DRAFT JOINT EMPLOYMENT REPORT FROM THE COMMISSION AND THE COUNCIL accompanying the Communication from the Commission on the Annual Growth Survey 2019
Date: 2018-11-21
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU employment policy, education policy, gender equality, job creation, labour market, poverty, social change, social integration, social situation, unemployment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 21.11.2018  COM(2018) 761 final  DRAFT JOINT EMPLOYMENT REPORT  FROM THE COMMISSION AND THE COUNCIL   accompanying the Communication from the Commission              on the Annual Growth Survey 2019  
 
 
TABLE OF CONTENTS 

FOREWORD ............................................................................................................................. 2 

KEY MESSAGES ...................................................................................................................... 3 

1.  OVERVIEW OF LABOUR MARKET AND SOCIAL TRENDS AND CHALLENGES 

IN THE EUROPEAN UNION ......................................................................................... 12 

1.1 

1.2 

Labour market trends ............................................................................................. 12 

Social trends ........................................................................................................... 17 

2.  SNAPSHOTS FROM THE SOCIAL SCOREBOARD ................................................... 21 

2.1 

2.2 

The scoreboard explained ...................................................................................... 21 

Evidence from the social scoreboard ..................................................................... 23 

3.   EMPLOYMENT AND SOCIAL REFORMS – MEMBER STATES PERFORMANCE 

AND ACTION .................................................................................................................. 30 

3.1   Guideline 5: Boosting demand for labour .............................................................. 30 

3.1.1 

Key indicators .................................................................................................... 31 

3.1.2 

Policy response ................................................................................................... 45 

3.2.  Guideline 6: Enhancing labour supply and improving access to employment, skills 
and competences ............................................................................................................... 51 

3.2.1 

Key indicators .................................................................................................... 51 

3.2.2 

Policy response ................................................................................................... 78 

3.3.  Guideline 7: Enhancing the functioning of labour markets and the effectiveness of 
social dialogue .................................................................................................................. 91 

3.3.1   Key indicators .................................................................................................... 91 

3.3.2  

Policy response ................................................................................................. 116 

3.4.  Guideline 8: Promoting equal opportunities for all, fostering social inclusion and 
combatting poverty ......................................................................................................... 130 

3.4.1 

Key indicators .................................................................................................. 130 

3.4.2 

Policy response ................................................................................................. 151 

ANNEXES ............................................................................................................................. 158 

1 

 
 
 
 
FOREWORD 

The  Joint  Employment  Report  (JER)  by  the  European  Commission  and  the  Council  is 

mandated  by  Article  148  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU). 

The  initial  proposal  for  this  report  by  the  European  Commission  is  part  of  the  Autumn 

package, which includes the Annual Growth Survey launching the European Semester cycle. 

The  Joint  Employment  Report  provides  an  annual  overview  of  key  employment  and  social 

developments in Europe as well as Member States' reform actions, in line with the Guidelines 
for the Employment Policies of the Member States1. The reporting on these reforms follows 

the structure of the Guidelines: boosting demand for labour (Guideline 5), enhancing labour 

supply and improving access to employment, skills and competences (Guideline 6), enhancing 

the functioning of labour markets and the effectiveness of social dialogue (Guideline 7), and 

promoting  equal  opportunities  for  all,  fostering  social  inclusion  and  combatting  poverty 

(Guideline 8).  

In addition, the Joint Employment Report monitors Member States' performance in relation to 

the Social Scoreboard set up in the context of the European Pillar of Social Rights. The Pillar 

was  established  as  an  inter-institutional  Proclamation  by  the  European  Parliament,  the 

Council and the Commission on 17 November 2017. It identifies principles and rights in three 

areas: i) equal opportunities and access to the labour market, ii) fair working conditions, and 

iii) social protection and inclusion. Monitoring of progress in these areas is underpinned by a 

detailed analysis of the Social Scoreboard accompanying the Pillar. 

The  Joint  Employment  Report  is  structured  as  follows:  an  introductory  chapter  (Chapter  1) 

reports  on  main  labour  market  and  social  trends  in  the  European  Union,  to  set  the  scene. 

Chapter 2 presents the main results from the analysis of the social scoreboard associated to the 

European Pillar  of Social  Rights. Chapter 3 provides a detailed cross-country description of 

key  indicators  (including  from  the  social  scoreboard)  and policies  implemented  by  Member 

States to address the Guidelines for Employment Policies. 

1  Revised  Employment  Guidelines  have  been  adopted  by  the  Council  of  the  European  Union  in  July  2018, 
aligning  the  guidelines  to  the  European  Pillar  of  Social  Rights  (Council  Decision  (EU)  2018/1215  of  16  July 
2018 on guidelines for the employment policies of the Member States). 

2 

 
 
 
 
                                                            
KEY MESSAGES 

Europe is making progress regarding the Social Scoreboard accompanying the European 

Pillar of Social Rights. In a context of improving labour markets and declining poverty, 13 

out of the 14 headline indicators of the Social Scoreboard recorded an improvement over the 

last  year,  on  average.  Still,  the  economic  recovery  is  not  yet  benefitting  all  citizens  and 

countries in the same manner. Challenges with regard to specific principles of the Pillar are 

identified  for  a  majority  of  Member  States.  The  current  economic  upswing  provides  an 

opportunity  for  stepping  up  reforms  aiming  at  improving  the  inclusiveness,  resilience  and 

fairness of labour markets and social protection systems, thus fostering convergence towards 

better living and working conditions in the EU. However, there are also downside risks to the 

recovery, which make it urgent for Member States to seize this opportunity. 

Strong job creation continues, with employment reaching a record level in the EU. In the 

second quarter of 2018, 239 million persons were in employment in the EU, 14 million more 

than the lowest level reached in mid-2013, at the peak of the crisis. The employment rate of 

people aged 20-64 rose to 73.2% in the same period: with the current trend, the EU is well on 

track  to  reach  the  Europe  2020  target  of  a  75%  employment  rate  in  2020.  Employment 

growth in 2017 and the first two quarters of 2018 was spread among all main demographic 

groups,  with  the  largest  increases  recorded  by  older  workers  (55-64)  as  in  previous  years. 

Yet, substantial disparities in employment rates across the EU suggest that there is room for 

further  improvement,  notably for  those  Member  States  that are  still  far  from  attaining  their 

national Europe 2020 targets. 

Unemployment  has  returned  to  its  pre-crisis  level,  but  remains  high  in  a  number  of 

Member  States.  Thanks  to  the  steady  labour  market  recovery,  the  unemployment  rate  kept 

declining in 2017, to reach 6.9% in the second quarter of 2018. It now stands at the lowest 

level in ten years, more than 4 pps below the 2013 peak. In the euro area, the unemployment 

rate at 8.3% in Q2-2018 remains one percentage point higher than the lowest level registered 

in 2008. Unemployment rates are still particularly high in Greece, Spain, Italy, Croatia and 

Cyprus.  

Employment  gains  continue  to  be  more  prominent  in  terms  of  employed  persons  than  of 

hours worked. The volume of total hours worked in the EU kept increasing in 2017 – though 

more slowly than total employment – and is not yet back to the 2008 level. A high number of 

3 

 
 
involuntary  part-time  workers  (i.e.  workers  who  are  in  part-time  but  would  like  to  work 

more), still 1.3 million above 2008, also suggests that there is remaining slack in the labour 

market. The decreasing number of hours worked per person is nonetheless part of a structural 

trend that started in the early 2000s.  

Household incomes continue rising in almost all Member States. Supporting the process of 

upward convergence, real per capita disposable household income grew more strongly in the 

Member  States  that  most  recently  joined  the  Union.  While  these  developments  were  mostly 

driven  by  favourable  economic  conditions,  they  benefitted  also  from  reforms  leading  to 

improvements in the adequacy of social benefits, including minimum income schemes. Yet, in 

a  number  of  countries  the  real  gross  disposable  income  per  capita  remains  significantly 

below the pre-crisis levels. Household incomes grew more slowly than GDP, highlighting that 

income gains from the recovery have reached households only to some extent – thus raising 

questions about the inclusiveness of recent growth.  

On the back of robust economic and labour market recovery, the share of people at-risk-of 

poverty or social exclusion decreased markedly in 2017. More than 5 million people exited 

from poverty or social exclusion, the largest decline since the recovery started. This change 

was driven mainly by decreasing numbers of people experiencing severe material deprivation 

and/or  living  in  very-low  work  intensity  households  (since  their  respective  peaks,  these 

indicators  dropped  by  respectively  15  and  8  million).  The  total  number  of  people  at  risk  of 

poverty  or  social  exclusion,  at  113  million  people  or  22.5%  of  total  population  in  2017,  is 

now below pre-crisis levels. Estimates indicate that this trend is set to continue into the next 

year. Still, there remains a long way to reach the Europe 2020 poverty and social exclusion 

reduction target. The risk of poverty or social exclusion remains a challenge particularly for 

children, people with disabilities and people with a migrant background.  

Real wage growth slowed down in 2017, but has picked up in 2018. Overall, wage growth 

remains  below  what  could  be  expected  given  the  positive  labour  market  and  economic 

performance.  The  modest  wage  dynamics  over  the  past  years  can  be  explained  by  weak 

productivity  growth,  still  low  inflation  expectations  and  remaining  reserves  in  the  labour 

market. In real terms, average wages still lag behind pre-crisis levels in many Member States 

and their growth remained,  in 2017,  below productivity growth. This is  in line with a long-

term trend: in the EU, between 2000 and 2017, real value added per person employed grew 

by  15.6%,  while  real  compensation  per  employee  grew  by  only  11.2%.  Despite  these 
4 

 
 
developments,  there  is  evidence  that  convergence  in  labour  income  levels  is  taking  place 

although large differences remain between and within Member States. 

Wage  setting  frameworks  (including  minimum  wages)  are  starting  to  react  to  the 

improvement  in  labour  market  conditions.  In  particular,  statutory  minimum  wages  were 

increased  in  several  countries,  with  the  involvement  of  social  partners.  This  development  is 

important  in  view  of  the  persisting  high  rates  of  in-work  poverty  in  a  number  of  Member 

States,  which  also  require  action  in  the  areas  of  tax  design  and  benefits  adequacy.  Against 

this  background,  it  is  important  that  the  adjustment  in  minimum  wage  levels  follows 

transparent  and  predictable  rules,  taking  into  account  their  impact  on  competitiveness,  job 

creation and in-work poverty. 

In  a  context  of  sustained  job  creation,  some  groups  still  face  difficulties  in  reaping  the 

benefits of the recovery. Job growth in 2017 has been mainly driven by women, older workers 

and high-skilled people. On the other hand, the employment rate of low-skilled workers is still 

below  pre-crisis  levels  and  remains  almost  30  pps  lower  than  that  of  high-skilled  workers. 

Though increasing, the employment rate of young people is lower than in 2008 (by 2.7 pps). 

On a positive note, the share of young people neither in employment, education or training at 

10.9% is now back to pre-crisis levels. People with a migrant background face employability 

challenges:  the  employment  rate  gap  between  native  and  non-EU  born  workers  stood  at 

10 pps in 2017 (up from 4.5 pps in 2008). This gap is especially pronounced among migrant 

women.  Finally,  people  with  disabilities  tend  to  participate  less  in  the  labour  market;  the 

potential to use their talents remains largely untapped. 

Participation  of  women  in  the  labour  market  continues  to  grow  at  a  fast  pace.  The 

employment rate of women stood at 66.5% in 2017, almost 5 pps higher than in 2008. Still, 

the  employment  rate  gender  gap  remains  substantial,  with  considerable  disparities  across 

Member  States.  Though  women  are  generally  better  qualified  than  men  in  terms  of 

educational  attainment  level,  the  gender  pay  gap  is  high  and  only  gradually  declining. 

Women  are  over-represented  in  lower-paid  sectors  and  occupations  and  work  more 

frequently in underqualified jobs compared to their skills level. The impact of parenthood and 

caring  responsibilities  remains 

the  main  driver  of 

lower  employment  rates,  with 

underdeveloped  services  being  a  major  impediment  to  stay  in  or  return  to  employment. 

Furthermore,  informal  carers,  the  majority  of  whom  are  women,  are  more  at  risk  of 

experiencing  poverty  and  financial  dependency,  with  career  interruptions  often  translating 
5 

 
 
into  lower  pension  entitlements.  A  number  of  Member  States  are  taking  action  to  provide 

affordable and equal access to quality childcare and long-term care services, but important 

challenges  remain.  A  more  balanced  distribution  of  paid  family-related  leaves  between 

women and men would be beneficial in some cases. A few Member States are adapting their 

tax and benefits systems to remove disincentives to work for second earners. Concrete actions 

to tackle the gender pay gap are in place only in a limited number of countries. 

The employment rate of older workers increased substantially over the last decade. For the 

age group 55-64 it rose from 45.5% in 2008 to 57.1% in 2017. Older workers were relatively 

more shielded from the recession and their employment rate kept increasing during the crisis, 

to  then become an important driver of  job recovery. The rising duration of  working lives is 

explained  by  a  number  of  factors,  including  increases  in  statutory  retirement  age,  better 

access  to  care  services,  availability  of  flexible  working  arrangements  and  active  ageing 

strategies. Several Member States are further promoting labour market participation of older 

workers, including by supporting flexible transitions into retirement and providing financial 

incentives both for employers and employees.  

The  labour  market  situation  of  young  people  continues  to 

improve,  but  youth 

unemployment  remains  high  in  a  number  of  Member  States.  While  steadily  declining  and 

back  to  the  2008  level,  the  youth  unemployment  rate  (age  group  15-24)  presents  large 

differences across countries and very high rates in some of them. A still considerable part of 

the young people is economically inactive. Overall in the EU, almost 6 million people aged 

15-24 were neither in employment, education or training (NEET) in 2017. If prolonged over 

time, detachment of young people from the labour market can have negative consequences for 

potential  growth  as  well  as  negative  effects  for  the  individuals  concerned,  such  as  the 

depreciation of skills and a higher risk of poverty and social exclusion later in life. Actions 

taken  by  Member  States  in  line  with  the  Council  Recommendation  establishing  the  Youth 

Guarantee are key drivers for improvement.  

Ensuring  access  to  quality  and  inclusive  education  and  training  enables  younger 

generations to become engaged and active citizens, helping them integrate into the labour 

market  and  society.  Europe  is  progressing  towards  reaching  the  2020  headline  target  on 

early  school  leaving  rate  of  10%,  and  has  almost  reached  the  target  of  40%  on  tertiary 

education  attainment.  Still,  large  differences  persist  across  Member  States  and  among 

6 

 
 
population groups (for instance, between men and women and between native- and non-EU 

born people). The high shares of low achievers in basic skills, and the strong correlation of 

educational outcomes with socio-economic status and labour market outcomes are a matter of 

concern. Member States are undertaking steps to improve their education systems, notably to 

further reduce drop-out rates, foster equal access and improve educational outcomes among 

disadvantaged  learners.  More  (and  more  efficient)  investment  in  education  and  training 

systems is a priority in some Member States. Improving the quality of higher education and its 

labour  market  relevance  is  also  high  on  the  agendas  of  Member  States,  especially  in  the 

context of rising tertiary education attainment rates. 

Technological  changes  and  related  transformations  in  labour  markets  crucially  require 

upskilling  and  reskilling  of  the  working  age  population.  Having  a  labour  market  relevant 

qualification  is  increasingly  important  for  workers  to  adapt  to  a  rapidly  changing 

environment.  In  the  EU,  the  ratio  between  low-qualified  adults  and  the  number  of  jobs 

requiring  a  low  qualification  level  is,  on  average,  three  to  one.  Yet,  low  skilled  and  older 

people  are  significantly  less  likely  to  participate  in  adult  learning  programmes  than  the 

average. Significant gaps remain in terms of digital skills: more than 40% of adults in the EU 

do not have basic digital skills, with peaks of 70% in some Member States. This implies that a 

significant  part  of  the  population  cannot  access  a  large  variety  of  services,  with  negative 

impacts on inclusion and productivity.  

Member States are adapting their skills development systems and are developing strategies 

to  improve  labour  market  relevance  of  training,  with  a  view  to  facilitating  learners’ 

transitions into and within the labour market. This includes making skills and qualifications 

easier to be understood and recognised throughout Europe and taking into account learning 

outside institutional contexts. Vocational education and training systems are being reviewed 

and updated, with the goal of improving their labour market relevance and promoting access, 

but challenges remain in these domains. The provision of incentives to disadvantaged groups 

to participate in adult learning, together with proper guidance and the provision of financial 

support  to  companies  for  training  their  staff  are  important  policy  levers  to  achieve  better 

outcomes.  Member  States  continue  to  increase  the  offer  of  learning  and  qualification 

opportunities to low-skilled adults, in line with the Upskilling Pathways initiative. Promoting 

development  of  digital  skills  occupies  an  important  place  among  Member  States’  education 

and skills priorities.  

7 

 
 
The  incidence  of  atypical  forms  of  work  is  roughly  stable  at  EU  level,  but  high  labour 

market segmentation remains an issue for a number of Member States. The share of total 

employees on a temporary contract did not change significantly over recent years, hovering 

around 14% on average. Globally, more than half of temporary employees are "involuntary", 

reaching  70%  or  more  in  12  Member  States.  In  several  countries,  the  combination  of  high 

shares  of  temporary  contracts  and  low  transition  rates  towards  permanent  contracts  is 

symptomatic  of  labour  market  duality.  This  is  a  matter  of  concern  as  atypical  workers 

experience  lower  job  quality  and  higher  in-work  poverty  risks.  In  addition,  around  one 

quarter  of  all  self-employed  workers  in  the  EU  can  be  classified  as  "vulnerable"  or 

"concealed". Also, survey results seem to suggest that the proportion of people earning more 

than half of their income from platform work may now have reached around 2% (2017) and is 

expected  to  increase,  which  underlines  the  importance  of  increased  policy  focus  on  this 

development.  Reforms  in  the  area  of  employment  protection  legislation  are  taking  place  in 

some Member States, with the aim to achieve a better balance between flexibility and security 

and avoid segmentation. These include, in some cases, stricter conditions for using temporary 

contracts, or larger scope for collective bargaining to define their framework. Regulation on 

new forms of work, including platform workers and own-account workers, has been initiated 

in a few Member States. 

Unemployment benefits of adequate amount, reasonable duration, accessible to all workers 

and  accompanied  by  effective  activation  measures  are  key  to  support  jobseekers  during 

transitions.  The  design  of  these  systems  varies  to  a  considerable  extent  from  one  Member 

States to another, across all dimensions. Recent reforms in this domain have mostly focused 

on  strengthening  activation  requirements  for  jobseekers  receiving  benefits,  for  instance  by 

reinforcing  job  search  obligations  and  conditions  to  accept  a  new  job.  Concerns  remain 

about the coverage of atypical workers, who often do not have full access to the system, and 

the  absence  of  coverage  for  the  self-employed  –  issues  highlighted  in  the  Commission's 

proposal  for  a  Council  recommendation  on  access  to  social  protection  for  workers  and  the 

self-employed. 

Effective  active  labour  market  policies  and  Public  Employment  Services  are  crucial  to 

ensure  well-functioning  and  inclusive  labour  markets.  Active  labour  market  policies 

improve labour market matching and increase the chances of job seekers to find a new job. 

Their  role  is  especially  important  to  foster  the  integration  of  the  long-term  unemployed. 

8 

 
 
Public  Employment  Services  are  the  main  institutions  in  charge  of  supporting  job  search 

efforts  of  the  unemployed  and  referring  them  to  activation  measures.  Yet,  participation  and 

investment in active labour market policies differs significantly across the EU. Similarly, the 

effectiveness of Public Employment Services in providing job search support is heterogeneous 

across and, sometimes, within Member States. While important measures are being taken in a 

majority of Member States, with  a focus  on the provision of individualised services, several 

Member States have scope to reinforce their active labour market policies systems. Member 

States  made  progress  on  implementing  the  Council  recommendation  on  the  integration  of 

long-term  unemployed,  with  further  action  needed  to  foster  cooperation  across  different 

actors and on improving outreach towards inactive people. Public Employment Services are 

continuing their reform agenda, in the framework of the European PES Network. While some 

Member States took further measures to promote the integration of migrants into the labour 

market (with a focus in particular on refugees), systematic approaches are lacking and there 

is a  need to invest more into upskilling and recognition of skill and qualifications, efficient 

labour market policies and support by Public Employment Services.  

For the first  time since the crisis income inequality in the EU decreased  slightly in 2017, 

driven by faster increases in the incomes of lower income households. This suggests that the 

recovery begins to reach the most vulnerable. Available estimates indicate that this positive 

trend  will  continue  in  a  majority  of  Member  States.  Still,  in  2017  the  richest  20%  of  the 

population had a disposable income that was 5.1 times higher than that of the poorest 20% in 

the EU (from 5.2 in 2016), with large variation across Member States. Income inequality is 

above  pre-crisis levels in some countries, often linked to  unequal opportunities in access  to 

education,  training  and  social  protection,  and  correlated  to  poor  labour  market  outcomes. 

Some  Member  States  are  undertaking  inequality-reducing  policies,  notably  in  the  design  of 

minimum wage setting and tax and benefit systems. To break the transmission of inequalities 

across  generations,  Member  States  can  take  further  action  in  different  areas,  such  as  by 

fostering equal opportunities in education and training, ensuring access to quality healthcare 

and other services, promoting gender equality and addressing regional disparities.  

The  measured  impact  of  social  transfers  (excluding  pensions)  on  poverty  reduction 

continued  to  decline  in  2017.  This  is  in  line  with  reduced  automatic  stabiliser  effects  in  a 

phase  of  economic  expansion,  though  large  variations  remain  among  Member  States.  The 

poverty-reducing impact of social transfers fell mostly in long-standing members of the EU, 

9 

 
 
while  it  increased  in  countries  that  joined  more  recently  (suggesting  that  convergence  is 

taking  place).  The  overall  outcome  depends  on  improved  labour  market  conditions  (and 

related  changes  in  the  characteristics  of  those  at  risk  of  poverty)  as  well  as  changes  in 

benefits  adequacy  and  coverage,  including  the  fact  that  benefits  sometimes  lag  behind 

generally increasing incomes. The adequacy of minimum income benefits varies significantly 

among Member States, as shown by the results of the related benchmarking exercise.  

Member  States  continue  taking  measures  to  modernise  social  protection  systems, 

strengthening  coverage  and  adequacy  of  benefits  and  services.  Steps  are  being  taken  to 

improve access to social protection, notably for non-standard workers and the self-employed 

who  continue  to  face  significant  gaps.  Some  innovations  are  also  being  introduced  with 

regard to new forms of work. Work on improving adequacy of benefits continues, though in 

some cases there have been delays. A number of Member States are improving their minimum 

income schemes by combining adequate levels of support with access to enabling goods and 

services,  and  with  incentives  to  (re)integrate  into  the  labour  market,  in  an  active  inclusion 

approach. Some Member States are enhancing integrated delivery of services (such as social 

assistance,  employment  and  other  social  services).  In  a  context  where  housing-related 

expenditures amount to a significant share of many households’ incomes and the evolution in 

the  number  of  homeless  is  not  improving,  some  Member  States  have  undertaken  reforms  to 

improve  access  to  housing,  either  through  the  provision  of  incentives  or  via  preventative 

measures. 

Demographic change and rising life expectancy present the pension, healthcare and long-

term care systems with a clear need to adapt. The demand for long-term care and healthcare 

is  growing  and  the  needs  are  changing  as  populations  age.  Over  the  next  five  decades,  the 

number of Europeans aged 80+ is set to double. By 2050, there will be only two persons in 

active  age  (15-64)  for  one  person  over  65  year  old,  compared  to  three  today;  the  ratio  is 

already  on  the  decrease.  Therefore,  while  measures  to  improve  financial  sustainability  are 

still high on many Member States’ agendas, ensuring pension adequacy gains in importance. 

The  income  replacement  and  poverty  prevention  capacity  of  pensions  varies  significantly 

among  Member  States.  Member  States  are  increasingly  taking  steps  to  safeguard  pension 

adequacy  through  minimum  guarantees  and  indexation  of  benefits,  promote  flexible 

retirement,  tailor  pension  accrual  conditions  to  diverse  categories  of  workers  and  enhance 

the role of supplementary pensions.  

10 

 
 
Improving access to quality healthcare and long-term care, together with increasing their 

effectiveness,  is  a  guiding  principle  for  reforms  in  Member  States.  For  some  Europeans, 

costs and waiting times remain important barriers for the accessibility of healthcare. Thus, in 

a  number  of  Member  States  reforms  of  healthcare  systems  focus  on  improving  their 

effectiveness  by  better  coordination  and  a  stronger  role  assigned  to  primary  care  and 

prevention.  Measures  are  taken  to  improve  training  and  working  conditions  of  health 

workers. In the area of long-term care, most care is still provided by family members, given 

the  lack  of  comprehensive  schemes  to  cover  the  need  for  old  age  care  in  the  majority  of 

Member  States.  Current  reforms  intend  to  combine  a  system  of  support  for  informal  and 

family  carers  by  public  institutions  and  a  network  of  community  and  institutional  services, 

with attention to sustainability in the face of demographic challenges. 

A  well-functioning  social  dialogue  is  a  key  element  of  the  European  social  market 

economy. It helps strengthening social cohesion and reducing conflicts in the society, to the 

mutual benefit of workers, employers and governments. The involvement of social partners in 

the preparation of reforms can improve their design and implementation, increase ownership 

among citizens and eventually lead to better socio-economic outcomes. However, the degree 

and impact of social partners' involvement varies considerably among Member States and is 

weak in several cases. While there is no one-size-fits-all model for social dialogue practices, 

in some Member States there is clear scope for improving the capacity of social partners and 

providing them with an adequate framework for predictable and timely consultation including 

in  all  key  stages  of  the  European  semester.  Similarly,  using  the  experience  of  civil  society 

organisations can play and plays an important role to ensure that reforms are designed and 

implemented  effectively.  Yet,  the  degree  of  engagement  with  societal  stakeholders  varies 

significantly  among  Member  States,  with  insufficient  capacity  to  actively  participate  in  the 

policy debate being an issue in some of them. 

11 

 
 
 
 
1. 

OVERVIEW  OF  LABOUR  MARKET  AND  SOCIAL  TRENDS  AND 

CHALLENGES IN THE EUROPEAN UNION 

This  section  presents  an  overview  of  labour  market  and  social  trends  and  challenges  in  the 

European  Union,  providing  a  detailed  analytical  account  of  major  employment  and  social 

policy areas.  

1.1 

Labour market trends 

Labour  market  conditions  continue  to  improve,  with  employment  reaching  a  record 

level  in  the  EU.  On  the  back  of  strong  economic  growth  (2.4%),  the  number  of  people  in 

employment in the EU increased by 1.6% in 2017, the largest annual increase rate since the 

start of the recovery. Total employment kept increasing in the first two quarters of 2018, to 
reach 238.9 million2 – about 3.2 million jobs more than one year ago, and the highest level 

ever  reached  in  the  EU.  Since  employment  started  recovering  in  mid-2013,  more  than  14 

million additional jobs were created.  

The  employment  rate  (of  people  aged  20-64)  is  on  a  steady  rise,  getting  closer  to  the 

Europe  2020  target.  It  increased  slightly  faster  than  in  2016,  by  1.1  percentage  point  to 

72.2% in 2017 and continued rising in the first two quarters of 2018, up to 73.2% (Figure 1). 

If the positive trend continues at the current pace, the EU would be well placed to reach its 

Europe 2020 target of a 75% employment rate. The situation continues to improve also in the 

euro area, where the employment rate reached its highest level at 71.9% in Q2-2018. These 

positive  developments  are  supported  by  a  continuing  upward  trend  in  labour  market 

participation. In Q2-2018, the activity rate (15-64) achieved a record high at 73.8% (73.5% in 

the euro area). The activity rate in the EU has been increasing at a constant pace, even during 

the  crisis,  closing  the  gap  with  the  United  States.  In  2017,  older  workers  and  women 

continued to drive the increase in labour force participation.  

2 Total employment figures come from National Accounts (domestic concept), other figures from Labour Force 
Survey data. Seasonally adjusted quarterly figures are used throughout this section. 

