion of men and women
over 75. Breakdown by: living in specialised institutions; who have help (other than the family) at home; and looked after by the
family.
However, on 17 April 2002, the German government approved a national sustainability strategy ("Perspectives for Germany. Our
Strategy for Sustainable Development"), in which a target is set of 30% for all-day childcare facilities in the Western Länder by
2010. Moreover, the Government has announced its intention to spend 4 billion EURO for all-day schools in the next years.

55

                                                
Persons  over  65  living  in
specialised 
institutions
(1999):
1.34%

-

Italy

Ireland

162,008
Children cared for (1998):
0-2 years: 6.3%
3-5 y.: 4.5%
6-10  y.  (outside  school  hours):
4%
11-13 y. (outside school hours):
1.2%
Children cared for at least a few
times a week (1998):
0-2 years: 57.5%
3-5 y.: 54.8%
6-10 y. (outside school hours):
49.7%
11-13 y. (outside school hours):
37.2%
-

Luxembourg

The
Netherlands

Portugal

Childcare places (2001):
1975
Children cared for (2001):
0-3 years: 25%
4-12  y.  (outside  school  hours):
8%
-

-

-

-

-

Spain

Children cared for (2000/2001):
0-2 years: 8.6%
3-5 y.: 92.4%

Sweden

The  United-
Kingdom

Children cared for (2001):
1-5 years: 77%
6-9  y.  (outside  school  hours):
68%
10-12  y.  (outside  school  hours):
8%
-

Number  of  persons  over  65
receiving  help  at  home
(1999):
112,797
Number 
places 
of 
specialised institutions:
208,513
Persons  over  65  receiving
care and assistance (2001):
18%
-at home: 9.4%
-special institutions: 8.6%

in

-

56

2001 target confirmed:
Increasing  childcare  places  30%  by
2003.
17%  proportion  of  children  0-3  years
old + 3000 places in school by 2004.
+ 33.000 childcare places by end 2002.

2001 data are confirmed:
Pre-school  education  for  all  children
under 5 years by 2006.
75%  coverage 
for  3-4  years  old
(including  1,800  new  classrooms).
100,000  children  up  to 3  years  will  be
received in day nurseries.
15%  coverage  for  0-2  years  old  and
94% for 3 years old.

-

2001 target is confirmed:
+1.6  million  children  cared  by  2004  =
+  900  neighbourhood  nurseries  for
disadvantaged areas by 2004.
New targets:
A childcare place for every lone parent
entering  employment  and  up  to  100

Early Excellence Centres by 2004.
+  100.000  new  full-time  places  for  3
and 4 year olds in schools.

Source: National data. Data is not comparable between countries.

Continued improvement of reconciliation policies

Better reconciling working time with family life contributes to quality in work and increasing
employment rates. A large number of activities have been reported in this respect. In Belgium,
Ireland, Greece and the United Kingdom care leave, shorter working hours for family reasons
and  career  break  measures  have  been  initiated  or  extended,  while  employment  rights  are
protected.  In  Austria,  Sweden  and  Finland  the  social  partners  are  active  in  fostering  gender
mainstreaming  and  a  better  work-life  balance  in  collective  agreements.  The  Netherlands  in
particular is continuing to develop a very comprehensive approach in this context (important
legislation being the Work and Care Act and the Working Time Act).

57

Many  Member States  are expanding  leave arrangements  (Denmark,  France,  Finland,  Spain,
Sweden, the United Kingdom, Ireland, Austria and the Netherlands). Whilst this is a positive
development,  given  the  gender  imbalance  in  the  approach  to  caring  with  the  responsibility
continuing  to  fall  on  women,  there  is  the  danger  that  long  periods  of  leave  could  have  a
negative  impact  on  women's  participation  rate,  widen  gender  pay  differentials  and  increase
gender segregation. Only a few countries have introduced initiatives to encourage men to use
parental leave schemes (Finland, France, Sweden, Denmark and Luxembourg). On the other
hand,  a  positive  development  is  that  more  countries  now  address  the  issue  of  encouraging
men  to  take  greater  responsibility  for  family  tasks  (Belgium,  Luxembourg,  Germany,  the
United Kingdom, Spain, Portugal and Austria).

58

3.

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

2002  EMPLOYMENT  GUIDELINES 

THE 

OF 

BELGIUM

Key performances in 2001: The economic slowdown in 2001 had a delayed impact on labour
market  developments:  while  employment  growth  still  reached  1.2%  and  the  unemployment
rate decreased slightly to 6.6%, the positive evolution of the employment rate since 1997 was
interrupted. Long-term unemployment continued to fall, but the Belgium labour market is still
characterised by high inflows into long-term unemployment, low labour market participation
especially for women and older persons, substantial geographical divergences and still high
tax and non-tax burden on labour.

General assessment of the employment policy: The Belgian NAP 2002 is a continuation of
the previous NAP. It gives a good and coherent overview of the policy mix implemented by the
different  Belgian  authorities  in  response  to  the  European  Employment  Strategy.  Initiatives
have  been  taken  to  harmonise  the  high  number  of  federal  activation  measures,  but  further
integration of federal and regional labour market policies is needed. While no national target
is  set,  the  NAP  identifies  regional  targets  for  the  employment  rate  that  reflect  the  different
points of departure. The overall employment strategy relies mainly on the reduction of labour
costs in combination with active labour market policies, including targeted measures to raise
the employment rate of older workers. Quality in work is a prime concern and addressed in
many dimensions. Measures to reduce working time have been taken and progress has been
made  in  the  development  of  regional  lifelong  learning  strategies.  Gender  mainstreaming
initiatives  tackle  the  underlying  factors  of  the  gender  pay  gap.  Several  measures  aim  at
ensuring that flexibility is not achieved at the expense of job quality and security. Initiatives to
address  regional  disparities  remain  limited  in  scope.  Social  partners  play  a  key  role  in  the
development  and  implementation  of  the  Belgian  employment  policy  and  they  have  been
actively involved in the preparation of the NAP. Although policy is of inclusive character in
that it caters well for groups with a weak position on the labour market, links to the inclusion
process are absent from the NAP.

Response to the Recommendations: The preventive approach has been strengthened but still
does  not  provide  a  comprehensive  and  systematic  intervention  for  unemployed  adults.  The
NAP  recognises  active  ageing  as  a  key  priority  and  positive  measures  have  been  taken  to
enhance the capacity of older workers to remain at work and to promote their reintegration,
but it remains to be seen whether these measures will suffice to raise the employment rate of

59

older workers substantially in the economic downturn. The previously decided comprehensive
tax reform is being implemented gradually from 2002 to 2005, and should, together with cuts
in  social  security  contributions,  reduce  the  overall  tax  burden  on  labour.  However,  strong
increases  in  real  unit  labour  costs  in  2001  risk  jeopardising  their  beneficial  effects.  A
common view on lifelong learning among all authorities involved is emerging. Action  plans
elaborated  on  regional  level  should  develop  into  coherent  and  comprehensive  regional
lifelong  learning  strategies.  The  NAP  does  not  present  new  initiatives  to  achieve  greater
labour market flexibility. Despite persistent regional disparities, measures to increase labour
mobility are of limited scope and there is room for improvement in the co-ordination between
regional labour market policies.

Key issues for the future: The implementation of the tax reform and wage moderation with a
view  to  increasing  the  overall  employment  rates,  the  monitoring  of  the  impact  of  recent
measures aimed at removing work disincentives and the development of effective strategies to
raise labour market participation among women and older people remain important tasks for
Belgium.  With  regard  to  the  latter,  further  measures  appear  necessary  to  curb  early
withdrawal. Action to prevent adult job seekers from becoming long-term unemployed could
be  intensified.  Measures  to  increase  labour  market  flexibility  without  jeopardising  job
security  would  appear  necessary.  In  view  of  the  substantial  regional  and  sub-regional
disparities in labour market  performance,  better  co-ordination  and  co-operation  among  the
regional public employment services seems to be called for and federal and regional policies
could be integrated better. The development of a comprehensive strategy for lifelong learning
may require greater policy effort.

60

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.

BELGIUM

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

2001 1997
56.9
59.9
22.1
24.1
46.5
50.5
3.6
1.0

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
LTU rate
Youth unemployment ratio
Female unemployment rate

2001 1997
9.2
6.6
5.5
3.0
7.2
6.1
11.9
7.4

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

61

DENMARK

Key performances in 2001: The economic slowdown in 2001 led to the forecast GDP growth
of  1.5%  being  even  lower,  1%  as  compared  to  3%  in  2000.  However,  the  macroeconomic
situation remains positive, and Denmark continues to have employment rates well above the
EU  targets  (total  76.2%,  women  72%  and  58%  for  those  aged  55-64).  Employment  growth
was  also  low,  at  0.2%,  but  the  employment  rate  of  older  workers  went  up  by  2.3%.
Unemployment has remained stable and, at 4.3%, relatively low.

General assessment of the employment policy: The political agenda remains focused on the
long-term challenges to Danish society, such as the ageing population, potential shortages of
labour,  the  difficult  labour  market  position  of  ethnic  minorities,  the  numbers  on  transfer
incomes, the relatively high taxation rate, and the need to upgrade qualifications in line with
international  changes.  Though  new  policy  actions  are  mostly  concentrated  under  the
Employability pillar, including increasing the workforce and a tax freeze, the government has
also  presented  a  competitiveness  package  aimed  at  improving  conditions  for  business.  To
meet the needs of the labour force, a target has been set for an expansion of 67 000 persons
by 2010, to be met mainly through increased integration of immigrants and earlier entry of
young  people  to  the  labour  market.  Compliance  with  the  target  of  ensuring  that  all
unemployed receive a new start before 6 or 12 months unemployment has still to be achieved.
Measures to  promote an  inclusive  labour  market,  both in the  private and  public  sector,  are
being developed on an ongoing basis with the development of existing and conclusion of new
agreements between the social partners. The NAP makes no mention of the Social Inclusion
Process.  The  government  continues  to  work  closely  with  the  social  partners  under  all  the
Pillars  to  ensure  quality  at  work,  though  it  is  dubious  about  the  indicators,  and  none  are
given. Some earlier initiatives through the PES on reducing gender segregation are beginning
to show results.

Response  to  the  recommendations:  The  two  recommendations  addressed  to  Denmark  are
closely linked to the two main planks of national employment policy. The final elements of the
1999 tax reform take place in  2002 and  imply, inter  alia, a  broadening of  the tax  base and
lower marginal rates. The tax freeze instituted by the new government should mean that the
latest reductions will not, as in earlier  years,  be  partly  offset  by  increased  local  taxes.  It  is
intended  to  lower  taxation  on  earned  income  from  2004  if  other  actions  prove  effective,
particularly the raising of numbers at work. The reforms of early pension schemes continue to
bear  fruit,  but  this  will  not  be  sufficient.  New  reforms  aim  at  increasing  the  numbers  of
immigrants  at  work,  and  encouraging  the  under-30s  to  join  the  labour  force  earlier.
Agreements  have  been  reached  with  the  social  partners  for  the  better  integration  of
immigrants,  mainly  through  the  workplace,  and  ways  of  reducing  the  length  of  tertiary

62

education are also being studied. The problem of work incentives with respect to benefits has
been  approached  selectively:  a  new  "starting  allowance"  has  been  introduced,  for  new
entrants to the country, much lower than the present social assistance. The government plans
to extend the youth scheme to those between 25 and 29. The general benefit level will remain
untouched, as it is seen as  providing  the security to  offset  the considerable  flexibility of the
Danish labour market.

Key issues for the future:  In view of the ageing of the  labour  force,  Denmark  may  need  to
ensure  an  adequate  labour  supply,  in  order  to  safeguard  growth  potential  and  the  welfare
model  built  over  decades.  Continuous  monitoring  of  the  effects  of  the  on-going  reforms,
particularly  the  tax  reform,  seems  needed.  It  seems  important  to  closely  follow  the  new
initiatives to strengthen labour market integration of immigrants and track the impact of the
reduced benefits on income levels to ensure they strike the right balance between increasing
economic incentives  and  avoiding  social  exclusion.  There  is  a  risk  that  sectoral  bottlenecks
could appear in the long-term, particularly in the health, education and social sector, where
there  is  overrepresentation  of  employees  aged  over  50.  The  statistical  information  on  the
unemployed  is  not  complete  without  the  data  on  those  not  covered  by  unemployment
insurance.

63

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.

DENMARK

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

2001 1997
74.9
76.2
51.7
58.0
69.1
72.0
3.0
1.0

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
5.2
4.3
1.7
0.9
5.6
5.9
6.2
4.9

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

64

GERMANY

Key  performances  in  2001:  The  global  economic  slowdown  in  2001  brought  real  GDP
growth down to 0.6%, the lowest rate since 1993. Employment growth was also very limited
(0.2%). Unemployment (7.9%) is stagnant and not expected to fall until 2003. The number of
jobs  declined  in  the  Eastern  part  of  the  country  where  unemployment  remains  high.  Long-
term unemployment (3.9%), while gradually decreasing, remains above the EU average. The
overall employment rate has risen by 2 percentage points since 1997. The rate for women has
been increasing even faster (+3.5 percentage points) and is higher than the 2005 interim EU-
target.  Although  the  employment  rate  for  older  workers  (55-64  years)  is  close  to  the  EU
average, it remains below the very low starting level of 1997.

