COMMISSION STAFF WORKING DOCUMENT on exploiting the employment potential of the personal and household services Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a job-rich recovery
Date: 2012-04-18
Institutions: European Commission
Subjects: home care, job creation, migrant unemployment, part-time employment, population ageing, service occupation, underground economy

EUROPEAN COMMISSION 

Strasbourg, 18.4.2012  
SWD(2012) 95 final 

COMMISSION STAFF WORKING DOCUMENT 

on exploiting the employment potential of the personal and household services  

Accompanying the document 

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

Towards a job-rich recovery 

{COM(2012) 173 final} 
{SWD(2012) 90 final} 
{SWD(2012) 92 final} 
{SWD(2012) 93 final} 
{SWD(2012) 96 final} 
{SWD(2012) 97 final} 
{SWD(2012) 98 final} 
{SWD(2012) 99 final} 
{SWD(2012) 100 final} 

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COMMISSION STAFF WORKING DOCUMENT 

on exploiting the employment potential of the personal and household services  

Accompanying the document 

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

Towards a job-rich recovery 

TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

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

DEFINING AND MEASURING PERSONAL AND HOUSEHOLD SERVICES.... 4 

LABOUR MARKET AND POLICY CHALLENGES ............................................. 10 

THE WAY FORWARD ............................................................................................ 15 

Disclaimer:  This  document  is  a  European  Commission  staff  working  document  for 
information  purposes.  It  does  not  represent  an  official  position  of  the  Commission  on  this 
issue, nor does it anticipate such a position. 

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1. 

INTRODUCTION 

To  create  job  opportunities  in  times  of  fiscal  consolidation  and  help  bring  the  20-64 
employment rate to 75% by 20201, the Annual Growth Survey 2012 emphasised the need for 
Member  States  to  give  priority  to  "developing  initiatives  that  facilitate  the  development  of 
sectors with the highest employment potential, including in the low-carbon, resource-efficient 
economy ("green jobs"), in the health and social services sector ("white jobs") as well as in 
the provision of other services to the individuals and households and in the digital economy"2. 
As  part  of  the  Europe  2020  strategy,  the  flagship  initiative  "An  Agenda  for  New  Skills  & 
Jobs"3  aims  to  contribute  to  the  achievement  of  the  2020  targets  through  better  skills 
upgrading, anticipation and matching. 

Activities  that  contribute  to  well-being  of  families  and  individuals  at  home  such  as  care 
services and housework services have an important job-creation potential. Home care services 
form  part  of  "white  jobs"  together  with  healthcare  services  and  residential  care  activities, 
while housework services are at the border of this category. Demand for care and household 
services  is  expected  to  increase  due  to  an  important  trend  population  ageing  in  all  Member 
States, combined with the expected decline of the number of potential carers within the family 
circle. 

In  policy  debates  in  many  Member  States,  personal  and  household  services  are  often 
mentioned as a possible answer to the following issues: 

•  Better work-life balance, achieved through increased externalization of daily tasks made 
at home as well as of child and elderly care. Accessible and affordable care services are 
also an important precondition for increasing female participation in the labour market. 
•  Creation  of  job  opportunities  for  the  relatively  low-skilled,  in  particular  as  far  as 
housework  services  are  concerned,  at  a  low  cost  for  public  finance  by  encouraging  the 
provision  of  housework  services  in  the  formal  economy  rather  than  in  the  shadow 
economy. Job creation is also a factor in considering the cost of different options for long 
term care. 

•  Improvement  in  the  quality  of  care,  thanks  to  a  workforce  having  the  right  skills  and 
benefitting  from  good  working  conditions,  subject  to  quality  controls  on  the  service 
providers. 

Moving  these  services  from  the  shadow  to  the  formal  economy  will  also  contribute  to  the 
creation and growth of micro- and SMEs and given that many of these services are provided 
by self-employed persons and small and medium-sized undertakings.  

Even  though  employment  in  personal  and  household  services  falls  under  Member  State 
responsibility, a common reflection is useful as all Member States face the same challenges. 
Sharing good practices, analysis and experiences could contribute to find right answers to the 
problems  currently  existing  in  this  area  of  the  economy  but  also  to  the  future  needs  arising 
from  demographic  developments.  In  compliance  with  the  principle  of  subsidiarity, 
Commission  services  submit  this  document  for  debate  to  all  stakeholders,  in  particular 
national authorities, social partners, service users and providers.  

1

2

3

http://ec.europa.eu/europe2020/index_en.htm 
http://ec.europa.eu/europe2020/reaching-the-goals/monitoring-progress/annual-growth-surveys/index_en.htm  
http://ec.europa.eu/social/main.jsp?langId=en&catId=958 

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2. 

DEFINING AND MEASURING PERSONAL AND HOUSEHOLD SERVICES  

For the purpose of this document, the term "personal and household services"(PHS) covers a 
broad  range  of  activities  that  contribute  to  well  being  at  home  of  families  and  individuals: 
child  care  (CC),  long  term  care  (LTC)  for  the  elderly  and  for  persons  with  disabilities, 
cleaning, remedial classes, home repairs, gardening, ICT support, etc.  