12 

 
 
 
 
 
 
 
                                                            
The  unemployment  rate  is  now  back  to  its  pre-crisis  level.  Thanks  to  the  steady  job 

creation  trend,  the  unemployment  rate  kept  falling,  down  to  6.9%  in  Q2-2018  –  a  level  not 

recorded  in  the  EU  since  Q2-2008  and  more  than  4  pps  below  the  2013  peak.  The 

improvement is less substantial in the euro area, where the unemployment rate, at 8.3% in Q2-

2018,  remains  one  percentage  point  higher  than  the  lowest  level  recorded  in  2008.  These 

positive trends are associated with a continuing decrease in the long-term unemployment rate 

(i.e.  share  of  the  unemployed  for  at  least  one  year  within  the  active  population),  which 

dropped in the EU by 0.5 pps year-on-year to 3% in Q2-2018 (3.9% in the euro area). Though 

unemployment (including long-term) decreased across all Member States over the last year, a 

significant dispersion of unemployment rates persists (as shown in Section 3.1.1), with some 

countries still far from their pre-crisis minimum levels.   

Figure 1: Employment and unemployment rates in the EU and euro area 

Source: Eurostat, LFS. Note: seasonally adjusted figures for Q2-2018. 

Youth  unemployment  also  continues  to  decrease  quickly,  dropping  by  1.8  pps  year-on-

year to 15.2% in Q2-2018 (16.9% in the euro area). This level corresponds to the minimum 

reached just before the crisis (Q2-2008) and is now almost 9 pps below the 2013 peak. Still, 

youth unemployment remains high in some Member States, with rates above 30% in Spain, 

Italy  and  Greece  (see  Section  3.2.1).  Continuing  improvements  are  recorded  in  terms  of 
13 

 
 
 
 
people  aged  15-24  who  are  neither  in  employment,  nor  in  education  or  training  (NEET), 

whose rate declined by 0.6 pps to 10.9% in 2017, a similar level as in 2008.  

The  decrease  in  youth  unemployment  is  mirrored  by  a  parallel  increase  in  the 

educational attainment of youth: the rate of early leavers from education and training (aged 

18-24), which has been steadily declining over the last decade, with the latest decrease (by 0.1 

pps)  reached  10.6%  in  2017.  This  is  very  close  to  the  Europe  2020  target  of  10%,    though 
there is room for further reduction3. Tertiary educational attainment for those aged 30 to 34 

continued  increasing  steadily,  reaching  39.9%  in  2017  –  almost  reaching  the  Europe  2020 

target of 40%. 

The  recovery  continues  to  be  more  prominent  in  terms  of  employed  persons  than  of 

hours  worked.  The  volume  of  total  hours  worked  in  the  EU  increased  by  1.2%  in  2017, 

continuing the positive trend started in 2015. Nonetheless, this increase remains below that of 

total  employment  (which  rose  by  1.6%,  see  above),  and  implies  that  the  number  of  hours 

worked  per capita  decreased.  Total  hours  worked  are  not  yet  back  to  their  2008  peak  level. 

This  evidence  points  to  remaining  slack  in  the  labour  market,  as  also  signalled  by  other 

indicators. In 2017, there were almost 9 million involuntary part-time workers in the EU (i.e. 

workers  who  are  in  part-time  but  would  like  to  work  more),  declining  from  a  peak  of  10.3 

million in 2013, but still 1.3 million above the level of 2008. In a longer-term perspective, the 

moderate  dynamics  of  working  hours  is  part  of  a  structural  shift,  linked  to  a  growing 

incidence  of  part-time  work  over  the  last  15  years  and  changing  preferences  of  workers  as 

concerns working time arrangements. As a result, the number of hours worked per person is 
on a gradually declining trend since 20004.  

Employment gains were spread among all the main demographic groups in 2017. As in 

previous years, older workers (55-64) recorded the largest increase (Figure 2): the number of 

employed  persons  in  this  group  rose  by  4.3%  in  2017,  pushing  the  employment  rate  up  to 

57.1%,  the  highest  ever  (almost  12  pps  higher  than  in  2008).  The  number  of  young  people 

(15-24) in employment increased slightly faster than in 2016 (1.6% vs. 1.3%). Yet, the youth 

employment rate has not fully recovered from the crisis, as at 34.7% in 2017 it remains 2.7 

3 In the Communication "Strengthening European Identity through Education and Culture" of 14 November 2017 
(COM(2017) 673 final) the Commission indicates the ambition to reduce the benchmark for early school leaving 
to 5% by 2025. 
4  More  details  in  European  Commission  (2018),  "Employment  and  Social  Developments  in  Europe.  Annual 
Review 2018". 

14 

 
 
                                                            
pps below the 2008 level. Nevertheless, in view of a stable activity rate (at 41.7% in 2017 vs. 

41.6% in 2016) the employment gains translated into a continuing decrease in unemployment 

for this age group. Employment increased slightly faster among women than among men in 

2017  (1.5%  vs.  1.3%).  Yet  the  employment  gender  gap  remains  almost  unchanged  at 

11.5 pps, 0.1 pps below 2016 (though significantly lower than the pre-crisis value of 15 pps in 

2008). Although increasing by 1.7 pps at 63% in 2017, the employment rate of non-EU born 

people  aged  20-64  remains  10  pps  lower  than  that  of  native-born.  The  gap  is  higher  for 

women (around 14 pps). 

Figure 2: Employment rates and employment growth across different groups in the EU 

Source: Eurostat, LFS. 

The recovery keeps increasing the number of high skilled workers in the economy. The 

number of people with higher education in employment increased by 2.9% in 2017 (age group 

25-64), while a moderate increase of 0.8% was recorded among medium-skilled workers (i.e. 

those  with  upper  secondary  education).  On  the  contrary,  the number  of  low-skilled workers 

(i.e. with lower secondary education or below) dropped by 0.4%. Since the overall population 

of low-skilled workers aged 25-64 is on the decline (by 2.7% compared to 2016) – as part of a 

15 

 
 
 
 
trend  reflecting  population  ageing  and  higher  educational  attainment  among  younger 

generations – this group's employment rate actually increased from 54.3% in 2016 to 55.6% 

in  2017.  The  gap  between  employment  rates  of  low-  and  high-skilled  workers  slightly 

decreased from 30.5 pps in 2016 to 29.7 pps in 2017, but remains very high and indicative of 

the room for action to increase the employability of people with low education level. Detailed 

trends by Member States are provided in the following sections of the report. 

Temporary employment, as a proportion of total employment, remained almost stable in 

2017, while part-time employment decreased marginally.  Following a similar trend as in 

recent years, the recovery is fostering job creation in both permanent and temporary contracts, 

which  rose  respectively  by  around  2.7  million  and  0.8  million  in  2017  (corresponding  to 

percentage increases by 1.7% and 2.9%). Nonetheless, as a proportion of total employment, 

the  share  of  temporary  employees  remained  almost  stable,  slightly  increasing  by  0.1  pps  to 

14.3% (age group 15-64). For a second year in a row, the proportion of part-time workers (age 

group  15-64)  decreased  marginally  (by  0.1%  to  19.4%  in  2017),  remaining  almost  2  pps 

above the 2008 level. On the upside, as also mentioned above, the share of involuntary part-

time  workers  is  decreasing  significantly  (from  21.1%  in  2016  to  19.8%  in  2017)  though 

remaining  substantial.  Self-employment  (15-64)  over  total  employment  continued  a  slow 

decline, down to 13.7% in 2017 (from 14.0% in 2016 and 14.4% in 2013). 

In  terms  of  sectoral  developments,  employment  continued  to  shift  towards  services.  In 
line  with  the  trend  of  recent  years,  the  largest  number  of  jobs  was  created  in  services5 

(2.8 million additional persons in employment in 2017, or +1.6% compared to 2016; based on 

national  accounts).  From  2008  to  2017,  the  share  of  employment  in  services  in  the  EU 

increased continuously from 70.1% to 73.9%. With an increase by 2%, construction recorded 

the largest increase in employment since the recession, consolidating the recovery  started in 

2015;  however,  the  number  of  employed  persons  is  still  almost  15%  lower  than  in  2008. 

Industry also showed a solid expansion (by 1.5%, the highest rate since 2007). Finally, after a 

long series of declines, employment in agriculture slightly increased by 0.3% in 2017. 

5 Within services, the largest percentage increase was recorded in "information and communication" activities, 
followed  by  "professional,  scientific  and  technical  activities;  administrative  and  support  service  activities" 
(respectively by 3.4% and 2.9% in 2017). On the contrary, "financial and insurance services" recorded a drop by 
0.7%. 

16 

 
 
                                                            
1.2 

Social trends 

The  number  of  persons  at  risk  of  poverty  or  social  exclusion  (AROPE6)7  has 

substantially  declined  in  2017  and  is  now  below  pre-crisis  levels.  The  declining  trend  in 

this indicator continued for a fifth consecutive year in 2017, falling to 113 million persons (or 

22.5%  of  the  total  population)  in  line  with  the  recovery  in  employment  and  the  increase  in 

disposable income. As a result, in 2017 there were 5 million fewer persons at risk of poverty 

or social exclusion in the EU than before the crisis (in 2008), while the decline from the peak 

in  2012  amounts  to  nearly  11  million.  However,  given  the setback  of  the  crisis,  the  Europe 

2020 headline target (20 million fewer people at risk of poverty or social exclusion compared 

to 2008) remains far from reach. The current overall decline in the indicator is driven by all its 

three sub-components, though to a different extent (see below and Figure 3). 

Figure 3: Percentage of population at-risk-of-poverty or social exclusion (AROPE) and 
subcomponents (2005-2017). 

Source: Eurostat, SILC. Note: the legend is explained in footnote 6. 

6 People at risk of poverty or social exclusion (AROPE) are people who are at risk of poverty (AROP) and/or 
experiencing  severe  material  deprivation  (SMD)  and/or  living  in  households  with  very  low  work  intensity 
(VLWI).  
People at risk of poverty are people living in a household whose equivalised disposable income is below 60% of 
the national equivalised median income (this indicator is therefore an income poverty indicator).  
People are severely materially deprived if they live in a household unable to afford at least four of the following 
items: 1) pay rent/mortgage/ utility bills on time; 2) keep home adequately warm; 3) meet unexpected expenses; 
4) eat meat, fish or a protein equivalent every second day; 5) one week annual holiday away from home; 6) have 
access to a car for private use; 7) have a washing machine; 8) have a colour TV; and 9) have a telephone.  
People living in households with very low work intensity (i.e. (quasi-)jobless households) are people aged 0-59 
living  in  a  household  where  working-age  adults  (18-59)  worked  less  than  20%  of  their  total  work  potential 
during the past year. 
7  The  income  statistics  of  EU  SILC refer  to  the  previous  income  year,  with  the  exception of United Kingdom 
(survey year) and Ireland (income of 12 months preceding the survey). 

17 

 
 
 
                                                            
A sharp fall in the number of persons suffering from severe material deprivation (SMD) 

brings  the  figures  to  its  lowest  level  in  recent  history,  reflecting  rising  standards  of 

living. Over 3 million people were relieved of severe material deprivation in the year to 2017, 

bringing  the  overall  number  of  persons  affected  down  to  34.8  million  or  6.9%  of  the  EU 

population (0.6 pps less than in 2017 and below 2008). This decline represents a significant 

improvement  for  a  fifth  year  in  a  row,  reflecting  an  improving  material  situation  of 

households. In spite of these positive developments, a large variation between Member States 

persists (see section 3.4). 

The  record  increase  in  employment  rates  has  contributed  to  reducing  the  number  of 

persons  living  in  quasi-jobless  households  by  3.7  million  in  2017.  As  a  share  of  the 

population aged 0-59, this corresponds to a decrease from 10.5% in 2016 to 9.3% in 2017 – 

below 10% for the first time since 2009. Yet, both the rate and the number of people affected 

remain above pre-crisis levels.  

The percentage of the population at risk of poverty has shown its first decline since the 

crisis.  Following  an  increase  in  the  number  of  people  at  risk  of  poverty  until  2014,  this 

indicator had stabilised in the following two years. In 2017 the rate fell by 0.4 pps to 16.9%, 

or  nearly  2  million  people  –  marking  the  first  year  after  the  crisis  in  which  the  incomes  of 

poor  households  have  risen  faster than  median  incomes.  The  latest  data  from  Eurostat  flash 
estimates8 suggest that this decline in poverty rates is set to continue. However, the at risk-of-

poverty rate for persons living in households with very low work intensity has increased for a 

fourth consecutive year, and is now at a record-high 62.3%. This points to persistent gaps in 

the adequacy of social benefits in several countries and has been identified as a trend to watch 
by the Social Protection Committee9. 

In spite of the overall decline in the share of people at risk of poverty, in-work poverty 

remains high. In 2017, 9.6% of the working population had household income below 60% of 

the national median, a figure that was unchanged from 2016, and which remains well above 

the  2008  figure  of  8.5%.  The  increases  to  date  have  affected  both  part-time  and  full-time 

workers, although the former remain at substantially higher risk of poverty (15.8% as against 

8  EU-SILC data  refer  in  most Member  States  to  incomes  recorded  in  the  previous  year  (i.e.  2016  incomes  for 
SILC 2017, see also footnote 7). Flash estimate statistics published by Eurostat indicate that improvements in the 
at-risk-of-poverty indicator (as well as the S80/S20 ratio) are also expected in most Member States for incomes 
recorded in 2017 (i.e. for indicators published in 2018). 
9 2018 SPC annual report. 

18 

 
 
                                                            
8.0%). The trend has affected in particular younger workers (aged under 30 years) who face a 

higher and increasing risk vis-à-vis workers aged 30 years and over. In-work poverty has been 

identified  as  a  trend  to  watch  by  the  Social  Protection  Committee  both  from  a  short-  and  
long-term perspective10.  

Poverty figures for the most vulnerable people indicate modest improvements, reversing 

previous trends. The poverty gap, which measures how far away from the poverty line those 

at risk of poverty are, fell in 2017. It decreased modestly from 25% to 24.7%, yet remaining 

well  ahead  of  pre-crisis  levels.  This  suggests  that  the  relative  income  position  of  the  most 

vulnerable is slightly improving. For  the unemployed, the poverty risk declined  for  the first 

time since the crisis, yet at 48% it remains near record-high levels. 

Despite  overall  improvements,  the  risk  of  poverty  or  social  exclusion  facing  children 

remains  high.  The  AROPE  rate  for  children  (aged  0-17)  continues  to  decline,  falling  from 

26.4% to 24.5% in 2017, well below the pre-crisis level. However, 62.9% of the children of 

low-skilled  parents  remain  at  risk  of  poverty  or  social  exclusion,  against  only  9%  for  the 

children  of  high-skilled  parents.  For  the  children  of  non-EU  born  people,  the  proportion  of 

those at risk of poverty or social exclusion has been rising throughout the post-crisis period, 

reaching 34.5% in 2017, more than twice the rate facing the children of native-born parents. A 

key driver of child  poverty  is  the growth in  the number of single parent households, whose 

share has increased from 4.4% of the EU population in 2011 to 4.8% in 2016 (but fell to 4.3% 

in 2017). The at-risk-of-poverty rate for children from single parent households is twice the 

average for children overall, a gap that continues to widen.     

Household incomes continue to grow, but at a slower rate than the economy as a whole. 

While the gross disposable income of households (GDHI) rose for a fourth year in a row to 

2017,  and  is  now  well  ahead  of  the  2008  level,  the  annual  increase  still  lags  behind  GDP 

growth (GDHI grew under 1% for the year to 2017, while real GDP per capita rose by 2.2% 

in the same period). This highlights that households' income gains are lagging behind overall 

income growth in the economy. As shown in Section 3.4, gross disposable household income 

per capita, in real terms, remains below pre-crisis levels in a number of Member States. 

Increases in income inequality in post-crisis years have begun to reverse in 2017, though 

not  compensating  yet  for  past  increases.  On  average,  the  richest  20%  of  households  in 

10 2018 SPC annual report. 

19 

 
 
                                                            
Member States have an income that exceeds that of the poorest 20% of households  by over 

five  times.  The  S80/S20  ratio  rose  from  5.0  to  5.2  between  2008  and  2016,  also  driven  by 

poor  labour  market  conditions  and  stagnating  incomes,  especially  in  the  lowest  part  of  the 

distribution. In 2017, this ratio has begun to decline, back to 5.1  on average in the EU. The 

latest Eurostat flash estimates suggest the decline is set to continue. 

20 

 
 
  
 
 
2. 

SNAPSHOTS FROM THE SOCIAL SCOREBOARD 

The European Pillar of Social Rights, established as an inter-institutional Proclamation by the 

European  Parliament,  the  Council  and  the  Commission  on  17  November  2017,  sets  out  a 

number of key principles and rights to support fair and well-functioning labour markets and 

welfare  systems.  It  is  designed  as  a  compass  for  a  renewed  process  of  convergence  among 

Member States towards better socio-economic conditions. 

The  European  Pillar  of  Social  Rights  is  accompanied  by  a  social  scoreboard  to  monitor 
performances and track trends across Member States11. The scoreboard provides a number of 

indicators  (headline  and  secondary)  to  screen  the  employment  and  social  performance  of 

Member States on selected indicators along three broad dimensions, identified in the context 

of  the  Pillar:  (i)  equal  opportunities  and  access  to  the  labour  market,  (ii)  dynamic  labour 

markets and fair working conditions, and (iii) public support / social protection and inclusion. 

Since the 2018 edition, the Joint Employment Report integrates the social scoreboard, whose 

results  (as  concerns  headline  indicators)  are  summarised  in  this  Chapter.  The  analysis  is 

placed in the broader reform context presented in Chapter 3. 

2.1 

The scoreboard explained 

The social scoreboard is  a central  tool for monitoring performance in the  employment 

and  social  domains,  and  convergence  towards  better  living  and  working  conditions.  In 

particular,  it  helps  monitoring  the  situation  of  Member  States  on  measurable  dimensions  of 

the  Pillar,  complementing  the  existing  monitoring  tools,  in  particular  the  Employment 
Performance Monitor and the Social Protection Performance Monitor12. It notably includes 14 
headline indicators that assess employment and social trends at large13: 

11 SWD(2017) 200 final, accompanying the Communication COM(2017) 250 final of 26 April 2017. 
12  The  Employment  Performance  Monitor  (EPM)  and  the  Social  Protection  Performance  Monitor  (SPPM)  are 
yearly reports prepared respectively by the Employment Committee and the Social Protection Committee. They 
identify trends to watch, key employment and social challenges in Member States, and monitor progress towards 
the Europe 2020 employment and poverty reduction targets. 
13 In the 2018 Joint Employment Report, upon request of the Employment Committee and the Social Protection 
Committee (and their Indicator Sub-Groups), two headline indicators in the domain of "dynamic labour markets 
and fair working  conditions"  ("participants in  active  labour  market  policies  per 100 persons  wanting  to  work" 
and  "compensation  of  employees  per  hour  worked,  in  euro")  were  not  included  in  the  overview  table  and  not 
presented  as  Scoreboard  headline  indicators  in  subsequent  analysis,  due  to  technical  concerns.  Following 
discussions,  in  September  2018  the  Committees  have  agreed  replacing  these  indicators  with  alternative  ones 
21 

 
 
 
 
                                                            
-  Equal opportunities and access to the labour market: 

  Share of early leavers from education and training, age 18-24 

  Gender gap in employment rate, age 20-64 

 

Income inequality measured as quintile share ratio - S80/S20 

  At-risk-of-poverty or social exclusion rate (AROPE) 

  Young people neither in employment nor in education or training (NEET rate), 

age 15-24 

-  Dynamic labour markets and fair working conditions: 

  Employment rate, age 20-64 

  Unemployment rate, age 15-74 

  Long-term unemployment rate, age 15-74 
  Gross disposable income of households in real terms, per capita14 

  Net earnings of a full-time single worker without children earning an average 

wage15 

-  Public support / Social protection and inclusion: 

 

Impact of social transfers (other than pensions) on poverty reduction16 

  Children aged less than 3 years in formal childcare 

  Self-reported unmet need for medical care 

  Share of population with basic overall digital skills or above. 

Headline  indicators  are  analysed  using  a  common  methodology  agreed  by  the 

Employment Committee and the Social Protection Committee (see Annex 3 for details). 

This methodology evaluates the situation and developments in Member States by looking at 
levels  and  yearly  changes17  of  each  of  the  headline  indicators  included  in  the  social 

(respectively  "long-term  unemployment  rate"  and  "net  earnings  of  a  full-time  single  worker  without  children 
earning an average wage"). These indicators, which are related  in particular to the Pillar principles on "Active 
support to employment" and "Wages", will be used in the analysis of the current Joint Employment Report.  
14 As demanded by the Committees, this indicator is measured using 'unadjusted income' (i.e. without including 
social transfers in kind) and dropping reference to the use of purchasing power standards (PPS) units. 
15  Levels  of  this  indicator  are  expressed  in  purchasing  power  standards  (PPS)  while  changes  are  expressed  in 
national currency in real terms. To smooth out short-term fluctuations, 3-year averages are used for both levels 
and changes. This indicator should be read and interpreted in conjunction with other indicators, such as the in-
work  poverty  rate,  the  ratio  between  the  fifth  and  the  first  decile  of  the  wage  distribution  (D5/D1)  and  other 
relevant EPM/SPPM and JAF indicators. 
16 This is measured as the difference, among total population, between the share of people at risk of poverty rate 
before and after social transfers. 
17  With  the  exception  of  the  Gross  Disposable  Household  Income,  which  is  measured  as  an  index  number 
(2008=100, thus reflecting a change compared to pre-crisis) and changes in the latest year; and net earnings of a 
22 

 
 
                                                                                                                                                                                          
scoreboard. Levels and changes are classified according to their distance from the respective 

(unweighted)  EU  averages.  Member  States'  performances  on  levels  and  changes  are  then 

combined (by using a predefined matrix) so that each Member State is assigned to one out of 

seven  categories  ("best  performers",  "better  than  average",  "good  but  to  monitor",  "on 

average/neutral",  "weak  but  improving",  "to  watch"  and  "critical  situations").  On  this  basis, 

Table 1 provides a summary of the readings of the scoreboard according to the latest figures 

available for each indicator.  

A  careful  and  non-mechanical  reading  of  the  table  is  warranted.  For  this  purpose,  a 

detailed  analysis  of  the  fourteen  indicators,  including  longer-term  trends  and  additional 

indicators,  when  relevant,  is  presented  in  Chapter  3.  In  addition,  the  forthcoming  country 

reports  will  provide  an  in-depth  analysis  of  all  "critical  situations"  and  additional  socio-

economic and policy background to better qualify country-specific challenges in the context 

of  the  European  Semester.  Together  with  further  analysis  included  in  the  Employment 

Performance  Monitor  and  the  Social  Protection  Performance  Monitor,  this  will  provide  an 

analytical  basis 

for 

the  subsequent  Commission  proposals 

for  Country  Specific 

Recommendations where appropriate. 

2.2 

Evidence from the social scoreboard 

The analysis of the Scoreboard points to a continuing recovery in the labour market and 
social  situation  for  the  EU  as  a  whole18.  On  average  for  the  EU19,  13  out  of  14  headline 

indicators recorded an improvement over the last available year (i.e. 2017 or 2016 depending 

on data availability), with only one (impact of social transfers on poverty reduction) slightly 

deteriorating,  though  in  line  with  a  reduced  impact  of  automatic  stabilisers  in  a  phase  of 

economic expansion.  The most  significant progress  was recorded in  (overall and long-term) 

unemployment rates, which decreased in all Member States in 2017, with only one "critical 

situation"  highlighted.  Developments  in  the  employment  rate  and  the  at-risk-of-poverty  or 

full-time  single  worker without  children  earning  an  average wage, for which  three-years  averages  are used,  in 
agreement with the Employment Committee and the Social Protection Committee. 
18  The  cut-off date  for  the  extraction  of social  scoreboard headline  indicators  is 26th October 2018. An  update 
will be provided in the final version of the Joint Employment Report for adoption by the EPSCO Council. 
19  This  evidence  refers  to  weighted  EU  averages,  except  for  the  indicator  "Net  earnings  of  a  full-time  single 
worker without children earning an average wage" for which unweighted average is used. 

23 

 
 
 
                                                                                                                                                                                          
social  exclusion  rate  were  also  positive  across  the  board,  as  the  large  majority  of  Member 

States recorded an improvement compared to the previous year. 

Most Member States face challenges on at least one headline indicator, but the overall 

count  has  reduced  compared  to  last  year.  Considering  the  three  more  problematic 

classifications altogether, i.e. "critical situation", "to watch" and "weak but improving", most 

Member States  are flagged at least  once  –  with the  exception of Germany, Finland, France, 

the Netherlands and Sweden. Considering "critical situations" only (i.e. indicators whose level 

is  much  worse  than  average,  and  either  not  improving  sufficiently  fast  or  deteriorating 

further),  the  number  of  flagged  Member  States  decreased  from  14  in  the  2018  Joint 

Employment Report (with a smaller set of indicators) to 13 in the current exercise (Estonia, 

Malta and Portugal have left this group, while Hungary and Latvia have joined it). The count 

of  challenges  points  to  an  improvement  across  the  board.  Across  the  14  domains  assessed, 

overall 117 "critical situation", "to watch" or "weak but improving" cases  are identified, i.e. 

about 31% of the total number of assessments (compared to 33% in the 2018 JER); of these, 

39 are "critical situations", corresponding to 10% of all assessments (compared to 13% in the 
2018 JER)20.  

Looking at the three broad dimensions covered by the scoreboard, similarly to the 2018 Joint 

Employment  Report,  problematic  flags  appear  more  frequently  in  the  area  of  "public 

support/social  protection  and  inclusion",  with  an  average  of  9.3  cases  (of  which  3.5 

"critical  situations")  per  indicator.  The  impact  of  social  transfers  on  poverty  reduction 

appears as the most challenging indicator, with flags for 11 Member States (of which 5 in the 

bottom category).  

The dimensions of "equal opportunities and access to the labour market" and "dynamic 

labour  markets  and  fair  working  conditions"  follow,  with  an  average  of  8.6  and  7.4 

flagged  cases  per  indicator  respectively  (3.2  and  1.8  "critical  situations"  each).  In  the  first 

domain, the most flagged indicator is early leavers from education and training (10 times). 

In  the  latter,  net  earnings  of  a  full-time  single  worker  without  children  earning  an 

average wage appears as the indicator with most numerous challenges (12 flags).  

20 The improving trend is confirmed if the two new indicators ("long-term unemployment rate" and "net earnings 
of a full-time single worker without children earning an average wage") are excluded from the count to allow a 
comparison on the same set of indicators. In this case, the overall percentage of "critical situations", "to watch" 
or "weak but improving" cases among total assessments is still 31%, while the percentage of "critical situations" 
slightly increases to 11%. 

24 

 
 
                                                            
As  for  the  last  year,  the  situation  of  Member  States  and  the  severity  of  the  respective 

challenges  vary  widely.  Greece,  Romania  and  Italy  still  present  "critical",  "to  watch",  or 

"weak but improving" assessments on ten or more indicators  – of which "critical situations" 

flagged respectively for 7, 4 and 6 indicators (see Table 1). For these countries, challenges are 

spread  uniformly  across  the  three  domains  (still,  "better  than  average"  performances  are 

flagged  once  for  Greece  and  Italy,  respectively  on  the  early  school  leavers  rate  and  self-

reported unmet needs for medical care, and twice for Romania, on the unemployment rate and 

the  growth  of  gross  disposable  household  income  per  capita).  In  terms  of  overall  count, 

Croatia and Spain (9 challenges each), Bulgaria (8 challenges), Cyprus, Latvia and Portugal 

(6  challenges  each)  follow.  By  contrast,  Netherlands  is  a  "best  performer"  or  "better  than 

average" on 11 headline indicators, followed by Czech Republic and Sweden (10 indicators 

each), Austria, Germany and Slovenia (8 indicators each).  

When  looking  at  equal  opportunities  and  access  to  the  labour  market,  the  largest 

improvements  were  recorded,  on  average,  in  terms  of  at-risk-of-poverty  or  social  exclusion 

and  NEET  rates,  while  progress  has  been  more  muted  as  concerns  early  school  leaving, 

gender employment gap and income inequality (however, the latter indicator shows the first 

decrease in the post-crisis period). When looking by indicator: 

  Spain,  Italy  and  Romania  face  a  "critical  situation"  when  it  comes  to  early  leavers 

from education and training, compared to Croatia, Ireland, Poland and Slovenia as the 

"best performers"; 

  Greece, Italy, and Romania score critical on the gender employment gap, compared to 

Finland, Lithuania and Sweden as "best performers"; 

  Bulgaria,  Spain,  Latvia  and  Lithuania  face  a  "critical  situation"  in  terms  of  income 

inequality compared to the best performance of the Czech Republic, Finland, Slovenia 

and Slovakia;  

  The  situation  as  concerns  the  at-risk-of-poverty  or  social  exclusion  rate  is  critical  in 

Bulgaria  and  Greece,  compared  to  the  Czech  Republic  and  Finland  as  "best 

performers";  

  Cyprus,  Croatia,  Greece  and  Italy  face  a  "critical  situation"  when  looking  at  NEETs 

while  Austria,  Czech  Republic,  Germany,  the  Netherlands,  Slovenia  and  Sweden 

perform the best. 