General  assessment  of  the  employment  policy:  The  general  overall  employment  rate  is
approaching  the  EU-target  for  2005.  The  employment  rate  of  older  workers  remains  a
concern.  The  economic  strategy  of  the  federal  government  intends  to  combine  a
macroeconomic  anti-inflationary,  growth  and  employment  oriented  policy,  with
microeconomic  structural  reforms  to  reduce  market  rigidities  and  increase  adaptability.  In
2002,  the  co-operation  of  the  Social  Partners  through  the  (tripartite)  'Job  Alliance'  lost
momentum  and  needs  to  be  re-launched.  Actions  under  the  Employability  Pillar  have  been
strengthened but need more focus, coherence and effectiveness. More efforts are required to
address  the  structural  problems  of  the  Eastern  Länder  and  to  improve  the  consistency
between employment and inclusion policies. The strategy to increase quality in work focused
on  health  and  safety  at  work  and  on  improving  the  security  of  part-time  workers.
Encouraging  the  regional  dimension,  supporting  the  preventive  approach  and  promoting
gender  mainstreaming  have  enhanced  the  relevance  and  the  value  added  of  the  European
Social Fund co-financed activities.

Response  to  the  Recommendations:  The  new  Job-AQTIV  Act  intends  to  strengthen  the
preventive  approach,  and  reduce  inflows  into  long-term  unemployment.  Its  effectiveness  for
young people, and adults, in particular in the Eastern Länder, and for immigrants (including
second  and  third  generation  of  immigrants)  will  be  closely  monitored  and  evaluated.  The
undergoing  reform  of  the  PES  represents  an  opportunity  to  strengthen  the  guidance  and
placement functions and give a greater focus to regional needs. The ESF interventions have
significantly helped develop a more preventative ALMP approach.

The  age  threshold  of  eligibility  for  retirement  for  women  and  for  certain  other  groups  has
been,  or  will  be,  raised.  To  improve  the  employability  of  older  workers,  a  further
intensification of tailor-made approaches are needed.

65

There are visible improvements in continuing training and lifelong learning which should be
furthered.  Policies  require  forceful  implementation,  with  partnership  between  the  federal
government,  the  Länder,  all  players  in  education  and  training,  and  the  Social  Partners.
Special  attention  should  be  given  on  one  hand  to  set  up  overarching  systems  for  the
accreditation  and  recognition  of  formal  and  non-formal  learning  and  the  development  of
common quality standards for providers, and on the other hand to raise the participation rate
to continuous training of low qualified people and SME workers.

The 'Mainz model' intends to improve the employment opportunities  at the lower  end of  the
pay scale. The effectiveness and the impact of the measure reducing taxation and non-wage
labour cost have to be comprehensively analysed.

Germany  commits  itself  to  increase  the  proportion  of  all-day  childcare  facilities  in  the
Western Länder  to 30% by 2010. The  'Report  on  the  Occupational  and  Income Situation of
Women  and  Men'  was  published  and  its  conclusions  need  to  be  translated  into  concrete
action, with an active participation of Social Partners from the private sector.

Key  issues  for  the  future:  A  large  job  deficit  remains,  notably  in  the  Eastern  Länder.
Regional disparities on the labour market could increase further. A comprehensive approach
in  the  Eastern  Länder  combining  regional,  labour  market  and  structural  policies  seems
needed to support employment creation and reduce inflows into long-term unemployment. The
reform  of  the  PES  offers  an  opportunity  to  enhance  the  efficiency  of  ALMPs,  notably  by
improving  their  monitoring  and  evaluation.  Special  attention  when  implementing  the
preventive  approach  needs  to  be  directed  at  people  threatened  by  exclusion.  Improved
employment opportunities for the low-paid  could  help  build an inclusive labour  market,  but
the interaction of taxes and benefits needs to provide appropriate incentives to take up work.
Appropriate qualitative and quantitative targets for lifelong learning seem needed, especially
concerning  the  participation  of  low  skilled  groups  and  SME  workers.  A  lack  of  childcare
facilities and full-day schools continue to hinder  the labour market participation  of  women,
especially in Western Germany. Providing more and affordable (child)care facilities and full-
day  schools,  reducing  fiscal  and  non-wage  labour  cost  related  disincentives  to  work,  and
eliminating gender pay differentials remain important issues for improving the labour market
participation of women.

66

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.

GERMANY

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

2001 1997
63.7
65.8
38.1
37.7
55.3
58.8
1.4
0.6

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
9.9
7.9
4.9
3.9
5.4
4.8
10.7
8.1

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

67

GREECE

Key performances  in  2001: Despite  the  recent  global  slowdown  of  economic  growth  in  the
latter  half  of  2001,  the  Greek  economy  grew  by  4.1%,  accompanied  by  improved  labour
productivity.  However,  total  employment  fell  by  0.3%.  The  main  structural  problems  of  the
Greek labour market persist: the low employment rate of 55.4% is far below the EU average
of 63.9%. The unemployment rate although declined from its peak of 11.9% in 1999 to 10.5%
in 2001 is still above the EU average of 7.4%. The unemployment rate for women of 15.6% is
more than double the rate for men. The gender gaps in both employment and unemployment
rates  remain  high.  Long-term  unemployment  declined  to  5.4%,  but  is  still  above  the  EU
average of 3.3%.

General  assessment  of  the  employment  policy:  Greece  falls  considerably  short  of  the
quantitative  targets  set  at  Lisbon  and  Stockholm,  as  employment  growth  continues  to  be
sluggish. Recent labour market policies aim at raising employment, reducing unemployment,
and combating labour rigidities. Their implementation must be accelerated and monitored, if
concrete  and  meaningful  results  are  to  be  expected.  Currently,  the  pension  system  is
undergoing reform and new legislation has been adopted, which rationalises provisions and
aims  to  ensure  the  economic  viability  of  the  pension  system.  Financially,  employability
remains the most important pillar and ESF resources contribute the most in implementing the
ALMPs. The implementation of the preventative and personalised approach is underway, but
further action is necessary to speed up the reform of the Public Employment Services. Several
measures taken to improve entrepreneurship are in the right direction, such as tax incentives,
administrative  simplification,  support  start-ups  and  female  entrerpreneurship.  The  NAP
Employment  illustrates  the  issue  of  quality  of  work  and  certainly  efforts  have  been  made.
However, ample  room  to increase the  efficiency of interventions pursued, still  exists.  Social
partners  have  been  involved  in  policy  definition  and  implementation,  which  could  lead  in
adapting the  education  system  to  labour  market  needs.  Numerous  measures  of  the  CSF  are
being implemented in the field of lifelong learning and training, the knowledge-based society
and  the  information  society,  entrepreneurship  and  equal  opportunities.  Finally,  NAP
Employment  2002,  considers  the  NAP  Inclusion  2001  and  synergies  between  the  two  plans
are evident.

Response to the Recommendations: There is visible progress towards a more comprehensive
and strategic method of policy making and the proposed measures are better focused on the
Employment Guidelines, while a sound policy follow-up system still needs to be established.

The reform of the Public Employment Services has begun, but more vigour is needed in order
to  overcome  a  number  of  obstacles  (administrative,  technical,  cultural)  to  ensure  full
implementation  of  the  preventative  and  personalised  approach.  Priority  actions  should  be

68

undertaken  to  improve  statistics  in  order  to  develop  and  run  a  comprehensive  statistical
monitoring system.

Tax  reforms  to  encourage  labour  market  participation  go  in  the  right  direction,  but  new
provisions are not expected to have a major impact on employment levels.

Measures to co-ordinate education, training and employment systems have been announced.
Efforts  to  develop  a  comprehensive  and  coherent  lifelong  learning  strategy  have  already
started and move in the right direction although much remains to be done in order to better
match the labour market needs.

The partnership approach has improved through the involvement of social partners in policy
formulation, the examination of existing legislation and the finance of education programmes
for the staff of small businesses. Their involvement will also lead to the modernisation of work
organisation and to the reduction of structural labour market imbalances.

A  gender  mainstreaming  approach  is  being  developed  within  institutions,  even  though  slow
progress  has  been  made  to  lower  the  so-called  "equality  deficit".  Greater  participation  of
women  in  the  labour  market  is  foreseen  through  proposals  for  opening  up  part  time  job
opportunities and incentives to enter the labour market. Progress in relation to the provision
of care facilities, for both children and other dependants, are also visible.

Key issues for the future: Despite the progress achieved in setting up policy and improving
legislation,  raising  the  employment  rate  remains  the  main  concern.  Measures  to  reduce  the
non-wage labour cost (notably for the low paid), the offer of greater incentives to encourage
part-time  employment,  and  completing  the  reform  of  Public  Employment  Services  appear
necessary. Employment rates, particularly for women and young people, could be increased
by speeding up the  implementation  of  preventative and  personalised  approaches,  as  well as
strengthening  active  policies.  For  older  people  this  could  by  addressed  via  active  ageing
policies.  Continuous  improvement  of  the  statistical  monitoring  system  would  be  a  priority.
Further  actions  seem  necessary  aiming  at  improving  incentives  to  work.  The  economic
relevance of education  and  vocational training  could  be improved by strengthening links to
labour  market  needs.  Further  development  and  implementation  of  a  comprehensive  lifelong
strategy,  including  promotion  of  active  ageing,  is  important.  Full  implementation  of  the
labour  market  reform  package  and  monitoring  of  its  impact  seem  necessary  to  ensure  the
modernisation  of  work  organisation  with  a  view  to  ensuring  a  proper  balance  between
flexibility and security. There is a need to significantly improve female employment from both
a quantitative and qualitative point of view in order to reduce the gender gap, especially in
terms of Job segregation and pay gaps.

69

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.

GREECE

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

Employment Indicators

2001 1997
55.1
55.4
40.9
38.0
39.3
40.9
3.6
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 rate

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
9.8
10.5
5.3
5.4
11.2
10.2
15.2
15.6

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

70

SPAIN

Key  performances  in  2001:  The  Spanish  economy  has  been  influenced  by  the  international
economic slowdown, although less than other EU countries. Growth slowed to 2.8% in 2001
from  4.1%  in  2000.  Labour  productivity  growth  was  only  of  0.3%.  Employment  growth
decreased to 2.5% in 2001 from 3.1% in 2000, still double the EU average. The employment
rate  increased  1.5  percentage  points  to  56.3%  and  the  unemployment  rate  decreased  to
10.6%. This reduction was larger for women and the long-term unemployed. A high share of
fixed-term contracts, and a low share of part-time work, well below the EU average, remain
worrisome  features  of  the  Spanish  labour  market.  Large  regional  unemployment  disparities
coexist with labour shortages in some sectors and occupations.

long 

they  reach 

for  unemployed  before 

General  assessment  of  the  employment  policy:  The  objective  of  moving  towards  full
employment has been explicitly adopted by the Spanish Government, but the NAP does not set
any intermediate target in order to contribute to the overall European objective. A preventive
approach  has  been  adopted  and  progressively  achieved  all  along  the  subsequent  NAPs,
term
reinforcing  employability  measures 
unemployment. The issue of maintaining and improving quality at work has been addressed
mainly  through  four  aspects:  training  (the  Law  for  Vocational  Training,  announced  in  last
year’s NAP, has been adopted in June 2002); job stability (measures implemented in previous
years  have  led  to  only  a  slight  reduction  in  the  rate  of  fixed-term  employment);  health  and
safety at work (not developed to the full extent in the NAP); and equal opportunities (actions
have been reinforced in the 2002 NAP compared with previous years). The relations between
the Government and the social partners have been very good during recent years. Although
they have worsened as a consequence of the disagreement between the Government and the
Trade  Unions  on  the  reform  of  the  labour  market  recently  adopted,  they  have  started  to
improved again. The policy mix: Since 1997, the Spanish employment strategy has centred on
Pillars I and II, promoting employability, promoting stable hiring and facilitating enterprise
creation. A growing concern in Pillar IV has been clearly  conveyed by the government and
the social partners, and measures favouring hiring of women and the socially excluded have
been adopted. The NAP establishes a group of measures which are  complementary to those
developed in the Social Inclusion NAP 2001.

Response to the Recommendations:

In the 2001 NAP, the quantified intermediate targets are not put forward explicitly, although
the goal of full employment has been set. As for the completion of modernisation of PES, the
accomplishment  of  the  information  system  “SISPE”  has  been  announced,  as  well  as  the
continuation of the decentralisation process for the implementation of active policies.

71

Measures for reducing the gender gaps focus on improving reconciliation between work and
family  life  have  been  taken  (Integrated  Family  Support  Plan  2001-2004)  A  clearer
formulation of the principle of equal pay has been introduced in the Workers' Statute.

The announced Law on Vocational Training has recently been adopted, It integrates the three
subsystems  in  the  field  of  training.  Stable  employment  has  grown  faster  than  fixed-term
employment. However, the rate of fixed-term employment remains high at about 31%, while
part-time employment has not experienced a significant increase.

No  additional  measures  have  been  adopted  in  order  to  reduce  regional  disparities  in
employment and unemployment. Given the scale of regional disparities, which are, although
improving, still among the most pronounced in the EU, a greater effort is needed.

Key  issues  for  the  future:  Reducing  the  rate  of  unemployment  and  increasing  the  rate  of
employment  call  for  further  efforts.  These  rates  are  still  significantly  lower  than  the  EU
average, despite the impressive efforts made in recent years. It is important to complete the
modernisation  of  the  PES  and  to  increase  co-ordination  between  regional  employment
services.  An  adequate  balance  between  regional  development  and 
functional  and
geographical mobility seems needed. The rate of female unemployment, which is still double
the rate for men, needs to be reduced, and progress is required to reconcile family and work,
in  particular  via  the  provision  of  child  and  dependant  care.  Notwithstanding  the  efforts
already  made,  a  reduction  in  fixed-term  contracts  and  a  greater  use  of  part-time  contracts
remain  important  challenges.  Therefore  it  seems  essential  to  give  a  new  momentum  to  the
social  dialogue.  The  adoption  of  the  Law  for  Vocational  Training  is  part  of  an  overall
strategy for lifelong learning, and it is desirable that it is implemented with a view to enhance
coherence with educational policy and non formal learning at all levels.