Based  on  statistical  information  available,  we  can  only  indicate  an  approximation  of  the 
NACE4  coverage  of  PHS  and  the  magnitude  of  formal  employment  in  this  area  which  is 
estimated at 7.5 million.  

CC and LTC for the elderly and for people with disabilities are social services, often provided 
by social economy actors, and play an essential role in maintaining social cohesion. They are 
generally considered as being of general interest and are often financed from public budgets. 
At EU level, policy coordination on the provision of these social services takes place within 
the Open Method of Coordination on Social Protection and Social Inclusion5. As far as LTC 
is specifically concerned, the Social Protection Committee adopted a special report on LTC in 
April 2008 and launched a further reflection on avenues worth exploring with regard to LTC 
challenges.  Moreover,  CC  and  LTC,  together  with  other  services  of  general  interest,  have 
been  the  object  of  a  debate  concerning  the  application  of  internal  market  and  competition 
rules: in this context, the Commission made in December 2011 a set of proposals which allow 
strengthening  social  considerations  in  public  procurement,  and  has  put  forward  a  new, 
simplified  state  aid  regime6.  Finally  the  Commission  has  promoted  the  development  within 
the  Social  Protection  Committee  of  a  voluntary  European  Quality  Framework  for  social 
services7 which should serve as a reference for defining, assuring, evaluating and improving 
the quality of these services. 

Personal and household services have a number of interesting characteristics from the point of 
view of employment policy:  

•  Low  import  content  (activities  produced  locally),  implying  low  import  loss  in  case  of 

public intervention; 

•  High employment content, implying a potentially important effect on job creation in case 

of public support; 

•  Varying  levels  of  technical  skills  requirements  (possibilities  of  “do  it  yourself”  in  some 
areas, higher requirements in the case of care), but generally a need for a decent level of e-
skills and good relational and social skills;  

•  Low productivity  in  some  of  the  tasks involved, but a  potential  for indirect productivity 
increases if clients of PHS are able to focus more on their own, higher-productivity work; 

4

5

6

7

aid 

State 

specific 

These  activities  cover  several  NACE  sectors  or  parts  thereof  ,  especially  NACE  Rev.2,  88  (social  work  activities  without 
accommodation), 97 (activities of households as employers of domestic personnel), 96 (other personal service activities), 82.99 
(other business support services) and 78 (activities linked to employment). 
http://ec.europa.eu/social/main.jsp?catId=755&langId=en 
See 
in: 
Services 
http://ec.europa.eu/competition/state_aid/overview/public_services_en.html.  See  also  Communication  on  social  services  of 
general  interest  'Implementing  the  Community  Lisbon  programme:  Social  services  of  general  interest  in  the  European  Union’, 
COM(2006) 177, 26 April 2006; Communication on "Services of general interest, including social services of general interest: a 
new European commitment", COM(2007) 725 final of 20 November 2007; First and Second Biennial Reports on social services 
of general interest (SEC(2008) 2179 of 2 July 2008 and SEC(2010) 1284 of 22 October 2010); Guide to the application of the 
European Union rules on state aid, public procurement and the internal market to services of general economic interest, and in 
particular to social services of general interest, SEC(2010) 1545 final of 7.12.2010; Communication "A Quality Framework for 
Services of General Interest in Europe", COM(2011) 900 of 20 December 2011. 
SPC/2010/10/8 final. 

Economic 

General 

Interest 

rules 

on 

of 

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•  Given the predominance of undeclared workers in these sectors, public intervention is not 

likely to trigger a shift of employment from other sectors; 

•  A  growing  need  for  these  services  due  to  population  ageing  and  to  the  need  to  increase 
female  participation  in  the  labour  market.  PHS  activities  help  to  improve  work-life 
balance as well as earn back effects via an increase of working hours or a return on the job 
market.  

Traditionally PHS are provided by and within the household, mostly by women. Parts of these 
tasks  have  been  progressively  externalised  outside  the  house  (catering,  laundering,  day 
nursery  and  institutions  for  elderly)  or  inside  the  home  to  external  workers  directly  or 
indirectly employed by the household. As mentioned above, public authorities have also been 
involved in the organisation and financing of LTC and CC as tools of social policies. 

2.1. 

Provision of PHS within the household  

OECD8  estimates  show  that  adult  household  members  in  European  Member  States  of  the 
OECD spend on average 2.5 hours per day on housework and care. Women are much more 
involved (3.5 hours) compared to men (1.5 hours) (see figure 1). The largest part of unpaid 
work are routine housework tasks (cooking, cleaning, gardening and home maintenance) and 
care activities. 

Assuming that the 331 million of EU population aged 15-65 (active and inactive) each spend 
2.5  hours  per  day  on  housework  and  care,  this  represents  +/-  830  million  hours/day  of 
household work in the EU or nearly 100 million full time equivalents. The externalisation of 
some  of  these  activities  could  represent  an  important  source  of  new  jobs  (self-employment, 
creation or development of SMEs).  