25 

 
 
Turning to dynamic labour markets and fair working conditions in the EU, on average the 

situation  improved  over  the  last  year  across  all  indicators,  notably  employment  and 

unemployment rates (both overall and long-term), gross disposable household income (GDHI) 

per capita and net earnings of a full-time single worker without children earning an average 

wage. When looking by indicator: 

  Croatia,  Greece,  Italy  and  Spain  face  a  "critical  situation"  when  it  comes  to  their 

employment  rate,  compared 

to 

the  Czech  Republic,  Estonia,  Germany, 

the 

Netherlands, Sweden and the UK as the "best performers"; 

  No  country  scores  critical  on  the  unemployment  rate  (Cyprus,  Croatia,  Greece  and 

Spain are marked "weak but improving", while Italy is "to watch"); on the other hand, 

the Czech Republic scores as "best performer"; 

 

Italy  scores  critical  on  the  long-term  unemployment  rate  (no  "best  performers" 

identified through the methodology, while 14 countries are "better than average")  

  The growth in per capita GDHI is seen as a "critical situation" in Greece and Cyprus, 

compared to Bulgaria and Poland as "best performers";  

  The situation on net earnings of a full-time single worker without children earning an 

average  wage  is  assessed  as  critical  for  Hungary  and  Slovakia,  while  Austria, 

Germany,  Luxembourg,  the  Netherlands  and  the  United  Kingdom  are  the  "best 

performers". 

As regards public support and social protection and inclusion, the situation has improved 

over the last year in terms of childcare availability, self-reported unmet need for medical care 

and  digital  skills  but  it  worsened  in  terms  of  the  impact  of  social  transfers  on  poverty 

reduction, as mentioned above. When looking by indicator: 

  Bulgaria, Greece, Italy, Latvia and Romania face a "critical situation" when it comes 

to the ability of their social transfers to reduce the risk of poverty. This compares to 

Denmark, Finland, Hungary and Sweden as the "best performers";  

  Bulgaria,  the  Czech  Republic,  Greece,  Poland  and  Slovakia  score  critical  on  the 

participation  of  children  aged  less  than  3  to  formal  childcare,  compared  to  France, 

Luxembourg, the Netherlands and Portugal as "best performers"; 

26 

 
 
  Latvia faces a "critical situation" in terms of self-reported unmet need for medical care 

(no  "best  performers"  identified  through  the  methodology,  while  12  countries  are 

"better than average"); 

  Bulgaria,  Croatia  and  Romania  face  a  "critical  situation"  when  looking  at  levels  of 

digital  skills,  while  Finland,  Luxembourg,  the  Netherlands  and  Sweden  perform  the 

best. 

27 

 
 
 
 
Table 1. Summary of headline indicators of the Social Scoreboard  

Note: On 26 October 2018: income quintile ratio, AROPE, impact of social transfers on poverty reduction and self-reported need for medical care not available for IE and 
UK;  GDHI  per  capita  growth  not  available  for  HR  and  MT;  net  earnings  of  a  full-time  single  worker  without  children  earning  the  average  wage  not  available  for  CY; 
individuals' level of digital skills not available for IT. Breaks in series and other statistical flags are reported in Annexes 1 and 2. 

28 

Early leavers from education and trainingGender employment gapIncome quintile ratioAt risk of poverty or social exclusion rateYouth NEET rateEmployment rateUnemployment rateLong-term unemployment rateReal GDHI per capita (2008 = 100)Net earnings of a full-time single worker earning AWImpact of social transfers on poverty reductionChildren aged less than 3 years in formal childcareSelf-reported unmet need for medical careIndividuals' level of digital skillsYear20172017201720172017201720172017201620162017201620172017Best performersHR, IE, PL, SIFI, LT, SECZ, FI, SI, SKCZ, FIAT, CZ, DE, NL, SE, SICZ, DE, EE, NL, SE, UKCZBG, PLUK, NL, LU, AT, DEDK, FI, HU, SEFR, LU, NL, PTFI, LU, NL, SEBetter than averageAT, CZ, EL, LT, LV, NLDK, EE, LU, PT, SI, SKBE, DK, HU, MT, NL, SECY, DE, FR, MT, PL, SE, SI, SKIEAT, BG, LT, PT, SIAT, DE, HU, LU, MT, NL, PL, PT, RO, UKAT, DE, CY, CZ, DK, EE, HR, HU, MT, NL, PL, PT, SE, UKDK, LT, RO, SEBE, FR, SE, DK, IE, FIBE, CZ, FR, NL, PL, SIEE, ES, MT, SIAT, CZ, DE, DK, ES, FR, HU, IT, LU, MT, NL, PLAT, CZ, DE, MT, UKOn averageBE, DE, EE, FI, FR, SE, UKAT, BE, BG, CY, DE, ES, FR, IE, NL, UKCY, DE, EE, FR, HR, LU, PLBE, EE, HU, PTBE, FI, FR, HU, LT, LV, MT, PL, PT, SK, UKCY, FI, FR, HU, IE, LU, LV, MT, PL, SKBE, BG, DK, EE, FI, FR, IE, LT, LV, SE, SI, SKBE, BG, FI, FR, IE, LT, LU, LV, RO, SICZ, EE, DE, FR, FI, HU, LV, NL, SI, SKMT, IT, EL, ESCY, DE, MT, SKCY, DE, FI, IE, IT, LV, UKBE, BG, FI, HR, LT, PT, SE, SKBE, EE, ES, FR, LT, SI, SKGood but to monitorLULVATAT, DK, NLDK, LUDKATBE, DK, SEDKWeak but improvingBG, MT, PTMTEL, IT, ROROBG, ROROCY, EL, ES, HREL, ESLT, EE, RO, BG, LVROEE, ELCYTo watchCY, DK, HU, SKCZ, HR, HU, PLPTES, HR, IT, LT, LU, LVEE, ESBEITSKAT, BE, ES, IE, IT, LU, PT, UKPT, PL, CZ, HR, SIEE, ES, HR, LT, LU, PTAT, HR, HU, LTCY, RO, SIEL, HU, IE, LV, PL, PTCritical situationsES, IT, ROEL, IT, ROBG, ES, LT, LVBG, ELCY, EL, HR, ITEL, ES, HR, ITITCY, ELHU, SKBG, EL, IT, LV, ROBG, CZ, EL, PL, SKLVBG, HR, ROEqual opportunities and access to the labour marketDynamic labour markets and fair working conditionsPublic support / Social protection and inclusion 
 
 
 
Box 1. Benchmarking - state of play  

The  importance  of  benchmarking  as  a  tool  to  support  structural  reforms  and  foster  upward 
convergence  in  the  employment  and  social  fields  was  recognised  by  the  Five  Presidents' 
Report of June 201521 and further underlined in the Reflection Paper on EMU deepening of 
May  201722. The Communication  of 26 April 2017 establishing  a European  Pillar of Social 
Rights23 identified benchmarking as a key vehicle to support the implementation of the Pillar 
within the European Semester. Since then, benchmarking exercises have been developed and 
discussed with Member States in several areas.  

In  particular,  the  Employment  Committee  (EMCO)  and  the  Social  Protection  Committee 
(SPC) have agreed on a common approach in three steps: (1) identification of key challenges 
and a set of high level outcome indicators relevant for the policy area under consideration; (2) 
performance indicators which allow for benchmarking the performance; (3) the identification 
of policy levers, which are accompanied by general principles for policy guidance and, when 
available, by specific indicators. At this stage, reference values for policy levers are not set, as 
the aim is to allow for comparisons across Member States.  

The  benchmarking  framework  on  unemployment  benefits  and  active  labour  market  policies 
was  used  for  the  first  time  in  the  2018  European  Semester.  In  this  context,  a  comparative 
analysis  of  specific  design  features  and  performance  of  unemployment  benefit  systems, 
notably  as  concerns  eligibility  and  adequacy  aspects,  was  included  in  the  2018  Joint 
Employment  Report  and  Country  Reports.  Following  the  endorsement  by  the  Employment 
Committee  (EMCO),  elements  of  the  framework  related  to  the  activation  component  of 
unemployment  benefit  schemes  (e.g.  availability-to-work  conditions  attached  to  receiving 
unemployment  benefits)  and  to  labour  market  services  in  support  of  job  seekers  are  now 
integrated in the European Semester 2019 and are presented in this report.  

Upon endorsement by the Social Protection Committee (SPC), the European Semester 2019 
also  sees  a  full  integration  of  the  benchmarking  framework  on  minimum  income  benefits, 
covering  adequacy,  coverage  and  activation  components  of  minimum  income  schemes, 
including as concerns their relation with in-kind services (healthcare, education and housing). 
Finally, this Semester cycle benefits, for the first time, from the results of the benchmarking 
framework on adult skills and learning, which was agreed with the Employment Committee in 
October 2018. Work is currently ongoing within relevant Committees on possible additional 
benchmarking  frameworks,  such  as  on  pension  adequacy,  to  be  utilised  in  future  Semester 
cycles. 

21  Completing  Europe's  Economic  and  Monetary  Union,  Report  by  Jean-Claude  Juncker,  in  close  cooperation 
with Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin Schulz, 22 June 2015. 
22 COM(2017) 291 final. 
23 COM(2017) 250 final. 

29 

 
 
 
 
 
                                                            
3.  

EMPLOYMENT  AND  SOCIAL  REFORMS 

–  MEMBER  STATES 

PERFORMANCE AND ACTION 

This  section  presents  an  overview  of  recent  key  employment  and  social  indicators  and 

measures  taken  by  the  Member  States  in  priority  areas  identified  by  the  EU  employment 
guidelines24, as adopted by the Council in 2018. For each guideline, recent developments on a 

selection of key indicators are presented, as well as policy measures taken by Member States. 

As  concerns  the  latter,  the  section  draws  on  Member  States’  National  Reform  Programmes 
2018 and European Commission sources25. If not  specified otherwise, only  policy measures 

implemented after June 2017 are presented in the report. An in-depth analysis of recent labour 

market  developments  can  be  found  in  the  Labour  Market  and  Wage  Developments  2018 
report26 and the Employment and Social Developments in Europe Review 2018.27  

3.1   Guideline 5: Boosting demand for labour  

This  section  looks  at  the  implementation  of  the  employment  guideline  no.  5,  which 

recommends Member States to create conditions promoting labour demand and job creation. 

It  first  presents  an  overview  of  unemployment  and  employment  rates  by  Member  State, 

complementing the analysis at EU level made in Chapter 1, to highlight the relevance of the 

job creation challenge across countries. It then looks at self-employment dynamics, as a proxy 

for  entrepreneurship  and  as  a  source  of  employment  growth  per  se  (aspects  of  self-

employment  related  to  new  forms  of  work  are  discussed  in  Chapter  3.3).  Finally,  it 

investigates wage and tax wedge developments as key macroeconomic determinants of hiring 

decisions. Section 3.1.2 reports on policy measures implemented by Member States in these 

areas to promote labour demand, including hiring subsidies.  

24 Council Decision (EU) 2018/1215 of 16 July 2018 on guidelines for the employment policies of the Member 
States. 
25 Including LABREF database, available at http://ec.europa.eu/social/main.jsp?catId=1143&intPageId=3193.  
26  European  Commission  (2018).  Labour  Market  and  Wage  Developments  in  Europe.  Annual  review  2018. 
Luxembourg: 
at: 
Union. 
http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8139&furtherPubs=yes 
27  European  Commission  (2018).  Employment  and  Social  Developments  in  Europe.  Annual  Review  2018. 
Luxembourg: 
at: 
Union. 
http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8110&furtherPubs=yes 

Publications 

Publications 

Available 

Available 

European 

European 

Office 

Office 

the 

the 

of 

of 

30 

 
 
 
                                                            
3.1.1  Key indicators 

The  decline  in  unemployment  accelerated  in  2017.  For  the  first  time  after  the  crisis,  the 

unemployment  rate  decreased  in  all  EU  Member  States.  A  quicker-than-average  drop 

occurred  notably  in  some  Member  States  suffering  from  very  high  unemployment  rates  – 

Greece, Spain, Croatia, Portugal, all experiencing a reduction by 2 pps or more – pointing to a 
clear convergence trend28 towards lower unemployment levels. Nonetheless, a strong decrease 

occurred  also  in  some  low-unemployment  countries  –  by  more  than  1  pp  in  the  Czech 

Republic,  the  Netherlands,  and  Poland.  As  evident  from  Figure  4  (which  looks  jointly  at 

levels and changes according to the agreed methodology for assessing headline indicators of 
the social scoreboard29), the dispersion of unemployment rates remained substantial in 2017, 

with  values  ranging  from  around  3%  in  the  Czech  Republic  to  21.5%  in  Greece.  The 

unemployment rate also remains high in Italy, with only limited improvements compared to 

2016. In spite of the steady decrease since 2013, in many Member States the unemployment 

rate  remains  much  higher  than  in  2008  (Figure  5)  –  especially  in  Croatia,  Greece,  Cyprus, 

Italy and Spain. On the contrary, in Germany, Hungary and Poland the unemployment rate in 

2017 was more than 2 pps lower than before the crisis. 

28 When looking at social scoreboard figures according to the common methodology, the report uses the concept 
of  convergence  in  levels,  or  "beta-convergence".  This  refers  to  the  situation  where  indicators  in  worse-
performing countries improve faster than in best performing ones. It can be assessed by looking at the slope of 
the regression line in the scatterplot of levels against changes. 
29 See Chapter 2 and Annex 2 for details. 

31 

 
 
                                                            
Figure 4: Unemployment rate (15-74) and yearly change (Social Scoreboard headline 
indicator)   

Source: Eurostat, LFS. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred on 
the unweighted EU average. The legend is presented in the Annex.  

Figure 5: Unemployment rate (15-74), multiannual comparison 

Source: Eurostat, LFS. 

32 

 
 
 
 
 
While  employment  rates  registered  strong  increases,  significant  disparities  remain.  All 
Member  States  recorded  increases,  with  the  exception  of  Denmark30  (a  0.5  pp  decrease, 

though  from  a  very  high  level).  As  shown  in  Figure  6,  employment  rates  are  only  partially 

converging:  Member  States  characterised  by  lower  employment  rates  tend  to  experience  a 

somewhat faster growth than average – but the situation remains scattered. Employment rates 

(age  group  20-64)  diverge  widely,  ranging  from  57.8%  in  Greece  to  81.8%  in  Sweden  in 

2017. At the lower end, the employment rate remains much below the EU average in some of 

the countries most hardly hit by the crisis, namely Greece, Croatia, Italy and Spain (flagged as 

"critical  situations").  Nine  countries  are  already  above  the  75%  target,  while  the  six  best 

performers  (Sweden,  Germany,  Estonia,  the  Czech  Republic,  the  United  Kingdom  and  the 

Netherlands are all close to or above 78%).   

30  This  decrease  should  be  interpreted  with  caution  as  employment  statistics  for  Denmark  present  a  break  in 
series in 2017 and 2016 (see also Annexes 1 and 2). A break in series is also flagged for Belgium in 2017. 

33 

 
 
 
 
                                                            
Figure 6: Employment rate (20-64) and yearly change (Social Scoreboard headline 
indicator)  

Source: Eurostat, LFS. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred on 
the unweighted EU average. The legend is presented in the Annex.  

Average employment rates in the EU have been constantly rising since 2013 and are now 

well above the pre-crisis peak.  Hungary and Malta, who had the lowest employment rates in 

the EU in in 2008, have experienced the highest long run increases (+11.8 pps and +13.8 pps 

respectively  in  2017)  and  are  now  slightly  above  the  EU  average.  However,  disparities  are 

still high. In particular, similarly as for unemployment rates, employment rates remain below 

2008  levels  in  those  countries  most  affected  by  the  crisis,  such  as  Greece,  Italy,  Croatia, 

Spain, Cyprus and Ireland (Figure 7).  

34 

 
 
 
 
 
Figure 7: Employment rate (20-64), multiannual comparison 

Source: Eurostat, LFS. 

The  sustained  job  growth  did  not  affect  the  long-term  declining  trend  in  self-

employment.  In  absolute  numbers,  self-employment  fell  by  0.5%  in  2017  (after  a  slight 
increase in 201631). It continued to decline also in relative terms, representing 13.7% of total 

employment  in  2017  (down  from  14.0%  in  2016  and  14.4%  in  2013).  The  share  of  self-

employed men over the total men employed, at 17.2%, remains much higher than for women 

(9.7%). Trends in self-employment are less negative if the primary sector and manufacturing 

are excluded. In particular, self-employment has steadily increased over the last ten years in 

most of the sectors related to services. 

Overall figures are the result of diverging developments across Member States, sectors 

and sub-groups. However the trends in self-employed do not seem linked to performance in 

employment  at  Member  State  or  sectoral  level.  In  terms  of  age  and  education  groups, 

developments  reflect  to  a  large  extent  the  changing  composition  of  the  workforce:  self-

employment kept falling for people aged 15-49 while it increased markedly for people aged 

50-64  and  65  and  over  (+1.2%  and  +4.0%,  respectively).  The  level  of  education  is  also  an 

important factor, as in 2017 the number of self-employed decreased by 3.2% for people with 

up  to  lower  secondary  education  and  increased  by  1%  for  people  with  tertiary  education. 

Finally, an increase in the number of self-employed born outside the EU is recorded. Aspects 

related to self-employment as an atypical form of work are discussed in detail in Chapter 3.3. 

31 Eurostat, LFS. 

35 

 
 
 
 
                                                            
Wage growth remains moderate in most Member States. Nominal wage growth in the EU 

has remained subdued during the recovery, but started picking up in 2017, with compensation 

per employee increasing by 2.1%. Differences across countries are considerable, with wages 

growing  generally  faster  in  Member  States  with  lower  levels  and  in  those  that  are  not 

members  of  the  euro  area.  The  increase  in  nominal  compensation  per  employee  was  the 

highest in Romania (16.0%), Lithuania (9.1%), Hungary (7.9%), Latvia (7.9%) and Bulgaria 

(7.5%), pointing to wage convergence between Eastern and Western Europe. At the low end, 

nominal wages declined in Finland (-1.1%) and Croatia (-1.1%) and remained flat in Spain, 

Italy and Greece.  

In  real  terms,  wage  growth  slowed  down  in  2017  compared  to  2016.  In  the  EU,  real 

consumption wages (i.e. wages adjusted for the change in consumer prices) grew by 0.5% in 

2017,  down  from  1.2%  in  2016.  In  the  euro  area,  real  wages  almost  stagnated  (+0.2%).  A 

decline  was  recorded  in  eight  countries:  Spain,  Italy,  Greece,  Croatia,  Portugal,  the 

Netherlands,  Austria  and  Finland.  The  slowdown  compared  to  2016  was  partly  due  to  the 

increase in consumer prices, which was not matched by the rise in compensations. However, 

even  when  looking  at  real  production  wages  (adjusted  for  the  GDP  deflator),  the  picture  is 

almost  unchanged,  with  real  wage  growth  increasing  only  slightly  in  the  EU  in  2017  (by 

0.7%) and a decline registered in ten countries (Figure 8). 

36 

 
 
Figure 8: Real compensation per employee, HICP and GDP deflator, 2017 annual % 
change  

Source: European Commission, AMECO database. 

In 2017, real wage growth stood below productivity growth in most Member States. This 

trend is also confirmed over a three-year period (Figure 9) and in a longer-term perspective 

(Figure  10).  In  nine  countries  (Belgium,  Cyprus,  Croatia,  Finland,  Greece,  Italy,  the 

Netherlands, Portugal and Spain), real wage growth was negative over the period 2015-2017. 

Also  over  the  longer  term  (2000-2017),  real  wage  developments  have  been  trailing  behind 

productivity on average. In Portugal and Italy, wages are still below 2000 levels in real terms. 

The recent trend is opposite for most of the central and eastern Member States, where, over 

the  last  three  years,  real  wage  growth  (deflated  with  GDP  deflator)  exceeded  productivity 

growth,  partially  as  a  result  of  the  catching-up  process  towards  higher  income  countries.  In 

2017, the largest excess growth of real wages over productivity growth was observed in the 

Baltic Member States, Bulgaria, and Slovakia.  

37 

 
 
 
 
Figure 9: Real compensation per employee and productivity, average growth rates 2015-
2016-2017  

Source:  Eurostat,  National  Accounts  (own  calculations,  from  Labour  Market  and  Wage  Developments  in 
Europe, annual review 2018). 

Figure 10: Wage and productivity developments, 2000-2017 average % changes 

Source: Eurostat, National Accounts (own calculations). 

38 

 
 
 
 
 
Wage  growth  remains  below  what  could  be  expected  on  the  basis  of  current 

unemployment levels. In the recovery, wage growth has been moderate overall, and has not 

appeared  to  react  to  the  fall  in  unemployment  rate  as  in  previous  economic  cycles.  This 

phenomenon  has  been  called  the  apparent  "flattening"  of  the  wage  Phillips  curve,  i.e.  the 

relationship between wage growth and unemployment. As shown for the euro area in Figure 

11, it suggests that wages have become less responsive to the overall unemployment rate in 

the economy. 

Figure 11: Phillips curve for the euro area: growth rate of compensation per employee, 
2000-2017  

Source:  DG  ECFIN  AMECO  database  and  Eurostat,  LFS  (own  calculations,  from  Labour  Market  and  Wage 
Developments in Europe, annual review 2018) 

Moderate nominal wage growth during the recovery can be explained by low inflation, 

low  productivity  growth,  the  effect  of  some  labour  market  reforms  and  remaining 

reserves in the labour market. A significant part of the moderation in nominal wages can be 

explained  by  low  inflation  (1.5%  on  average  during  the  recovery,  between  2010  and  2017, 

compared to  2.2%  in  2000-2007). Meanwhile, real productivity growth increased  somewhat 

(0.7%  on  average  over  2010-2017  as  compared  to  0.4%  pre-crisis)  but  was  coupled  with  a 

significantly higher unemployment rate (11.7% in the post-crisis period as compared to 8.7% 

pre-crisis). Overall, recent estimations suggest that inflation, productivity and labour market 
reserves  explain  much  of  the  recent  wage  moderation  (IMF  201732;  European  Commission 

32 IMF (2017), World Economic Outlook, October 2017. 

39 

 
 
 
 
                                                            
201833).  Latent  labour  market  reserves,  notably  an  increased  share  of  underemployed  part-

time  workers,  may  contribute  to  wage  moderation  in  some  Member  States  with  low 

unemployment rate. 

Net earnings are converging in Europe, with fast growth in Central and Eastern Europe 

and  slow  growth  in  Western  and  Southern  Europe,  especially  in  those  countries  most 

affected by the crisis. Convergence in labour income levels is key to ensure that anyone in 

the  EU  achieves  a  decent  standard  of  living,  as  advocated  by  the  European  Pillar  of  Social 

Rights. Evidence shows that this convergence process is taking place, albeit at a slow pace, as 

large discrepancies still remain across Member States. Taking as a reference a single earner 

without  children  earning  the  average  wage  level,  over  a  three-year  period  (2013-2016)  net 
earnings34  increased  the  most  in  some  countries  characterised  by  the  lowest  levels.  For  this 

reason,  Bulgaria,  Romania,  Latvia,  Lithuania  and  Estonia  are  classified  as  “weak  but 

improving”.  Slovakia  and  Hungary,  while  having  also  experienced  higher  than  average 

increases, are marked as "critical situations" in view of slower progress. At the other end of 

the  spectrum,  growth  in  net  earnings  was  moderate  (ranging  from  0.7%  to  2.1%)  in  all  the 

"best  performers"  (Luxembourg,  the  United  Kingdom,  the  Netherlands,  Germany  and 

Austria). Net earnings decreased or did not grow in Portugal, Greece and Belgium. 

33  European  Commission  (2018).  Labour  Market  and  Wage  Developments  in  Europe.  Annual  review  2018. 
Luxembourg: Publications Office of the European Union. 
34  Net  earnings  levels  are  measured  in  purchasing  power  standards  (PPS)  to  allow  a  meaningful  comparison 
across Member States. The changes are measured in national currency and in real terms. This indicator should be 
read and interpreted in conjunction with other indicators, such as the in-work poverty rate, the ratio between the 
fifth and the first decile of the wage distribution (D5/D1) and other relevant EPM/SPPM and JAF indicators. 

40 

 
 
                                                            
Figure 12: Net earnings and yearly change – average over three years (Social 
Scoreboard headline indicator)  

Source: OECD (own calculations). Period: 2016 levels (3-year average) and average yearly changes 2013-2016. 
Note: Axes are centred on the unweighted EU  average. The legend is presented in the Annex. Member States 
marked  with  an  asterisk  are  those  where  nominal  unit  labour  cost  (NULC)  exceeded  the  threshold  set  by  the 
Macroeconomic Imbalances Procedure (MIP). The MIP scoreboard indicator is the percentage change over three 
years of NULC. The threshold is 9% for the euro area countries and 12% for the non-euro area countries. Data 
not available for Cyprus. 

In-work  poverty  remains  well  above  pre-crisis  levels  and  is  only  slowly  declining.  The 

share of persons who, while being at work, have an equivalised disposable income below the 

risk-of-poverty threshold rose from 8.6% in 2008, to 9.0% in 2013 and to 9.6% in 2017. The 

highest level was recorded in Romania (17.4%), followed by Luxembourg, Spain, Greece and 

Italy – all above 12%. At the other end of the spectrum, the in-work poverty rate is below 5% 

in  Finland,  the  Czech  Republic  and  Ireland.  In-work  poverty  kept  increasing  in  several 

Member States in 2017, including (by more than 0.5 pps) in Hungary, Italy, Latvia, Slovenia, 

Belgium and the Netherlands (see also Chapter 3.4).  

41 

 
 
 
 
Figure 13: In-work at-risk-of-poverty rate, multiannual comparison  

Source: Eurostat. Note: for HR, 2010 instead of 2008 data. For IE and UK, 2016 instead of 2017 data. 

Wage dispersion seems broadly stable in Europe. Wage growth, especially at the bottom of 

the wage scale, plays an important role in reducing income inequalities and in-work poverty. 

Dispersion of gross earnings, measured as the ratio between the fifth and first decile (D5/D1), 

ranged in 2016 from 1.43 in Finland to 1.90 in the Czech Republic. Wage setting institutions 

can have an impact on wage dispersion. In particular, stronger collective bargaining tends to 
be  associated  with  a  lower  earnings  inequality  (European  Commission,  201835).  Collective 

bargaining coverage varies widely across Europe, reflecting different national traditions and 

institutions. In 2015, the percentage of employees with the right to bargain ranged from 98% 

in Austria to 7.1% in Lithuania. 

In  most  Member  States,  statutory  minimum  wages  set  a  lower  bound  to  the  wage 

distribution. Minimum wages may increase labour market participation of certain groups and 

support  aggregate  demand  by  increasing  the  income  of  low-wage  earning  families,  which 

have a higher propensity to consume. At the same time, minimum wages increase the cost of 

hiring  low-wage  workers,  thereby  potentially  harming  the  employment  opportunities  of 

groups typically earning low wages (e.g. young and low-skilled workers), depending on the 

structure of the economy and the macroeconomic situation. Statutory minimum wages set at a 

national level exist in most Member States, with the exception of Austria, Cyprus, Denmark, 

35  European  Commission  (2018).  Labour  Market  and  Wage  Developments  in  Europe.  Annual  review  2018. 
Luxembourg: Publications Office of the European Union. 

42 

 
 
 
 
                                                            
Finland, Italy and Sweden. For international comparison, the absolute level of the minimum 

wage  is  not  a  very  useful  measure  because  it  does  not  take  into  account  cross-country 

differences  in  labour  productivity  and  prices.  It  is  therefore  more  useful  to  look  at  the 

minimum  wage  relative  to  a  country's  average  or  median  wage.  Figure  14  shows  the 

minimum wage as a percentage of the median wage in EU Member States, as calculated by 

the  OECD.  The  highest  minimum  wages,  as  a  ratio  to  the  median,  are  found  in  France, 

Slovenia,  Portugal,  Romania,  and  Luxemburg.  The  lowest  levels  are  observed  in  the  Spain, 

Czech  Republic,  Estonia,  the  Netherlands,  and  Ireland.  As  the  potential  impact  on  both 

employment and living conditions is higher when a large share of the workforce is covered by 

the minimum wage, this indicator should also be taken into account in the discussion of policy 

options  at  national  level.  Targeted  measures  to  reduce  in-work  poverty,  such  as  in-work 

benefits, should also be considered. 