72

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.

SPAIN

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

2001 1997
48.2
56.3
33.5
38.9
33.6
41.9
4.0
2.8

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
17.0
10.6
10.8
5.1
13.2
9.1
23.4
15.5

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

73

FRANCE

Key  performances  in  2001:  Despite  economic  growth  slowing  to  1.8%,  employment
increased by 1.9% and the 2001 unemployment rate was brought down to 8.6%, although the
9% mark was overstepped at the end of the year. Since the launch of the Luxembourg process
in 1997, the employment rate has increased from 59.5% to 63.1%, with an overall gain of 2
million jobs. The female employment rate has increased from 52.4% to 56.1%, exceeding the
EU  average.  The  employment  rate  of  older  people  remains  static  at  around  30%  (31%  in
2001). Although unemployment has fallen considerably over the last five years (900 000 fewer
people), it is still above the EU average. Lastly, labour productivity turned negative (-0.4%)
and the increase in the unit labour cost (1.3%) is above the EU average (0.6%).

General assessment of the employment policy: The Luxembourg process has  encouraged a
structured view of employment policy and action against unemployment, serving in part as the
reference framework. The shift from a classic approach to a preventive one was seen mainly
in  the  generalisation  of  the  "new  start"  action  plan  (July  2001),  with  greater  reliance  on
social  dialogue  (933  agreements  signed  in  2001).  Other  elements  include  a  lowering  of
charges  and  the  introduction  of  various  schemes  for  getting  low-skilled  and  young  people
back to or into work.  Whilst aiming at the common objectives, France has  followed its  own
agenda  of  statutorily  reducing  working  time  to  35  hours.  In  relation  to  the  common
challenges,  the  attention  given  to  the  active  ageing  policy  and  reduction  of  pockets  of
unemployment has not yet produced adequate results. There is some tie-in with the Inclusion
NAP, particularly as regards prevention and activation. The European objective of enhancing
the quality of work occupies a significant  place  in the  Employment  NAP, implementation of
which is primarily the responsibility of the social partners.

Response to  the Recommendations:  With the generalisation of the "new start" action plan,
2001 saw the application of schemes tailored for young and adult unemployed persons, and
preventive  measures.  Arrangements  for  reducing  charges  on  the  low-paid  and  measures  to
give young people work have contributed to a sharp rise in jobs, an appreciable lowering of
labour  costs  for  low-skilled  sectors  or  people  with  little  experience,  and  a  reduction  of
"inactivity  traps".  Although  boosted  particularly  by  the  35-hour  agreements,  the  social
dialogue is far from becoming the rule. It could, however, prove useful in matters concerning
wage policy, quality of work and lifelong learning, particularly in SMEs and for the benefit of
poorly skilled or older workers. The employment rate for older workers remains low and the
average retirement age is 58. Despite this glaring inconsistency with the common objectives,
there has been little in the way of discussion or effort to limit early retirements.

Key  issues  for  the  future:  The  forthcoming  introduction  of  reduced  working  time  in  1.3
million  small  businesses  may  call  for  appropriate  back-up  measures  to  guarantee  the
necessary  flexibility.  Social  dialogue  could  be  given  priority  in  matters  relating  to
organisation of working time, lifelong learning and starting and ending working life. Charges
on  labour  could  be  reduced  further,  whilst  avoiding  distortions  on  the  labour  market
according to employee categories. There is an ongoing problem of recruitment, which tends
to  be  acute  in  certain  occupations.  Other  problem  areas  have  to  do  with  school-leavers
without  qualifications  and  persistent  pockets  of  worsening  unemployment.  Lastly,  could  be
taken  to  ensure  greater  participation  of  older  workers  in  economic  life  calls  for  vigorous
measures  and.  In  spite  of  positive  signs,  the  definition  of  a  coherent  strategy  for  lifelong
learning is still on the agenda.

74

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.

FRANCE

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

2001 1997
59.5
63.1
29.1
31.0
52.4
56.1
1.9
1.8

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
11.8
8.6
5.0
2.9
9.4
7.1
13.7
10.5

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

75

IRELAND

Key performances in 2001: Ireland experienced a sharp slowdown in economic growth in the
latter half of 2001. However, despite the slowdown, Ireland continued to record remarkable
employment  outcomes,  mainly  due  to  the  persistence  of  the  strong  performance  from  the
previous  year.  This  resulted 
increasing  by  2.9%,
unemployment decreasing to just 3.8% and long term unemployment to 1.3%. The growth in
employment  was  more  in  favour  of  women  and  older  workers  while  unemployment  is  now
higher amongst  men  than  women  in  all  categories.  Despite  the  improvements  in  relation  to
women,  there  is  still  a  significant  gap  (18%)  between  the  employment  rate  for  women  and
men.

in  overall  employment  (65.7%) 

General  assessment  of  the  employment  policy:  Steady  progress  is  being  made  towards
meeting the targets set at Lisbon. Ireland has, for the first time, set explicit targets in the area
of  long-term  unemployment  and  employment  for  vulnerable  groups  and  has  made  good
linkages  with  the  Social  Inclusion  NAP.  Social  partnership  in  Ireland  is  a  strong  factor  in
employment success and could be further strengthened by increasing the regional and  local
dimension. Recent legislative initiatives for part-time workers and family carers should assist
in retaining/encouraging women into the labour force and improve the work-life balance. The
main emphasis on quality in work is pay and working time although the NAP also refers to
new  national  partnership  arrangements  and  new  legislation  that  will  help  to  improve  work
life balance.

Response to the Recommendations: Ireland's success in tackling unemployment  means that
those who remain unemployed are the most disadvantaged in society. A new 'high supports'
process  and  mainstreaming  of  programmes  for  people  with  disabilities  will  provide  greater
support  to  those  who  are  most  vulnerable.  An  overall  appraisal  of  active  labour  market
policies is at an advanced stage as part of the national partnership agreement. Continued tax
reform  and  an  increase  in  the  national  minimum  wage  provides  an  incentive  for  the
unemployed and the low paid to re-enter/remain in the labour force. There is no discernible
improvement  in  the  gender  pay  gap  or  occupational  segregation.  Good  progress  has  been
made  in  the  provision  of  childcare  places  but  there  is  still  a  major  problem  in  relation  to
childcare affordability.

The delay in finalising an overall strategic framework for lifelong learning is discouraging in
view  of  the  previous  emphasis  on  this  issue  although  significant  efforts  are  being  made  to
address the literacy and numeracy problems affecting one in four of the population. Similarly,
impetus is lacking in relation to in-company training, particularly in view of trends indicating

76

that  changes  taking  place  in  the  occupational  pattern  of  employment  will  favour  those  who
are most educated.

The delay in finalising the National Spatial Strategy does not allow for a complete assessment
to be made. Although it is recognised that policies adopted have had an impact in reducing
regional  imbalance,  it  is  disappointing  to  note  that  the  slowdown  in  economic  growth  and
consequent increase in unemployment, has had greatest impact in the Border, Midlands and
Western Region, the poorer of the two regions in Ireland

Key issues for the future: The current strategies have proven to be successful in increasing
labour  supply  but  it  seems  important  to  ensure  that  programmes  are  correctly  targeted  at
those  who  suffer  the  greatest  disadvantage,  with  the  emphasis  on  future  employability.  To
address low educational levels and workforce skills it seems necessary that Government and
social  partners  expedite  the  development  and  implementation  of  the  long  awaited  lifelong
learning strategy and also, intensify efforts to promote in-company training, in particular for
older  workers.  The  gender  pay  gap  calls  for  a  more  proactive  policy  response  that  is
measurable over time. The provision of childcare and in particular the problem of childcare
affordability  requires  further  action  in  view  of  the  major  barrier  it  presents  to  working
mothers.  Finally,  it  is  expected  that  the  imminent  National  Spatial  Strategy  will  contain
policies to address the problem of regional imbalance.

77

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.

IRELAND

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

2001 1997
57.5
65.7
40.3
46.8
45.9
55.0
10.8
6.8

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
9.9
3.8
6.1
1.3
7.1
3.3
9.9
3.7

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

78

ITALY

Key performances in 2001:  Following the  general world economic slowdown, in  2001  real
GDP  growth  was  almost  1%  less  than  in  2000.  Employment  growth  (1.6%)  was  only
marginally affected, due to the increase in permanent jobs and the female component, while
the employment rate for older people increased only by 0.3%. This performance lowered the
unemployment rate to 9.5%. Despite an improvement in employment since 1997, the wide gap
with  the  EU  partners  remained  substantially  unchanged.  Total  employment  rate  is  equal  to
54.8%, 41.1% for women, and 28% for older people; rates for women, youth, and long term
unemployment  remain  high.  The  main  challenge  is  the  geographical  segmentation:  the
unemployment rate in the South is more than 19%, against the 5% in the Centre-North.

General  assessment  of  the  employment  policy:  The  NAP  presents  broad  proposals  which
should reform  labour  market regulation, while less attention  is given to actions which have
already  been  implemented.  As  a  major  part  of  the  document  is  concerned  with  broad
proposals which are not detailed yet, an adequate evaluation will be possible only after their
translation into concrete actions. For the first time, the Regions contributed and indicated the
ESF as the main financial instrument for regional active policies. The policy agenda is well
described  and  is  based  on  legislation  against  undeclared  work,  educational  and  training
system reform (extension of compulsory education, increased flexibility, emphasis on IT and
languages,  increase  and  facilitate  apprenticeships,  etc.)  and  labour  market  flexibility.  This
policy  mix,  centered  on  employability  and  adaptability,  is  expected  to  influence  equal
opportunities through an easier recourse to part-time work, and to increase quality in work
through  reducing  undeclared  work  and  the  reducing  the  disparity  between  protected  and
flexible  work,  while  security  in  work  and  other  quality  aspects  are  not  analysed.  The
enterpreneurship  pillar  does  not  present  relevant  innovations.  In  general,  the  actions
proposed in the NAP do not seem sufficient to address the problems identified for the South,
though the agreement called "Patto per l'Italia", drawn up after the NAP, partly fills this gap,
especially  in  the  chapter  on  the  investment  for  the  South.  It  remains  to  be  seen  if  all  the
measures  announced  in  this  Pact  will  be  implemented,  given  the  budgetary  restrictions
currently faced by the country. The government's main aim is to increase employment rates,
in line with the Lisbon strategy. Thus the NAP quantifies the employment targets for women
(46%)  and  for  older  people  (40%)  for  2005.  It  also  presents  a  new  framework  for  the
relationship  with the  Social Partners, aimed at moving from  traditional  long-term  tripartite
agreements  on  income  policy  to  specific  agreements.  Social  dialogue  facilitated  the
transposition of certain directives. The government proposal to revise Art 18 of the Workers
Statute ended with a tripartite agreement on labour policies with the majority of trade unions
and  the  employers.  The  NAP  makes  a  reference  to  the  NAP  inclusion  and  emphases  the
contribution of EQUAL and the role of the Regions and local communities, also through the
ESF.

79

Response to the 2001 Council Recommendations: The NAP presents broad proposals which
should  increase  employment  rates  particularly  for  women  and  older  people,  but  the  policy
mix appears unbalanced and doubts remain on whether the reforms will improve the labour
market in the South, without complementary actions on the demand side, although this was set
out in the "Patto per l'Italia". The government presented the employment targets for women
and  older  people  for  2005.  The  latter  is,  to  say  the  least,  ambitious:  for  its  realisation  the
government relies also upon a new proposal to reform the pension system whose timing is not
certain. Provisions are made to combat the undeclared economy, but they are not described
in detail and, in the light  of the  “100  days Law” results, their  contribution is controversial
and will lead to new negotiations between the government and social partners.

The strategy centres on the increase of labour market flexibility (flexible contracts – part time
and  interim  -  and  relaxation  of  some  rules  on  individual  dismissal).  The  ways  to  combine
flexibility and security are not detailed and the policy mix could lead to marginalisation -of
“disadvantaged”  groups  and  generally  in  the  South  also  due  to  the  reliance  on  tax  credits
which  do  not  seem  to  favour  unemployed  people  in  the  area.  The  government  proposed  a
benefit system reform aimed at guaranteeing broader coverage and at eliminating differences
of treatment between categories: if the "Patto per l'Italia" is implemented, the Financial Act
for 2003 should finance the extension in quantity and time of the unemployment benefits. As
for  the  pension  system,  the  government  presented  a  proposal  aimed  at  extending  people's
working life. In the "Patto per l'Italia" the government also committed itself to make tax cuts
of 5,500Meuro for those on low incomes in 2003.

Despite improvements in the creation of employment centres, mainly financed by the ESF, the
2002 targets will be probably reached in the Centre-North, but probably not in the South. A
new Law on the job placement  system  aims at removing from  the Register of workers those
who  do  not  accept  a  reasonable  job/training  offer  and  a  “Legge  delega”  proposes  more
competition  between  private  and  public  agencies  and  a  new  role  for  Temporary  Work
Agencies.  However,  the  interactions  between  the  previous  and  the  current  reforms  are  not
analysed. A labour information system is still missing and input and output indicators cannot
be provided. The NAP does not present new policies for unemployment, implicitly relying on
the planned reforms - though without specifying how these could affect the persistent levels of
youth and long-term unemployment in the South.

Greater  use  of  part  time  work  should  raise  the  employment  rate  for  women.  To  increase
childcare facilities, a National Plan for kindergartens was presented, though the NAP is not
completely  informative  on  that  point,  and  financial  provisions  for  childcare  facilities  for
single parent families were made. However, no targets were set and the proposed measures
are likely to have only a limited impact.