Figure 1: Minutes per day devoted to the activity by men and women 

120

100

80

60

40

20

0

Men

Women

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2

3

4

5

6

7

Cooking and
food c lean-
up

Cleaning Gar dening

and pet care

Construction
and repair

Shopping Volunteering

Total
Childcare

9
Source: "Society at a Glance 2011-OECD social indicators"
In addition, a Eurofound report10 from 2011 concluded that about 80% of time spent caring 
for  people  with  disabilities  or  dependent  elderly  persons  is  provided  by  informal  care 
providers especially from within the same household, or among friends and neighbours, with 
no impact on public spending. Even though an informal care provider may receive informal 

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9

10

Society at a Glance 2011-OECD social indicators, pages 12 & 22. OECD 
A distinction can be made between: physical care, educational and recreational childcare and travel related to any of the two other 
categories, e.g. driving a child to school, to a doctor or to sport activities 
http://www.eurofound.europa.eu/publications/htmlfiles/ef1093.htm  

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payments from the person receiving care, this does not correspond to an employer-employee 
relationship. 

However, the increase of the female employment rate (from 51.2% in 1997 to 58.2% in 2010) 
implies  less  time  spent  at  home,  and  a  need  to  re-think  informal  household-based  care  for 
children  and  the  elderly  as  well  as  housework.  Also,  increasing  divorce  rates11  may  reduce 
traditional  household  support  to  the  elderly.  The  data  available  for  the  period  1970-2007 
shows that this trend is common across Europe, with certain differences among a number of 
Member States. At the EU level, the absolute divorce rate12 has grown from 0.9% in 1970 to 
2.1%  in  2007,  with  peaks  in  Austria,  Belgium,  Germany,  Denmark,  Finland,  Luxembourg, 
Netherlands, Sweden and the UK.  

The  Second  European  Quality  of  Life  Survey-Family  life  and  work13  emphasized  that  the 
feeling  of  an  excessive  workload  due  either  to  professional  or  family  obligations  leads  to  a 
substantial  reduction  in  life  satisfaction.  Also  the  Fifth  European  Working  Conditions 
Survey14 showed that almost one fifth of European workers are having difficulties achieving a 
satisfactory  work–life  balance.  Women  who  are  gainfully  employed  full  time  outside  their 
home  experience  work–life  conflict  and  tend  to  be  less  satisfied  with  life  than  women  who 
work  solely  at  home.  Since  female  employment  is  an  important  part  of  our  economic 
prosperity, better conditions should be put in place to contribute to a better work-life balance 
and support women's labour market participation.  

A good coverage of childcare facilities is crucial for further increasing women employment 
rates and meeting the employment headline target agreed in the framework of Europe 202015. 
In  the  case  of  childcare  facilities,  expenditure  should  also  be  seen  as  an  investment  in  the 
future. Quality childcare can help develop the skills and learning capacities of young children 
(especially disadvantaged ones). In general, families have a choice between using the services 
of  a  day  nursery,  paying  someone  to  take  care  of  their  children  individually  at  home, 
involving family members or taking care themselves. The choice will depend on the price of 
the services and on the availability of places. Consequently,  their choice will impact  on  the 
employment rate. Overall, the lack of formal CC or LTC might be compensated by informal 
arrangements which support participation in formal employment of the users, but not of the 
providers. 

2.2. 

Public authorities' support to childcare and long-term care  

At  Member  States  level,  public  authorities  support  CC  and  LTC  in  line  with  social  policy 
objectives, as these services play and essential social inclusion role and are a precondition for 
increasing  female  participation  in  the  labour  market.  Public  intervention  in  the  organisation 
and financing of CC and LTC aims at ensuring the right for all to have access to high-quality 
services,  independently  of  wealth  or  income,  as  well  as  the  long-term  sustainability  of  the 
delivery systems.  

Public  authorities  either  provide  the  services  directly  or  support  their  provision  by  private 
providers (either profit or non-profit), while having to ensure compliance with EU State aid 
rules.  Often  care  at  home  for  the  elderly,  among  whom  the  incidence  of  impairments  or 

11

12

13

14

15

Demography report 2010 page 68: http://ec.europa.eu/social/BlobServlet?docId=6824&langId=en  
The ratio of the number of divorces during the year to the average population in that year (Eurostat). 
Second European Quality of Life Survey: Family life and work, Eurofound (March 2010) 
Fifth European Working Conditions Survey 2010: http://www.eurofound.europa.eu/pubdocs/2010/74/en/3/EF1074EN.pdf  
"Progress on equality between women and men", Commission Staff Working Document, to be published  

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disabilities is higher, and for people with disabilities needs to be complemented by housework 
services. 

Public  authorities  can  also  support  the  demand  of  CC  and  LTC  through  dependents 
allowances  (e.g.  in  Germany,  Italy  and  France),  family  allowances  or  tax  reduction  on  the 
costs incurred for care services16. 

Care for the elderly  

LTC services are necessary for people who depend on help to carry out daily activities such as 
getting up, eating, bathing, dressing, going to bed, or using the toilet. LTC is delivered either 
informally (see previous section) or formally by care assistants. Formal care is given at home 
or in institutions (such as care centres and nursing homes) and generally a part of the cost is 
supported by public authorities. 