Figure 14: Minimum wages as proportion of the median and average earnings of full-
time workers (2017) 

Source: OECD. Notes: AT, CY, DK, FI, IT and SE do not have a statutory national minimum wage. For BG, HR 
and MT no information is provided by the OECD. Eurostat data indicates that, in 2017, the monthly minimum 
wage as a proportion of the mean value of monthly wages was 47.8% in BG, 40.6% in HR and 43.6% in MT 
(Industry, Construction and Services; not comparable to OECD figures).   

The  tax  burden  on  labour  in  Europe  has  gradually  decreased  in  recent  years,  but 

significant differences remain across Member States.  In 2017, the tax wedge for a single 

worker earning the average wage ranged from less than 30% in Ireland and Malta to around 

43 

 
 
 
 
 
50%  in  Belgium,  Germany,  Hungary,  Italy,  France  and  Austria.  For  lower  income  workers 

(defined as those earning 67% of the average wage), the tax wedge ranged from around 20% 

in Malta and Ireland to more than 45% in Belgium, Hungary and Germany. Different country 

patterns emerge with respect to the progressivity of tax rates and the redistributive effect of 

the tax system (see section 3.4). In 2017, the most significant reductions in the tax wedge for 

single workers earning the average wage occurred in Hungary (-2.1 pps), Luxembourg (-1.8 

pps) and  Finland (-1.2 pps), while the largest increase was in  Bulgaria (+0.6 pps). Between 

2013 and 2017 the non-weighted average tax wedge decreased by 0.5 pps in the EU (and by 

0.8  pps  for  low-income  workers,  with  important  reductions  in  Italy,  Hungary,  France, 

Belgium,  Romania  and  the  Netherlands).  Over  the  same  period,  there  has  been  some 

convergence in the level of the tax wedge, with the difference between the highest and lowest 

tax  wedge  at  average  wage  level  decreasing  by  2.1  pps,  and  by  2.9  pps  for  lower  income 

workers. This is principally due to large reductions in some of the countries experiencing the 

highest  rates  (Belgium,  Austria,  Hungary,  as  well  as  Italy  and  France,  but  limited  to  lower 

income  workers).  Large  reductions  in  the  tax  wedge  were  also  seen  in  Romania  and  the 

Netherlands.  Increases  in  the  tax  wedge  over  the  same  period  were  less  pronounced,  but 
affected particularly lower income workers in the Czech Republic, Slovenia and Portugal36.  

36 More information on recent trends including on different income groups can be found in: Tax Policies in the 
European Union – 2018 Survey, European Commission, DG TAXUD. 

44 

 
 
                                                            
Figure 15: Tax wedge on labour, level in 2017 and change 2013/2017 

Source:  Tax  and  benefits  database,  European  Commission/OECD.  Note:  data  are  for  single  earner  households 
(no children). No recent data available for Cyprus. Data updated on 11 April 2018. 

3.1.2  Policy response 

Several  Member  States  resorted  to  employment  subsidies  for  job  creation,  although 

some scaling down is occurring as labour market conditions improve. Most measures in 

this  area  target  specific  groups  facing  labour  market  integration  problems  (e.g.  youth,  older 

people,  long-term  unemployed,  migrants,  etc.)  and  consist  of  financial  incentives  to 

employers  for  hiring  targeted  workers.  Targeted  hiring  subsidies  were  introduced  or 

confirmed  by  several  Member  States  (more  details  to  be  found  in  section  3.2).  A  few 

45 

 
 
 
 
 
countries  also  adopted  hiring  subsidies  for  a  wider  public,  i.e.  without  or  with  looser 

eligibility conditions, usually with the aim of promoting open-ended employment. In Greece, 

additional  cycles  of  public  works  were  launched  in  2017  in  51  municipalities  and  new 

programmes are under preparation; furthermore, a new programme of public works in forest 

fire  protection  was  launched  in  May  2018.  In  October  2017,  Greece  also  adopted  a 

programme  subsidising  wages  of  workers  under  contracts  for  provision  of  independent 

services in case they are hired as employees. Finally, a programme of subsidies to businesses 

for  the  employment  of  15,000  unemployed  people  aged  30-49  was  recently  launched.  In 

France, subsidised contracts declined further in 2018 from  310,000 to 200,000 and are now 

limited to the most vulnerable people in the non-profit sector, including young people and the 

long-term unemployed. As of 2018, existing schemes of subsidised contracts were reviewed 

and  renamed  Parcours  Emploi  Compétence,  increasing  their  counselling  and  training 

dimension.  In  this  context,  a  targeted  hiring  premium  called  Emplois  francs  for  hiring 

jobseekers  from  most  deprived  urban  areas  (Quartiers  politique  de  la  ville)  is  being  tested 

since April 2018 in ten areas, with no other condition than being a jobseeker resident in the 

area. Moreover, in the context of the new Poverty Plan, additional measures for labour market 

integration  of  people  with  social  and  employment  difficulties  (Insertion  par  l’activité 

économique)  have  been  decided.  Italy  introduced  a  structural  reduction  of  contributions  for 

employers hiring young people or long-term unemployed in Southern regions on a permanent 

basis or under apprenticeships. Portugal put in place a set of financial incentives to permanent 

hiring, in the form of partial exemptions of social security contributions for certain vulnerable 

groups (young people, long-term unemployed, older people). In Hungary, the ESF contributes 

to enhancing the employment potential of social enterprises through incentives and subsidies 

for job creation.  

Some  Member  States  are  taking  action  to  promote  entrepreneurship  and  start-ups.  In 

Greece, subsidies are granted for a first-time hiring of employees by young self-employed or 

enterprises run by young people. In Latvia, a new law sets the main principles and working 

arrangements  of  social  enterprises.  Support  to  approximately  200  social  enterprises  will  be 

provided.  Moreover,  the  turnover  threshold  for  payers  of  the  microenterprise  tax  has  been 

reduced  from  EUR  100,000  to  EUR  40,000,  keeping  a  single  rate  of  15%  of  which  80%  is 

diverted towards state insurance mandatory contributions. In Hungary, since autumn 2017, a 

loan  facility  (that  can  be  combined  with  several  other  grant  instruments)  is  available  to 

support individuals to become entrepreneurs or to social enterprises to promote the expansion 

46 

 
 
of their market activities. In Poland, the government has adopted a draft law to reduce social 

security  contributions  for  small  business  owners,  so-called  small  ZUS  contributions.  In 

Slovakia, new legislation has been adopted on the conditions for the public support to social 

economy  and  social  enterprises.  In  Finland,  as  of  2018,  it  is  possible  to  receive  the 

unemployment benefit in the form of a grant for starting-up a new business and while working 

as a part-time entrepreneur. Moreover, discussions are ongoing on how to make easier for the 

unemployed to set up companies. Steps have also been taken in many Member States to make 

sure  that  self-employed  enjoy  adequate  social  rights  (see  section  3.3  on  labour  market 

segmentation). 

Some Member States reduced labour costs by decreasing the tax wedge, often targeting 

the  lowest  incomes.  The  tax  wedge  was  tackled  mainly  for  low-income  earners,  through 

reforms focused on personal income taxation, often by increasing tax allowances (i.e. the tax-

free  amount  of  income)  or  introducing  progressivity  in  the  overall  system.  For  instance,  a 

major  reform  was  adopted  in  Lithuania,  amending  the  Law  on  Personal  Income  Tax  (PIT), 

introducing  progressivity  instead  of  the  previous  flat  rate  and  increasing  the  tax-exempt 

amount of income. Similarly, in Latvia a major tax reform includes the replacement of a flat 

23% personal income tax rate with a progressive system. Non-taxable allowances were also 

increased. Estonia also introduced non-taxable allowances. The Netherlands announced a PIT 

reform to be implemented over the course of 2019 and 2020. This includes a reduction in the 

number of tax brackets from four to two, alongside an increase in the  general tax credit and 

the  earned  income  tax  credit.  The  reform  is  expected  to  reduce  the  overall  tax  burden  on 

labour,  in  particular  at  middle  to  higher  income  levels.  In  Romania,  the  flat  PIT  rate  was 

reduced  from  16%  to  10%  from  2018,  alongside  major  changes  to  the  design  of  social 

security contributions. Portugal introduced PIT reforms intended to reduce the tax burden on 

low  to  middle  income  earners;  including  an  increase  in  the  number  of  tax  brackets.  Other 

Member States introduced reforms with a narrower scope. For instance, in Malta, an income 

tax rebate on employment income between EUR 40 and EUR 68 for people earning less than 

EUR 60,000 per year was adopted. The United Kingdom increased the personal allowance to 

£11,850  (about  EUR  13,400)  per  year  and  the  threshold  for  the  higher  rate  from  £45,000 

(about  EUR  50,850)  to  £46,350  (about  EUR  52,400).  In  Denmark,  the  2018  tax  agreement 

strengthens the incentive to work full-time, in particular targeting unemployed and part time 

workers.  In  Cyprus,  The  Child  Benefit  Law  was  modified  to  increase  the  eligible  income 

threshold by EUR 5,000 for every additional child after the first two.  

47 

 
 
Some  Member  States  also  intervened  on  the  tax  wedge  through  reduction  in  social 

security  contributions.  In  France,  the  transformation  of  the  tax  credit  for  employment  and 

competitiveness  into  a  direct  reduction  of  social  security  contributions  on  wages  up  to  2.5 

times  the  minimum  wage  is  to  be  implemented  in  2019  (complemented  by  strengthened 

reduction  for  lower  wages,  postponed  to  October  2019).  In  Croatia,  the  base  on  which  the 

employer contribution for social security is calculated was cut by 50 % for those workers that 

have  been  employed  for  a  period  of  more  than  12  months  on  the  minimum  wage.  Belgium 

adopted  a  reduction  of  social  security  contribution  for  some  types  of  shift  work  in  the 

construction sector. More generally, the profit participation scheme in the private sector has 

been  replaced  by  a  new  premium  (an  amount  or  a  percentage  of  the  salary),  which  cannot 

exceed  30%  of  the  total  gross  salary.  The  employer  is  exempt  from  social  contributions  on 

these premiums, while the employee should pay a solidarity contribution of 13.07%.   

Wage setting frameworks have been the object of major reforms over the past years. In 

Greece,  after  the  exit  from  the  ESM  Programme  in  August  2018,  two  collective  bargaining 

principles,  suspended  in  2011,  are  reintroduced:  the  possibility  to  administratively  extend 

sectoral  agreements  to  non-signatory  parties  and  the  favourability  principle  (in  case  of 

conflicting  collective  agreements,  e.g.  sector  and  firm  level,  the  more  favourable  for  the 

worker  prevails).  In  Croatia,  the  draft  proposal  for  the  Act  on  Wages  in  Civil  Service 

determined the framework for the payment class system and payment grades, as well as for 

assessing work efficiency. France, building on previous reforms, further defined the perimeter 

of each level of collective bargaining. In the future, sector level bargaining will prevail over 

national labour law for setting framework and conditions of use of fixed-term, project-based 

contracts  and  trial  period  (see  also  Chapter  3.3).  Agreement  at  company-level  can  be  less 

favourable  than  at  branch-level,  with  the  exception  of  13  defined  areas  of  bargaining, 

including sectorial minimum wages, while branch-level agreements apply if no agreement is 

reached  at  company-level.  Moreover,  majority  agreements  at  company-level  to  preserve 

employment  (accords  de  competitivité)  are  now  extended  beyond  working  time  conditions 

and also include remuneration, also allowing companies to dismiss employees that refuse such 

agreements  on  real  and  serious  grounds.  In  Italy,  in  March  2018  an  agreement  among  the 

main  trade  unions  and  the  employers'  organisation  paved  the  way  for  a  strengthening  of 

collective bargaining, by defining criteria for measuring representativeness of social partners’ 

associations. In Cyprus, a new agreement on the Cost of Living Adjustment index came into 

force in 2018, leading to limited increases in wages and defining criteria on the frequency and 

48 

 
 
nature  of  periodical  adjustments.  In  Latvia,  new  conditions  for  overtime  pay  are  being  set, 

with the involvement of social partners, jointly with negotiations on sectoral minimum wages. 

In  Portugal,  a  set  of  measures  has  been  agreed  with  social  partners  (and  are  now  being 

discussed in Parliament) to improve the scope of collective bargaining. In particular, "banks 

of  hours"  would  not  be  agreed  on  an  individual  basis  anymore,  but  as  part  of  collective 

bargaining or group agreements, to be reached after worker’s consultation (see also Chapter 

3.3). In Spain, social partners reached in June 2018 a preliminary wage agreement for 2018, 

with  a  general  2  %  wage  increase  (slightly  above  the  expected  inflation  rate),  plus  another 

1 % depending on the results, productivity and absenteeism rates of the firm/ sector. Romania 

made  wage  bargaining  compulsory  for  all  companies.  Ireland  introduced  the  possibility  for 

collective  bargaining  for  certain  categories  of  self-employed,  Slovakia  reintroduced  the 

extension  of  higher  level  collective  agreements  under  specific  conditions  to  the  non-

participating employers without their  consent. 

As  labour  market  conditions  improve,  minimum  wages  have  been  increased  in  several 

countries, while steps are also taken to make  minimum wage setting frameworks more 

predictable. Statutory minimum wages increased in all of the countries where changes took 

place  between  2017  and  2018,  with  the  exception  of  Germany,  Greece,  Luxembourg  and 
Belgium, where there was a decline in real terms37. In recent years, expert groups have been 

involved in minimum wage-setting in a growing number of countries, including Germany and 

Ireland.  Malta  will  set  up  such  a  group  in  2018  and  a  possible  involvement  of  experts  is 

discussed in Bulgaria and Romania. Estonia adopted a EUR 30 increase of minimum wage in 

2018 to reach EUR 500, while anchoring the formula for future increases to official forecasts 

of labour productivity and economic growth. Ireland increased the National Minimum Wage 

by 30 cent to EUR 9.55 per hour, following the advice of Low Pay Commission, which also 

took  into  account  competitiveness  development  and  the  impact  on  employment.  In  Spain,  a 

law (agreed with the social partners) increased the minimum wage in 2018 by 4% compared 

to 2017 and further increases have been proposed for 2019. In Croatia, besides increasing the 

minimum  wage  level  and  reducing  the  health  insurance  contributions  paid  by  employers,  a 

new  regulation  stipulates  that  additional  earnings  (from  overtime  work,  night  work  or  work 

during holidays) shall be excluded from the definition of minimum wage. Latvia introduced a 

minimum wage increase to EUR 430 per month, up from EUR 380, as of 2018. In Hungary, 

the  minimum  wage  was  raised  by  8%  to  HUF  138,000,  approximately  EUR  440,  in  2018 

37 Eurofound (2018) Statutory minimum wages 2018. 

49 

 
 
                                                            
(+12%  for  skilled  workers).  In  Slovakia,  as  of  1  January  2019,  the  minimum  wage  will  be 

increased  to  520  EUR,  up  from  EUR  480.  The  United  Kingdom  raised  the  national  living 

wage  (to  £7.83  per  hour,  about  EUR  6.9)  in  April  2018,  as  well  as  the  national  minimum 

wage  for  young  workers.  The  minimum  wage  for  young  workers  was  also  increased  in  the 

Netherlands,  while  Germany  introduced  a  minimum  wage  for  temporary  agency  workers. 

Finally, Bulgaria adopted the Law on the Ratification of ILO Convention 131, with a view to 

achieve a consensus with the social partners on the development of a transparent mechanism 

for setting the minimum wage. 

50 

 
 
 
 
3.2. Guideline  6:  Enhancing  labour  supply  and  improving  access  to  employment,  skills 

and competences 

This  section  looks  at  the  implementation  of  the  employment  guideline  no.  6,  which 

recommends  to  Member  States  to  create  conditions  to  promote  labour  supply,  skills  and 

competences. It presents indicators about educational and training attainment, outcomes and  

impact  on  skills  development  and  the  employability  of  the  workforce.  It  then  goes  through 

labour market outcomes for various groups underrepresented in the labour market (e.g. young 

people,  older  workers,  women,  people  with  a  migrant  background  and  people  with 

disabilities).  Section  3.2.2  reports  on  policy  measures  of  Member  States  in  these  areas  and 

measures targeted at those  groups. 

3.2.1  Key indicators 

The share of early leavers from education and training has continued to decrease over 

the years, although the downward trend has slowed down recently and large differences 

persist among the Member States. Overall, the average early school leaving rate in the EU 

decreased from 14.7% in 2008 to 11.9% in 2013 and further to 10.6% in 2017. The situation 

has remained almost stable in comparison with the previous year, when the EU average was 

10.7%.  Eighteen  Member  States  have  reached  the  EU  target  value  (<  10%),  with  Germany 

(10.1%), the United Kingdom (10.6%) and Estonia (10.8%) very close to meeting it. A certain 

degree  of  convergence  among  Member  States  in  terms  of  recent  trends  is  visible  in  2017 

(Figure 16), with significant decrease in the early school leaver rates (by more than 1 pp) in 

Portugal,  Malta  and  Bulgaria  (all  flagged  "weak  but  improving")  but  also  some  major 
increases in Slovakia (+1.9 pps), Luxembourg (+1.8 pps), Denmark38 (+1.6 pps) and Cyprus 

(+1 pp). According to the social scoreboard classification, in spite of some improvement the 

situation remains "critical" in Spain (18.3%) and Romania (18.1%) as well as in Italy (14%) 

where the rate has slightly increased. 

38  This increase should be interpreted with caution as Denmark presents a break in series in 2017 and 2016 (see 
also Annexes 1 and 2). Breaks in series are also flagged for Belgium and Malta in 2017. 

51 

 
 
 
 
                                                            
Figure 16: Early leavers from education and training (% of population aged 18-24) and 
yearly change (Social Scoreboard headline indicator) 

Source:  Eurostat.  Period:  2017  levels  and  yearly  changes with  respect  to  2016.  Note: Axes  are  centred  on  the 
unweighted EU average. The legend is presented in the Annex. 

Remarkable long-term improvements have been registered in most EU Member States, 

especially  in  those  previously  showing  particularly  high  shares  of  early  school  leavers. 

From 2008 to 2017, both Ireland and Greece have been able to significantly reduce their early 

school leaver rates, by 6.6 and 8.4 pps respectively, and they are currently well below the EU 

target value. At the same time, Spain (18.3%) and Portugal (12.6%) have drastically reduced 

their  early  school  leaver  rates  by  13.4  and  22.3  pps  respectively  since  2008,  although  they 

have not reached the target yet. Among countries with high levels of early school leaver rate, 

only  Romania  does  not  show  any  major  development  across  the  years  while  Slovakia 

experienced  a  sizeable  increase  of  3.3  pps,  although  it  still  remains  below  the  EU  headline 

target in 2017 (Figure 17). 

52 

 
 
 
 
Figure 17: Early leavers from education and training, 2008-2017 (%) 

Source: Eurostat, online data code: [edat_lfse_14]. 

There are still important differences in terms of early school leaving rates between men 

and women and between native-born and non-EU born people. While on average in the 

EU 8.9% young women left school early in 2017, the ratio for men was 12.1%. This gender 

gap  is  particularly  pronounced  in  Denmark,  Luxembourg,  Italy,  Portugal,  Malta,  Estonia, 

Latvia,  and  Spain  (more  than  5  pps),  with  Bulgaria,  Hungary  and  Slovakia  being  the  only 

Member States where there are lower early school leaver rates for men than for women. At 

the  same  time,  the  early  school  leaving  rates  are  much  higher  among  non  EU-born  than 

among  native-born  pupils.  In  2017,  the  EU  average  among  the  native-born  was  9.6%; 

however for the non-EU born it was twice as high. The early school leaver rates of non EU-

born  are  particularly  low  in  Ireland,  Luxembourg  and  the  Netherlands  –  all  well  below  the 

10% benchmark – while they are extremely high in Spain (31.9%) and Italy (30.1%).  

After several years of steady progress, the share of low achievers39 in basic skills among 

15  year-olds  is  on  the  rise.    The  2015  OECD  Programme  for  International  Student 

Assessments (PISA) shows that on average in the EU the share of pupils who perform below 

the baseline level is around 20%, with 19.7% in reading, 22.2% in mathematics and 20.6% in 
science.  Compared  to  the  previous  PISA  round  in  201240,  the  situation  has  worsened  in  all 

three  domains:  by  1.9  pps  in  reading,  0.1  pp  in  mathematics,  and  4  pps  in  science.  Low-

39 PISA defines “low achievers” as those 15-year-old students who in basic skills score below the baseline level 
of proficiency that is required to participate fully in modern society (i.e. level 2).  
40 The OECD's Programme for International Student Assessment (PISA) survey of basic competences of 15 year-
old is conducted every three years. 

53 

 
 
 
 
                                                            
achievers  deserve  additional  support  because  they  are  those  more  at  risk  of  future 

unemployment and social exclusion later on in life. In 2015, the percentage of students with 

low  achievement  in  mathematics  in  the  EU  was  22.2%,  with  striking  differences  among 

Member  States.  Whereas  Estonia,  Finland,  Denmark  and  Ireland  featured  less  than  15%  of 

low achievers in mathematics, Cyprus, Bulgaria, Romania, Greece and Croatia struggled with 

more  than  30%  of  students  who  failed  to  reach  basic  proficiency  levels  in  mathematics 

(Figure 18). 

Figure 18: Percentage of low achieving students in mathematics, 2015 

Source:  OECD.  Note:  Countries  are  ordered  by  low  to  high  share  of  low  achievers  in  mathematics.  EU  weighted  average 
calculated by DG EAC. 

Educational  outcomes  are  strongly  influenced  by  students’  socio-economic  status  and 

migrant  background.  Students  with  lower  socio-economic  status  or  with  a  migrant 

background  are  overrepresented  among  the  group  of  low  achievers  and  struggle  to  obtain 

baseline  proficiency  in  all  three  domains.  A  closer  look  at  those  students  who  reached  the 

baseline levels of proficiency in all three domains against unfavourable situations  shows that 

the performance gap between native and foreign born students is of 23 pps on average in the 

EU,  with  native  students  performing  better  in  all  the  Member  States,  except  for  Malta  (as 

shown in Figure 19). Very significant differences are registered in Finland, Sweden, Austria, 

Germany and France (between 35 and 40 pps), while the performance gap is below 15 pps in 

Cyprus, the United Kingdom and Portugal. Low educational outcomes and inequalities linked 

to socio-economic background represent major obstacles to human capital improvement, with 

potential knock-on effects on skills levels.  

54 

 
 
 
Roma inclusion in education remains a challenge, due to several factors, including school 

segregation,  non-inclusive  teaching  and  barriers  induced  by  severe  poverty  or  housing 

segregation.  Notwithstanding  efforts  to  increase  participation  rates  and  reduce  drop-out, 

significant issues remain in promoting ethnically-mixed schools and desegregation measures. 

To be noted also that a significant number of Roma children in Hungary, Bulgaria, Romania, 

and Slovak Republic live in deep poverty without access to basic public utilities. 

Figure 19: Percentage of students attaining baseline proficiency by migrant background, 
2015 

Source: OECD (2018): The Resilience of Students with  an Immigrant Background: Factors that Shape Well-Being, Figure 
3.7. 
Notes:  Statistically  significant  differences  are  shown  next  to  country/economy  name.  Only  countries  with  valid  values  for 
immigrant students are shown. For the EU average, this number refers only to the subset of countries/economies with valid 
information on both groups of students. Students who attain baseline academic proficiency are students who reach at least 
PISA proficiency level two in all three PISA core subjects – math, reading and science. Countries and economies are ranked 
in descending order of the percentage of first-generation immigrant students reaching baseline levels of proficiency in PISA 
core domains. 

The  proportion  of  30-34  year  olds  who  successfully  complete  tertiary  education 

continues to increase in the EU and the 40% headline target has almost been reached. In 

the EU, 39.9% of the 30-34 year-old population held a tertiary degree in 2017, as a result of a 

gradual  increase  over  the  last  years.  Tertiary  educational  attainment  rose  in  most  of  the 

Member  States  between  2014  and  2017.  Only  in  Croatia,  Hungary  and,  to  a  lesser  extent, 

Spain  and  Finland,  the  proportion  of  the  population  with  a  tertiary  qualification  decreased 

over  the  same  period.  By  contrast,  there  was  a  remarkable  growth  of  7.4,  6.5  and  6  pps  in 

Slovakia,  Greece  and  Czech  Republic,  respectively.  Among  the  countries  that  have  tertiary 

attainment rates below 40%, only Romania, Italy and Croatia have not reached 30% (Figure 

55 

 
 
 
 
20).  Overall,  15  out  of  the  28  Member  States  have  met  their  respective  national  targets  in 

2017. 

Figure 20: Tertiary educational attainment, 2008, 2013, 2017 and EU2020 target  

Source: Eurostat, LFS [edat_lfse_03]. The indicators cover the share of the total population aged 30-34 having successfully 
completed tertiary education (ISCED 5-8). Break in series in 2014 due to the introduction of the new ISCED classification;  
2017 data for LU are unreliable because of the small sample size. 

Women  show  a  higher  tertiary  attainment  rate  than  men  and  important  gaps  exist 

between  native  and  non-EU  born  people.  In  2017,  44.9%  of  women  aged  30-34  year  old 

held a higher education qualification, against a 34.9% of men. This gap has increased over the 

past  15  years  and  is  particularly  significant  in  Latvia,  Lithuania,  and  Slovenia,  where  the 

tertiary attainment of women is more than 20 pps higher than that of men. At the same time, 

in almost all Member States the share of people born within the country or within the EU is 

higher  than  the  share  of  those  born  outside  the  EU.  On  average  this  gap  amounts  to  about 

5.5 pps, pointing to persistent challenges in terms of equity, access and the social dimension 

of higher education. 

About  one  third  of  young  adults  in  the  EU  hold  a  VET-related  qualification.  In  2016, 

33% of young adults within the age group 30-34 acquired an upper-secondary qualification of 

a vocational orientation. As shown in Figure  21, this share was more than 40% in countries 

such as Slovakia, Hungary, Austria, Romania, Germany, Czech Republic and Croatia, whose 

model  of  transitions  from  education  to  employment  is  strongly  rooted  in  the  vocational 

56 

 
 
 
 
 
education  system.  On  the  contrary,  the  share  was  comparatively  lower  (less  than  20%)  in 

countries  whose  model  is  more  centred  around  tertiary  education  (e.g.  Lithuania,  Sweden, 

Cyprus  and  Ireland)  or  with  overall  comparatively  lower  diffusion  of  direct  labour  market 

relevant qualifications (e.g. Malta, Portugal, Spain, Luxembourg and Greece). 

Figure 21: Education to employment: transition pathways and systems, 2016 

Source: Eurostat, LFS. Online data code: [lfso_16feduc]. 
Note:  Non-VOC  qualifications  includes  qualifications  at  ISCED  levels  0-2  or  a  medium-level  qualification 
(ISCED 3-4) of a general orientation; ISCED 3-4 VOC are qualifications at a medium (ISCED 3-4) level with a 
vocational orientation; ISCED 5-8 includes a high level of education qualifications 

Not  everyone  gets  an  equal  chance  to  acquire  the  skills  and  qualifications  that  are 

valuable in the labour market. In some countries, more than half of the young people aged 

30-34 report not to have a qualification – be it vocational or academic – clearly linked to the 

labour market. This has an impact in terms of integration in the labour market. For example 

(as  shown  in  Figure  22,  while  those  with  VET  and  higher  education  qualifications  achieve 

employment  rates  around  or  above  80%,  less  than  70%  of  those  with  an  upper-secondary 

diploma  of  a  general  orientation  are  in  employment  after  the  age  of  25.  Those  without  an 

upper-secondary  diploma  are  even  more  disadvantaged,  with  less  than  60%  in  employment 

after age of 25.  