The  NAP  devotes  increased  attention  to  lifelong  learning  policies.  Regional  and  national
education and university reforms were  partly  implemented  with  the  support  of  the  ESF  and

80

show an evolution towards a more flexible and open learning system. However, the training
supply from social partners did not particularly improve. The "Tremonti bis" gives financial
provision  for  training,  but  Social  Partners  normally  do  not  participate  in  the  training  offer
within enterprises and the Funds for continuous training are still not operative.

Key  issues  for  the  future:  In  order  to  increase  the  still-low  employment  rates,  Italy  could
make  better  use  of  the  labour  supply  of  older  people  and  women,  and  address  regional
disparities and undeclared work. In particular, the positive female employment trend could be
accelerated  by  enhancing  the  provision  of  care  services  for  children  and  other  dependants.
For  older  workers,  further  vigorous  measures  (including  training  programmes)  appear
needed to increase the effective retirement age. Once the proposed measures for flexibility are
implemented,  particular  attention  seems  necessary  for  the  security  and  quality  aspects  in
order  to  avoid  the  risk  of  marginalisation  for  the  long-term  unemployed  and  women,
especially in the South. Key issues remain the reduction of tax burden on labour, especially
for  low-paid  workers,  and  the  role  of  the  PES  at  regional  level  in  providing  active  and
preventive measures, together with the essential data collection system. Full implementation
of  a  lifelong  learning  strategy  in  Italy  is  needed,  both  at  the  national  and  regional  levels,
particularly  as  far  as  the  continuos  training  offer  by  social  partners  is  concerned.

81

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.

ITALY

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

2001 1997
51.2
54.8
27.9
28.0
36.4
41.1
2.0
1.8

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
11.6
9.4
7.5
5.9
12.6
10.2
16.1
12.9

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

82

LUXEMBOURG

Key  performances  in  2001:  The  economic  slowdown  resulted  in  less  growth  than  in  2000
(3.5% against  7.5%),  although in excess of  the EU  average  (1.6%),  giving  a  further  rise  in
total  employment  of  5.6%.  With  cross-border  workers  accounting  for  a  large  proportion  of
the jobs created (65%), the national employment rate improved only slightly (0.2%) and fell
short  of  the  EU  average  (62.9%  against  63.9%).  The  female  employment  rate  is  steadily
increasing  (1.4  points  per  year  on  average  since  1997).  The  employment  rate  for  workers
over the age of 55, already poor, is falling (24.4%). The unemployment rate (2.0%) remains
the lowest in the EU, but rose towards the end of the year.

General  assessment  of  the  employment  policy:  The  Luxembourg  process,  as  the  reference
framework  for  employment  policy,  has  engendered  an  inter-ministerial  approach  and
involvement of  the social partners. The  general  employment rate is rising as a result  of  the
increased  participation  of  women  in  the  labour  market,  and  is  on  track  for  meeting  the
Stockholm  2005  objective.  Despite  increased  efforts,  the  rate  of  entry  into  long-term
unemployment is on the rise, especially among young people (although the rising number of
people undergoing training, who are kept on the lists of registered unemployed, seems to be
one of the reasons). As far as older workers are concerned, the measures taken have proven
to  be  inadequate  for  raising  the  employment  rate,  and  it  is  doubtful  whether  the  measures
adopted  in  the  Employment  NAP  will  be  enough  to  dissuade  people  from  taking  early
retirement. With regard to lifelong learning, the success of the proposed reform will depend
inter  alia  on  consensus  being  achieved  between  the  various  partners  involved.  Clear  links
with the Inclusion NAP have been created, particularly in terms of prevention and activation.
The objective of enhancing the quality of work occupies a significant place in the Employment
NAP. Implementation of this objective is primarily the responsibility of the social partners.

Response to the Recommendations: In the case of older workers, incentives are geared to a
mix  of  work  and  retirement,  either  resumption  of  activity  for  persons  unable  to  work  or
revaluation of pension rights if working life is extended. Two draft laws aimed at promoting
the extension of working life and the reintegration of people unable to work were voted on in
June  2002.  Assessments  are  planned  for  2002  prior  to  any  new  measure  being  taken.
Women's  access  has  been  facilitated  through  support  and  integration  measures,  childcare
facilities, and  parental leave, although  such  measures remain  partial.  Further  progress  has
been  made  on  the  education/training  front,  focusing  on  the  three  priorities  set  out  in  the
recommendations:  effective  application  of  the  framework  law  on  continuing  vocational
training (in 2001, 50% increase in applications for approval and State co-financing); action
against  school  dropouts  through  different  measures  involving  support,  programmes  and
certification;  review  of  the  apprenticeship  and  training  system,  with  the  introduction  of  a

83

general concept  of lifelong learning,  validation and  certification  of  achievements,  extension
of basic vocational training and occupational reintegration. The absence of statistical data,
however, makes it impossible to measure the effects of key decisions taken or envisaged.

Key  issues  for  the  future:  The  employment  rate  of  older  workers  needs  to  be  increase
appreciably. There is a risk that the progress achieved in raising the female employment rate
could  let-up  in  a  less  dynamic  labour  market.  There  is  also  a  problem  of  young  people
without vocational qualifications to be addressed . In relation to these aspects (young people,
women  and  the  older  population)  and  others,  such  as  the  quality  of  work  or  wage  gaps
between men and women, appropriate indicators would be needed to verify the impact of the
measures and reforms decided on since the first Employment NAP.

84

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.

LUXEMBOURG

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

2001 1997
59.9
62.9
23.9
24.4
45.3
50.9
9.0
3.5

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
2.7
2.0
0.9
0.5
2.9
2.7
3.9
2.4

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

85

THE NETHERLANDS

Key performances in 2001: The impact of the 2001 global economic slowdown is reflected in
slow  growth  in  The  Netherlands  (1,1%)  and,  for  the  first  time  in  years,  an  increase  in
unemployment  in  the  first  quarter  of  2002.  Labour  productivity  turned  negative  in  2001  (-
0,9%). However, with 74.1% overall and 65.2% for women, the employment rate continues to
score  well  above  the  Lisbon  targets.  Since  1997,  the  employment  rate  for  older  workers
improved  considerably:  from  31.8%,  far  below  the  EU  average,  to  39.6%  in  2001,  slightly
above  it.  The  tight  labour  market  and  considerable  policy  efforts  resulted  in  a  substantial
decrease  of  the  unemployment  rate  for  ethnic  minorities.  However,  it  remains  three  times
higher than for the native Dutch.

increased 

General  assessment  of 
labour  market
the  employment  policy:  Despite 
participation,  as  well  as  continuing  labour  market  shortages,  a  considerable  share  of  the
working-age  population  (the  low-skilled,  partially  disabled,  older  workers  and  ethnic
minorities)  still  depends  on  social  security  benefits,  in  particular  the  disability  schemes.
According  to  national  estimates,  approximately  a  quarter  of  the  inactive  would  have  any
realistic  chance  of  short  term  reintegration  in  the  labour  market.  Against  this  background,
LLL policies do not yet sufficiently bridge the gap between labour market supply on the one
hand and demand on the other. The Lisbon target to halve the number of early school leavers
by  2010  is  not  yet  likely  to  be  achieved.  The  weak  Dutch  performance  regarding  the
comprehensive  approach  for  adults  (66%  non-compliance  and  23%  entries  into  LTU)  is  of
concern.  The  stress  in  active  ageing  policy  is  on  restrictive  measures  discouraging  older
workers from leaving the labour market. Approximately €5.800 million was spent on ALMP in
2002, an increase of 37% on the 1997 figure. The ESF mainly finances projects that help to
comply  with  the  first  guidelines  of  the  EES.  Government  action  aimed  at  reducing  the
administrative burden of businesses has been insufficient over the past years. The gender pay
gap is one of the largest in the EU. Quality policies, addressed in close consultation with the
social partners, are generally well developed. The emphasis is on balancing legislation, self-
regulation,  tax  concessions  and  other  incentives  aimed  at  better  combining  work  and  care.
Some  progress  is  made  in  shortening  child  care  waiting  lists  and  a  structural  solution  is
expected  from  the  introduction  of  a  private  market  for  child  care  in  2004.  Life  cycle
approaches  are  currently  being  developed.  Dutch  employment  and  inclusion  policies
coherently fit together although tackling the poverty trap remains a point for attention.

Response to the 2001 Recommendations: Although the recent agreement on the reform of the
disability  scheme  can  be  welcomed,  it  takes  a  rather  one-sided  approach  as  it  merely
addresses inflows. The in- and outflow to and from the scheme also depend on the practical
implementation  of  medical  examination  criteria  as  well  as  on  the  implementation  of

86

reintegration  plans.  Figures  on  the  participation  of  disability  benefit  recipients  in
reintegration  programmes  leave  serious  doubts  about  their  sufficiency  and  efficiency.  In
addition, the overrepresentation of women, young people and ethnic minorities in the scheme
requires more  specific  attention.  Considerable  efforts  have  been  made  to  tackle  the  poverty
trap  but  the  likely  impact  differs  considerably  according  to  household  type.  Lack  of
transparency  and  (possible)  disincentives,  deriving  from  the  cumulation  of  income  support
established at the various government levels, still stand in the way of making work really pay
for all households.

Key issues for the future: There is a need to substantially enhance participation of disabled
workers, adapted  to their remaining work  capacity,  which  would  help  tackle  bottlenecks  on
the  labour  market.  The  implementation  of  the  reform  of  the  disability  scheme  needs  to  be
carefully  monitored.  Furthermore,  the  substantial  unexploited  supply  of  labour  could  be
addressed  by  fully  applying  the  preventive  (comprehensive)  approach  to  adults  and  by
eliminating  the  remaining  poverty  traps.  The  gender  pay  gap  is  still  too  high.  As  regards
education  and  training,  the  link  in  lifelong  learning  policies  between  labour  supply  and
demand could be strengthened, in co-operation with the social partners, and the prevention of
to  ethnic  minorities.
school  drop  out  calls 

for  action,  paying  special  attention 

87

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.

NETHERLANDS

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

2001 1997
68.0
74.1
31.8
39.6
57.4
65.2
3.8
1.1

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
4.9
2.4
2.3
0.8
5.8
4.1
6.6
3.0

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

88

AUSTRIA

Key performances in 2001: Economic growth slowed to 1% in 2001 leading to employment
growth  of  only  0.2%.  This  left  the  employment  rate  unchanged  at  68.4%.  There  was  an
increase  in  the  female  employment  rate  to  just  over  60%  but  a  decline  of  the  male  rate  to
76.7%. The low employment rate for older workers declined further to 28.6%, remaining one
of the lowest in the EU. The unemployment rate declined further from 3.7% in 2000 to 3.6%
in 2001, but started to increase from mid 2001. The long-term unemployment rate continued
to fall, but the youth unemployment ratio increased from 2.9% in 2000 to 3.2% in 2001.

General  assessment  of  the  employment  policy:  Low  growth  in  2002  is  expected  to  impact
negatively on the labour market, with total employment expected to fall by 0.4%. Austria may
fail  to  reach  its  3.5%  national  unemployment  target  for  2002  and  also  its  national
employment target, inter alia, because of unfavourable economic conditions. The employment
rates  are  already  close  to  the  Lisbon  targets  and  no  additional  measures  have  been  taken.
Quality  in  work  is  largely  linked  to  opportunities  to  secure  more  and  better  qualifications.
Although there is no comprehensive strategy, there are a large number of isolated initiatives.
The  involvement  of  the  Social  Partners  in  the  NAP  process  has  become  less  intense,  but  a
collective agreement for temporary agency workers was reached after long negotiations. The
policy  mix  remains  unchanged  in  2001.  Although  active  labour  market  policies  under  the
employability  pillar  have  been  given  a  sharper  focus,  they  have  been  reduced  for  young
people.  Under  the  entrepreneurship  pillar,  a  number  of  successful  initiatives  have  been
pursued,  notably  the  Territorial  Employment  Pacts,  which  seem  to  be  the  key  to  unlocking
regional  growth  potential.  There  has  been  some  progress  in  respect  of  policies  under  the
adaptability pillar, such as collective agreements concerning flexible working models. Action
under the equal opportunities pillar remains limited to a number of innovatory projects. The
gender pay gap has not narrowed. The NAP presents a wide range of individual policies, but
it is difficult to detect an overall strategic approach. A link to the social inclusion action plan
has not been established.

Response to the recommendations:

Active labour market policy actions and measures to reduce skill gaps have been enhanced in
2001, including for disabled persons. Further extension of tax and benefit reforms to increase
the participation of older workers, the low skilled and ethnic minorities is required. The very
low  employment  rate  for  older  workers  does  not  show  any  sign  of  improvement.  Current
measures including  the  part-time retirement of  older workers do not seem likely to produce
the expected results.

89

Under equal opportunities and gender mainstreaming little has been implemented other than
the introduction of the childcare allowance. The NAP fails to address further action which is
needed  to  extend  childcare  facilities.  The  new  childcare  allowance  might  actually  reduce
women's  incentives  to  work.  It  is  too  early  to  assess  whether  this  policy  leaves  sufficient
financial room for further complementary measures. The large gender wage gap has not been
reduced. Initial steps have been taken to implement a comprehensive and coherent strategy on
lifelong learning, but the required indicators, and quantitative targets on financial resources
and participation are still lacking.