Some Member States have had reasonably comprehensive care services at home in place for 
many years and the LTC needs of the population are fully covered within the formal system. 
In  other  Member  States  that  have  more  family-oriented  welfare  traditions,  comprehensive 
approaches  to  long-term  care  have  started  to  develop  only  relatively  recently.  In  contrast, 
large numbers of people do not receive formal care services and rely exclusively on informal 
care in other Member States17. 

Child care 

The  needs  of  families  and  the  offer  of  child-minding  vary  with  the  age  of  children 
(maternity/parental  leave,  time  between  maternity/parental  leave  and  entry  into  compulsory 
schooling,  and  during  compulsory  schooling).  An  affordable  and  accessible  quality  CC 
provision  is  extremely  important  for  working  parents.  Throughout  Europe,  however,  the 
availability, quality and affordability of CC differ extensively. The European Union Statistics 
on  Income  and  Living  Conditions  (EU-SILC)  data  indicate  that  some  Member  States  have 
extensive formal arrangements (including pre-school education), whereas others rely more on 
other  arrangements  (such  as  childminders  and/or  family,  friends  or  neighbours).  In  the  age 
category 0–2 years, the use of formal CC arrangements varies from 73% in Denmark to only 
2%  in  the  Czech  Republic  and  Poland18.  In  the  framework  of  the  Strategy  for  equality 
between  men  and  women,  the  Commission  will  report  on  the  Member  States'  performance 
with regard to childcare facilities. 

The  demand  for  CC  is  influenced  by  the  participation  rate  of  parents  in  the  labour  market 
(mothers),  the  actual  part-time  number  of  hours  worked,  the  levels  of  unemployment,  the 
length of parental leave, the opening hours of school and the availability of alternatives like 
grand-parents and/or other informal arrangements19.  

16

17

18

19

In France additional benefits of taxes reductions have been put in place for elderly care (personal allocation of autonomy - APA) 
and for child care until 3 years old according to the revenue of parents (allocation for young children - APJE). 
Extract  of  the  report  of  the  project "Living  independently  at  home:  reforms  in  organisation  and governance of  European  home 
care for older people and people with disabilities in 9 European countries " LIVINDHOME: 
http://www.sfi.dk/livindhome-7284.aspx  
Review of 30 European countries, 2009 http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=545&furtherNews=yes  
Early Childhood Education and Care: Providing all our children with the best start for the world of tomorrow, COM(2011) 66 
final  

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2.3. 

Provision of PHS by undeclared workers 

Without  public  support,  formal  employment  in  PHS  is  quite  costly  for  the  majority  of  the 
population and the formal market (see 2.2) for PHS is quite limited. Hence, a noticeable part 
of  PHS  is  provided  informally  by  undeclared  workers.  This  is  clearly  due  to  the  difference 
between  the  net  wage  of  the  user  and  the  cost  of  the  service  provider  for  activities  that  the 
user can realise him or herself.  

Due  to  its  nature,  undeclared  work  is  very  difficult  to  estimate.  Only  a  limited  number  of 
studies  have  been  conducted  to  shed  light  on  the  extent  of  undeclared  work  in  the  EU.  A 
special  Eurobarometer  (n°284)  on  "Undeclared  work  in  the  European  Union"20  based  on  a 
direct  survey  with  interviews  of  26,755  EU  citizens  aged  15  and  older  living  in  the  27  EU 
Member  States  was  published  in  October  2007.  In  the  survey  the  definition  of  undeclared 
work was not restricted to work carried out for money but comprised also work done in return 
for payment in kind. According to the survey, 11% of the EU27 population admitted that they 
have bought goods or services connected with undeclared work. Among them, 17% of buyers 
said they bought household services (e.g. gardening, house cleaning, child and elderly care) 
and 8% personal services (e.g. hairdressing or private teaching), which represents 7.7 million 
and 3.5 million individuals respectively. 

If  we  take  these  figures  into  account  and  factor  in  that  we  have  more  or  less  410  million 
individuals  aged  15  years  or  older  in  Europe,  it  is  possible  to  conclude  that  45.1  million21 
people used undeclared work. Since undeclared workers do not typically work full-time22, the 
potential  number  of  undeclared  workers  in  the  household  services  is  estimated  at  1  million. 
This  is  a  conservative  estimate  taking  into  account  the  probability  of  under-reporting  in 
surveys on undeclared work. 

However, this Eurobarometer-based projection may underestimate the real situation. In fact, 
recent data from Germany and Italy23 alone seem to exceed this estimation. Germany is one of 
the  Member  States  with  the  highest  level  of  informal  employment  in  private  homes  as  it  is 
assumed that 90-95% of these activities in private homes are rendered informally. This figure 
includes informal employment of  irregular  migrants as well as informal work performed by 
neighbours,  friends  and  acquaintances.  Informal  work  is  especially  widespread  in  the 
households  of  elderly  people  with  at  least  500,000  to  600,000  informal  domestic  workers. 
Italy has also a large share of informal employment in private households where most of the 
domestic  work  is  carried  out  by  irregular  immigrants.  The  actual  number  of  migrant  care 
workers (called "badanti"24) is unknown, due to the nature of the phenomenon. However, their 
number  is  estimated  between  0.7  and  1  million  which  is  far  higher  than  the  workers  in  the 
formal care sector25. 