Having  a  labour  market  relevant  qualification  –  be  it  academic  or  vocational  –  is 

increasingly  important  to  adapt  to  a  rapidly  changing  economy  and  to  address  the 

demand  for  high  skills.  The  employment  rate  of  recent  graduates  with  a  tertiary  degree  in 

57 

 
 
 
2017  was  84.9%  and  was  0.9  pps  higher  than  the  overall  employment  rate  of  working-age 

adults  with  the  same  educational  attainment.  Only  in  a  few  Member  States  (Italy,  Greece, 

Croatia,  Cyprus,  Slovenia  and  Spain),  recent  tertiary  graduates  are  still  disadvantaged, 

although the situation in all those countries has improved, with the exception of Croatia. Not 

far  behind,  the  employment  rate  of  recent  graduates  with  a  medium-level  vocational 

qualification was 76.6%, 5.7 pps higher than the overall employment rate of the working-age 

adults  with  medium-level  educational  attainment,  pointing  to  an  employment  premium  for 

recent  VET  graduates.  Conversely,  the  employment  rate  of  those  with  only  a  medium  level 

general qualification was 64.1%. Young adults who only had a low-level qualification were 

further disadvantaged in the labour market with an employment rate of 56.4% in 2017.  

Figure 22: Employment rate of recent graduates by educational attainment level, 2017 

Source:  Eurostat  LFS.  Note:  young  adults  aged  20-34.  Data  for  low-qualified  include  all  young  adults  not 
enrolled in education or training no matter how long ago they completed their education. Data for medium and 
highly qualified include only individuals who have graduated 1-3 years before the survey. 

One  way to improve  labour market  outcomes of  young people  is  to provide  them with 

opportunities  to  gain  exposure  to  real  working  environment  –  through  either  company-

based  work-based  learning  or  apprenticeships,  which  are  linked  to  the  curriculum  of  their 

programme.  Those  with  such  an  experience  during  their  studies  are  able  to  find  a  job  more 

58 

 
 
 
 
 
easily and may even have the possibility to apply for more advanced positions. However, as 

shown  in  Figure  23,  less  than  50%  of  those  holding  a  VET  qualification  report  to  have 

received  such  experience  during  their  studies.  An  even  smaller  proportion  had  a  more 

significant work-based learning experience through an apprenticeship. The largest proportion 

of  VET  students  having  access  to  work-based  learning  (more  than  90%)  can  be  found  in 

Hungary, the Netherlands, Finland and Sweden. 

Figure 23: Access to work-based learning and apprenticeships in VET, 2016 

Source:  Eurostat,  LFS.  Online  data  code:  [lfso_16feduc].  Notes:  young  adults  aged  15-34  with  a  vocational 
qualification  at  upper-secondary  or  post-secondary  non-tertiary  level.  LU  data  is  not  available.  Data  for 
‘Apprenticeship’ in BG, LV, LT and PT is not available. Data for DE might not be representative due to a large 
number of non-response. 

Low  qualified  adults  are  also  often  at  a  significant  disadvantage  in  the  labour  market 

compared to their peers who have stayed in education longer. In the EU, the ratio between 

low-qualified adults and the number of jobs requiring low levels of qualification is on average 

3 to 1 (Table 2). In other words, there are three times more low-qualified adults compared to 

the  jobs  that  require  an  only  low  level  of  qualification.  The  issue  seems  more  pressing  in 

countries like Malta, Portugal, Greece, Italy and Spain with a ratio higher than 4. This may 

eventually result in weaker labour market attachment, higher  incidences of precarious work, 

high unemployment and in the risk to drift-away from the labour market altogether.  

59 

 
 
 
 
 
 
Table 2: Number of low-qualified adults and low-qualified jobs in the EU. 

Total low qualified 
adults 25-64 (ths) 

Total elementary jobs 
(ths) 

Ratio 

EU28 

Malta 

Portugal 

Greece 

Italy 

Spain 

Sweden 

Romania 

Belgium 

Croatia 

France 

Luxembourg 

Netherlands 

United Kingdom 

Ireland 

Finland 

Austria 

Slovenia 

Bulgaria 

Germany 

Hungary 

Denmark 

Cyprus 

Estonia 

Poland 

Czech Republic 

Slovakia 

Latvia 

Lithuania 
Source: Eurostat, LFS, 2017. 

61,353.0 

125.8 

2,897.3 

1,583.2 

12,834.9 

10,654.1 

751.0 

2,417.4 

1,386.0 

366.5 

7,200.6 

64.8 

1,902.2 

6,744.3 

443.0 

329.0 

728.4 

140.7 

677.2 

6,116.8 

857.9 

527.3 

88.1 

80.4 

1,617.0 

367.2 

272.2 

100.7 

79.4 

20,210.6 

17.6 

490.0 

268.0 

2,517.8 

2,409.0 

231.1 

776.4 

449.6 

119.4 

2,692.9 

24.6 

742.0 

2,641.3 

176.3 

148.3 

337.3 

67.5 

333.0 

3,154.2 

460.4 

302.3 

53.5 

51.5 

1,041.6 

266.3 

217.3 

106.7 

115.1 

3.0 

7.1 

5.9 

5.9 

5.1 

4.4 

3.2 

3.1 

3.1 

3.1 

2.7 

2.6 

2.6 

2.6 

2.5 

2.2 

2.2 

2.1 

2.0 

1.9 

1.9 

1.7 

1.6 

1.6 

1.6 

1.4 

1.3 

0.9 

0.7 

Low skilled and older people are less likely to participate in adult learning programmes. 

In 2017, the rate of participation in adult learning in the EU for low qualified and older people 

has  been  twice  lower  than  the  overall  participation  rate  of  10.9%  (Figure  24).  Even  the 

unemployed, who should be a particularly relevant target group for re-skilling, are less likely 

than  an  average  employee  to  participate  in  learning.  This  trend  is  also  visible  in  countries 

where the overall participation in adult learning is close or above the EU average. 

60 

 
 
 
 
Figure 24: Participation in adult learning by demographic groups 

Source: EU LFS, 2017 

The level of digital skills is not growing fast and the persisting gap between top and low 

performers points to a two speed digital Europe. On average in the EU 57% of population 

aged 16-64 had at least basic digital skills in 2017. Low digital skills may have an impact on 

productivity  and  growth  potential,  but  also  on  social  exclusion  for  a  significant  part  of  the 

population,  in  view  of  the  changing  modalities  for  fruition  of  services  and  the  impact  of 

technology  on  the  world  of  work.  The  level  is  particularly  low  in  Bulgaria,  Romania  and 

Croatia ("critical situations"). In six other countries (Greece, Poland, Portugal, Latvia, Ireland, 

and Hungary, all flagged "to watch") it is comparatively higher (around 50%) but still low in 

comparison  to  the  average.  The  best  performances  can  be  found  in  Luxembourg,  the 

Netherlands, Sweden and Finland with rates above 75%.  

61 

 
 
 
 
Figure  25:  Share  of  population  with  basic  overall  digital  skills  or  above  and  yearly 
change (Social Scoreboard headline indicator) 

Source:  Eurostat.  Period:  2017  levels  and  yearly  changes with  respect  to  2016.  Note: Axes  are  centred  on  the 
unweighted EU average. The legend is presented in the Annex. Data for IT not available. 

The  provision  of  guidance  about  learning  opportunities  can  effectively  stimulate 

individual  demand  for  and  participation  in  learning.  The  benchmarking  framework  on 
adult skills and learning41 has identified the provision of guidance on learning opportunities as 

a  key  policy  lever  to  encourage  participation  of  adults  in  learning.  According  to  the  latest 

(2016) data on access to guidance services for learning, as provided by the Adult Education 

41  DG  EMPL  worked  with  Member  States  (in  consultation  with  DG  EAC)  to  develop  a  comprehensive 
framework for benchmarking adult skills and adult learning systems in the EU, from a cross-country perspective. 
The  framework  is  based  on  a  three-step  approach  endorsed  by  EMCO  and  SPC  in  June  2017.  In  a  first  step, 
broad  key  challenges  in  the  field  of  adult  skills  and  learning  are  discussed  and  a  set  of  high-level  outcome 
indicators  is  identified  (employment  rates,  productivity  and  skills  mismatch).  In  a  second  step,  a  set  of 
performance indicators is identified, including the share of adults with medium and high skills, participation of 
adults  in  learning,  digital  skills,  and  the  share  of  jobs  requiring  medium  and  high  skills.  For  the  third  step,  a 
thematic approach is followed to identify key policy levers that are effective in improving performance of adult 
skills  and  learning  systems:  the  provision  of  guidance  on  learning  opportunities;  initiatives  aimed  to  engage 
disadvantaged  groups  to  learning,  such  as  the  unemployed  and  the  low-qualified;  and  measures  to 
support/incentivise  enterprises  in training their staff. The latter indicators are presented in this section. 

62 

 
 
 
 
                                                            
Survey,42  there  is  a  strong  positive  relationship  between  the  share  of  adults  (aged  25-64) 
receiving guidance and the share of those eventually participating in learning.43 While public 

guidance services represent a common policy tool in most Member States,  their coverage in 

terms  of  outreach  varies  considerably  from  one  country  to  the  other.  Notably,  as  shown  in 

Figure 26, in 2016 the share of adults who received free of charge information or advice on 

learning  opportunities  from  institutions  or  organisations  during  the  last  12  months  ranged 

from  1.5%  in  Romania  to  nearly  56%  in  Sweden  (EU  average:  24.3%).  In  countries  like 

Bulgaria,  Greece,  Lithuania,  and  Italy,  less  than  10%  of  adults  benefitted  from  this  type  of 

free of charge services, whereas participation in learning is also relatively low over the same 

reference period (29% against an EU average of 43%). On the other hand, in Sweden, Austria 

the Netherlands, Luxembourg and Denmark, more than 40% of adults received guidance on 

learning opportunities. This can be considered one of the determinants of the relatively high 

adult learning participation rate registered in these countries (57% against an EU average of 

43%).  

Figure 26. Share of adults receiving guidance on adult learning opportunities, 2016  

Source: Eurostat, Adult Education Survey. Data correspond to 2016. Data for Ireland and Hungary are missing. 

Training measures to engage disadvantaged persons are particularly relevant. They may 

take various forms, including for  example formal or non-formal vocational training or basic 

42 Data cover the range of services (such as the provision of information, assessment, career management skills, 
orientation  and  advice)  to  assist  learners  and/or  potential  learners  to  make  choices  relating  to  education  and 
training possibilities. 
43  European  Commission  (2015),  An  in-depth  analysis  of  adult  learning  policies  and  their  effectiveness  in 
Europe. 

63 

 
 
 
                                                            
skills  development  programmes.44  Low-qualified  and  unemployed  adults  face  particular 

challenges  in  terms  of  accessing  learning.  According  to  LFS  data,  in  2017  the  share  of 

unemployed adults who participated in any training activity during the last four weeks before 

the survey  (as part of all unemployed adults) ranges from almost 1.5% in Slovakia to nearly 

45%  in  Sweden  (EU  average:  10.1%)  (Figure  27).  Apart  from  Slovakia,  in  countries  like 

Croatia,  Hungary,  Bulgaria,  Poland,  Greece,  Italy,  the  Czech  Republic,  Cyprus,  Latvia  and 

Germany, less than 10% of unemployed adults participate in learning. On the other hand, in 

Denmark,  Luxembourg  and  Finland  the  share  of  participants  exceeds  20%.  Looking  at  the 
share  of  low-qualified45  adults  who  participated  in  any  training  activity  during  the  last  four 

weeks  before  the  survey  (as  a  share  of  all  low-qualified  adults)  significant  discrepancies 

across  Member  States  also  emerge  (Figure  28).  Less  than  1%  of  low-qualified  adults 

participate in learning in Cyprus, Greece and Croatia, while more than 10% do so in Sweden, 

Denmark and Finland (EU average: 4.3%). 

Figure  27.  Share  of  unemployed  adults  participating  in  learning  (as  a  share  of  all 
unemployed adults), 2017 

Source: EU Labour Force Survey. Data correspond to 2017. Data for LT and RO are missing. 

44  See,  for  example,  ESRI  (2012)  ‘Literacy,  Numeracy  and  Activation  among  the  Unemployed’;  Shaw,  N., 
Armistead, C. (2002) ‘Evaluation of the Union Learning Fund Year 4’, London: Department for Education and 
Skills;  Casey,  H.  et  al  (2006)  ‘You  wouldn’t  expect  a  maths  teacher  to  teach  plastering:  Embedding  literacy, 
language and numeracy in post-16 vocational programmes – the impact on learning and achievement’, NRDC. 
45 Low-qualified are defined here as persons with at most lower secondary educational attainment (ISCED levels 
0-2). 

64 

 
 
 
                                                            
Figure  28.  Share  of  low-qualified  adults  participating  in  learning  (as  part  of  all  low-
qualified adults), 2017 

Source: EU Labour Force Survey. Data correspond to 2017. Data for RO, BG, LT, SK are not available. 

The  provision  of  financial  incentives  to  employers  can  encourage  their  investment  in 

staff training. Employers in most cases are the ones providing or financing adult learning for 

their  staff,  as  they  sponsor  more  than  two-thirds  of  all  adults  participating  in  job-related 

training. Despite low overall coverage, public financing to employers is a common policy tool 

in  Member States. Incentives can  broadly take the form of  tax incentives  (tax credits  or tax 

allowances),  direct  subsidies  for  training  (including  EU  support)  or  levy-based  financing 

schemes (training funds). There is also evidence that direct subsidies to enterprises (e.g. in the 

form  of  grants)  can  be  more  effective  in  steering  employee  participation  in  learning,  as 

compared  to  the  other  forms  of  financial  incentives.  The  appropriate  targeting  of  financial 

support for training is important, for example, by focusing on enterprises that face financial 

and  capacity  constraints,  notably  SMEs,  in  order  to  avoid  deadweight  effects  (financing 

investment that would have taken place anyway). Indeed, evidence shows that the coverage, 

rather  than  the  volume  of  financial  support,  has  a  strong  positive  link  with  participation  of 

adults  in  learning.  According  to  latest  (2015)  data  on  financial  support  from  Continuous 
Vocational Training Survey,46 the share of companies which report to have received any type 

of public co-financing for training activities during the last 12 months (reflecting the coverage 

of financial support) range from 0.1% in Romania to nearly 64% in Spain (Figure 29). Apart 

from  Romania,  also  in  Portugal,  Slovakia  and  Bulgaria  the  share  of  companies  that  receive 

46 Data are part of the European statistics on Lifelong Learning and cover all three types of financial incentives, 
namely direct subsidies for training, tax incentives and receipts from levy-based training funds. Among others, 
the  survey  provides  data  on  enterprises'  receipts  from  collective,  mutual  or  other  training  funds  and  any  other 
financial support acquired from the public sector for the provision of continuing vocational training. 

65 

 
 
 
                                                            
such type of financial support is lower than 1%. Conversely, in Cyprus, Belgium, France and 

Spain, this share exceeds 20%.    

Figure 29. Financial support for training provided to companies, 2015 

Source:  Eurostat,  Continuous  Vocational  Training  Survey.  Data  correspond  to  2015  and  show  the  share  of 
enterprises with 10 and more persons employed that report to have received public financial support for training 
provision during the reference year (2015). Data for Ireland are missing. 

The  labour  market  situation  of  young  people  continues  to  improve,  in  line  with  the 

strengthening  of  the  macroeconomic  environment.  In  the  EU,  the  youth  unemployment 

rate decreased from a peak of 23.7% in 2013 to 16.8% in 2017. However, it is still higher than 

it  was  in  2008  and  remains  above  30%  in  some  Member  States  (Italy,  Spain  and  Greece). 

Dispersion in youth unemployment rate is decreasing over time (see Figure  30), with higher 

reductions seen in countries with higher levels, although with some exceptions (Italy, France, 

Belgium)  where  the  decline  is  rather  slow.  At  the  other  end  of  the  spectrum,  remarkable 

reductions  have  been  achieved  in  the  Czech  Republic,  Hungary,  Slovenia,  Bulgaria,  Ireland 

and  Poland,  which  were  well  below  the  EU  average  in  2017.  Young  men  and  women 

experience similar levels and trends in unemployment rates (16.1% for women and 17.4% for 

men  in  2017).  The  employment  recovery  does  not  always  lead  to  quality  job  creation,  as 

young people are more often employed under non-standard and precarious types of contracts, 

including  temporary  jobs,  involuntary  part-time  work  and  low-paid  jobs.  In  2017,  43.9%  of 

young  workers  (up  from  42.2%  in  2013)  worked  under  a  temporary  contract  (compared  to 

12.2% of workers aged 25-54) – more than 7 out of 10 in Slovenia and Spain.  

66 

 
 
 
 
Figure 30: Youth unemployment rate (15-24), multiannual comparison 

Source: Eurostat, LFS. 

In addition to those working or seeking a job, a considerable part of young people aged 

15-24 are economically inactive. In total in the EU, in 2017 almost 6 million people aged 15-

24  were  neither  in  employment,  education  or  training  (NEET).  This  amounts  to  10.9%  of 

population in that age class, down from a peak of 13.2% in 2012 and back to the level of 2008 

(10.9%). This reduction was due mostly to unemployed NEETs moving into work. As shown 

in  Figure  31,  NEET  rates  above  15%  are  still  recorded  in  several  countries  (Italy,  Cyprus, 
Bulgaria, Croatia, Greece and Romania). The number of NEETs is increasing in Denmark47, 

Luxembourg,  Estonia  and,  more  worryingly,  in  the  two  countries  with  the  highest  rates 

(Cyprus and Italy, both "critical situations"). For this reason, convergence is only limited, as 

suggested  by  the  slightly  negative  slope  of  the  regression  line.  On  a  more  positive  tone, 

remarkable  reductions  are  observed  in  Bulgaria  and  Romania  ("weak  but  improving"), 

starting from high levels.  

47 This increase should be interpreted with caution as Denmark presents a break in series in 2017 and 2016 (see 
also Annexes 1 and 2). Breaks in series are also flagged for Belgium, Ireland and Malta in 2017. 

67 

 
 
 
 
                                                            
Figure 31: NEET rate (15-24) and yearly change (Social Scoreboard headline indicator). 

Source:  Eurostat.  Period:  2017  levels  and  yearly  changes with  respect  to  2016.  Note: Axes  are  centred  on  the 
unweighted EU average. The legend is presented in the Annex. 

Following  the  reduction  in  youth  unemployment,  the  majority  of  NEETs  are  inactive, 

but  with  substantial  differences  among  Member  States.  Inactivity  rates  are  particularly 

high  in  Bulgaria, Romania and Italy, while  unemployment is  predominant  in  Spain, Croatia 

and Greece. Having only low-level education has been identified as the main risk factor for 
being NEET48. Among female NEETs, inactivity is more frequent than unemployment, while 

the opposite holds for men. 

Employment rate  of  older  workers has grown substantially  over  the last decade.  Older 

workers  (aged  55-64)  have  weathered  the  crisis  relatively  better  than  other  age  groups  and 

have  driven  most  of  the  job  creation  during  the  recovery,  with  almost  7  million  additional 

people in employment between Q2-2013 and Q2-2018. More generally, as already shown in 

Section  1,  the  age  group  55-64  is  a  very  important  driver  of  the  overall  increase  in 

48  Eurofound  (2016),  'Exploring  the  Diversity  of  NEETs'.  Luxembourg:  Publications  Office  of  the  European 
Union. 

68 

 
 
 
 
                                                            
employment rates over the last ten years. In 2017, the employment rate of people aged 55-64 

rose to 55.3%, 1.8 percentage points higher than in previous year, and the steady increase is 

projected  to  continue  against  the  background  of  demographic  change.  Employment  rates  of 

older workers vary widely across Member States, ranging from 76.4% in Sweden to 38.3% in 

Greece, with rates below or close to 50% also recorded in Spain, Belgium, Poland and Malta. 

The employment rate of women aged 55-64 is growing faster than for men and stood at 50.9% 

in 2016.  

Since 2008, the average duration of working life increased in almost all Member States, 

with  major  increases  (by  more  than  two  years)  in  Estonia,  Lithuania,  the  Czech  Republic, 

Malta, Hungary, Poland and Luxembourg. The gender gap in the duration of working lives is 

declining but still significant, with women participating in the labour market on average 4.9 

years less than men (33.4 vs 38.3 years in 2017). This average is the result of major variations 

across  Member  States  and  is  driven  by  multiple  factors,  such  as  insufficient  access  to  care 

services as well as lower pensionable ages for women in some Member States. 

Figure 32: Average duration of working life, 2008-2017 comparison 

Source: Eurostat, LFS. 

In 2017, the employment rate of women continued its steady increase. It reached 66.5%, 

compared to 65.3% a year before. The employment rate of women improved in all Member 

States, with the exception of Denmark (where it is nonetheless very high). It ranges between 

79.9% in Sweden and 48.0% in Greece, with low rates (below 60%) also recorded in Spain, 

69 

 
 
 
 
Malta, Croatia and Italy. Despite progress, in  all Member States women continue to be less 

represented  in  the  labour  market  compared  to  men.  The  gender  gap  in  employment  –  a 

headline  indicator  of  the  Social  Scoreboard  –  remains  high  at  11.5  percentage  points.  In  a 

context of little variation compared to last year, convergence among Member States is limited. 

Italy,  Greece,  and  Romania  are  flagged  as  "critical  situations",  while  Malta,  which  still 

experiences  the  highest  gender  employment  gap,  saw  a  notable  improvement  in  2017. 

Significant increases (by 1 pp or more) were registered in Latvia, Hungary and Croatia, even 

if in these Member States employment rate increased for both sexes, but much faster for men 

than  for  women.  Latvia,  together  with  Lithuania,  Finland  and  Sweden,  remain  the  best 

performers on the gender employment gap.     

Figure  33:  Gender  employment  gap  and  yearly  change  (Social  Scoreboard  headline 
indicator) 

Source: Eurostat, LFS. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred on 
the unweighted EU average. The legend is presented in the Annex. 

The  gender  employment  gap  is  bigger  in  terms  of  full-time  equivalents,  as  women 

register higher rates of part-time work. The average gender gap in part-time employment 

70 

 
 
 
 
decreased  only  slightly  compared  to  2016  and  stood  at  23  pps  in  2017.  Overall,  31.1%  of 

women  in  the  EU  worked  part-time  in  2017  compared  to  8.2%  of  men.  However,  there  are 

large differences across Member States. While the share of women working part-time remains 

traditionally  low  in  most  of  the  Eastern  European  Member  States  (below  10%  in  Bulgaria, 

Croatia,  Lithuania,  Hungary,  Poland,  Romania  and  Latvia),  it  has  reached  74.1%  in  the 

Netherlands  (22.6%  for  men),  49.9%  in  Austria  (10.5%  for  men)  and  46.8%  in  Germany 

(9.3%  for  men).  Availability  of  part-time  work  is  an  important  factor  for  keeping  women 

attached  to  the  labour  market,  notably  when  they  have  children.  However,  long  periods  of 

reduced working hours may fuel gender gaps in wages and pensions, as part-time is usually 

also  associated  with  lower  hourly  earnings  and  lower  social  security  contributions.  Even  if 

declining, 22.5% of female part-time employment was involuntary in 2017. 

In addition to lower employment rates, women also tend to suffer from a significant pay 
gap.  In  spite  of  women  being  generally  better  qualified  than  men49,  the  gender  pay  gap 
remains  stable  at  16.2%50  in  2016,  with  only  a  small  decline  compared  to  2013  (16.8%). 

Women  tend  to  be  over-represented  in  lower  paid  sectors  and  occupations  and  frequently 

work in underqualified jobs compared to their skills. Still, part of the pay gap remains even if 

netting out factors such as differences in experience, level of education, type of contract, and 

so on. Differences across countries are considerable. The gender pay gap remains above 20% 

in  Estonia,  the  Czech  Republic,  Germany,  the  United  Kingdom  and  Austria,  while  the 

smallest values (slightly above 5%) are registered in Romania, Italy and Luxembourg. Since 

2013,  the  situation  has  considerably  improved  in  Estonia,  Hungary  and  Spain,  while  the 

gender pay gap has increased by more than 2 pps in Portugal and Lithuania. The gender pay 

gap frequently translates into a pension gap between women and men, which stood at around 

37.2 % in 2016 (decreasing by 1.1 pps compared to 2015). The gender pension gap was the 

highest  in  Cyprus,  the  Netherlands  and  Malta  (above  44%),  while  the  smallest  gaps  (below 

10%) were registered in Estonia, Denmark and Slovakia.    

49 In 2017, 44.9% of women aged 30-34 in the EU had tertiary education compared to 34.9% of men (see also 
earlier in this Section); in all Member States, the tertiary education attainment rate is higher for women than for 
men. 
50  The  reference  Social  Scoreboard  indicator  is  the  unadjusted  gender  pay  gap  (i.e.  not  adjusted  according  to 
individual characteristics that may explain part of the earnings difference), which should give an overall picture 
of gender inequalities in terms of pay. Research shows that most of the gap persists even when differences in 
educational  attainment,  occupational  choice,  working  hours  and  other  observable  attributes  are  taken  into 
account (e.g. http://ec.europa.eu/justice/gender-equality/files/gender_pay_gap/2016_factors_gpg_en.pdf). 

71 

 
 
                                                            
Figure 34: Unadjusted gender pay gap in 2013 and 2016 

Source: Eurostat. Note: the unadjusted Gender Pay Gap (GPG) is measured as the difference between average 
gross hourly earnings of male and female paid employees as a percentage of average gross hourly earnings of 
male paid employees. No recent data available for Croatia, Greece and Ireland. 

Gaps  in  employment  tend  to  be  wider  for  women  with  caring  responsibilities.  For 

instance,  parenthood  is  one  of  the  main  factors  hampering  women's  full  participation  in  the 

labour market. In all Member States, the gender employment gap widens substantially  when 

parenthood is taken into account. On average in 2017, the employment rate of women (20-49 

years old) with a child under the age of 6 was 9.2 pps lower than for women without children. 

In  the  Czech  Republic,  Hungary  and  Slovakia  the  negative  impact  of  parenthood  is 

particularly high (over 40 pps), while the impact is positive  – but smaller than for men – in 

Portugal, Luxembourg, Sweden and Croatia. Conversely, parenthood has a positive impact on 

the labour market participation of men in all EU Member States (+12.4 pps on average). 

72 

 
 
 
 
Figure 35: Employment impact of parenthood for men and women (age 20-49) in 2017  

Source:  Eurostat.  Note:  the  employment  impact  of  parenthood  is  measured  as  the  difference  (in  pps)  of  the 
employment rate of women (men) with at least one child under the age of 6 and the employment rate of women 
(men) with no children. 

Unequal  access  to  quality  and  affordable  childcare  and  long-term  care  services 

contributes to the negative effect of parenthood on the employment of women. As shown 

by  the  Social  Scoreboard  headline  indicator  on  participation  in  formal  childcare,  in  2016 

around  33%  of  children  aged  0  to  3  were  enrolled  in  formal  childcare.  This  means  that  the 

Barcelona  target  on  the  availability  of  (high  quality  and  affordable)  childcare  facilities  for 

children  in  this  age  group  has  been  nominally  reached.  However,  major  differences  persist 

among  countries.  While  in  Denmark  the  enrolment  rate  stood  at  70%  and  in  Portugal, 

Luxembourg, Sweden and the Netherlands at around 50%, in Slovakia, the Czech Republic, 

Poland  and  Greece  it  was  well  below  10%  (the  latter  countries,  together  with  Bulgaria,  are 

flagged  as  "critical  situations").  In  these  Member  States,  lack  of  formal  childcare 

arrangements also translates into poor labour market outcomes for women (in all of them the 

gender  employment  gap  is  above  the  EU  average  and  parenthood  has  a  negative  impact  on 

employment  rates).  In  2017,  21.6%  of  women  with  caring  responsibilities  in  the  EU  were 

inactive or worked part-time due to a lack of childcare and long-term care services. In Greece, 

Spain, Croatia and Cyprus this share was well above 50%, reaching a record high in Romania 

and Latvia (above 89%).  

73 

 
 
 
 
Figure  36:  Children  in  formal  childcare  0-3  and  yearly  change  (Social  Scoreboard 
headline indicator) 

Source: Eurostat, EU-SILC. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred 
on the unweighted EU average. The legend is presented in the Annex.  

The provision of formal accessible, high-quality and sustainable long-term care services 

remains  a  challenge  in  several  Member  States.  The  underdevelopment  of  long-term  care 

services  can  be  a  major  impediment  for  women  to  stay  in  employment,  as  informal  care  is 

often  the  only  option  for  many  families.  Demographic  change  is  going  to  aggravate  this 

challenge,  as  the  number  of  dependent  elderly  people  is  estimated  to  rise  by  13  million 
between  2016  and  207051.  Furthermore,  informal  carers,  the  majority  of  whom  are  women, 

are more at risk of experiencing poverty and financial dependency, especially when forced to 

reduce  their  working  hours  or  withdraw  from  employment  to  care  for  their  relatives,  thus 

lowering their income and pension entitlements.  