Key  issues  for  the  future:  Overcoming  labour  market  shortages,  advancing  gender
mainstreaming  and  fixing  national  medium  term  targets  for  employment  constitute  major
policy issues. A medium term strategy seems needed to substantially increase the employment
rate for older workers and the participation rate of low skilled workers. The issue of quality
in work  could  be  addressed  more  comprehensively  and  underpinned  by  relevant  indicators.
More  emphasis  could  be  given  to  the  development  and  implementation  of  a  coherent  and
comprehensive  strategy,  and  the  setting  of  quantitative  and  qualitative  targets  for  lifelong
learning, especially in adult education and continuing training. A more structured approach
regarding the reduction of gender gaps and the  extension of childcare facilities in line with
the Barcelona Council conclusions seems needed.

90

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.

AUSTRIA

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

2001 1997
67.8
68.4
28.5
28.6
58.6
60.1
1.6
1.0

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

Unemployment rate
LTU rate
Youth unemployment ratio
Female unemployment rate

2001 1997
4.4
3.6
1.2
0.9
3.9
3.2
5.4
4.3

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

91

PORTUGAL

Key performances in 2001: Although the general economic indicators deteriorated in 2001,
the employment rate continued to increase. This growth has been shared by both genders, but
has been particularly significant for women. All age groups have increased their employment
rates in 2001, with the exception of the 55-64 age group (-0.7 p.p.). The total unemployment
rate continued to be one of the lowest in the EU, but in 2001 the youth unemployment ratio
increased  by  0.4  p.p.  for  both  genders  in  contrast  with  the  trend  since  1997.  A  continued
positive  indicator  is  the  decrease  of  the  long-term  unemployment  rate  for  both  genders.
However, for the 55-64 age group, the proportion of LTU in total unemployed, has increased
between 1997 and 2001, and is now more than 63%. The Labour productivity level continues
to be the lowest in the EU, and stagnated in 2001, thus further widening the gap with the EU
average, and jeopardising the prospect of convergence.

General  assessment  of  the  employment  policy:  Progress  towards  achieving  the  targets
established in both the Lisbon and Stockholm Summits has been very positive. Only the total
employment target of 70% for 2010 has not yet been accomplished (still 68.9% in 2001, but
above  the  67%  target  for  2005).  The  Government  aims  to  increase  the  quality  of  job/s  by
encouraging negotiations between the Social Partners, improving qualified employment, and
fighting various forms of illegal work. The NAP’s diagnosis has identified a set of structural
weaknesses of the Portuguese employment system. To address these weaknesses, policies have
focused on three strategic priorities; (i) the sustainability of employability levels through the
National  Lifelong  Learning  Strategy,  (ii)  the  integration  into  the  labour  market  of  socially
excluded  people  or  those  at  risk  of  being  excluded,  through  the  National  Action  Plan  for
Inclusion, (iii) employment quality issues namely through the improvement of education and
professional qualifications levels and of working conditions and labour relations. Almost 66%
of funding for actions under the 2002 NAP will be provided by ESF and ERDF.

Response  to  the  Recommendations:  A  comprehensive  strategy  was  set  out  in  2001.  The
results  of  the  LLL  strategy  can  only  be  expected  in  the  long-term.  Over  the  last  decade,
progress has been made, in particular at the level of school age youth. However, Portugal's
labour force continues to reveal serious qualification weaknesses. The process of training and
certification  of  competencies  in  ICT  needs  to  be  closely  followed  to  recover  from
implementation delays. To implement an approach based on partnership and support for the
commitments  of  the  social  partners,  three  tripartite  agreements  were  signed  in  2001.  These
agreements  are  expected  to  have  a  decisive  role  in  the  effort  to  overcome  the  Portuguese
structural weaknesses. The social partners have progressively integrated some of the issues of
the EES in their collective bargaining. However, the on-going talks to sign an agreement in
the areas of wage policy and productivity, as well as the reform of labour legislation should

92

be  steadily  pursued.  These  are  strategic  areas  that  would  contribute  to  ensuring  better
employment quality, higher competitiveness and productivity, more employment security and
better adaptability of enterprises. In spite of significant progress in the involvement of social
partners in the employment process, there is still great dependency on the central role played
by  the  government.  To  pursue  efforts  to  reconcile  family  and  working  life,  the  Government
has  given  priority  to  improve  the  supply  of  family  support  services  and  childcare  facilities.
This  includes  the  expansion  of  the  network  of  facilities  for  early  childhood  care,  and  a
progressive  universal  access  to  pre-school  education.  To  reduce  the  gender  gap  at  the
sectoral level the government has focused on training actions intended to change traditional
attitudes in society. However, these actions aimed at changing cultural perceptions will only
produce results in the very long-term. The index of sectoral gender segregation in Portugal,
continues  to  be  higher  than  the  European  average.  Although  the  global  gender  pay  gap  in
Portugal  is  among  the  lowest  in  the  EU  (5.9%  in  1998),  according  to  the  NAP  2002  the
women’s gross average earnings in the private sector is only just under 77% of men’s.

Key  issues  for  the  future:  The  successful  implementation  of  the  lifelong  learning  strategy
adopted in 2001 is crucial to address the low educational levels, the high level of school drop
outs  and  weaknesses  of  workforce  qualifications.  The  agreements  signed  between  the
Government  and  social  partners  demand  a  strong  commitment  by  all  signatories,  to
implement  and  monitor  its  operational  measures.  Continued  efforts  seem  necessary  to
reconcile  family  and  working  life,  the  gender  pay-gap  in  the  private  sector,  and  sectoral
segregation. The reduction of employment disparities between regions requires that the PES
continue their efforts to provide adequate responses. There is still a strong need to increase
productivity and  quality  in  work. Reconciling this need, in a period of economic slowdown,
with the government's aim to maintain employment growth and low unemployment, while at
the  same  time  restructuring  the  economy  as  well  as  public  administration,  will  be  a  major
challenge.

93

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.

PORTUGAL

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

2001 1997
64.0
68.9
47.3
50.3
56.1
61.1
3.9
1.7

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
6.8
4.1
3.2
1.5
6.4
4.5
7.6
5.1

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

94

FINLAND

Key performances in 2001. The global economic slowdown in 2001  had a sharp impact  on
the  Finnish  economy.  GDP  growth  dropped  to  0.7%  after  5.6%  in  2000.  However,
employment  still  continued  to  increase  slightly  to  68.1%;  70.9%  for  men  and  65.4%  for
women.  The  employment  rate  for  those  aged  55-64  reached  45.7%.  Accordingly,
unemployment  decreased  to  9.1%,  but  remained  above  the  EU  average.  The  labour  market
continued  to  be  characterised  by  high  structural  unemployment  together  with  recruitment
problems and large regional variations.

General  assessment  of  the  employment  policy.  The  Finnish  NAPs  have  moved  in  a  more
strategic  direction  and  towards  long-term  planning  as  part  of  the  Government's  economic
policy  since  1998.  The  target  is  to  raise  the  overall  employment  rate  to  70%,  the  female
employment  rate  to  68%  and  the  employment  rate  for  those  aged  55-64  to  55%  by  2010.
Because  of  a  less  favourable  economic  situation,  Finland  has  realistically  given  up  its
previous target to raise employment to 70% by 2005. The interim overall employment target
and  the  Lisbon  target  for  women  have  been  exceeded.  All  pillars  are  well  presented,  and
emphasis  is  put  on  the  first  pillar.  Pillar  IV  has  received  a  more  equitable  status  over  the
years,  although  gender  mainstreaming  remains  weak.  Finland  is  one  of  the  Member  States
most exposed to the effects of an ageing population. Thus, ensuring the availability of labour
is further emphasised throughout the pillars as a prerequisite for achieving the employment
targets. Promoting the employability of vulnerable groups is part of this approach, which is
challenging because two thirds of all unemployed are judged to be hard-to-place. The NAP is
coherent with the NAP on Inclusion. Development of quality of work is being promoted in co-
operation with social partners mainly in terms of working life development programmes and
labour  legislation  reforms,  combining  flexibility  and  security  aspects.  Finland  continued  to
have a comprehensive life-long learning strategy, though without national targets for human
resources  investment.  In  order  to  make  regional  policies  more  effective,  Finland  is
introducing  new  legislative  and  operational  tools,  whose  impact  needs  to  be  monitored.  A
large range of measures for promoting entrepreneurship have been launched in recent years,
but  the  threshold  for  business  start-ups  still  seems  to  be  rather  high.  The  role  of  social
partners  in  the  formulation  of  employment  policy  is  well  established  and  there  is  a  trend
towards higher participation of relevant actors in the NAP process at all levels. However, the
regional and local dimension  of  the  process  needs  to  be  consolidated.  Most  of  the  common
indicators  and  some  quality  indicators  are  presented  in  the  NAP.  There  are  only  partial
financial data. The ESF programmes are contributing to the implementation of all pillars.

Response  to  the  recommendations.  As  regards  the  tax  burden  on  labour,  Finland  had
exceeded the present Government's targets for tax reductions and will study the need to make

95

further changes in taxation for use by the next Government. The problems of low-paid labour
still exist and call for further targeting of measures. As far as benefit systems are concerned,
the  extensive  reform  of  the  pension  system  was  agreed  through  tripartite  co-operation  in
2001. The aim is to increase the flexibility both of the retirement age and incentives to remain
longer  in  the  labour  force.  However,  the  long  phasing-out  (2007-2014)  of  the  existing
unemployment  pension  scheme  may  risk  delaying  the  achievement  of  a  higher  effective
retirement age. Related to  improving  the effectiveness of active labour market programmes,
several experiments and measures have been launched with the aim of finding more effective
employment policies. The results cannot be seen yet. As regards gender segregation and pay
gaps, there are no positive trends to report so far. Various actions are underway and a few
new initiatives have been introduced. A more strategic approach is needed in order to reduce
gender pay gaps.

Key  issues  for  the  future.  There  is  still  a  need  to  reduce  the  high  level  of  structural
unemployment and to increase the supply of labour, notably that of older workers in view of
population ageing. Further attention could be given to the relatively high degree of fixed term
contracts in the labour market. The large regional variations as well as the gender imbalance
and gender gap call for further action. Tax and benefit schemes, especially for the low-paid,
still deserve attention.

96

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.

FINLAND

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

2001 1997
63.3
68.1
35.7
45.7
60.3
65.4
6.3
0.7

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
12.7
9.1
4.7
2.5
11.6
10.3
13.0
9.7

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

97

SWEDEN

Key  performances  in  2001:  The  Swedish  economy  experienced  a  sharp  slowdown  in  2001
and  real  GDP  growth  decelerated  to  1.2%  from  3.6%  in  2000,  heavily  influenced  by  the
global economic slowdown and in particular the slump in the ICT sector. Employment growth
has been robust in recent years and was still 1.9% in 2001. The rise in employment has led to
a  decline  in  unemployment  to  5.1%  last  year.  However,  the  slowdown  in  the  economy  will
mean that the unemployment rate will increase  to some extent  this  year. The  unemployment
rate is expected to fall again next year when the economy gains momentum.

General assessment of the employment policy: To achieve more and better jobs the Swedish
government emphasises the importance of having a good policy mix and letting several policy
areas  interact.  Policy  areas  which  are  important  for  reaching  this  are  to  have  an  active
labour market policy, to set national targets for the employment rate, to improve incentives to
take  up  a  job,  to  bring  in  reforms  aiming  at  making  it  possible  for  older  workers  to  stay
longer in working life as well as to take initiatives for improved quality in work and lifelong
learning.  The  social  partners  have  taken  an  active  role  in  developing  this  year's  NAP  and
their contribution is clear. However, the evaluation of the EES shows that the social partners
have not increased their influence on policy over the last 5 years. Even though measures for
disabled people and immigrants can be found there is no reference in the NAP to the social
inclusion  NAP.  Furthermore,  much  attention  is  given  to  the  need  to  increase  labour  force
participation, mainly by stimulating young people, older workers, women and immigrants to
increase  their  labour  force  participation.  Given  the  present  situation  in  the  Swedish  labour
market,  with  an  urgent  need  for  more  labour,  a  priority  should  be  to  stimulate  increased
labour  force  participation  among  immigrants,  young  people  and  older  people.  The  rapidly
increase  in  long-term  sick  leave  will  be  combated  by  the  new  eleven-point  programme
consisting  of  three  overall  priorities;  measures  to  enhance  the  working  environment  and  a
clearer  employer  responsibility,  measures  for  a  quick  return  to  the  labour  market  after  a
period of sick leave and, finally, research. It remains to be seen if this is sufficient.

Response  to  the  recommendations:  On  the  recommendation  to  reduce  the  tax  burden  on
labour some new initiatives can be found, although there is still a high overall tax burden on
labour. A third step in the on-going process of the tax reform that started two years ago has
been taken. It will reduce marginal taxation for low- and medium wage earners by about 1.5
percentage points. Furthermore, on the tax and benefit schemes, participation in ALMP will
not give entitlement to a new benefit period for unemployment insurance and benefit can be
received  for  a  maximum  of  600  benefit  days.  The  response  on  the  recommendation  on  the
gender segregated labour market is good. The Swedish government is aware of the problem
and  has  taken  some  new  measures  to  reduce  the  imbalance.  The  National  Labour  Market

98

Board  (AMS)  was  given  special  funds  for  a  project  called  "Break  Through"  which  aims  to
break the gender segregation in the labour market. The response to the third recommendation
on  ensuring  the  effectiveness  of  the  ALMP  is  good.  The  ALMP  is  continuously  followed-up
and evaluated  by  the  Institute  for  Evaluation  of  Labour  Market  Policy.  The  effectiveness  of
the ALMP is also ensured by the government's setting of quantitative targets and continuous
monitoring  of  AMS's  activities,  by  requiring  more  report  back  to  the  government  on  the
effectiveness in the ALMP's.