20

21

22

23

24

25

http://ec.europa.eu/public_opinion/archives/ebs/ebs_284_en.pdf  
This is the number of the users of undeclared work, e.g. 11% out of 410 million. 
On the basis of an average number of 200 hours/year/undeclared worker (around 1/8th of the average working time of a full time 
worker)  
http://www.iwak-frankfurt.de/documents/brochure/april2011.pdf  
Mainly migrant women often co-habiting with a dependant older person and often working in the grey market, with no residence 
permit. 
http://www.iwak-frankfurt.de/documents/brochure/april2011.pdf  

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2.4. 

Public support to the PHS supply in order to fight against the undeclared work  

Taking into account the importance of undeclared work in the PHS sectors, public authorities 
can  consider  intervening  with  the  aim  of  encouraging  the  provision  of  PHS  in  the  formal 
economy. This intervention can cover both care activities and housework activities. 

This could notably take the form of a direct intervention in the price paid by the user via e.g. 
services  vouchers  which  targeted  at  specific  tasks.  The  consumer  pays  only  part  of  the  real 
price (close to the price on the black market) and public authorities pay the difference.  

The service voucher is one instrument, among others, that improves solvency of the demand. 
It is also an interesting tool as it is flexible and easy to use. The latter feature is particularly 
important  for  the  elderly  (dependant  or  not)  who  need  to  get  assistance.  It  also  simplifies 
administrative  procedures,  allows  for  a  continuous  verification  to  whom  it  has  been 
distributed,  and  it  favours  the  development  of  local  business  activities.  It  also  enables 
financial tracing, allowing an easier evaluation of cost and earn-back (see 3.2).  

In  France  the  system  of  CESU  vouchers26,  which  households  can  get  from  a  bank  or  as  a 
benefit from their employers27, aims at creating formal jobs in private households. In 2005 the 
"Borloo  Plan"  addressed  simultaneously  a  number  of  policy  issues  related  to  personal 
services: labour law, social protection legislation, quality control, and organizational issues28. 
As a consequence, between 2005 and 2009, France succeeded in creating 500,000 new jobs 
subject to social contributions in private households, mainly for groups on the fringes of the 
labour  market.  Informal  employment  could  thus  be  reduced  by  70%29.  There  is  also  the 
possibility  for  households  to  be  the  direct  employer  of  housework  workers  with  simplified 
administrative procedures30. The market volume for domestic services for the year 2009 was 
16 billion Euros. Since 1987, a specific "70+ Rule" has been set out to strengthen the demand 
of the elderly with the aim that a private household of 70 years or older does not have to pay 
any social contributions for directly employed workers.  

In  Germany,  several  instruments  support  creating  formal  employment  in  this  sector,  for 
example the institution of "Mini-jobs", which enables private households to use a simplified 
procedure for registering their domestic worker ("Haushaltsscheckverfahren"). The latter may 
earn up to 400 Euros per month and the households as employers profit from reduced tax rates 
for  social  security  contributions  (14.34%  flat  rate  contributions  including  shares  for  health 
pension and accident insurances as the most important articles)31.  

In  Austria32  informal  work  in  private  households  is  traditionally  widespread  with  the 
exception of LTC. A legalisation strategy targeting long-term assistance in private households 
started in 2007 and succeeded in reducing informal (migrant) employment in the households 
of the elderly by 80% within two years. In other areas of domestic services, most of the work 
is  still  performed  informally.  Austria  also  launched  a  voucher  system  to  promote  formal 
employment, however only 1,000 vouchers are sold per year. This could be explained by the 

26

27

28

29

30

31

32

CESU voucher (Cheque Emploi Service Universel) http://www.cesu.urssaf.fr/cesweb/home.jsp  
Concerning  the  principle  of  pre-financed  service  voucher,  see  "Le  cheque-service,  un  instrument  pour  le  développement  des 
services de proximité", Fondation Roi Baudouin, Belgique, Octobre 1994. 
http://www.travail-emploi-sante.gouv.fr/actualite-presse,42/dossiers-de-presse,46/presentation-du-plan-de,82.html  
See footnote 25  
http://www.fepem.fr/  
See footnote 25  
See footnote 25  

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fact that the cost of this voucher for the household is above the current informal market price 
for these services.  

3. 

LABOUR MARKET AND POLICY CHALLENGES  

3.1. 

Better work-life balance  

Bringing the employment rate to 75% of the population aged 20-64 by 2020 will require that 
Member  States  give  particular  priority  to  encouraging  women  to  work  and  improving  the 
overall work-life balance.  

According to recent projections, the number of Europeans aged 65+ will almost double over 
the  next  50  years,  rising  from  87.5  million  in  2010  to  152.6  million  in  206033. At  the same 
time  the  working-age  population  is  starting  to  decrease,  after  many  decades  of  continuous 
increase.  