Women also tend to face strong financial disincentives when entering the labour market 

or  wanting  to  work  more.  In  particular,  when  income  tax  is  levied  on  household  income 

51 European Commission (2018), "Ageing Report 2018", European Economy Institutional Paper 079. 

74 

 
 
 
 
                                                            
rather  than  on  individual  income,  non-working  partners  and  second  earners  (often  women) 

can  face  high  financial  disincentives  to  participate  in  the  labour  market  or  to  work  more 

hours.  Other  features  of  the  tax  and  benefit  system  may  also  discourage  labour  supply, 

including family-based, dependent spouse and transferable deductions. In 2016, the inactivity 

trap for the second income earner was particularly high in Denmark, Germany, Belgium and 
France,  while  the  low  wage  trap  was  high  in  Belgium,  Germany  and  Luxembourg52.  Large 

costs  of  care  facilities  increase  inactivity  traps,  acting  as  disincentives  to  take  up  jobs  or 

increase working hours. 

People with a migrant background benefit only partially from the general improvement 

in labour market conditions. Whereas non-EU born people make up an increasing share of 

population  in  the  EU  (7.2%  in  2017,  up  from  6.6%  in  2014),  they  are  less  likely  to  be  in 

employment than native born. In 2017, 63% of non-EU born people of working-age (20-64) 

were  in  employment,  a  much  lower  level  than  before  the  crisis  (66.2%  in  2008).  The 

employment gap between the two groups stood at 10 pps in 2017, slightly better than in 2016 

(10.5 pps), but much worse than in 2008 (4.5 pps). In some Member States (Finland, Sweden, 

the Netherlands and Belgium) this gap was around or close to 20 percentage points in 2017. 

The situation is even more challenging for non-EU born women. Their employment rate stood 

at  54.1%  in  2017,  with  a  gap  of  13.6%  with  respect  to  native  women.  Moreover,  when  in 

employment,  non-EU  born  people  are  more  likely  to  be  affected  by  in-work  poverty  than 

native-born. 

52  The  inactivity  trap  for  the  second  earner  measures  the  marginal  effective  tax  rate  on  labour  income  from  a 
second member of a couple moving from social assistance to work. The low wage trap is calculated for couple 
without children where a second earner increases earnings from 33% to 67% of the average wage and where the 
principal earner earns 100% of the average wage.  

75 

 
 
 
                                                            
Figure 37: Employment rate of non-EU born people, multiannual comparison 

Source: Eurostat. Note: no data available for Germany for 2008 and 2013. 

Figure 38: Employment rate by country of birth, ages 20-64, 2017 

Source: Eurostat.  

Challenges faced by people with a migrant background have a tendency to be passed on 

over  generations.  The  share  of  people  with  a  migrant  background  is  increasing,  especially 

76 

 
 
 
 
 
 
among young people53, and there is evidence that native born people with foreign born parents 
have lower employment rates than those with native background54. In turn this contributes to 

higher  unemployment  rates  among  some  groups  of  disadvantaged  young  people.  Labour 
market  outcomes  also  differ  markedly  by  reason  of  migration55.  However,  while  the  lower 

employment rates of migrants are partly driven by a higher share of persons with low level of 
education,  a  rising  level  of  education56  does  not  translate  into  better  employment  outcomes 
and there is a significant under-use of migrants' skills and qualifications57.     

The employment rate gap experienced by persons with disabilities indicates an untapped 
potential to use their talents. In the EU in 2016, the employment gap58 between persons with 

disabilities  and  those  without  was  large,  with  a  48.1%  employment  rate  for  persons  with 

disabilities versus  73.9%  for those without. There is,  however, a substantial  variation in the 
gap  between  Member  States59,  varying  from  14.7  pps  (Italy)  to  over  45  pps  (Ireland).  In 

addition, only 59.7% of persons with disabilities in the EU are economically active, compared 

to  82.2%  of  those  without  disabilities,  suggesting  that  significant  barriers  exist  for  persons 
with  disabilities  in  accessing  the  labour  market60.  Countries  with  similar  activity  rates  for 

persons  without  disabilities  can  have  greatly  different  activity  rates  for  persons  with 

disabilities. The quality of work is also an important issue, as in 2016 persons with disabilities 
in the EU were more likely to face in-work poverty than the general population.61 In terms of 

gender, the employment rate of women with disabilities (45.9%) was only slightly lower than 

that  of  men  with  disabilities  (50.6%),  and  the  gap  was  reversed  in  some  Member  States. 

53  In  the  EU,  in  2014,  around  20%  of  people  aged  15-29  had  a  migrant  background  –  either  foreign-born  or 
native born with at least one foreign born parent. Source: Eurostat. 
54 OECD (2017), Catching Up? Intergenerational Mobility and Children of Immigrants. 
55 The employment rate of non-EU born people is higher for those arrived for study or employment reasons (71% 
in 2014, even higher than for natives) and lower for those arrived for family reasons and for refugees. Migrants 
for family reasons were in 2014 the biggest share among non-EU born people (52%). Their employment rate was 
53% in 2014, lower than among refugees (56%). 
56 In terms of educational attainment, third-country nationals (aged 25-54) were more likely to have a low level 
of  education  in  2017  (43.6%)  compared  to  host-country  nationals  (21.2%),  and  less  likely  to  have  reached 
tertiary education (respectively 26.3% and 31.6%). 
57  The  gap  in  the  employment  rate  among  non-EU  born  and  native-born  is  the  most  pronounced  among  those 
with tertiary education, highlighting that migrants face lower returns on their education compared to natives (see 
also  Employment  and  Social  Developments  in  Europe  2015).  In  2017,  around  42%  of  third-country  nationals 
with  high  level  of  education  were  over-qualified:  i.e.  working  but  in  low  or  medium-skilled  occupations, 
compared to around 20% among host-country nationals. However, the gap between the two groups did reduce 
over the last few years, from 25 pps in 2012 to 20 pps in 2017. 
58 Data come from EU-SILC 2015 analysed by the Academic Network of European Disability Experts (ANED).  
59 The prevalence of disability also differs among Member States to a considerable extent. 
60 ibid 
61 EU-SILC (2017) In-work at-risk-of-poverty rate by level of activity limitation, sex and age (hlth_dpe050) 

77 

 
 
                                                            
Looking at the overall quality of life perceived by people with disabilities, Eurofound62 finds 

that the extent to which they feel left out of society varies considerably depending on whether 

they are employed or not. Those who have a job far less often report feeling left out of society 

than  long-term  unemployed  respondents  or  those  who  are  unable  to  work  because  of  their 

disability. 

3.2.2  Policy response 

Comprehensive  strategies  that  focus  on  the  root  causes  of  early  school  leaving  are 

required  to  reduce  dropout  rates,  prevent  social  exclusion  and  help  the  transition  of 

young  people  to  the  labour  market.  Many  Member  States  have  recently  introduced 

measures to reduce the number of early school leavers, from policies for language support for 

students  with  a  different  mother  tongue,  to  education  and  career  guidance  in  schools,  or 

measures to support early leavers to re-enter the education and training system. For instance, 

in Bulgaria, the 'Your class' project funds additional pedagogical support for students at risk 

of  dropping  out,  such  as  language  training,  additional  classes  to  overcome  learning  gaps  or 

extra-curricular  activities  to  increase  students'  motivation.  Sweden  financially  supports 

schools  according  to  pupils'  socio-economic  background,  in  order  to  promote  a  balanced 

social composition and to prevent early school leaving. In Spain, the Proeducar plan fosters 

policies  that  enhance  the  quality  and  equity  of  the  education  system  and  support  second 

chance programmes. 

Ensuring  access  to  affordable  and  high  quality  education,  as  well  as  supporting 

teachers’ continuous professional development, is crucial to improve pupils’ educational 

outcomes.  Ireland’s  Action  Plan  for  Education  focuses  on  promoting  and  encouraging 

quality,  excellence  and  innovation,  meeting  critical  skills  gaps,  leading  in  key  enabling 

technologies  and  championing 

inclusion.  A  recent  secondary  education  reform 

in 

Luxembourg aims at adapting education to students' needs, giving schools more autonomy to 

organise the curriculum according to the profile they opt for, diversifying the language offer 

and introducing three-year plans for school development covering aspects such as guidance, 

study success, after-school activities, psycho-social assistance and improving digital skills. In 

Croatia,  the  School  for  Life  initiative  introduces  new  curricula  based  on  the  learning 

62 Eurofound (2018), The social and employment situation of people with disabilities, Publications Office of the 
European Union, Luxembourg, forthcoming. 

78 

 
 
 
                                                            
outcomes approach, which shifts the classroom focus to the pupils’ experience, recognizes the 

importance of teacher preparation and introduces cross-subject teaching of key competences, 

such as entrepreneurship, learning to learn or citizenship education. 'Co-operation for the Best 

School possible' ('Samverkan för bästa skola') is Sweden's initiative to tackle inequalities. It 

provides  tailor-made  support  that  is  practice-oriented  and  is  accompanied  by  teachers' 

professional  development  in  schools  that  face  the  most  severe  challenges  in  providing  high 

quality  teaching  and  where  a  high  proportion  of  pupils  do  not  complete  their  education. 

Cyprus is implementing a new professional learning framework for teachers to upscale their 

continuous training and has started to upgrade the pre-school curriculum based on success and 

adequacy  indicators.  In  Lithuania,  the  new  Teacher  Training  Regulation  defines  quality 

requirements for study programmes and teacher internships; it also specifies possibilities for 

teacher  training  and  professional  development,  and  establishes  criteria  for  national  teacher 

training centres.  

Effective  enforcement  of  legislative  changes  for  Roma  inclusion  in  education  remains 

important.  In  Bulgaria  the  measures  currently  in  place  for  Roma  students  include 

scholarships and extracurricular activities, additional Bulgarian language classes and activities 

with parents. In July 2017, Hungary amended its Equal Treatment and Public Education Acts 

to ensure prohibition of segregation. Also, schools with low achievement, high drop-out rate 

and  high  risk  of  segregation  have  been  selected  in  2017  to  receive  training  and  complex 

development support to implement differentiated teaching methods. Antisegregation officers 

and working groups are being set up in educational districts. In Romania, the responsibilities 

of school inspectorates and of the quality assurance agency (ARACIP) to monitor segregation 

were  expanded.  The  revised  Action  Plan  for  integrating  Roma  approved  by  the  Slovak 

government in February 2017 is being implemented but results remain to be seen. The Slovak 

Republic adopted a 10 year National Education Development Plan which should also address 

the aspects of inclusiveness and quality of education, also for Roma children. 

Boosting the quality of higher education is key, especially in the context of continuously 

rising tertiary education attainment rates. The Commission Communication on a renewed 
EU  agenda  for  higher  education  of  201763  stresses  the  importance  of  measures  aimed  to 

broaden participation in higher education, increase completion rates, equip students with skills 

and  competences  relevant  to  the  world  of  work  or  improve  the  efficiency  of  the  higher 

63 COM(2017) 247 final 

79 

 
 
                                                            
education funding system. Several Member States have announced reforms in line with those 

principles. France has recently adopted a law to support students’ success in higher education, 

notably through increased guidance for entry, support all along the studies, and publication of 

expected competences prior to entry for different study areas. Austria and the Czech Republic 

recently  introduced  new  funding  systems  for  higher  education  to  foster  diversification  and 

quality.  In  Poland,  the  recently  adopted  Act  on  research,  science  and  higher  education 

("Ustawa  2.0")  represents  a  major  modernisation  effort  that  aims  to  increase  quality  in  the 

higher education sector. Portugal introduced measures to increase higher education enrolment, 

such as bolstering the social support mechanisms to students from disadvantaged backgrounds 

through a significant increase in scholarships, a social scheme for payment of tuition fees in 

multiple  instalments,  and  the  implementation  of  a  redefined  programme  "+Superior",  to 

promote and support enrolment in less densely populated and lower demand regions. 

Member  States  continue  to  make  skills  and  qualifications  easier  to  understand 

throughout  Europe.  All  Member  states  have  national  qualifications  frameworks  organised 

around the principle of learning outcomes. Almost all (27) have put their qualification levels 

in  relation  with  the  European  Qualifications  Framework,  and  19  indicate  the  EQF  level  on 

their  qualifications,  making  them  clearer  and  better  comparable  (Belgium,  the  Czech 

Republic,  Denmark,  Germany,  Estonia,  Greece,  France,  Ireland,  Italy,  Latvia,  Lithuania, 

Luxembourg,  Hungary,  Malta,  the  Netherlands,  Austria,  Portugal,  Slovenia  and  the  United 

Kingdom).  

More  and  more  Member  States  take  into  account  learning  outside  institutional 

education  and  training.  In  15  countries  a  coordination  mechanism  has  been  set  up  to 

promote exchange and consistency in validation efforts across education and training sectors, 

the  labour  market  and  the  third  sector  (Belgium,  Denmark,  France,  Greece,  Ireland,  Italy, 

Latvia, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden). Links 

between  national  qualification  frameworks  (NQF)  and  validation  are  intensifying  in  most 

countries. Validation can lead to any qualification included in the framework in 11 countries 

(Belgium,  France,  Ireland,  Latvia,  Malta,  the  Netherlands,  Poland,  Portugal,  Romania,  the 

United  kingdom)  and  to  credit  towards  a  qualification  in  further  four  (Denmark,  Estonia, 

Spain, Slovenia). 

Member  States  are  moving  towards  a  comprehensive  strategic  approach  to  skills 

governance.  In  2016,  as  part  of  the  Skills  Agenda  package,  the  Council  adopted  a 

80 

 
 
Recommendation on Upskilling Pathways aiming to help responding to skills gaps, inequality 

and emerging labour market needs requiring ever higher levels of skills. Through Upskilling 

Pathways,  policy  makers  would  design  and  implement  policies  specifically  tailored  to  the 

needs of low-skilled adults. Several Member states have been working towards national skills 

strategies,  supported  by  the  Commission  in  cooperation  with  the  OECD  (Spain,  Italy, 

Portugal,  Slovenia  and  more  recently,  Belgium/Flanders).  After  completing  the  diagnostic 

phase and identifying the main skills challenges, Italy and Slovenia are carrying out the action 

phase  of  the  process.  Portugal  has  completed  both  the  diagnostic  and  action  phase  and 

launched  its  action  plan  in  May  of  this  year.  Latvia  and  Poland  will  embark  on  their  Skills 

Strategy projects later in 2018.  

Further steps are being taken to promote and facilitate access and participation in VET. 

Luxembourg has modified its legislation regarding the support and development of life-long 

learning  with  the  aim  to  improve  effectiveness  of  spending  through  the  co-financing  of 

vocational  life-long  learning.  France  committed  additional  funds  to  vocational  training  and 

apprenticeship via the so-called Plan d'Investissement Competence (PIC), implying almost a 

10%  average  annual  increase  in  public  spending  on  vocational  training  and  apprenticeship. 

Malta’s "Get Qualified" scheme aims at improving financial support for students wishing to 

pursue vocational training. 

Member  States  are  adapting  their  systems  of  vocational  education and  training  with  a 

goal  of  improving  their  labour  market  relevance.  Slovenia  has  introduced  an  annex  to  a 

certificate,  which  provides  detailed,  uniform  and  internationally  comparable  information  to 

employers on vocational qualifications. In the framework of the Technical Education Reform 

the United Kingdom has announced the introduction of T-levels – technical qualifications that 

16- to 19-year-olds will be able to take as an alternative to A-levels, the main school leaving 

qualification. Greece expanded its apprenticeship support for the upper-secondary vocational 

school  graduates  that  gives  access  to  EQF  level  5  qualifications  and  aims  at  facilitating 

transition  to  the  labour  market.  Croatia  has  amended  the  Vocational  Education  Act  that 

provides  for  development  and  design  of  new  vocational  curricula  for  acquiring  vocational 

qualifications as required by the labour market; it also establishes a better quality assurance 

system and regional competency centres. In Cyprus, the government has introduced measures 

aiming  at  improving  the  quality  of  vocational  education  and  the  acquisition  of  skills  and 

competences required by the labour market through, in particular, promoting the cooperation 

between VET providers and industry regarding practical trainings (via industrial placement). 

81 

 
 
In  Finland, the  VET  reform  measures  aim  further  at  developing  apprenticeship  training  and 

facilitating flexible paths to learning and a practical approach to obtaining a qualification. 

Several  Member  States  adopted  different  measures  promoting  the  development  of 

digital skills. An EU funded project “Education for Tomorrow” is being launched in Bulgaria 

to  help  open  the  education  to  digital  technologies  and  to  introduce  innovative  teaching 

methods  as  well  as  to  increase  motivation  to  learn  and  overcome  difficulties  in  learning 

content. UK rolls out the National Retraining Scheme where it will use an additional GBP 30 

million  (EUR  34  million)  for  particular  digital  skills  needs.  Spain  adopted  a  digital  skills 

training programme for Young Professionals offering the unemployed young people from the 

National Youth Guarantee System training oriented to the digital industry and new business 

models. Malta set up a sub-committee in its National Skills Council to carry out research and 

make recommendations to address digital skills mismatches. 

Further  improving  youth  employment  and  supporting  young  people’s  transition 

between education and the labour market remains an important priority. In 2017, more 

than  5  million  young  people  registered  in  the  Youth  Guarantee  and  3.5  million  took  up  an 

offer of employment, continued education, a traineeship or an apprenticeship and close to half 

of  young  people  were  still  in  employment,  education  or  training  6  months  after  leaving  the 

Youth  Guarantee  registry.  However,  in  many  Member  States  the  estimated  proportion  of 

NEETs registered with the scheme throughout the year is still below 50%. In a context where 

young  people’s  labour  market  performance  has  significantly  improved,  policy  measures 

underpinning the Youth Guarantee’s delivery are becoming more targeted. 

Member States are stepping up their outreach efforts, making services more accessible 

to young people and ensuring a better identification of those in need. In Finland, the one-

stop  guidance  centres  for  youth  (Ohjaamo,  originally  operating  under  ESF  funding)  were 

made  permanent  and  will  receive  extensive  financial  support,  aiming  to  reach  a  total  of 

10,000  young  people.  Youth  Employment  Agencies  are  being  rolled  out  across  Germany. 

Cyprus  has  launched  an  outreach  project  supported  by  the  Ministry  of  Education  in 

cooperation with the Ministry of Labour and the Cyprus Youth Board, aiming to reach out to 

4,000  inactive  NEETs  and  to  provide  them  with  activation  support  through  counselling  and 

tailor made training. In Croatia, a NEET mapping system is in place since November 2017, 

which  aims  to  identify  non-registered  NEETs  and  their  characteristics  to  better  target 

measures to this group. 

82 

 
 
New  measures  were  also  introduced  to  better  support  young  people  facing  multiple 

disadvantages,  including  through  better  cooperation  between  employment,  social  and 

education services. In Austria, youth coaching helps keep young people in the education and 

training  system  as  long  as  possible,  or  alternatively  reintegrate  them  into  the  system.  In 

Ireland,  the  Youth  Employment  Support  Scheme  was  announced  in  2018.  It  offers  work 

placements to young jobseekers who are long-term unemployed or face significant barriers to 

employment. Participants learn basic work and social skills in a supportive environment while 

receiving a weekly payment equivalent to the net minimum wage.  

Member  States  continue  supporting  labour  market  demand  through  employment  and 

entrepreneurship  incentives,  mainly  in  the  form  of  targeted  wage  and  recruitment 

subsidies. In March 2018, Belgium adopted a new law to support new “Starter Jobs”, which 

has  not  yet  entered  into  force,  making  the  employment  of  inexperienced  young  people 

between  18  and  21  years  less  costly  without  reducing  their  net  pay.  Spain  launched  a  new 

wage subsidy programme for 10,000 unemployed 18-29 years old, with emphasis on higher 

education graduates (6,000 places).  A longer subsidy period is granted for the recruitment of 

long-term unemployed and minimum income beneficiaries. Spain also adopted a reduction in 

the social security contributions during 3 years for firms that transform training contracts into 

open-ended and new wage subsidies for a first-time hiring by young entrepreneurs (up to 35 

years).  A  longer  subsidy  period  is  foreseen  for  young  unemployed  (up  to  29  years).  Italy 

offers  an  array  of  incentives  linked  to  social  security  contributions,  such  as  reduced 

contribution  during  three  years  for  private  companies  hiring  youth  under  an  open-ended 

contract or total exoneration during three years for employers hiring young people on open-

ended contracts after a traineeship or a dual VET programme and for employers hiring young 

people  enrolled  in  the  Youth  Guarantee  programme.  Romania  is  planning  to  increase  the 

employment  subsidy  for  hiring  young  NEETs  and  young  graduates  from  1.125  lei/month 

(about EUR 245) to 2.250 lei/month (about EUR 490).     

An  important  focus  on  upskilling  and  re-skilling  young  people  through  active  labour 

market policies is present in several Member States. In Croatia, the Ministry of Labour and 

Pension System and the Managing Board of the Croatian Employment Service adopted a new 

package of active labour market measures with additional emphasis on training and workplace 

training,  including  for  youth.  Since  2017,  Spain  has  implemented  a  Digital  skills  training 

programme  for  Young  Professionals,  offering  unemployed  young  people  from  the  National 

Youth Guarantee System training oriented to the digital industry and new business models. 

83 

 
 
Member States have also continued adapting their traineeship legislation to the Quality 
Framework  for  Traineeships64  and  further  developed  financial 

incentives  for 

traineeships.    In  Lithuania,  a  new  Law  on  Employment,  which  came  into  force  on  1  July 

2017,  makes  a  distinction  between  two  types  of  traineeship,  namely  "voluntary  practice" 

(Article 10) and “Advanced Training” (Article 39), and sets a clearer framework for unpaid 

and paid traineeships. In Spain, the 2018 budget law includes a financial allocation to launch a 

Youth Guarantee training bonus (bono de formacion garantia juvenil), a financial support of 

EUR  430  during  a  maximum  of  18  months  for  young  people  hired  on  training  and 

apprenticeship contracts. In July 2018, Romania adopted a traineeship law supporting people 

above 16 years old. The law makes it compulsory for employers to offer a monthly payment 

of  minimum  50%  of  the  gross  minimum  wage,  for  a  maximum  of  720  hours  (within  6 

months). A bonus will be offered for hiring trainees at the end of their traineeship.  

64 Council Recommendation of 10 March 2014 on a Quality Framework for Traineeships, 2014/C 88/01. 

84 

 
 
 
 
                                                            
Box 2. Making full use of the European Social Fund (ESF) 

With a budget of EUR 86.4 billion for 2014-2020, the European Social Fund (ESF) is one the 
key  EU  instruments  to  support  addressing  the  challenges  identified  in  the  country-specific 
recommendations  (CSRs).  The  operational  programmes  directly  contribute  to  promoting 
sustainable  and  quality  employment,  promoting  social  inclusion,  investing  in  education  and 
training and enhancing institutional capacity building. 

One  of  the  key  policy  priorities  is  youth  employment,  tackled  through  both  the  ESF  own 
resources  and  the  Youth  Employment  Initiative  (YEI).  The  budget  of  the  YEI  has  been 
increased in 2017 to EUR 8.9 billion, covering the full 2014-2020 programming period. The 
YEI  specifically  targets  young  people  who  are  not  in  employment,  education  or  training 
(NEET), concentrated on the EU regions with the highest youth unemployment rates in 2012. 

Over  15  million  participants  have  benefitted  from  ESF  and  YEI  support  between  2014  and 
2017, including almost 3 million long-term unemployed (17%). Young people below 25 years 
of  age  (42%  of  total  participants)  and  low-skilled  people  with  primary  or  lower  secondary 
education  (44%  of  total  participants)  are  key  target  groups  of  these  interventions. 
Implementation, which showed a sharp acceleration in 2017, should continue steadily in the 
coming years. 

Over 2.4 million young NEET have been supported by the YEI between 2014 and 2017, out 
of which: 

- 

- 

- 

1.5 million young people have completed the YEI supported intervention; 

780,000  young  people  were  in  education/training,  gaining  a  qualification,  or  in 
employment, including self-employment, upon leaving; 

550,000  young  people  received  an  offer  of  employment,  continued  education, 
apprenticeship or traineeship upon leaving; 

On 30 May 2018, the European Commission adopted a proposal for the 2021-2027 European 
Social  Fund  Plus  (ESF+).  The  ESF+  will  allow  within  the  broader  framework  of  the 
Structural  and  Investment  Funds  to  focus  support  more  on  challenges  identified  in  the 
European Semester. In this context, ESF+ will merge the: 

• 

• 

• 

• 

European Social Fund (ESF) and the Youth Employment Initiative (YEI), 

Fund for European Aid to the Most Deprived (FEAD), 

EU Programme for Employment and Social Innovation, and 

EU Health Programme. 

The ESF+ Regulation will aim to ensure that resources under the shared management strand 
focus on the key challenges identified, in particular it will: 

85 

 
 
• 

• 

• 

• 

• 

• 

Support the principles of the European pillar of social rights and the implementation of 
recommendations under the European Semester; 

Continue to provide support to young people with a minimum allocation for Member 
States with high youth unemployment rates; 

Foster social inclusion with a minimum share of 25%; 

Support Union actions for social innovation, mobility and health; 

Support long-term integration of third-country nationals, in complementarity with the 
Asylum and Migration Fund (AMF); 

Be  made  simpler  to  reduce  the  administrative  burden  on  national  authorities  or 
organisations benefiting from ESF+ measures. 

Several Member States continue their efforts to promote labour market participation of 

older  workers.  In  Denmark,  the  pension  agreement  strengthens  the  incentives  for  older 

workers  to  stay  longer  on  the  labour  market.  A  series  of  initiatives  increases  the  degree  of 

flexibility in the pension system, including higher financial incentives to postpone retirement 

and to establish private pension schemes. Greece adopted a programme of subsidies to public 

sector  and  local  enterprises,  entities  and  organizations  to  employ  10,000  long-term 

unemployed aged 55-67. In Malta, retired pensioners, who are less than 65 years of age and 

are self-employed or work part-time, will be able to pay the national insurance contribution 

pro-rata at a 15 per cent rate instead of the full rate. Slovenia introduced a subsidy aimed at 

permanent  employment  of  persons  older  than  58  years,  with  priority  for  unemployment 

benefit- and cash social assistance beneficiaries. The subsidy amounts to EUR 11,000 and is 

payed  to  the  employer  in  two  parts  (half  at  the  recruitment  and  half  after  the  18th  monthly 

salary). Moreover, a project was started to provide comprehensive support to companies for 

an active ageing of the workforce. Both measures are co-financed by the ESF. Finally, in line 

with the Active Ageing Strategy, in March 2018 the governmental council for active ageing 

and intergenerational cooperation was established, consisting of ministers and representatives 

of professional institutions, NGOs and economy. 

Many  Member  States  continue  efforts  in  the  area  of  childcare  and  long-term  care 

services to remove obstacles to employment of women. In June 2018, Germany adopted a 

programme  "Childcare  financing"  supporting  the  expansion  of  childcare  places  for  very 

young children in order to increase the number of women working full-time. The programme, 

86 

 
 
 
with  a  budget  of  EUR  3.28  billion,  aims  at  providing  additional  100,000  childcare  places. 

Ireland has put forward the early childhood education scheme for children in pre-school age. 

As  of  September  2018,  children  are  able  to  start  attending  childcare  system  at  the  age  of  2 

years and 8 months and continue until they reach the compulsory school age. Also Greece has 

extended  the  obligatory  pre-school  education  from  1  to  2  years  and  has  provided  15 

million EUR for additional 10,000 childcare places. Some Member States have taken steps to 

improve  the  affordability  of  childcare.  In  Spain,  the  Law  on  the  Personal  Income  Tax  has 

been modified in order to enable a deduction of childcare expenses for children up to 3 years 

of  age.  Finland  lowered  fees  for  early  childhood  education  for  low-income  and  middle-

income families. According to estimates, this will make approximately 6,700 families eligible 

for free early childhood education and care. Ireland announced a single affordable childcare 

scheme which would provide financial support for pre-school and school childcare. Bulgaria 

adopted  measures  aiming  at  providing  more  long-term  care  facilities  for  the  elderly  and 

persons with disabilities. Some Member States also took measures in favour of paid informal 

care.  The  Czech  Republic  adopted  a  law  on  special  leave  for  carers  (paid  leave  up  to  three 

months for informal carers of family dependants). Ireland plans to extend the parental leave 

entitlement to 26 weeks (6 months) in respect of each child. If passed, the additional 8 weeks 

provided for under the legislation will be made available to those parents who have already 

availed  of  the  existing  18  week  entitlement.  Finally,  Estonia  introduced  5  additional  carers' 

leave days (remunerated at the minimum wage). 