Key issues for the future: Changes have been made to the tax and benefit systems resulting in
lower marginal effects although the tax burden on labour remains high. Some benefit systems
are quite generous, but include tight eligibility criteria. The need to increase the labour force
is  likely  to  become  one  of  the  main  challenges  ahead  for  Sweden.  In  this  light,  one  of  the
government's and the social partners' most important challenges ahead seems to be to ensure
that  the  rapid  increase  in  sick  leave,  especially  the  long-term  sick  leave,  is  reduced.  The
promotion of labour force participation of immigrants could also help

99

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.

SWEDEN

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

2001 1997
68.1
71.7
61.8
66.5
66.6
70.4
2.1
1.2

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
9.9
5.1
3.4
1.8
9.3
5.2
9.5
4.9

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

100

UNITED KINGDOM

Key performances in 2001: The global economic slowdown has so far had little impact on the
UK  labour  market.  Employment  growth  continued  for  a  fifth  successive  year.  An  extra  1.5
million people have moved into work since 1997. This growth was broadly based, increasing
the  overall  employment  rate  to  71.7%  and  the  rates  for  males,  females  and  older  workers.
Nevertheless  some  structural  challenges  remain.  The  numbers  of  people  claiming  sickness
and  disability  benefit  continued  to  rise  to  almost  3  million,  of  which  2.5  million  have  been
claiming  for  over  a  year.  Although  unemployment  has  fallen  in  all  regions,  regional
disparities  are  rising.  Non-employment  remains  concentrated  within  deprived  communities,
among  workless  families,  and  among  certain  disadvantaged  groups  (lone  parents,  certain
ethnic  minorities,  male  older  workers,  and  the  disabled).  40%  of  those  on  benefits  have
literacy and numeracy problems.

General assessment of the employment policy: The UK exceeds the quantitative targets set at
Lisbon. Policy has become more  ambitious  since the beginning of  the  Employment  Strategy
with a goal to  deliver  full  employment.  Entrepreneurship  and  Employability  policies  aim  to
promote  social  inclusion,  with  local  initiatives  addressing  geographical  variations  in  job
creation. Links with the Social Inclusion NAP are not well demonstrated. Adaptability policy
concentrates  on  promoting  flexible  working  practices,  combined  with  minimum  levels  of
security.  Recent  policy  should  improve  the  work-life  balance  and  the  NAP  illustrates  that
gender issues are better mainstreamed throughout policy development. The UK's strategy to
increase quality in work centres on providing greater choice in the range of  jobs available.
The  NAP  recognises  the  benefits  if  employers  explore  ways  to  improve  the  quality  in  work,
noting that this can improve productivity, but it is unclear how employers will be encouraged
to address this. The prospects of temporary agency workers have improved while they remain
potentially more vulnerable than other workers.

Response  to  the  Recommendations:  At  the  enterprise,  local,  regional  and  national  level,
Social  Partners  have  become  more  closely  involved  in  policy  delivery  since  1997.  At  the
national  level  the  Government  approach  remains  to  consult  Social  Partners  on  policy
implementation "where appropriate", with no  general framework for  their  involvement.  The
Social Partners joint Productivity Report is an important contribution to the workforce skills
agenda. A range of policies linked to modernising work organisation, implemented after the
involvement of the Social Partners, should contribute to raising quality in work.

The  UK  Government recognises that  the  gender pay gap  is  unacceptably  high.  Government
Departments  are  to  prepare  Action  Plans  to  reduce  any  gaps.  Other  developments
concentrate on research to better understand the issue. The number of women working part-

101

time (often on low pay) is a major contributor to the pay gap and the ability of these women
to  progress  often  depend  upon  acquiring  new  skills.  Efforts  to  address  the  provision  and
affordability  of  childcare  have  delivered  results.  However  the  gap  between  supply  and
demand remains significant so momentum should continue.

Under  the  common  definition  of  the  indicator  for  Guideline  2,  14.2%  of  the  unemployed
participated in an active measure in 2001. The NAP argues that the active benefit regime and
the dynamic UK labour market make setting a training focused target inappropriate. In-flows
into long-term unemployment (9.1%) fell again but remain above levels of the best performing
Member States. To balance the emphasis on active job search, and given that those reaching
the New Deal are the hardest to help, policies to identify and address basic skills deficiencies
are very important.

The  English  Learning  and  Skills  Councils  (LSCs)  and  their  equivalents  in  the  Devolved
Administrations have the central role for workforce development, with the key actions at the
local level. LSC's have responsibility for the new "Employer Training Pilots", which provide
training  entitlements  for  low  skilled  employees,  and  support  for  employers  whose  staff  take
time off to train. Government research suggests the unskilled, part-timers and older workers
are  among  the  least  likely  to  receive  work-based  training.  Policies  in  place  could  be
complemented  by  providing  further  incentives  to  those  most  in  need  and  to  employers  least
able to afford to pay for the training (SME's) would complement the approach.

Key issues  for the future: The continuing rise  in numbers claiming  Sickness  and  Disability
Benefit  represent  a  potential  constraint  to  further  increases  in  labour  supply.  Further
challenges  include  increasing  regional  employment  disparities  and  the  gaps  in  employment
rates  between  a  range  of  disadvantaged  groups  and  the  rest  of  the  workforce.  Earlier
intervention  for  more  of  the  unemployed  would  complement  a  preventative  approach  that
emphasises  active  job  search.  To  address  workforce  skill  gaps  and  low  productivity,  the
Government and Social Partners could encourage work-based training (particularly amongst
small  firms).  Encouraging  employers  to  train  women  working  in  low  paid  part-time  work
could help address an unacceptably wide gender pay gap. At national level it is important to
build  upon  the  increasing  role  of  the  Social  Partners  in  delivering  policy,  in  particular  to
raise quality in work.

102

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.

UNITED KINGDOM

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

2001 1997
70.0
71.7
48.3
52.3
63.2
65.1
3.4
2.2

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

2001

1997

EU Benchmark

GDP growth

Empl. rate
55-64 years old

Unemployment Indicators

Unemployment rate

Female Employment rate

2001

1997

EU Benchmark

Female unemployment rate

Long term
unemployment rate

Youth unemployment ratio

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

2001 1997
6.9
5.0
2.6
1.3
9.1
7.7
5.8
4.4

EU Benchmark

2.7 (average of 3 best performers:LU,NL,AT)
0.8 (average of 4 best performers:LU,NL,DK,AT)
3.1 (average of 3 best performers:LU,AT,IE)
3.0 (average of 3 best performers:LU,NL,IE)

103

4.

THE WAY FORWARD

This  report's  review  of  the  major  developments  in  national  employment  policies  and
performances in 2001 completes and largely confirms the lessons learned from the evaluation
of the first years of the European employment strategy. There is now a strong basis on which
to  design  the  future  generation  of  the  EES,  responding  to  the  call  from  the  Barcelona
European Council for a reinforced Employment Strategy.

Need to pursue structural reforms of the labour markets

Policy measures taken by Members States to improve the functioning of their labour markets
have paid dividends, as demonstrated in the evaluation report. But the relatively weak position
of  the  EU  as  a  whole  in  terms  of  employment  and  participation  levels,  unemployment  and
productivity  per  worker  shows  that  major  weaknesses  remain.  In  addition,  wide  disparities
persist  on  the  labour  market  whether  in  terms  of  gender,  age,  people  at  a  disadvantage  or
between  regions  within  Member  States.  Considerable  differences  persist  between  Member
States as regards levels of performance and the speed of structural reforms.

It is all the more important to pursue reforms in order to strengthen the EU position in the face
of emerging challenges. These include the ageing and declining working age population, the
insufficiently  developed  dimensions  of  quality  in  employment  and  inclusiveness  of  labour
markets,  the  globalisation  of  the  world  economy,  the  rapid  pace  of  economic  and  social
restructuring  and  the  emergence  of  bottlenecks  in  certain  sectors  and  regions.  Candidate
countries, due to join the EU shortly, are  still undergoing major  economic  restructuring  and
face acute challenges in terms of employment and the functioning of their labour markets.

Faced  with  the  current  economic  slowdown  Member  States  should  intensify  structural
reforms including those of labour markets in order to support adaptation to change of workers
as well as firms. On the contrary a successful implementation of the EES will help to stabilise
expectations  and  limit  the  rise  in  unemployment  and  long-term  unemployment  while
preparing  the  labour  force  for  the  next  upswing.  Reforms  in  the  labour  market  must  be
accompanied  by  other  structural  reforms,  notably  in  the  products,  capital  and  services
markets, as they are largely inter-dependant.

Broad consensus on the main elements for an effective new EES

104

The Commission Communication on "Taking stock of five years of the EES"38 identified key
issues  for  the  debate  on  the  future  of  the  EES.  This,  coupled  with  a  complementary
Communication on "Streamlining the annual economic and employment policy co-ordination
cycles"39,  provided  the  basis  for  an  active  debate  at  all  levels.  The  European  Parliament
adopted a resolution in September40 and the Council held a first debate in October. Based on
these  and  other  elements,  a  broad  consensus  has  emerged  on  some  key  features  for  a
reinforced EES.

(cid:1)  the main focus of the EES should be on delivering the Lisbon objectives of more and better
jobs  and  greater  social  cohesion  in  the  wider  context  of  progress  towards  a  knowledge
based  economy  and  of  the  pursuit  of  sustainable  development.  These  objectives  are
complementary and closely interlinked;

(cid:1)  the  EES  should  be  designed  as  a  medium-term  strategy  with  a  2010  horizon  and  a  mid-
term  review  in  2006.  Changes  in  the  Employment  Guidelines  in  the  intermediary  years
should be avoided;

(cid:1)  the  Employment  Guidelines  should  cover  a  broad  employment  policy  agenda  in  an
integrated way, whilst focussing on key priorities, underpinned by appropriate targets, and
being more result-oriented;

(cid:1)  an  annual  review  of  progress  towards  the  agreed  objectives  should  be  continue  to  take
place,  based  on  the  National  Action  Plans  for  Employment,  and  relying  on  effective
indicators;

(cid:1)  the different processes contributing to the implementation of the Lisbon agenda should be
streamlined. This involves in particular a synchronisation of the employment co-ordination
process  with  the  Broad  Economic  Policy  Guidelines  and  a  better  complementarity  and
consistency between them, recognising their respective roles; and

(cid:1)  The EES should be underpinned by improved governance.

Priorities for the future

38

39

40

COM(2002) 416 final, 17 July 2002.
COM(2002)487 final, 3 September 2002.
Assessment of the first five years of the guidelines on employment, PE 316.370, 25 September 2002.

105

                                                
Successful employment policies responding to the above framework conditions are central to
achieving the overall objectives of the Lisbon strategy, namely sustainable economic growth,
full employment, competitiveness and strengthened social cohesion.

The EES so far has succeeded in promoting a better interaction between  a  range of policies
that contribute to employment and in fostering a convergence of national employment policies
towards  the  Employment  Guidelines'  commitments  (see  the  Commission  Communication
"Taking  stock  of  five  years  of  the  European  Employment  Strategy").  The  future  EES  must
build on this experience and maintain the momentum of structural reforms. By doing so it will
continue  to  be  a  strategy  for  promoting  and  managing  change  in  order  to  facilitate  and
accompany  the  deep  economic  and  social  transformations  in  the  new  as  well  as  the  current
Member States.

A  strengthened  Employment  Strategy  would  thus  pursue  three  mutually  reinforcing
objectives: increasing employment and participation rates, raising quality and productivity at
work  and  promoting  an  inclusive  labour  market.  The  modalities  of  its  implementation  also
deserve better attention in order to improve governance.

Investment in human capital, skills development and lifelong learning are key to responding
to these challenges. Moreover the integration of a gender perspective, both through the use of
gender  mainstreaming  and,  where  necessary,  through  specific  measures  is  also  an  essential
dimension.

Policy efforts to support an enhanced EES must be based on strong commitments by Member
States  in  terms  of  resources,  both  administrative  and  financial,  leading  in  some  cases  to  a
redirecting of public expenditure.

Raising employment and participation rates

Achieving the employment objectives set by the Lisbon and Stockholm European Councils is
crucial  for  EU  economic  growth  as  well  as  for  the  sustainability  of  our  social  protection
systems.

Success depends on a wide range of policies as outlined in the Joint Report on raising labour
force participation, which was presented by the Commission and the Council to the Barcelona
European  Council41.  In  particular,  macro-economic  policies  and  appropriate  wage
developments  should  continue  to  support  investment,  growth  and  employment  and  the

41

Increasing labour force participation and promoting active ageing, COM(2002) 9 final, 24 January 2002, Council document N°
6707 of 8 March 2002.

106

                                                
business  environment  should  facilitate  entrepreneurship  and  job  creation.  It  is  important  to
maintain  -  and  in  some  countries  to  accelerate  -  growth  in  the  employment  of  women.  The
low  employment  rate  of  older  workers  calls  for  comprehensive  and  determined  policy
responses. The implementation of effective and efficient active and preventive policies for the
unemployed and the inactive should be pursued, and further reforms of tax/benefit systems to
make work pay should be undertaken, while preserving adequate levels of social protection.
The  fight  against  undeclared  work  should  be  intensified,  with  a  view  to  replacing  it  with
regular employment. In the face of recruitment bottlenecks, mobility should be facilitated and
well-managed immigration from third countries could be seen as a useful additional source of
labour supply. Persistent regional disparities in terms of employment and unemployment also
call for appropriate responses.

Building on synergies between productivity and quality at work

Quality at work is a multidimensional concept as recognised by the Laeken European Council
in December 2001, which agreed a set of indicators to monitor progress achieved by Member
States in this respect. Experience so far shows that Member States are starting to integrate a
quality dimension into their employment policy, but, for the most part, still only in a partial
way. Further progress needs to be achieved,  considering that improving quality  at work is a
condition  for  a  sustainable  increase  in  employment  as  well  as  for  further  increases  in  the
productivity of labour.