With  regard  to  LTC  delivery,  the  reservoir  of  informal  careers  will  contract  over  the  next 
years  and  decades,  as  a  result  of  higher  employment  participation  of  women  and  older 
workers. An in-depth analysis of demographic trends over the next decades shows a decline 
(see figure 2) of the Oldest Old Support Ratio (OOSR: 50-74 / over 85). Recruitment of carers 
from outside the family will be increasingly important for meeting LTC needs. A recent UK-
focused study34 concluded that the supply of intense informal care to disabled older people by 
their adult children is unlikely to keep pace with demand in future years. 

Figure 2: Evolution of the Oldest Old Support Ratio - OOSR 

Source: 2008; Pickard et al., 2009 

In order to identify the future number of people in need of LTC, a precise analysis is required 
of  factors  underpinning  LTC  needs,  such  as  activity  limitations,  disability,  and  diseases  or 
conditions  that  cause  them.  Clear  and  precise  connections  between  all  these  factors  are  not 
always  easy  to  demonstrate.  Research  has  shown  that  the  major  driver  for  LTC  needs  is 
disability,  the  latter  being  connected  with  age  structure  of  the  population  and  prevalence  of 
specific  diseases  and  conditions.  Based  on  this  finding  and  on  the  demographic  trends 

33

34

Ageing Report 2012 page 20: http://ec.europa.eu/economy_finance/publications/european_economy/2011/pdf/ee-2011-4_en.pdf  
Source: 2000/01 and 2001/02 GHS, Government Actuaries Department population and marital status projections, 2001 Census, 
PSSRU modelling, extracted from Pickard et al., 2009  

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mentioned  above  (especially  evolution  of  population  above  80),  an  extrapolation  has  been 
made on the potential number of LTC beneficiaries (see figure 3).   

Figure 3: Projected number of beneficiaries in various long-term care settings in the EU-
27 according to alternative scenarios 

Source: European Commission/Economic Policy Committee (2009) 

In addition to the cost of pension schemes which might be harder to sustain as the size of the 
active  population  decreases,  ageing  will  inevitably  lead  to  increasing  pressures  on 
governments  to  provide  social  services35.  These  changes  will  lead  to  a  reduction  of  the 
household supply  and the  gap between  the need for care and the supply of formal care will 
increase.  As  consequences,  there  is  a  risk  that  households  hire  undeclared  workers  to  help 
them in these activities to find a solution to their needs. 

3.2. 

Potential of job creation with a low cost for public finance 

The possibility of a higher public intervention needs to be carefully analysed in respect of its 
possible impact at increasing the public deficit. Therefore an in-depth analysis is necessary to 
estimate the real cost of further possible public interventions. As already mentioned, various 
Member  States  are  already  supporting  the  supply  and  demand  of  PHS.  Although  these 
systems  can  seems  expensive  for  the  public  purse  at  first,  the  state  gets  back  part  of  its 
intervention via: 

•  Additional  personal  taxes/social  security  contributions  and  reductions  in  unemployment 

benefits related to the job creation (earn-back effects). 

•  Externalities which are more difficult to quantify, such as better work–life balance, which 
also contributes to higher competitiveness through less stress, less absenteeism and higher 
productivity;  savings  achieved  in  comparison  with  costs  of  alternative  solutions 
(especially for LTC and the possibility for elderly people to stay at home); job creation for 
the  management  of  the  provider;  more  consumption  by  the  service  workers,  increasing 
aggregate demand, etc. (indirect earn back effects). 

35

Ageing Report 2009: http://ec.europa.eu/economy_finance/publications/publication14992_en.pdf 

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Belgian Service Vouchers: a precious source of quantitative data  

Service vouchers in Belgium can be used for activities done at home (cleaning, laundry and 
ironing, cooking and sewing) and outside the house (shopping, ironing in an ironing atelier, 
and providing assistance with the transportation of persons under specific conditions). For the 
time  being,  these  vouchers  cannot  be  used  for  home  repair  or  gardening.  The  user  pays  per 
hour €7.5 for the service, the real cost is €20.80 
and the difference (€13.30) is financed by the 
RVA/ONEM36. In addition to the supplement, governments allow households to deduct their 
spending on vouchers from their taxable earnings (price after fiscal deductibility = €5.25).  

Based  on  a  study37  realised  for  the  Belgian  government,  the  net  cost  of  intervention  of  the 
system is: 

Gross cost 

€ 1,430,432.704  

Earn back effects 

€ 629,734,509  

Indirect earn back effect 

between 

€ 418,275,083 and 534,575,083 38  

Net cost 

between 

€ 382,423,112 and 266,123,112 

According to this report, the user seems ready to pay €8.59 on the black market. In this case, 
the fiscal deductibility could be suppressed and the price for a service-voucher increased up to 
€8.59.  The  net  cost  for  the  public  authoriti es  becomes  equal  to  €82,478,861  or  becomes 
negative  (then  a  benefit)  €-33,821,139.  In  av erage,  the  net  cost  is  €24,328,861  or  an 
intervention  of  €304  per  job 
(80,000  full  time  jobs  created  by  the  implementation  of  the 
service-voucher  system).  Assuming  that  cost  for  users  is  equal  to  the  price  on  the  black 
market seems realistic and logical. 