A  balanced  distribution  of  paid  leave  between  women  and  men  can  be  particularly 

beneficial  in  fostering  women’s  employment  after  having  children.  To  this  end,  Spain 

adopted a new law extending the right of fathers to paid paternity leave from 4 to 5 weeks. 

Czech Republic introduced one week of paid paternity leave. Slovenia has reduced the length 

of paternity leave from 90 to 30 days but has significantly increased the amount of paternity 

allowance  to  100%  of  wages.  In  the  Netherlands,  the  draft  bill  extending  the  length  of 

paternity leave from 2 to 5 days and granting additional 5 weeks of leave for parents has been 

sent to the Parliament. Estonia plans to make the parental leave scheme more flexible to allow 

for both parents to take the leave simultaneously.  

Some Member States are adapting their tax and benefits systems to remove disincentives 

to  work  for  second  earners.  Denmark  adopted  the  2018  tax  agreement  strengthening  the 

incentives  to  work  full-time,  notably  for  the  unemployed  and  part-time  workers.  Spain 

modified the 2018 budget law to introduce a Personal Income Tax deduction for a dependent 

87 

 
 
partner  with  low  income.  Latvia  extended  the  coverage  on  non-taxable  income  to  non-

working spouses taking care of a child up to 3 years old or at least 3 children up to 18 years 

old.  

Only  a  limited  number  of  Member  States  took  steps  to  address  the  gender  pay  gap. 

Sweden  established  a  new  agency  for  work  environment  that  will  collect  and  disseminate 

information  on  the  work  environment  policies,  including  on  gender  segregation  in 

occupations. Estonia plans to increase pay transparency in the public sector and will develop 

an IT tool to analyse wage differences between men and women. France announced a set of 

10  measures  to  foster  closing  the  gender  pay  gap.    In  August  2018,  Portugal  introduced 

measures to promote equal remuneration among women and men who perform equal work or 

work of equal value. These entail an annual report on general and sectorial information about 

gender differences in remuneration, and an assessment per company, profession and level of 

qualifications. Specific actions from the labour inspectorate and sanctions against employers 

based on the grounds of discriminatory treatment are envisaged.  

Many Member States are taking action to promote integration of people with a migrant 

background  through  strategic  plans,  funding,  legislation  and  innovative  measures.  In 

Finland,  new  models  for  funding  integration  were  introduced,  speeding  up  the  integration 

process, and allowing  migrants  to combine education and work in  a flexible way. In  Malta, 

the  Migrant  Integration  Strategy  &  Action  Plan  (Vision  2020)  as  a  framework  for 

understanding  successful  integration  was  launched  in  December  2017.  In  Belgium,  the 

integration  programme  of  the  German-speaking  Community  became  mandatory  for  foreign 

nationals who are above 18 years of age, are registered at a municipality as of January 2018 

and have a residence permit valid for at least three months. In Austria, two new integration 

laws came into effect in the summer of 2017 as part of a larger effort to promote integration. 

The Integration Act requires refugees and persons with subsidiary protection status to sign an 

“integration statement” and to participate in integration courses. With effect from 1st January 

2018,  the  Federal  Asylum  Law  was  adapted,  entitling  beneficiaries  of  subsidiary  protection 

and  asylum seekers to integration support, provided that granting  of international protection 

seems very likely.  

Promoting  the  integration  of  migrants  in  the  labour  market  is  a  priority  in  many 

Member States. In Belgium, the Flemish Public Employment Service (VDAB) implemented 

its Action Plan for 2017 entitled ‘Integration through work’. Sweden adopted new measures 

88 

 
 
to facilitate the integration of newly arrived migrants, in particular to the labour market via, 

inter alia, the provision of targeted education and training. The Swedish Agency for Economic 

and  Regional  Growth  facilitates  contacts  and  networking  between  foreign-born  women,  in 

particular  newly  arrived  women,  and  employers.  In  Estonia,  an  information  campaign  was 

launched  to  encourage  second  and  third  generations’  access  to  employment  in  the  public 

sector. A pilot mentoring programme was also launched to facilitate third-country nationals’ 

access to the labour market. 

Promoting access to education and training can be a key driver for the integration in the 

labour  market  and  in  society  at  large.  In  Sweden,  under  the  education  and  training 

obligation,  all  newly  arrived  immigrants  from  third  countries  who  benefit  from  the  Public 

Employment  Service's  Introduction  Programme  and  are  considered  in  need  of  education  or 

training to get a job can apply for education and training paths. In Estonia, an online platform 

for immigrants to learn Estonian was further developed in 2017. In Finland, reforms in basic 

and  vocational  education  aimed  to  enhance  the  development  of  migrants’  linguistic 

capabilities. In addition, a legislative amendment was adopted to provide literacy for migrants 

in adult education provision. Croatia improved its system of recognition of qualifications for 

beneficiaries  of  international  protection  and  allowed  them  to  finish  education  started  in  the 

country  of  origin,  free  of  charge.  In  Germany,  measures  were  implemented  to  help  third-

country nationals to integrate into the labour market via recognition of their occupational and 

educational qualifications, as well as their non-formal skills.  

Member  states  are  also  taking  specific  measures  for  refugees  and  asylum  seekers.  In 

Belgium,  structural  cooperation  has  been  agreed  between  the  Federal  Agency  for  the 

reception of asylum seekers (Fedasil) and the Walloon Public Employment Agency (Forem), 

mainly to facilitate access to employment for asylum seekers. In Estonia, the Unemployment 

Insurance  Agency  extended  a  project  ‘My  First  Job  in  Estonia’  under  the  Youth  Guarantee 

scheme, co-financed by the European Social Fund for beneficiaries of international protection. 

In Luxembourg, the Employment Agency set up a service for the integration of beneficiaries 

of  international  protection  in  the  labour  market.  In  the  Netherlands,  a  programme  for 

beneficiaries  of  international  protection  and  native-born  with  a  migrant  background  was 

launched  to  improve  access  to  employment.  France  launched  the  “pathway  for  1,000 

refugees” initiative, which offers 1,000 beneficiaries of international protection with an eight-

month  integration  pathway  including  accommodation,  language  learning  and  certified 

vocational training. 

89 

 
 
Several Member States are promoting the employment of persons with disabilities. Since 

September 2017, the Greek government has been subsidising the employment of persons with 

disabilities and the adaptation of workplaces in the local government and private companies. 

In a similar vein, Sweden has raised the cap for subsidising the employment of persons with 

disabilities.  Poland  is  implementing  a  European  Social  Fund-financed  project  to  reduce 

barriers  to  employment  of  persons  with  disabilities.  Bulgaria  is  investing  on  training  to 

increase  the  employability  of  persons  with  disabilities  ("training  and  employment"),  with 

priority  to  those  with  more  severe  disabilities.  France  adopted  the  Liberté  de  Choisir  son 

Avenir  Professionnel  law  ("Freedom  to  Choose  one's  Professional  Future"),  aiming  to 

promote the employment of persons with disabilities. This law includes a scaling up of socio-

medical  approaches  to  aid  in  job  searches,  a  move  of  the  requirement  to  have  6%  of 

recruitment  from  people  with  disabilities  from  the  work  unit  to  the  company  level  and  the 

introduction  a  compulsory  company  declaration  (from  January  2020)  on  measures  taken  to 

integrate workers with a disability. In Portugal a new social benefit granted to people with a 

disability  above  60%  aims  to  encourage  them  to  continue  working  or  to  look  for  a  job 

(currently, people with disabilities are not entitled to receive disability benefits if they receive 

any  form  of  remuneration).  Malta  is  introducing  a  new  budgetary  measure  that  will  allow 

people with disability to keep their disability pension in full when working/when they get a 

job. 

90 

 
 
 
 
3.3. Guideline  7:  Enhancing  the  functioning  of  labour  markets  and  the  effectiveness  of 

social dialogue  

This  section  looks  at  the  implementation  of  the  employment  guideline  no.  7,  which 

recommends  Member  States  to  enhance  the  functioning  of  the  labour  market  and  the 

effectiveness  of  social  dialogue.  This  includes  balancing  flexibility  and  security  in  labour 

market  policies,  preventing  labour  market  segmentation  and  fostering  transitions  towards 

open-ended forms of employment, ensuring effective active labour market policies and public 

employment services, providing adequate unemployment benefits that do not disincentivise a 

prompt  return  to  employment,  and  promoting  the  mobility  of  workers  and  learners.  In 

addition,  the  guideline  recommends  Member  States  to  ensure  the  timely  and  meaningful 

involvement  of  the  social  partners  in  the  design  and  implementation  of  policies,  including 

through  support  for  increased  capacity  of  the  social  partners.  The  chapter  starts  by  shortly 

introducing  key  indicators  pointing  at  challenges  in  this  area,  notably  on  segmentation 

between  permanent  and  temporary  jobs  (and  related  job  quality  issues),  participation  into 

active  labour  market  policies  and  PES,  functioning  of  unemployment  benefits  (through  an 

update  of  the  benchmarking  exercise  presented  in  2018)  and  the  extend  of  workers'  and 

learners'  mobility.  Section  3.3.2  finally  reports  on  policy  measures  from  Member  States  in 

these areas. 

3.3.1   Key indicators 

Though roughly stable at EU level, labour market segmentation represents an issue for a 

number of Member States. Segmentation is the situation where (at least) two “segments” of 

workers  characterised  by  different  rights,  entitlements  and/or  working  conditions  coexist  in 

the labour market. Especially if associated with limited possibilities to move from atypical to 

permanent jobs, it may hamper the functioning and fairness of labour markets. A high share of 

temporary  workers  can  be  a  rough  indicator  of  labour  market  segmentation  in  a  Member 

State. At EU level (Figure 39) the proportion of temporary contracts over total employees did 

not change significantly over recent years, hovering around 14% on average over the last ten 

years.  However,  some  Member  States  experience  much  higher  levels:  this  is  the  case  in 

particular  of  Spain,  Poland,  Portugal,  the  Netherlands  and  Croatia,  which  all  recorded  rates 

above 20% in 2017; followed by other six member states (Slovenia, France, Sweden, Finland, 

Italy and Cyprus) in the range between 15% and 20%. Some of these countries went through 

91 

 
 
 
significant increases between 2008 and 2017, notably Croatia (by 8 pps), Slovakia (by 5 pps), 

the  Netherlands  (by  around  4  pps)  and  Italy  (by  2  pps).  A  significant  increase  was  also 

recorded by Denmark (from 8.5% in 2008 to 12.9% in 2017). A peculiar case is Spain, where 

the  share  of  temporary  contracts  contracted  significantly  during  the  crisis  (from  29.2%  in 

2008 to 23.2% in 2013) to increase again with the recovery (up to 26.8% in 2017). 

Figure 39: Share of temporary workers over total employees (15-64).  

Source: Eurostat, LFS. 

Temporary  contracts  may  act  as  stepping  stones  towards  permanent  jobs,  but  often 

represent  "dead  ends".  Figure  40  shows  the  transition  rates  from  temporary  to  permanent 

contracts (averaged over three years to minimise the impact of short-term fluctuations) plotted 

against the share of temporary contracts over total employees. On average, 24% workers with 

a temporary contract move to a permanent contract during the following year. However, in a 

number of Member States the yearly transition rate is significantly lower than the EU average. 

This  is  the  case,  in  particular,  of  Spain,  France,  Poland  and  Italy,  which  combine  a  low 

transition rate (around 11% for the former two countries, 20% for Italy and 22% for Poland) 

with  a  high  share  of  temporary  contracts,  pointing  to  segmentation.  Transition  rates  are 

comparatively  higher  in  Member  States  with  a  low  proportion  of  fixed-term  contracts. 

Conversely, in the countries with a high share of fixed-term contract, workers tend to be stuck 

in temporary jobs. Notable exceptions are represented by Sweden and Slovenia that, in spite 

of having high shares of temporary workers, present transition rates close or above 40%. 

92 

 
 
 
 
 
Figure 40: Share of temporary workers over total employees 15-64 (2017) and transition 

rate to permanent jobs, 3-years average (2016).  

Source: Eurostat, LFS, SILC. 
Note: the transition rate for IE and MT refers to 2015. 

In the EU, the majority of temporary workers are on a fixed-term contract because they 

cannot  find  a  permanent  job.  The  proportion  of  "involuntary"  temporary  workers  is  an 

additional  indication  of  segmentation  in  the  labour  market;  around  54%  of  all  temporary 

workers aged 15-64 in the EU are in this situation (2 pps more than in 2008), but the share is 

above  70%  in  12  Member  States.  In  this  perspective,  the  situation  of  Member  States  like 

Portugal,  Croatia  and  Spain  –  which  combine  a  high  share  of  temporary  workers  with  a 

percentage of "involuntariness" higher than 80% – is especially challenging (Figure 41). The 

situation of Cyprus also needs some monitoring: even if the share of temporary employees is 

only slightly above the EU average, 91.9% of them are in this situation because they could not 

find a permanent job. Younger workers are normally more willing to accept temporary jobs; 

as  shown  in  Figure  41,  when  the  25-64  age  group  is  considered,  the  share  of  involuntary 

temporary workers is higher in all Member States. Interestingly, the gap between 15-64 and 

25-64  age  groups  is  lowest  where  the  share  of  involuntary  temporary  workers  is  highest, 

indicating  that  in  more  segmented  labour  markets  also  younger  workers  have  a  strict 

preference for open-ended contracts. The share of older workers (aged 55-64) on involuntary 

93 

 
 
 
 
 
 
temporary contracts has increased substantially with the crisis, from 51.9% in 2008 to 60.6% 

in 2017. 

Figure  41:  Involuntary  temporary  workers  as  a  share  of  total  temporary  employees, 
2017.  

Source: Eurostat, LFS. 

A  high  proportion  of  self-employed  workers  may  also  be  a  sign  of  labour  market 

segmentation.  While  self-employment  is  normally  voluntary,  it  may  conceal  dependent 

employment  relationships  (so-called  'bogus'  self-employment).  In  addition,  often  social 

security  systems  are  not  adapted  to  include  the  self-employed  (this  issue  is  discussed  in 

Chapter  3.4).  The  degree  of  autonomy  of  self-employed  workers  cannot  be  measured  with 
comparable Eurostat statistics across Member States65. However, some proxy information can 

be  obtained  by  looking  at  the  share  of  self-employed  without  employees  ('own  account 

workers')  over  total  employment  –  when  high,  it  could  signal  the  need  for  further  country-

specific assessment. The ranking shows Greece (22.3%), Romania (15.3%) and Italy (15.1%) 

on top in 2017, followed by Poland, Czech Republic, Slovakia, the United Kingdom and the 

Netherlands with rates above 11% (Figure 42). At the lower end, Denmark, Germany, Sweden 

and Hungary show rates below or close to 5%. Since 2008 the share of own account workers 

has  remained  stable  on  average  in  the  EU,  but  significant  increases  were  recorded  in  some 

65 A forthcoming ad-hoc Eurostat LFS module on self-employment, whose results are expected in 2019, will help 
shedding light on the issue. 

94 

 
 
 
 
 
                                                            
countries, notably in the Netherlands (from 8.4% in 2008 to 11.5% in 2017) and in the United 

Kingdom (from 9.8% to 11.8%). On the contrary, it has decreased markedly in Croatia (from 
11.7%  to  5.7%)  and  Portugal  (from  13.5%  to  8.9%).  According  to  Eurofound66,  in  2015 

around one quarter of all self-employed workers in the EU could be classified as "vulnerable" 
or  "concealed"67,  with  substantial  differences  among  Member  States.  These  workers  are 

characterised  by  economic  dependence,  low  levels  of  autonomy  and  financial  vulnerability; 

therefore, ‘bogus self-employed’ are most likely to be found in these groups. Figure 43 shows 

the  distribution  of  self-employed  workers  in  these  two  categories  as  a  share  of  total 

employment, by Member State. 

Figure 42: Self-employed without employees as percentage of total employment.  

Source: Eurostat, LFS – own calculations. 

66  Eurofound  (2017),  Exploring  self-employment  in  the  European  Union,  Publications  Office  of  the  European 
Union, Luxembourg. 
67 Based on 2015 data from the sixth European Working Conditions Survey (EWCS) five distinct clusters of self-
employed  are  identified  (‘employers’,  ‘stable  own-account  workers’,  ‘small  traders  and  farmers’,  ‘vulnerable’ 
and  ‘concealed’).  The  clusters  are  the  outcome  of  a  statistical  model  (latent  class  analysis)  controlling  for 
variables  for  economic  dependence  (e.g.  number  of  clients,  ease  of  finding  new  customers),  operational 
dependence  (e.g.  able  to  take  time  off  on  short  notice)  and  entrepreneurialism  (e.g.  having  multiple 
establishments, reason to become self-employed). More details in Eurofound (2017), ibid. 

95 

 
 
 
 
 
                                                            
Figure  43:  "Vulnerable"  and  "concealed"  self-employed  workers  as  a  proportion  of 
total employment.  

Source: Eurofound (2017) – based on sixth European Working Conditions Survey (2015). 

"Platform work", though currently limited to small parts of the workforce, may have a 

significant  impact  on  working  conditions  and  patterns.  Recently,  the  European 
Commission's  COLLEEM  online  survey68  investigated  the  utilisation  of  online  platforms 

among frequent internet users aged 16-74 in 14 EU countries, providing some initial tentative 
evidence on the situation of platform workers. According to European Commission (2018)69, 

based on the survey results, the proportion of people earning more than half of their income 

from platform  work hovered slightly above  2% in 2017, with the  highest levels recorded in 

United Kingdom (4.3%) and the Netherlands (2.9%). Around half of those for whom platform 

work  is  the  main  activity  regard  themselves  as  fully  or  partly  self-employed,  although  a 

significant  share  (38%)  see  themselves  as  employees.  This  suggests  that  many  platform 

workers may not be covered by social protection – an issue which is complicated by the fact 

that often their employment status is not clear for regulatory purposes. 

Temporary  workers  experience  lower  job  quality,  over  a  number  of  different 

dimensions. The sixth European Working Conditions Survey (2015) provides information on 

68  The  COLLEEM  ("Collaborative  Economy  and  Employment")  survey  is  an  online  panel  survey  on  digital 
platforms commissioned by DG EMPL and coordinated by the JRC. It was conducted in 14 European Member 
States: DE, ES, FI, FR, HR, HU, IT, LT, NL, PT, RO, SE, SK and UK. The survey was conducted in June 2017. 
See Pesole et al., (2018). 
69  European  Commission  (2018).  Employment  and  Social  Developments  in  Europe.  Annual  Review  2018. 
Luxembourg: Publications Office of the European Union. 

96 

 
 
 
  
                                                            
a number of key dimensions of job quality. Based on this survey, Eurofound70 has computed 

seven job quality indexes (concerning respectively physical environment; social environment; 

work intensity; skills and discretion; working time quality; prospects; and earnings). Looking 
at  differences  in  the  scores  for  six  of  the  seven  job  quality  indices71  (Table  3)  workers  on 

short-term  temporary  contracts  score  below  average  in  four  of  them,  of  which  prospects 

(including job security and career advancement) and skills and discretion (which includes, for 

instance,  access  to  training  and  decision  autonomy)  are  the  most  challenging.  On  the  other 

hand,  as  regards  the  social  environment,  they  have  a  slightly  higher  score  than the  average. 

Longer-term temporary contracts show a similar pattern, but their job quality scores are closer 

to  the  average;  in  addition,  they  find  themselves  in  less  favourable  social  environments 

compared to the average. Differences remain after statistically controlling for factors such as 

individual or job-related characteristics (Figure 44). Workers on temporary contracts are also 

more  than  three  times  as  likely  to  be  at  risk  of  poverty  as  those  in  permanent  employment 

(16.3% of temporary workers, versus 5.8% of permanent workers in 2017); a gap which has 

been growing steadily since the crisis. 

Table 3: Job quality scores by employment status (2015) 

Source: Eurofound computation on EWCS 2015. Green marks “better than average”, red “worse than average”. 
The shade of the colour indicates the deviation from the average (darker shades have more distance to average).  

70 Eurofound (2018), “Does employment Status matter for job quality?", forthcoming. 
71 The seventh dimension, i.e. earnings, is excluded because of low reliability. 

97 

Physical environmentWork intensityWorking time qualitySocial environmentProspectsSkills and DiscretionIndefinite Contract843571655656Fixed-term>1 year833470594652Fixed term<1 year813670653844Other employees823071644144Self-emp, no employees - dependent832772444454Self-emp, no employees - independent832667475064Employers843560766271Total833470645356Employment statusDimesions of job quality 
 
 
 
                                                            
Figure 44: Effects of employment status on specific aspects of job quality, controlling for 

individual and job-related characteristics (2015) 

Source: Eurofound computation on EWCS, 2015 
Note:  The  colours  represent  the  relative  association  between  each  job  quality  indicator  and  the  employment 
status as compared to the reference group of employees with indefinite contracts. Results stem from multi-level 
regressions controlling for individual characteristics, occupation, sector and others. 

Effective  active  labour  market  policies  (ALMPs)  are  a  key  component  of  well-

functioning labour markets. They increase the opportunities of job-seekers to find a new job 

and  improve  labour  market  matching.  The  main  challenge  that  ALMPs  seek  to  address  is 

unemployment,  notably  long-term  unemployment  (i.e.  of  duration  longer  than  one  year). 

Evidence shows that the longer the spell a job-seeker spends in unemployment, the higher is 

the risk of skills depreciation, discouragement and overall detachment from the labour market. 

Therefore, long-term unemployment is both an indicator of the effectiveness of ALMPs and a 

measure  of  the  challenge  faced  by  a  country  in  terms  of  activation  of  its  unemployed 
population72.  Figure  45  shows  the  long-term  unemployment  rate  (i.e.  the  ratio  between  the 

number of people unemployed for more than one year and the active population) in 2017 and 

its change compared to 2016. As also mentioned in Chapter 1, long-term unemployment has 

been  reducing  in  all  Member  States  in  2017,  on  the  back  of  the  labour  market  recovery.  In 

spite  of  a  broadly  converging  trend  (as  highlighted  by  the  negative  slope  of  the  regression 

line) there remain significant discrepancies across Member States, with rates ranging in 2017 

from 1% in Czech Republic to 15.6% in Greece. Together with Spain (which shows a rate of 

7.7%), Greece is flagged as "weak but improving", as it combines a much higher than average 

level  with  a  fast  rate  of  reduction  over  the  last  year.  Italy,  which  recorded  a  comparatively 

72  For  these  reasons,  the  long-term  unemployment  rate  has  been  agreed  by  the  Employment  Committee  as  a 
headline social scoreboard indicator to monitor active support to employment. 

98 

Job securityTraining receivedDifficulties in taking time offCalled to work at short noticeRegularity (medium to high)High strainPart-time (vs Full-time)Fixed-term>1 yearFixed-term<1 yearSelf-emp, no employees - dependentSelf-emp, no employees - independentEmployers 
 
 
                                                            
lower  long-term  unemployment  rate  (6.5%),  is  flagged  as  a  "critical  situation",  in 

consideration of its limited improvement in 2017 compared to the previous year. The situation 

of  Slovakia  is  considered  "to  watch"  with  a  rate  of  5.1%.  Among  the  countries  marked  as 

"better  than  average",  it  is  worth  mentioning  Cyprus,  Portugal  and  Croatia,  which  are 

classified  in  this  group  because  of  their  performance  on  the  yearly  change,  pointing  to  a 

significant improvement in 2017 (the level being close but still above the EU average). 

Figure 45: Long-term unemployment rate (Social Scoreboard headline indicator) 

Source: Eurostat, LFS. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred on 
the unweighted EU average. The legend is presented in the Annex.  

In most Member States, the long-term unemployment rate has not recovered yet to pre-

crisis levels. The improvement with respect to 2013 (reference as peak year of the crisis) has 

been  especially  relevant  (by  more  than  4  pps)  in  Croatia,  Spain,  Slovakia,  Portugal,  Ireland 

and Bulgaria. Still, in few Member States the long-term unemployment rate in 2017 is equal 

or higher than in 2013, notably for France (same rate), Austria (+0.5 pps), Finland (+0.4 pps) 

99 

 
 
 
 
 
and Luxembourg (+0.3 pps). In addition, for 21 Member States the long-term unemployment 

rate  remains  higher  than  in  2008,  the  largest  gaps  being  recorded  for  Greece  (+11.9  pps), 

Spain (+5.7 pps), Cyprus (+4 pps) and Italy (+3.5 pps). This is an indication of the intensity of 

the  recession  suffered  by  these  countries  in  past  years,  and  the  impact  it  keeps  showing  on 

labour  market  outcomes  –  but,  at  the  same  time,  of  the  challenges  faced  by  the  public 

employment  services  and  active  labour  market  policies  systems,  which  in  many  cases  were 

put under severe stress by the suddenly increasing number of job-seekers. 

Figure 46: Long-term unemployment as a percentage of active population 

Source: Eurostat, LFS. 

Participation  in  active  labour  market  policies  still  differs  significantly  across  the  EU. 

Active  labour  market  policies  (ALMPs)  represent  one  of  the  cornerstones  in  ensuring 

effective  labour  market  transitions  and  high  performing  labour  markets.  Together  with  an 

effective lifelong learning infrastructure, ALMPs constitute the actual support (and security) 

dimension  of  a  well-balanced  flexicurity  set-up,  which  is  recognised  as  a  factor  improving 

labour market performance. In this light, disparities among Member States in participation to 

activation  measures  are  striking.  On  the  one  hand,  there  is  a  large  group  of  Member  States 

(Greece,  Romania,  Bulgaria,  Latvia,  Slovenia,  Croatia,  Cyprus  and  Malta)  where  less  than 

10% of those wanting to work participated in ALMPs in 2016. Moreover, this share in most 

cases  has  decreased  in  recent  years.  On  the  other  hand,  there  is  another  group  of  countries 

100 

 
 
 
 
 
recording participation rates beyond 40% (Sweden, France, Denmark, Hungary, Luxembourg 

and  Belgium);  for  this  group  of  countries  the  trend  is  generally  positive  or  constant  since 
2013. This seems to indicate that convergence is not taking place on this policy indicator73. In 

most countries, participation rates have dropped after the crisis (with the notable exceptions of 

Belgium, Hungary, Sweden, Czech Republic and Estonia) indicating that the increase in the 

number  of  people  looking  for  a  job  has  not  been  followed  by  a  proportional  increase  in 

participation to ALMPs. 

Figure 47: Participants in ALMPs per 100 persons wanting to work 

Source: Eurostat, LMP database and LFS. No recent data available for UK; no figures for 2016 for IT. 

Total  investment  in  active  labour  market  policies  also  seems  to  diverge  greatly  among 

Member  States.  If  the  share  of  long-term  unemployed  is  a  rough  approximation  for  the 

effectiveness of active labour market policies, this divergence is a matter of concern as well. 

Although  spending  on  labour  market  services  and  measures  to  some  extent  is  related  to  the 

unemployment  and  competitiveness situation in  a  given Member  State, the  figures  illustrate 

large  differences  in  the  commitment  to  building  effective  systems  for  active  labour  market 

policies. The spending on labour market services and measures varies from 1.5% of GDP to 

less  than  0.1%  in  some  of  the  less  committed  Member  States  (Figure  48).  Moreover,  the 

Member  States  with  the  lowest  investments  in  ALMPs  also  tend  to  be  those  where  a 

73  Nonetheless,  this  indicator  should  be  interpreted  with  caution,  as  it  only  measures  participation  to  (and  not 
effectiveness  of)  labour  market  policies,  and  for  a  number  of  countries  it  presents  statistical  reliability  issues, 
related to the data collection process. 

101 

 
 
 
 
 
                                                            
significant  part  of  the  ALMP  system  is  co-financed  by  the  ESF  and  where  the  long-term 

sustainability of the system is in question.  

Figure 48: Spending on labour market services and measures (2016) and share of long-
term unemployed (2017)  

Public Employment Services (PES) are the main labour market institutions in charge of 

job  search  support  and  referral  of  job-seekers  to  activation  measures.  Although 

structured  differently  in  each  country,  all  PES  aim  at  matching  supply  and  demand  in  the 

labour  market  by  providing  services  to  both  registered  unemployed  and  employers.  In 

particular,  they  are  in  charge  for  profiling  clients,  providing  them  counselling  and 

individualised  support,  referring  them  to  training  and  activation  measures,  and  (in  many 

countries) paying unemployment and/or welfare benefits.  