In particular, diverse patterns of employment relationships and innovative approaches to work
organisation  should  continue  to  be  encouraged  to  respond  to  the  needs  both  of  firms  and
workers. In this context, it is important to address and avoid labour market segmentation and
to achieve a good balance between flexibility and security by ensuring that workers employed
under  different  contractual  and  working  time  arrangements  have  equal  access  to  security,
career development and training. Increasing investment in human capital is a crucial priority
and  it  is  essential  to  provide  adequate  incentives  for  implementing  life-long  learning
strategies.  In  order  to  retain  more  people  longer  in  employment,  there  is  a  need  to  ensure
quality in workplaces, including  through  improving  health  and  safety.  Measures  to  improve
quality at work are also particularly relevant to increase the participation of women and older
workers.

The conditions available to facilitate the access of young people to the labour market and their
career  progression  through  quality  employment  deserves  special  attention.  The  quality  of
social  dialogue  in  general  and  negotiated  agreements  in  collective  bargaining  play  a  crucial
role in promoting quality at work under these different aspects.

Promoting an inclusive labour market

107

Employment  is  a  major  factor  of  social  cohesion  and  inclusion.  The  EES  has  therefore  a
major role to play in promoting the Lisbon objective of an inclusive society. In particular it
should aim at reducing the wide disparities persisting on the labour markets between women
and men, between able-bodied and disabled persons and between nationals and non-nationals.
These disparities are reflected both in terms of long-term unemployment – which bears a high
risk of exit from the labour market and social exclusion – and in terms of inactivity. Problems
are often exacerbated by a strong regional concentration and a concentration in urban as well
as rural areas.

Experience shows that successful integration of less favoured categories on the labour market
depends on a comprehensive approach based on the anticipation and the prevention of needs,
combining:

(cid:1)  well-targeted active and preventive labour market measures to enhance their employability,

taking into account the personal characteristics of the people concerned;

(cid:1)  measures  to  promote  the  creation  of  adequate  job  opportunities,  together  with  raising
awareness-raising  and  recruitment  incentives  for  employers,  and  non-discrimination
legislation  and  policies.  In  this  context,  opportunities  for  job  creation  in  the  social
economy or in sectors responding to new demands should be further exploited; and

(cid:1)  as well as support from a wider set of accompanying measures, making work a real option
for those concerned. The availability of care services for children and other dependants is
particularly important in this respect.

108

Better governance

The  Commission  Communication  and  the  evaluation  of  the  EES  already  identified  better
governance of the EES as a key issue for the future, highlighting in particular the need for a
stronger  involvement  of  social  partners  and  other  relevant  actors,  the  need  for  a  territorial
dimension  for  the  EES  as  well  as  the  importance  of  inter-departmental  co-operation  at
national and EU levels.
In its Resolution of 25 September 200242 on the future of the EES, the European Parliament
laid strong emphasis on the need for the EES to be better integrated in national policy making.
The  Commission  welcomes  in  particular  the  call  for  greater  involvement  of  national
Parliaments  in  the  elaboration  of  the  National  Action  Plans  for  Employment.  Such
involvement, which is already organised in a few Member States, would certainly increase the
added-value of the EES and its impact. Steps should also be taken to ensure greater visibility
of the EES with stakeholders and the public at large.

In  particular,  a  closer  involvement  of  social  partners  and  a  greater  visibility  of  their
contribution to the EES must be encouraged, building on their joint declaration to the Laeken
Summit  and  their  joint  work  programme  at  EU  level.  In  the  context  of  the  framework  for
actions  with  regard  to  skills  and  competencies  development  submitted  to  the  Barcelona
Council the social partners have already committed themselves to regularly monitoring these
developments at all levels and to undertake an evaluation in 2006. In its Communication on
"the European social  dialogue, a  force for innovation  and  change"43,  the  contribution  of  the
social partners to the success of the Lisbon strategy is underlined. Concerted action between
the social partners will be strengthened by way of a Council decision to establish a "tripartite
summit for growth and employment", to meet on the eve of the Spring European Council.

Similarly, a close association of regional and local actors and representatives of civil society
in the development and implementation of the strategy would be beneficial.

The involvement of these stakeholders should enhance social capital, i.e. the support provided
by institutions, services and informal networks to those out of work and wanting to find a job.

42

43

Assessment of the first five years of the guidelines on employment, PE 316.370, 25 September 2002.
COM(2002)341.

109

                                                
Follow-up

The coming months will provide an opportunity for further debate on proposals for the future
of  the  EES.  In  January  2003,  the  Commission  will  present  a  Communication  proposing  an
outline  for  the  revised  strategy,  with  concrete  objectives  and  targets.  Following  the  Spring
European  Council,  the  Commission  will,  in  April  2003,  make  a  formal  proposal  of
Employment Guidelines and Recommendations, with a view to its adoption by the Council at
the end of the first semester 2003.

110

ANNEX 1: OVERVIEW OF THE 2001 PERFORMANCE AND KEY INDICATORS44

Employment Indicators

Total Employment Rate

Males
Females
15-24
25-54
55-64

Full-time eq. Employment rate45

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 (capita)
Labour Productivity Growth (hourly)
Real Unit Labour Costs

Other key indicators

BE

DK

DE

GR

ES

FR

IE

IT

LUX

NL

AU

PT

SF

SW UK

EU15

59.9
69.1
50.5
32.7
75.9
24.1
55.7
68.6
43.0

6.6
6.0
7.4
6.1
6.3
5.9
3.0
2.8
3.4

1.2
1.0
-0.2
-0.2
1.3

76.2
80.2
72.0
62.3
84.4
58.0
69.8
76.9
63.0

4.3
3.8
4.9
5.9
5.5
6.3
0.9
0.8
1.0

0.2
1.0
0.8
1.0
0.9

65.8
72.6
58.8
46.5
79.3
37.7
58.6
70.9
46.5

7.9
7.7
8.1
4.8
5.6
4.0
3.9
3.7
4.1

0.2
0.6
0.4
0.4
-0.1

55.4
70.8
40.9
26.0
70.1
38.0
55.1
71.2
40.0

10.5
7.0
15.6
10.2
8.4
11.9
5.4
3.2
8.7

-0.1
4.1
4.2
4.2
-1.2

56.3
70.9
41.9
33.1
68.8
38.9
53.8
70.3
37.8

10.6
7.5
15.5
9.1
7.8
10.3
5.1
3.1
8.1

2.5
2.8
0.3
0.3
0.0

63.1
70.3
56.1
29.5
79.9
31.0
59.9
70.3
50.0

8.6
7.1
10.5
7.1
7.0
7.1
2.9
2.4
3.5

1.9
1.8
-0.4
0.1
1.3

65.7
76.4
55.0
49.6
76.4
46.8
60.7
75.6
45.7

3.8
3.9
3.7
3.3
3.8
2.8
1.3
1.6
0.8

2.9
6.8
3.7
3.7
0.3

54.8
68.5
41.1
26.3
69.2
28.0
52.7
67.6
38.1

9.4
7.3
12.9
10.2
10.1
10.4
5.9
4.5
8.0

1.6
1.8
0.2
0.2
-0.1

62.9
74.8
50.9
32.4
78.7
24.4
60.0
74.9
45.1

2.0
1.7
2.4
2.7
3.2
2.1
0.5
0.5
0.5

5.6
3.5
-2.0
-2.1
7.1

74.1
82.8
65.2
70.4
82.8
39.6
58.1
75.0
41.6

2.4
1.9
3.0
4.1
3.5
4.6
0.8
0.7
1.0

2.1
1.1
-0.9
-0.9
1.0

68.4
76.7
60.1
51.2
82.7
28.6
63.4
76.0
50.9

68.9
76.9
61.1
43.8
82.4
50.3
67.4
77.5
57.7

3.6
3.0
4.3
3.2
3.0
3.4
0.9
0.9
1.0

0.2
1.0
0.8
0.8
0.1

4.1
3.2
5.1
4.5
3.9
5.1
1.5
1.2
1.9

1.6
1.7
0.0
0.0
0.8

68.1
70.9
65.4
41.7
81.6
45.7
65.7
69.8
61.8

9.1
8.6
9.7
10.3
10.3
10.2
2.5
2.7
2.3

1.2
0.7
-0.5
-0.5
2.8

71.7
73.0
70.4
36.6
83.1
66.5
65.1
70.0
60.2

5.1
5.2
4.9
5.2
5.2
5.2
1.8
2.1
1.5

1.9
1.2
-0.6
-0.6
2.3

71.7
78.3
65.1
56.9
80.6
52.3
62.1
74.8
50.2

5.0
5.5
4.4
7.7
9.1
6.3
1.3
1.7
0.8

0.8
2.2
1.4
1.2
1.3

63.9
73.0
54.9
40.7
77.1
38.5
58.5
71.3
46.0

7.4
6.4
8.7
7.1
7.2
7.0
3.3
2.8
3.9

1.2
1.6
0.4
0.3
0.6

44

45

For further explanation of the indicators see annex 3.
Data for Spain for 2001 are provisional.

111

                                                
Participation in education and training

Males
Females

Investment expenditure on education
Share of teachers with IS literacy

Computer training
Internet training

Rate of early school leaving
Males
Females
Internet Coverage in Schools
Primary
Secondary
Tertiary

Rate of self-employed

Males
Females
Employment Rate in Services
Males
Females

Adjusted implicit Tax Rate on employed Labour
Tax Rate on low wage earners
Accidents at work (reference year 1999)
Non-standard Employment

Part-time
Fixed-term

Gender Segregation

Occupations
Sectors

Gender Gap in the employment impact of
parenthood (ratio)
Employment Impact of parenthood

Males
Females

Gender Pay Gap (reference year 1998)

7.3
7.7
6.9

17.8
16.4
19.1

5.2
5.7
4.8

1.4
1.5
1.2
3.5

4.7
4.1
5.2
4.4

2.7
2.5
3.0
5.7

5.2
5.2
5.3

5.1
4.9
5.2
4.5

5.3
5.9
4.7

16.3
17.0
15.5
4.9

7.8
9.0
6.7

3.3
3.0
3.7

19.3
17.1
21.4

21.7
18.0
25.6

8.4
7.8
8.9

17.5
15.4
19.7
8.3

74
56

44
29
13.5
15.0
12.0
84
63
97
98
9.8
13.0
5.9

51
34
13.6
15.0
12.3
91
90
96
94
13.2
16.3
9.1

35
22
12.5
12.2
12.8
94
90
98
97
9.9
12.8
6.4

41
21
18.1
19.0
17.2
92
86
100
100
6.7
8.0
4.7

68
59
16.8
16.9
16.7
98
98
99
100
8.0
12.2
3.2
56.4
50.5
62.3
41.5
41.1

40
24
16.5
20.4
13.0
45
22
58
85
31.6
37.9
21.3
33.0
38.0
28.3
37.5
34.3

63
47
28.3
34.7
21.8
94
91
95
98
18.4
21.3
13.6
35.9
37.3
34.3
31.5
33.3

58
33
26.4
30.2
22.6
89
87
98
97
11.3
23.7
15.1
28.6
6.5
15.4
52.9
36.0
48.7
40.2
57.2
31.8
28.3
41.3
44.0
49.1
24.8
42.9
4924 4908 3031 2740 7027 4991 1291 4067 4973 4223 3301 5048 3137 1425 1606
9.2
9.3
13.0
25.1
9.6
20.2
6.7
9.5
8.8

63
52
7.7
9.2
6.2
100
100
100
100
10.6
15.2
5.6
52.5
44.2
61.1
48.5
47.0

76
56
10.3
13.0
7.7
99
99
99
97
12.3
16.0
8.3
45.3
37.1
53.6
45.3
40.9

37
21
45.2
52.3
38.0
62
56
91
100
25.0
27.4
22.1
40.3
38.7
41.6
33.9
29.6

64
43
10.2
9.7
10.7
72
53
95
96
10.8
12.8
8.4
42.4
39.6
45.0
41.7
39.9

62
35
15.3
16.5
14.1
93
91
100
100
10.8
12.7
8.4
56.9
55.6
58.2
31.6
36.8

74
49
18.9
22.6
15.1
98
96
99
100
17.0
24.3
6.5
42.1
38.5
45.8
27.4
17.3

14.9
17.1
14.9

11.5
3.5
12.9

24.6
8.4
31.5

15.6
17.7
3.7

33.4
43.1
14.3

23.6
22.7
14.7

14.7
4.8
20.3

20.8
11.8
17.9

7.7
20.8
12.4

18.1
20.8
9.4

7.7
11.5
4.4

6.5
17.3
8.1

29.8
28.8

38.8
45.4

37.9
38.4

95
93
98

26.1
18.1
1.15

-9.7
1.7
7

28.1
19.0

27.0
18.2
1.53

21.7
15.5
1.29

25.0
19.5
1.40

26.6
17.4
1.34

26.8
20.7

21.9
15.2
1.30

26.8
19.6
1.26

25.0
18.1
1.23

27.2
20.3
1.18

26.5
21.5
1.08

29.6
21.9

29.0
21.8

-7.6
21.9
19

-15.2 -14.1
8.2
4.2
14
13

-9.3
11.9
11

-7.2
9.2

-13.9
4.9
9

-4.3
12.0
21

-6.3
6.8
21

-9.6
-2.0
6

20

10

26.7
18.8
1.47

-5.8
21.6
24

112

54
36
19.4
21.9
16.8
89
84
96
97
14.0
17.8
9
44.4
43.0
45.6
36.4
37.8
4088
13.4
18.9
13.2