The report also shows an interesting impact of the vouchers: 10.4% of the users declared that 
they could increase their working time/employability as they delegate some tasks with the use 
of the service vouchers and 0.6% of the users declared that they could enter again the labour 
market as they can make a paid work instead to spend time for housework. 10.8% of the users 
declared that without service vouchers they would be obliged to reduce their working time. 

Public authorities should have a broad vision of the cost as often the department which invests 
and the one which receives the benefits are different. This will help to understand the real net 
cost  of  the  public  support  given  to  job  creation  in  this  sector.  A  global  view  on  the 
beneficiaries  is  also  necessary.  For  example,  the  tax  reduction  mechanism  favours  high-
income families while very low-income families benefit from exemption from co-payments, 
leaving  middle-income  families  to  shoulder  a  comparatively  larger  share  of  the  financial 
burden of the incumbent system39. 

The  long-term  impact  of  a  stable  development of  PHS  should  also  be  taken  into  account  in 
considering provision of public financial support to their supply and/or demand. 

36

37

38

39

EN 

RVA (Rijksdienst voor Arbeidsvoorziening)/ONEM (Office national de l'emploi) 
IDEA  CONSULT  "Evaluation  du  régime  des 
http://www.ideaconsult.be/index.php?option=com_content&view=article&id=48&Itemid=54&projid=277  
Page 114 of the IDEA report , see footnote 37 
EU  Expert  Group  on  Gender  and  Employment  Long-Term  Care  for  the  elderly.  Provisions  and  providers  in  33  European 
countries  

les  services  et  emplois  de  proximité  2010": 

titres  services  pour 

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Simple  extrapolations  should  always  be  undertaken  with  care.  But  in  view  of  previous 
findings  (demography-related  needs,  elementary  occupations,  limited  net  fiscal  costs),  some 
basic calculations can be helpful in to illustrating the potential job opportunities that greater 
support to PHS could trigger EU-wide: 

•  An extrapolation of the Belgian system to the EU (taking into account the respective size 
of both populations, simple multiplication by 50) gives a net cost of 1.2 billion euros for 4 
million of new jobs in housework services.  
If  each  person  currently  employed  (215,000,000)  externalises  only  1  hour/week 
(compared to the 2.5 hours which adult Europeans on average spend on household work 
each day, as noted in section 2.1), a potential of almost 5.5 million of new jobs40 exists.

• 

3.3. 

Quality of services and quality of work  

Workers in the PHS sectors are mostly women, mainly working part time, with relatively low 
skills and often from migrant background. They are often employed directly by families on an 
irregular  basis  which  may  affect  quality  of  service,  in  particular  as  far  as  care  services  are 
concerned.  To  ensure  quality  services,  workers  should  have  a  stable  employment  with  a 
minimum  of  working  hours,  the  right  skills  as  well  as  good  working  conditions.  Public 
intervention could therefore be warranted regarding certain aspects concerning the quality of 
the services. 

Quality  

The  Social  Platform41  in  its  recommendations  "to  achieve  the  quality  social  and  health 
services" suggest that "quality must be defined at a local level-the closest level to the users of 
the  services".  It  is  important  to  respect  the  needs  of  the  user  (gender,  age,  religion,  ethnic 
origin, etc) and training should be provided in this sense.  

A  project  launched  by  the  European  Social  Network  on  the  changing  relationships  between 
financer,  provider  and  user  of  services  for  elderly  people  in  Europe42  suggests  that  control 
mechanisms could be put in place to assess and control the quality of the services provided 
and  that  Member  States  should  ensure  that  people  who  employ  irregular  migrants  are 
sanctioned in line with Directive 2009/52/EC. This should apply to individual organisations, 
agencies or services. Quality indicators remain to be developed.  

In  this  context  the  voluntary  European  Quality  Framework  for  Social  Services  mentioned 
above43,  is  a  useful  tool  to  promote  CC  and  LTC  quality:  it  identifies  quality  principles 
referring  to  the  characteristics  that  a  social  service  should  have  in  order  to  address  the 
multiple  needs  and  expectations  of  the  service  user  and  to  various  dimensions  of  service 
provision  (availability,  accessibility,  affordability,  person-centeredness,  comprehensiveness, 
continuity,  orientation  towards  outcomes,  respect  for  users'  rights,  participation  and 
empowerment,  partnership,  good  governance,  good  working  conditions  and  working 
environment/investment  in  human  capital,  adequate  physical  infrastructure).  It  also  suggests 
operational  criteria  which  might  be  of  help  for  the  monitoring  and  evaluation  of  social 

40

41

42

43

215,000,000 hours / 40 h 
http://cms.horus.be/files/99907/MediaArchive/Policies/SocialPlatform_Nine_Principles_EN.pdf  
http://www.esn-eu.org/commissioning-for-quality/index.htm  
See section 2 and footnote 7 

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13 

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services quality. Moreover, it articulates methodological elements for developing quality tools 
(standards or indicators) at national or local level.  