25.2
17.7
1.36

-9.5
12.2
16

ANNEX 2: OVERVIEW OF THE COMMON AGREED INDICATORS ON PREVENTION AND ACTIVATION FOR 2000 AND 200146

Table A: Common agreed indicators on prevention. Young unemployed people

2000

2001

Effort (C/A)

Non-compliance (D/B)

Output (B/A)

Effort (C/A)

Non-compliance (D/B)

Output (B/A)

Total

H

F

Total

H

53,3

53,2

53,2

1,0

1,0

1,0

65,6

66,5

64,2

39,0

42,0

37,0

5,9

5,2

6,7

4,3

BE

DK

DE

EL

ES

FR

IE

IT

19,7

83,0

18,1

36,0

59,4

21,7

81,0

18,5

37,0

59,9

60,9

11,8

0

LUX

40,7

NL

AU

PT

FIN

SW

100

58,4

36,1

99,0

98,7

56,2

34

98,8

98,4

61,3

37,3

99,2

98,9

15,2

18,5

12,8

6,8

10,9

9,6

7,5

11,0

10,3

6,4

10,7

8,5

F

23,6

80,0

19,1

38,0

60,3

Tot

H

F

Total

H

44,9

42,9

46,9

57,9

6,0

6,0

7,0

1,0

16,6

16,0

17,5

76,3

8,0

7,0

9,0

32,0

59,3

1,0

76,1

10,6

33,0

F

56,3

1,0

76,6

10,1

31,0

Total

H

29,0

83,0

17,7

27,8

84,0

15,0

F

30,3

82,0

22,9

Tot

H

F

36,2

35,5

36,9

6,0

6,0

6,0

16,2

15,8

16,7

39,5

44,7

46,0

47,0

45,0

10,0

8,0

13,0

14,8

12,8

16,8

6,,4(a)

5,6 (a)

7,2 (a)

53,8 (a)

54,5 (a)

53,3 (a)

14.1

13.0

15.2

55,9 (b)

54,0 (b)

57,9 (b)

79,0 (b)

80,0 (b)

78,1 (b)

8,1

21,8

10,0

2,8

12,1

9,1

1,3

3,8

43,5

100

2,2

9,5

10,8

1,6

3,6

60,7

13,8

34,9

7,8

1,1

99,5

97,9

58,5

33,5

99,4

97,5

63,6

35,7

99,5

98,3

59,0

8,2

0

13,9

23,9

8,7

1,1

7,2

26,8

10,0

15,8

26,3

10,1

1,2

12,3

22,7

7,5

0,9

2,5

2,0

3,2

17,4

15,0

18,8

8,6

2,1

10,0

2,5

7,4

1,7

46

For explanation of the indicators see annex 3.

113

                                                
UK

100

100

100

0

0

0

16

16

15

100

100

100

0

0

0

16

16

15

114

Table B: Common agreed indicators on prevention. Adult unemployed people

Effort (C/A)

Non-compliance (D/B)

Output (B/A)

Effort (C/A)

Non-compliance (D/B)

Output (B/A)

2000

2001

Tot

H

F

47,8

49,6

46,3

1,0

1,0

1,0

67,2

68,2

65,8

30,0

29,0

30,0

6,6

5,3

7,9

BE

DK

DE

EL

ES

FR

IRL

IT

LUX

27,3

NL

AU

PT

FIN

SW

UK

12,0

54,6

35,8

98,6

93,3

100

49,5

37,2

98,0

92,2

100

67,0

35,1

98,9

94,4

100

Tot

38,0

66,0

23,6

62,0

50,6

38,2

66,0

16,9

11,6

14,1

0,8

0

H

36,0

75,0

21,0

66,0

55

18,7

11,4

14,6

0,7

0

F

39,6

58,0

26,3

59,0

45,9

15,3

11,8

13,6

0,8

0

Tot

H

35,0

33,5

3,0

3,0

17,3

15,0

8,0

7,0

13,3

12,1

14,6

21,0

0,9

0,6

14,4

16,7

10.2

14,1

6,7

10

7,8

11

F

36,3

3,0

20,4

9,0

14,6

1,7

13,2

7,9

5,6

7

115

Tot

H

F

Tot

H

F

Tot

H

F

1,0

74,3

1,0

69,7

1,0

60,0

68,0

70,9

22,4

22,0

53,0

22,9

3,0

3,0

3,0

20,7

19,2

23,8

23,0

21,0

25,0

62,0

66,0

58,0

9,0

8,0

11,0

7,6 (a)

5,9 (a)

9,4 (a)

39,1 (a)

29,0 (a)

12.3

11.6

13.0

53,4 (b)

52,6 (b)

54,1
(b)

75,3 (b)

74,9 (b)

7,7

32,1

15,0

56,3

34,1

99,4

95,6

100

48,5

21,9

66,0

12,7

15,3

23,0

50,9

35,3

99,1

94,8

100

70,0

14,8

15,8

33,6

21,7

22,7

99,6

96,4

100

9,7

0,1

0

13,9

0,1

0

13,7

21,0

7,4

0,1

0

0,6

0,5

0,9

17,6

20,1

16,3

9,5

4,4

9

13,6

5,2

10

7,3

3,6

7

Country-specific remarks concerning annex 2

BE: 2000 figures cover the period 07/99-06/00 for young persons and 01/00-12/00 for adults.
2001 figures cover the period 07/00 – 06/2001 for young persons. 2001 figures for adults are
not available.

DK:  Insured  unemployed only.  2000  figures  cover the period 2nd half of 1999  – 2nd half of
2000 and 2001 figures cover the period 2nd half of 2000 – 2nd half of 2001 for young persons.

DE: Adult data include all unemployed.

EL: Indicators are not available.

ES: 2001 figures cover the period 01/04/2001 – 31/03/2002.

FR:  Due  to  methodological  and  implementation  changes  put  in  place  by  the  new  PAP/ND
("personalised action programme for a new start"), as from 1 July 2001, the input indicators
are separated into two periods: (a) 1st semester of 2001; and (b) 2nd semester of 2001

NL: Prevention indicators are based on newly unemployed only. Data on young unemployed
is based on situation 12 months after registration.

PT: In 2001 the data cover for the first time the whole territory.

116

ANNEX 3: INDICATORS: SOURCES AND DEFINITIONS

Data used in this report mainly originates from Eurostat, the Statistical Office of the European
Communities. Some data is also provided in the National Action Plans on Employment. The
main Eurostat data sources are:

- the European Community Labour Force Survey (LFS),

- the Eurostat Quarterly Labour Force Data series (QLFD),

- the European harmonised series on unemployment, and

- the European Community Household Panel (ECHP).

The  European  Community  Labour  Force  Survey  (LFS)  is  the  EU's  harmonised  survey  on
labour  market  developments.  Some  Member  States  provide  quarterly  results  from  a
continuous labour force survey, others conduct a single annual survey in the spring.

The Eurostat Quarterly Labour Force Data series (QLFD) is a harmonised series of quarterly
employment  statistics  based  on  LFS  and  on  national  sources  where  applicable.  The  QLFD
consist of two sets of quarterly series: 1) population, employment and unemployment by sex
and  age,  mainly  based  on  the  Community  LFS  results,  and  2)  employment  by  economic
activity  and  employment  status  (mainly  based  on  the  ESA  1995  national  accounts
employment data), further broken down by sex and by some job characteristics.

The  European  Community  Household  Panel  (ECHP)  is  an  annual  longitudinal  survey  of  a
representative panel of households launched in 1994, covering living conditions, employment
status, health, education and income. Data were available for the first four waves of the panel
(1994-1998)  at  the  time  of  publication  of  this  report.  The  survey  is  based  on  a  harmonised
Eurostat questionnaire, adapted by national institutes.

Performance indicators

EMP1/EMP2/EMPc2
and gender

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

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

Source: Eurostat QLFD

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EMPc3

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

UNEMP1

Unemployment rates by gender

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

Source: Eurostat harmonised series on unemployment

UNEMPc1 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

UNEMP2

Long-term unemployment rates by gender

Definition:  Long-term  unemployed  (12  months  duration  or  more)  as  a  share  of  active
population of same gender.

Source: Eurostat QLFD

EMPc1

Employment growth

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

Source: QLFD

ECON1, ECONc1, ECONc2
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).

Key indicators

PREV1 Prevention: Effort indicator

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Definition: Share of young/adult unemployed becoming unemployed in month X and having
started an individual action plan before reaching 6/12 months unemployment (by gender).

Source: National Action Plans

PREV2 Prevention: Non compliance indicator

Definition:  Share  of  young/adult  becoming  unemployed  in  month  X,  still  unemployed  in
months X+6/12 and not having started an individual action plan (by gender).

Source: National Action Plans

PREV3 Prevention: Output indicator: Rate of inflow into long-term unemployment

Definition: Share of young (adult) persons who are still unemployed at the end of month X+6
(12) without any break (by gender).

Source: National Action Plans

ACT1

Activation: Activation rate

Definition:  Number  of  participants  in  training  and  similar  measures  who  were  previously
registered unemployed related to the number of registered unemployed (including persons in
measures) (yearly averages). Broken down by types of measure and by gender.

Source: National Action Plans

ACT2 (ACT3)
(unemployment)

Effectiveness  of  activation:  Rate  of  return  to  employment

Definition: Rate of return to employment (unemployment) after participation in a measure.

Source: National Action Plans

LLL1

Investment expenditure on education/GDP

Definition: Total public expenditure on education as a percentage of GDP.

Source: UNESCO/OECD/EUROSTAT annual data.

LLL2

Participation in education and training

Definition: Percentage of working age population participating in education and training.

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Source: Labour Force Survey

LLL3

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 and by working status.

Source: Labour Force Survey

LLL4

Internet coverage in schools

Definition:  Percentage  of  schools  connected  to  the  internet  by  level  and  type  of  education
(primary, secondary, professional/technical - INSED levels 1 and 2-3).

Source: Eurobarometer Flash 102 and 119.

LLL5

Share of teachers with IS literacy

Definition:  Percentage  of  teachers,  having  acquired  digital  literacy  skills  (i.e.  trained  in  the
use of computers and the internet) or using computers  (off-line/on-line)  by school level  and
type of education (primary, secondary, professional/technical) – INSED levels 1 and 2-3).

Source: Eurobarometer Flash 102 and 119.

ENTR3 Rate of self-employment

Definition: Number of self-employed as a percentage of number of employed persons.

Source: Labour Force Survey.

ENTR4 Employment rate in services

Definition:  Number  of  employed  persons  working  in  the  services  sector  (in  main  job)  aged
15-64 as percentage of the population aged 15-64.

Source: Eurostat QLFD

TAX1

Adjusted implicit tax rate on employed labour

Definition: Ratio  of  total taxes on employed labour (personal  income  taxes  plus  employees'
and  employers'  social  security  contributions  plus  payroll  taxes)  divided  by  the  total
compensation of employees plus payroll taxes paid by the employers.

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Source:  Eurostat  "The  structures  of  the  taxation  systems  in  the  EU"  as  updated  by  the
Commission services- DG TAXUD, 2002.

TAX2

Tax rate on low wage earners

Definition:  Ratio  of  income  tax  plus  employee  and  employer  social  contributions  including
payroll  taxes  less  cash  benefits  divided  by  the  labour  costs  for  a  low-wage  earner  (single
person without children with a wage of 67% of the average production worker's wage).

Source: OECD, "Taxing wages- taxes on wages and salaries, social security contributions for
employees  and  their  employers,  child  benefits  ",  calculations  by  the  Commission  services
based on OECD database 1996-2001.

HSW1 Accidents at work

Definition:  The evolution  of  the  incidence  rate,  defined  as  the  number  of  accidents  at  work
per 100 000 persons in employment.

Source: European Statistics on Accidents at Work (ESAW)

NFW1 New forms of work (non-standard employment)

Definition: Number of employees working voluntary and involuntary part-time as % of total
number of employees and of those with voluntary and involuntary fixed-term contracts as %
of total number of employees.

Source: Labour Force Survey

EO1

Absolute unemployment gap

Definition:  The  difference  in  unemployment  rates  between  women  and  men  in  absolute
figures (percentage points).

Source: Eurostat harmonised series on unemployment

EO2

Absolute employment ga

Definition: The difference in employment rates between women and men in absolute figures
(percentage points).

Source: Eurostat QLFD

EO3

Index of gender segregation in occupations

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Definition: The average national share of employment for women and men is applied to each
occupation, the differences are added up to produce a total amount of gender imbalance. This
figure is presented as a proportion of total employment.

Source: Labour Force Survey.

EO4

Index of gender segregation in sectors

Definition: The average national share of employment for women and men is applied to each
sector,  the  differences  are  added  up  to  produce  a  total  amount  of  gender  imbalance.  This
figure is presented as a proportion of total employment.

Source: Labour Force Survey.

EO5

Gender pay gap

Definition: Ratio of women's hourly gross earnings index to men's for paid employees at work
15+ hours. Breakdown by private and public sectors.

Source: European Community Household Panel (ECHP).

EO6

Gender gap in the employment impact of parenthood

Definition: The ratio  between  employment  rates of men, with and without children,  and the
employment rates of women, with and without children, age group 20-50. Children aged 0-6
years  are  included.  (Mc/Mnc)/(Wc/Wnc),  where  Mc=men  with  children,  Wc=women  with
children, Mnc=men with no children, Wnc=women with no children. The closer the value is
to 1, the more similar the impact of parenthood is on women and men. Values over 1 indicate
that the impact of parenthood on women is larger than on men.

Source: Labour Force Survey.

EO7

Employment impact of parenthood

Definition: The absolute difference in employment rates without the presence of any children
and with the presence of a child aged 0-6 (age group 20-50), by gender.

Source: Labour Force Survey.

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