As  suggested  by  the  EU  Disability  High  Level  Group  position  paper  on  social  services  of 
general interest, sustainable externalisation of services requires a good quality of care as well 
as  of  domestic  activities44.  Binding  quality  standards  and  appropriate  public  control 
mechanisms are also called for. 

Skills and training  

The  Europe  2020  EU  flagship  initiative  "Agenda  for  New  skills  and  new  jobs"  supports 
initiatives in the Member States to recognise the skills acquired during the delivery of care to 
dependent relatives.  

CC  and  LTC  do  not  demand  as  high  technical  skills  as,  for  instance,  professional  health 
services. Therefore they may be attractive to allow people to get a good foothold in the labour 
market  while  opening  possibilities  for  later  up  skilling  and  possible  upgrading.  Training 
opportunities  should  be  available  to  ensure  such  up  skilling  and  it  should  be  possible  for 
carers to go through a certification process. In this perspective there is a need to improve the 
cooperation  between  the  world  of  work  and  the  world  of  training45  in  order  to  foster  the 
recognition of "informal and non formal learning".  

The recent Commission Communication on childcare46 places, for instance, a great emphasis 
on the need for better qualifications of staff in CC. 

In  1996,  the  European  social  partners  in  the  cleaning  industry  have  signed  a  joint 
memorandum on new sources of employment47 where they underlined the importance of the 
skill  enhancement  and  quality  of  working  conditions  for  the  development  of  cleaning 
activities at home. 

Technology 

Externalisation of PHS could improve the productivity of such activities due to better use of 
technologies  and  investment  in  training,  as  externalisation  is  usually  associated  with 
specialisation.  

The CARICT project48, steered by the Commission’s JRC-IPTS has evaluated systematically 
and at EU level 52 ICT based practices for domiciliary care in several Member States in terms 
of  impact  and  cost–efficiency.  Inspiring  examples  could  be  shared  between  Member  States 
(e.g.  SOPHIA  (DE),  CAMPUS  (IT)  and  E-Care  (IT)).  Technology  can  be  used  to  support 
training  and  certification  efficiently  at  a  large  scale,  organise  labour  markets  (e.g.  FEPEM 
(FR)), create new opportunities for volunteering, improve attractiveness of work in care, and 
help carers to balance care and other activities. 

Information  and  Communication  Technologies  can  enable  distance  and  self-learning  for 
caregivers with significant time and mobility constraints to attend regular face-to-face courses 

44

45

46

47

48

http://ec.europa.eu/social/BlobServlet?docId=4483&langId=en  
Bruges Communiqué: http://ec.europa.eu/education/lifelong-learning-policy/doc/vocational/bruges_en.pdf  
http://ec.europa.eu/education/school-education/doc/childhoodcom_en.pdf  
http://ec.europa.eu/employment_social/dsw/public/actRetrieveText.do?id=10713  
http://is.jrc.ec.europa.eu/pages/EAP/eInclusion/carers.html#projects  

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due to their care duties (e.g. City and Guilds – Learning for Living; Caring with Confidence 
in  the  UK,  Coidanet  in  Spain,  Aspasia  in  Italy)49.  ICT  can  also  support  large-scale 
certification of competences. 

4. 

THE WAY FORWARD  

Given  the  foreseeable  impact  of  demographic  evolution  on  our  societies,  European  labour 
markets  need  to  become  more  inclusive  and  the  employment  rate  needs  to  rise.  PHS  offer 
significant  opportunities  in  this  respect,  allowing  to  improve  work-life  balance,  increase 
productivity and bring undeclared work into the official labour market.  

With  the present  document, the Commission services  invite  all stakeholders to comment on 
possible actions to address the issue of promoting new jobs in the PHS sectors. In particular, 
views are sought on:  

•  Ways to improve measurement and monitoring of the employment levels in PHS, taking 
into  account  the  impact  of  the  on-going  crisis,  loss  of  purchasing  power,  labour  market 
exclusion issues and the potentially positive effect on the creation or growth of SMEs; 
•  The utility of developing sharing of experiences, especially concerning the tools used or 
planned to support the PHS with a specific attention to the cost effectiveness and to the 
reduction of undeclared work; 

•  Ways  of  ensuring  quality  services  and  jobs  (skill  needs,  working  conditions),  including 

possibly through development quality standards;  

•  Other ways to ensure greater professionalisation of PHS jobs. 

The  present  document  commits  only  the  Commission's  services  involved  in  its  preparation. 
The  text  is  prepared  as  a  basis  for  comment  and  does  not  prejudge  the  final  form  of  any 
decision to be taken by the Commission. 

Responses can be sent to empl-household-services@ec.europa.eu 

Alternatively, for those without web access, responses can be sent by post to:  

European Commission 
Directorate-General for Employment, Social Affairs & Inclusion 
Discussion on Personal and household services 
Unit C2 
Rue Joseph II 2 - 1040 Brussels - Belgium 

Deadline for responding: 15 July 2012 

49

Kluzer S., Redecker C. and Centeno C. (2010) Long-term care Challenges in an Ageing Society: The role of ICT and Migrants, 
JRC IPTS Scientific and Technical Report Series, EUR 24382 EN available at: 
http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=3299  

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