Nonetheless,  the  effectiveness  of  Public  Employment  Services  in  providing  job  search 

support is unequal among Member States, depending inter alia on their capacity, quality of 

services offered and coordination with other actors. Such discrepancies reflect, in many cases, 

the  use  of  PES  made  by  unemployed  people  for  job  search  (beyond  formal  registration 

requirements,  which  are  generally  necessary  to  access  unemployment  and  other  welfare 

benefits). Figure 49 shows the share of unemployed people using public employment services 

for job search. The values do not differ significantly from those published in the 2018 Joint 

Employment  Report.  At  the  bottom  of  the  distribution,  Spain,  Italy  and  Romania  show  the 

102 

 
 
 
 
lowest shares in 2017 (less than 30%), followed by the Netherlands, the United Kingdom and 

Portugal  (with  a  share  between  30%  and  40%).  Conversely,  in  Member  States  such  as 

Lithuania, Slovakia, the Czech Republic, Austria, Slovenia, Germany and Greece, the share of 

unemployed  people  who  declare  using  Public  Employment  Services  to  search  for  a  job  is 

above  70%.  On  average,  the  use  of  PES  by  unemployed  has  constantly  decreased  since  the 

onset of the crisis, dropping from 58.1% in 2008 to 45.2% in 2017 (1 pp less than in 2016). 

Nonetheless,  an  opposite  trend  is  recorded  in  few  Member  States,  with  notable  increases  in 

Latvia and Cyprus (by more than 30 pps), Estonia and Greece (by around 15 pps), Romania 

and Slovenia (by around 9 pps). In some of these countries, though, increased rates may be 

due to stronger obligations to register in order to access benefits. Figure 50 provides a hint to 

the  use  made  of  selected  alternative  job  search  methods  by  unemployed  people,  including 

private  employment  offices,  direct  applications  to  employers  and  informal  methods  such  as 

asking  friends,  relatives  and  trade  unions.  While  it  is  difficult  to  find  general  patterns,  it 

appears that in  Member States  where  usage of public employment services is  low, informal 

methods are the most frequently used. 

Figure 49: Share of unemployed people using public employment services for job search 

Source: Eurostat, LFS. 

103 

 
 
 
 
Figure 50: Share of unemployed people using selected job search methods (2017) 

Source: Eurostat, LFS. 

The provision of adequate unemployment benefits of reasonable duration, accessible to 

all workers and accompanied by effective active labour market policies is key to support 

jobseekers  during  transitions  in  the  labour  market.  The  2018  Joint  Employment  Report 

presented  an  extensive  comparative  analysis  of  the  main  design  features  of  unemployment 

benefit  systems  across  the  EU,  based  on  the  results  of  the  benchmarking  exercise  of 

unemployment benefits and ALMPs conducted within the Employment Committee (EMCO). 

The analysis, which looked into a number of performance and policy lever indicators (for year 

2016  or  2017  depending  on  data  availability)  remains  overall  valid,  in  view  of  the  limited 

policy changes occurred during the reference period for this report (for details on the reforms 

taken  by  Member  States  in  this  domain,  see  Section  3.3.2;  for  a  long-term  overview  of 
reforms  by  Member  States,  see  European  Commission,  201874).  This  section  provides  an 

update  of  the  exercise,  notably  of  policy  lever  indicators.  Furthermore,  it  looks  into  the 

additional  indicators  of  strictness  of  job-search  requirements  for  unemployed  jobseekers 

which have been agreed by the Employment Committee in 2018.  

The  share  of  short-term  unemployed  people75  covered  by  unemployment  benefits 

amounts to around one third, on average. This share slightly decreased in the aftermath of 

the  crisis  (from  34.4%  in  2008  to  32.7%  in  2017),  remaining  stable  over  the  most  recent 

years. However, significant differences across countries persist (Figure 51). These differences 

depend  on  the  policy  design  of  the  unemployment  benefits  systems  (notably  on  eligibility 

74  European  Commission  (2018).  Labour  Market  and  Wage  Developments  in  Europe.  Annual  review  2018. 
Luxembourg: Publications Office of the European Union. 
75 Those who have been unemployed for less than one year. 

104 

 
 
 
                                                            
conditions,  maximum  duration,  strictness  of  job  search  requirements,  overlaps  with  other 

social protection schemes) as well as on the cyclical position of different countries. In a long 

term perspective, between 2008 and 2017 the largest increases in coverage were recorded in 

Latvia (by almost 16 pps), Italy (10 pps) and France (9 pps). On the other hand, the largest 

drops were recorded in Hungary (-15 pps), Luxembourg (-12 pps), Croatia and Germany (-10 

pps).  The  latter,  however,  still  shows  the  highest  coverage  rate  (62.8%)  –  followed  by 

Finland,  Austria,  Belgium  and  France  with  rates  above  50%.  On  the  contrary,  the  lowest 

coverage  can  be  observed  in  Malta,  Croatia,  Poland,  Romania  and  Bulgaria,  with  rates 

significantly below 15% and no sign of improvement.  

Figure 51: coverage of unemployment benefits for the short-term unemployed 

Source: computation on Eurostat, LFS data. Note: data not available for IE and NL. 

There  have  been  no  major  changes  between  2016  and  2018  in  the  design  of 

unemployment  benefits  in  Member  States.  To  be  entitled  to  unemployment  benefits, 

unemployed people are generally required to have a minimum work record and/or have paid 

insurance contributions during a period of time. As shown in Figure 52, this minimum period 

ranges from less than 20 weeks in France and Italy to a year (52 weeks) or more in Poland, 

Romania and Slovakia. Almost no variations are recorded between 2016 and 2018, with three 

exceptions. In the case of Austria, an insurance record of 52 weeks within the last 24 months 

is still required for first-time applications. However, for subsequent applications, this period 

has  been  reduced to  28 weeks. In  Bulgaria, the length  of the required qualifying period  has 

105 

 
 
 
 
increased from 9 months of insurance during the 15 months prior to unemployment, to at least 

12 months of insurance during the 18 months before unemployment. A similar reduction has 

taken place in Latvia where the requirement increased from having paid at least 9 months of 

contributions  in  the  12 months  prior  to  unemployment  to  having  paid  at  least  12  months  of 

insurance  in  the  16  months  prior  to  unemployment.  As  concerns  the  maximum  duration  of 

benefits (Figure 53), there has been no change between 2017 and 2018. Belgium remains at 

the higher end with unlimited benefit duration  – which should be seen in the context of the 

absence of an unemployment assistance scheme. On the opposite side are Hungary and Malta. 

The maximum duration continues to be shorter than the contribution periods in most Member 

States;  only  in  four  they  are  equal (France,  Netherlands,  Greece,  Luxembourg)  and  in  three 

cases higher (Finland, Denmark, Belgium). As concerns level and adequacy of unemployment 

benefits Member States also present significant disparities. Net replacement rates for a low-

wage worker with a short work history (1 year) range from less than 20% of previous (net) 

earnings in Hungary to around 90% in Luxembourg (Figure 54). The comparison between the 
net replacement rates at the 2nd and the 12th month of the unemployment spell shows the effect 

of  either  the  expiration  of  the  benefits  (with  individuals  falling  into  other  schemes,  such  as 
unemployment or social assistance), or the reduction in benefit generosity over time76. 

76  The  OECD  models  used  for  this  indicator  have  been  refined  since  adoption  of  the  2018  Joint  Employment 
Report in Council, in particular for AT, DK, EE, FI, DE, ES, IE, IT, UK. 

106 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Figure 52: Length of the required qualifying period, 2016 and 2018 (in weeks) 

Source: MISSOC (Mutual Information System on Social Protection) database, and national legislation. Note: In 
Malta (2018), the minimum qualifying criteria are 50 weeks of paid contributions of which at least 20 paid or 
credited  in  the  previous  2  calendar  years;  in  Ireland  (2016  and  2018),  at  least  104  weekly  contributions  must 
have been paid since the person first started work. 

Figure 53: Maximum duration of benefits with a 1-year work record, 2017, and 2018 

Source: MISSOC (Mutual Information System on Social Protection) database  and national legislation (January 
2017  and  January  2018).  Note:  in  Belgium  there  is no  limit  on  the duration of benefits.  In  Cyprus, weeks  are 
calculated on the basis of 6 working days per week. In Ireland, benefit is paid for 39 weeks (234 days) only for 
people with 260 or more weekly PRSI contributions paid. In Slovakia, a person with a one-year record cannot 
qualify for unemployment benefits (at least 2 years of unemployment insurance contributions during the last 3 
years  are  required.  In  Poland,  duration  varies  depending  on  the  level  of  the  unemployment  rate  of  the  region 
relative to the national average. 

107 

 
 
 
 
 
Figure 54: Net replacement rate of unemployment benefits at 67% of the average wage, 
at the 2nd and 12th month of unemployment (2018)  

Source:  European  Commission  based  on  OECD  Tax-Benefit  Model.  Note:  The  indicator  is  calculated  for  the 
case of a single person without children with a short work history (1 year) and aged 20. Further methodological 
details in footnote 76. 

Member States have developed several strategies to activate recipients of unemployment 

benefits.  The  adopted  policy  instruments  follow  the  principle  of  mutual  obligation.  In 

particular, recipients of unemployment benefits are required to engage in job-search activities; 

at  the  same  time,  public  authorities  have  to  support  them  in  their  job  search  and  in 

overcoming  the  obstacles  that  may  prevent  them  from  regaining  employment  while 

monitoring  their  compliance  with  availability-to-work  conditions  (and  implementing 

sanctions  when  needed).  The  principle  of  early  intervention  and  tailor-made  services  to 

unemployed  jobseekers  has  also  been  widely  embraced  by  Member  States  with  the  aim  of 

shortening  unemployment  spells,  fostering  quality  matches  and  preventing  long-term 

unemployment and discouragement. Indeed, mandatory requirements for Public Employment 

Services  to  provide  certain  types  of  early  support  for  jobseekers  (profiling,  design  of 

individual action plans, personalised counselling) exist in most Member States.  

There  is  a  large  diversity  in  the  strictness  of  availability-to-work  conditions  and  job-
search requirements77 attached to unemployment benefits. Figure 55 shows the severity of 

availability  requirements  and  suitable  work  criteria  for  unemployment  benefits  recipients. 

77 These policy indicators were developed by the OECD using data collected via comprehensive expert surveys. 
They provide information about legal (i.e. de jure) conditions, but not about its effective implementation (which 
can vary between countries with the same rules).These indicators cannot be interpreted in a simplistic manner, as 
it is not possible to identify an 'optimal' degree of strictness for job-search and availability requirements. 

108 

 
 
 
 
 
 
                                                            
They appear to be the strictest in Poland, Denmark, Malta and Croatia, while they are the least 

strict  in  Belgium,  Lithuania,  Bulgaria,  Cyprus,  Finland  and  Spain.  Figure  56  shows  a  great 

variation  in  the  strictness  of  job-search  and  monitoring  requirements.  In  particular,  stricter 

requirements exist in Malta, the United Kingdom and Luxembourg, while the least strict are 

observed in Cyprus, Greece and Poland. Finally, Figure 57 also shows a large diversity in the 

severity  of  sanctions  applied  when  unemployment  benefits  recipients  do  not  comply  with 

availability  and  job-search  requirements.  Sanctions  appear  to  be  the  strictest  in  Slovenia, 

Romania,  Luxembourg,  Greece,  Croatia  and  Portugal,  while  they  are  the  least  strict  in 

Austria, Hungary, Cyprus, Ireland, Denmark and Germany (in some cases however this goes 

along  with  a  short  duration  of  benefits).  Malta,  Croatia  and  Estonia  appear  to  have  more 

stringent provisions in all dimensions. Yet, several Member States display a combination of 

stringent  provisions  for  certain  components  and  less  stringent  for  others.  For  instance, 

Denmark has the second most stringent provisions for availability requirements and suitable 

work  criteria,  but  one  of  the  least  strict  for  benefit  sanctions.  These  different  approaches 

provide  an  insight  on  how  national  systems  tackle  the  issue  of  moral  hazard  inherent  to 

unemployment  insurance  benefits.  For  instance,  more  strict  job-search  and  availability 

requirements are expected to encourage higher job-search efforts and faster acceptance of job 

offers,  thus  counterbalancing  the  possible  financial  disincentives  created  by  unemployment 

benefit  systems  and  reducing  unemployment  duration.  At  the  same  time,  overly  stringent 

requirements may have counterproductive effects, for instance as concerns a reduction in the 

coverage of benefits or a detriment in the quality of matches, which may not be long-lasting 

(with more people falling back into unemployment more frequently).  

109 

 
 
Figure 55: Availability requirements and suitable work criteria, 2017 

Source: OECD. Note: Scored from 1 (most lenient) to 5 (most strict).  

Figure 56: Job-search and monitoring requirements, 2017  

Source: OECD. Note: Scored from 1 (most lenient) to 5 (most strict).  

110 

 
 
 
 
 
 
 
Figure 57: Strictness of benefits sanctions, 2017  

Source: OECD. Note: Scored from 1 (most lenient) to 5 (most strict) 

Tackling  barriers  to  mobility  of  workers  and  learners  can  enhance  employability  and 

skills development, helping exploiting the full potential of the European labour market. 

In 2017, there were roughly 12.4 million EU citizens of working age (20-64) living in another 
country  than  their  country  of  citizenship78.  This  number  has  increased  by  5%  compared  to 

2016,  at  a  similar  pace  as  it  had  increased  in  the  previous  years.  Germany  and  the  United 

Kingdom were the main countries of residence in 2017, hosting respectively 3 million and 2.6 

million  people,  followed  by  Spain  (1.4  million),  Italy  (1.2  million)  and  France  (around 

1 million).  While  Germany  and  the  United  Kingdom  show  an  upward  trend  going  back  to 

2015,  Italy  and  France  show  a  more  moderate  (and  lower  than  average)  growth.  On  the 

contrary, Spain had an absolute lower number of EU28 movers, with a 1% decrease compared 

to 2016. This continues a (slowing) downward trend observed since 2014. The main countries 

of  origin  remain  unchanged  from  2016,  with  Romanian,  Polish,  Portuguese,  Italian  and 

Bulgarian nationals constituting the largest groups at EU level. Together their numbers reach 

around 6.6 million people, more than half of the total EU-28 movers in the EU. In proportion 

to  the  population,  the  highest  outflows  are  recorded  in  Lithuania,  Romania  and  Latvia;  a 

78  This  number  refers  to  "long-term"  EU-28  movers  of  working  age,  living  in  EU-28,  based  on  Eurostat 
demography statistics. For details, see European Commission (forthcoming), 2018 Annual Report on Intra-EU 
Labour Mobility, Directorate-General for Employment, Social Affairs and Inclusion. 

111 

 
 
 
 
                                                            
rising trend could be observed in Lithuania, Romaina, Latvia, Estonia and Croatia. The main 

countries  of  origin  and  countries  of  destination  remain  unchanged  when  focusing  on 

economically active citizens (i.e. employed persons and jobseekers). 

Studying  abroad  is  beneficial  for  skills  development  and  better  future  labour  market 

prospects.  Mobile  students  contribute  to  knowledge  development,  stronger  cultural 

awareness,  technology  upgrading  and  capacity  building  in  their  country  when  they  return 

home  after  studying  abroad.  Moreover,  students’  exchanges  between  countries  enhance 

opportunities  for  collaboration  between  academic  institutions,  contributing  to  the  European 

goal of opening up and modernising education systems. Yet only small shares of Europeans 

are mobile graduates. In 2016, only 10.7 % of higher education graduates originating from EU 

Member States were mobile; 3.1 % were degree mobile and graduated in a different country 

from that in which they got their diploma, while 7.6 % had a credit mobility stay and spent a 

temporary study period or/and work placement abroad.  The Member States with the highest 

shares of outward mobile graduates are Luxembourg (84.4%), the Netherlands (23.2%), and 

Finland  (19.5%).  Other  four  EU  Member  States  have  student  mobility  rates  above  15  % 

(Germany, France, Cyprus and Lithuania). Mobility patterns between countries are explained 

by several factors, such as geographical proximity, language ties or the availability of English 

language programmes in non-English speaking countries. The teaching quality of universities 

and their reputation also represent strong attracting factors. 

Social dialogue, whether bipartite or tripartite, is a key element of the European social 

market  economy.  It  enables  promoting  agreements  and  policy  measures  that  balance  the 

interests  of  both  sides  of  industry.  Effective  social  dialogue  finds  solutions  which  are 

acceptable to the involved partners, and thus reduces conflicts in the society and strengthens 

social  cohesion.  An  important  element  for  such  dialogue  is  the  mutual  respect  and  trust 

between the partners, which comes  along with  the experience  of previous good cooperation 

and  the  value  added  of  such  negotiated  results.  To  allow  for  such  negotiations,  the  social 

partners  need  to  be  independent  of  each  other  and  of  the  government  (autonomy  of  social 

partners). Hence, social dialogue is to the advantage of workers, employers and governments. 

The  ‘New  Start  for  Social  Dialogue’  initiative  launched  in  March  2015,  the  Council 

conclusions  and  the  Quadripartite  Statement  signed  by  the  European  social  partners,  the 

Commission and the Netherlands Presidency on behalf of the Council  on ‘A new start for a 

strong  social  dialogue’,  both  adopted  in  June  2016,  call  on  the  Member  States  to  closely 

involve social partners in the design and implementation of relevant reforms and policies, in 

112 

 
 
line with national practices. The European Pillar of Social Rights and the new Employment 

Guideline 7 restate that social dialogue is a core value of the European Union.  

The  European  Union  faces  a  diversity  of  national  social  dialogue  systems.  These 

differences are mainly related to divergent institutional frameworks and operational capacities 

of social partner organisations, contributing to important differentials in the quality of social 

dialogue.  While  there  is  no  one-size-fits-all  model,  timely  and  meaningful  involvement  of 

social  partners  in  policy  design  and  implementation,  including  by  providing  support  for 

increased capacity of social partners, should be considered as a common denominator for well 

performing  and  effective  tripartite  social  dialogue  systems,.  The  latter  is  equally  true  for 

bipartite social dialogue.  

The  capacity  of  social  partners  plays  an  important  role  in  shaping  the  social  dialogue.   

Social partners' membership figures provide some indication of their capacity to represent the 

respective  collective  interests  of  either  side  of  industry  (Figure  58).  The  larger  their 

membership  and  the  more  representative,  the  stronger  their  voice  and  mandate  arguably  is. 

Still, these figures do not provide a full picture. For instance, in certain Member States with 

low  measured union  density (e.g. France),  trade unions may enjoy fairly broad support also 

from non-members (see Eurobarometer data on trust in unions) and have a strong capacity to 

participate in policy developments. In most Member States, union density has been in decline 

since the 1980s, with employer density somewhat more stable. Beyond aggregate membership 

figures, representation structure – more or less fragmented – may also impact the capacity of 

social partners, especially when fragmented representation is weakly coordinated. 

113 

 
 
 
 
Figure 58: Trade union density rate 

Source: OECD and ICTWSS database (the source containing more recent data per MS was used). Note: calculated as a share 
of employees that are trade union members. Data years: 2017 for SE, 2016 for AT, CZ, DK,FI, DE, HU, IE, IT, LT, NL, UK; 
2015 for BE, EE, FR, LV, LU, PT, SK, SI, ES; 2014 for PL; 2013 for CY, EL; 2012 for HR, MT, BG and RO. The data on 
employer density for a number of Member States have been updated less frequently in the recent years; therefore, it is not 
presented in a chart. 

The  capacity  building  measures  are  supported  by  the  European  Structural  and 

Investment  Funds  in  a  number  of  Member  States.  Financial  support  has  been  allocated, 

among  others,  in  Bulgaria,  Cyprus,  Czechia,  Greece,  France,  Lithuania,  Latvia,  Poland, 

Slovakia and Portugal. In Portugal, the European Social Fund (ESF) supports the institutional 

capacity  building  of  social  partners  in  view  of  their  important  role  in  the  modernization  of 

labour  market  institutions,  including  the  management  and  implementation  of  active  labour 

market  policies  and  vocational  education  and  training.  In  Latvia,  the  ESF  supports 

strengthening  of  the  bipartite  social  dialogue.  The  goal  of  the  projects  is  to  develop  a  legal 

framework to facilitate social dialogue in different sectors.  Yet, there is room for improving 

the take up of available EU funding in several Member States in order to increase the capacity 

of social partners. 

The changing world of work offer new opportunities for social partner organisations but 

also poses new threats. Already now, workers under different contractual arrangements show 

very different  representation  patterns. In  particular, employees with permanent contracts are 

affiliated  to  a  trade  union  to  a  significantly  higher  degree  than  workers  on  fixed-term 

contracts.  In  addition,  most  of  the  newer  forms  of  employment  suffer  from  a  lack  of 

representation. Research from the Netherlands suggests that these developments may impact 

the  outcome  of  collective  bargaining,  with  lower  wage  increases  in  sectors  with  many 

114 

 
 
 
 
independent workers (and lower membership) compared to other sectors79. At the same time, 

enterprises  in  the  expanding  service  sector  are  less  likely  to  be  members  of  employer 

organisations than those in industry. In recent years, social partners' organisations have taken 

initiatives to attract new members, or strengthen the voice of certain underrepresented groups 

(youth and platform workers) through targeted strategies and recruitment efforts and creating 
specific structures within the organisation80. 

In  the  EU,  the  representativeness  of  social  partner  organisations  is  typically  assessed 

using  two  different  principles.  On  the  one  hand,  some  countries  rely  principally  on  "legal 

conformity", meaning a certain number of legal requirements regulate the representativeness 

of social partners and specify the preconditions for participation in collective bargaining and 

binding  collective  agreements  (e.g.  elections  and  density  or  membership  on  the  union  side, 

and employee coverage or employer membership density of the employer side). On the other 

hand, other Member States rely on the principle of "mutual recognition" which involves self-

regulation  by the social partners. Finally,  a number of countries employ  a mix  of these  two 

principles.  In  practice,  a  lack  of  transparency  can  make  it  difficult  to  univocally  gauge  the 
representativeness of various organisations81. 

The European Semester dedicates increasing attention to social dialogue. In 2017, a first 

fully-fledged  multilateral  surveillance  exercise  on  the  involvement  of  social  partners  in 

reforms and policies was held in the Employment Committee, institutionally underpinned by 

the  Employment  Guidelines,  with  14  Member  States  reviewed  and  country-specific 

conclusions. National social partner representatives were present and provided their view on 

the state of play. Whereas the functioning of social dialogue is specific to each country, the 

review revealed some challenges common to several of the reviewed Member States. These 

include  capacity  issues  among  the  social  partners  and  the  need  for  more  predictable, 

meaningful  and  timely  consultation  of  social  partners  covering  different  phases  of  reforms. 

The  conclusions  of  the  multilateral  surveillance  exercise  together  with  further  analysis 

included in the country reports finally translated into a strong emphasis on the role of social 

dialogue in the country-specific recommendations, proposed by the Commission in May and 

adopted  by  the  Council  in  July  2018.  For  two  Member  States  (Hungary  and  Romania) 

recommendations  explicitly  call  for  an  improvement  of  social  dialogue,  while  for  several 

79  DNB  (2018),  "DNBulletin:  Flexibilisering  arbeidsmarkt  gaat  gepaard  met  daling  arbeidsinkomensquote", 
published on 1st February 2018. 
80 See Chapters 5 in Employment and Social Developments in Europe, 2018 and 2017 editions.  
81 Eurofound (2016), 'The concept of representativeness at national, international and European level'. 

115 

 
 
                                                            
other Member States the role of social partners, including in some cases existing challenges, 

is  recalled  in  the  recitals.  In  some  cases  there  is  scope  for  improving  the  capacity  of  social 

partners  and  providing  them  with  an  adequate  framework  for  predictable  and  timely 

consultation  on  policy  making  and  notably  reforms,  including  in  all  key  stages  of  the 

European Semester. 

The consultation of civil society organisations also plays an important role to ensure that 

reforms  are  designed  and  implemented  effectively.  As  highlighted  in  the  revised 

Employment  Guidelines  adopted  in  July  2018,  Member  States  should  take  into  account  the 

experience of civil society organisations on employment and social issues, where relevant and 

building  on  existing  national  practices.  For  their  involvement  to  be  fruitful  in  the 

identification of policy challenges and remedies, it is important that the dialogue is inspired to 
the principles of openness, pluralism and transparency. Preliminary  evidence82 suggests that 

the  degree  of  engagement  of  civil  society  stakeholders  varies  significantly  among  Member 

States, as regards both the European Semester and more generally the consultation on planned 

reforms. Consultation with stakeholders may be challenging in countries where civil society is 

less organised: in particular, insufficient capacity to actively engage in the policy debate may 

be an issue in some Member States.  

3.3.2   Policy response  

Reforms  in  the  area  of  employment  protection  legislation  are  taking  place  in  some 

Member States, with the aim to achieve a better balance between flexibility and security 

and  avoid  segmentation.  France,  as  part  of  a  broader  reform  of  labour  law,  introduced  in 

January 2018 a compulsory seniority and age-based reference for compensation of employees 

in  case  of  unlawful  dismissals  on  economic  grounds,  aiming  at  increasing  coherence  of  the 

amounts related to similar cases and to facilitate the resolution of litigation at the conciliation 

stage.  To  compensate,  severance  pay  in  case  of  economically  justified  dismissals  will  be 

increased  by  25%.  In  addition,  companies  can  implement  through  a  majority  agreement  the 

"Rupture Conventionnelle Collective" (RCC) i.e. a mutually-agreed resignation procedure in 

exchange  of  a  compensation  for  the  employee  (which  cannot  be  inferior  to  individual 

severance  pay),  after  negotiation  with  trade  unions.  The  use  of  this  mechanism  has  to  be 

82 As collected, for instance, during the seminar "The Social Pillar and European Semester as tools for delivering 
social Europe – a reflection with civil society", held on 2 October 2018 in Brussels. 

116 

 
 
 
                                                            
validated by public authorities, notably to avoid abuses. The timespan for starting a lawsuit to 

contest a dismissal (except in cases of harassment and discrimination) was reduced from 2 to 

1 year. Moreover, in December 2017 collective bargaining rules were reviewed to restrain the 

scope of assessment of financial difficulties justifying collective dismissal; the assessment for 

assessing economic difficulties for a company is now restricted to the national territory, away 

from worldwide scope, giving more leeway to companies to justify collective dismissals.  In 

Belgium, the notice periods were shortened in 2018 during the beginning period of each new 

employment  contract  (from  2  to  1  week  during  the  first  3  months,  from  4  to  3  weeks  the 

fourth  month).  In  Croatia,  an  Amendment  to  the  Labour  Act  has  reintroduced  in  2017  the 

possibility for the employer, abolished in 2014, to bring a claim to court in order to override 

the  works  council’s  refusal  to  give  consent  to  the  dismissal  of  protected  employees  (e.g. 

employees  who  are  members  of  the  works  council,  disabled  employees,  older  employees, 

etc.). In Italy, workers' compensation in case of unfair dismissals was recently increased. 

A number of Member States are further planning measures in this domain, which may 

be  adopted  in  the  near  future.  In  the  Netherlands,  a  (draft)  package  of  comprehensive 

measures was submitted to public consultation in April 2018, with the intention to achieve a 

better  balance  in  employment  protection  law.  The  package  includes  the  introduction  of  an 

additional  ground  (so-called  "accumulation  ground")  for  dismissal  of  employees  with  a 

permanent  contract;  the  possible  extension  of  the  probation  period  for  permanent  contracts 

(from 2 to 5 months); the extension of the duration period of successive temporary contracts 

to  3  years  (instead  of  only  2  years  as  previously);  and  the  possibility  to  differentiate 

unemployment contributions with respect to the type of contract. In Finland, the government 

is preparing an amendment to the Employment Contracts Act, aimed at easing the criteria for 

individual  redundancy  in  businesses  employing  10  people  or  less.  The  objective  is to  lower 

the threshold for hiring new employees. This would be combined with easier hiring on fixed-

term  contracts  of  young  unemployed  people  (below  30  years  old).  The  draft  proposal  was 

circulated for comments in summer 2018. Based on the comments the government revised the 

size from enterprises employing 20 people to those employing 10 people. The amendment has 

received  so  far  mixed  appraisals  in  view  of  the  broad  scope  of  both  measures,  which  is 

considered by some not targeted enough. 

As  concerns  temporary  contracts,  some  Member  States  are  acting  to  establish  stricter 

conditions for their use (in order to prevent abuses) or allow more freedom to collective 

bargaining in negotiating their framework. In the Czech Republic, several measures aimed 

117 

 
 
to  prevent  abuses  of  temporary  work  agencies have  become  operational  in  July  2017;  these 

include stricter sanctions for the responsible representative of a temporary work agency that 

lost  its  licence  due  to  breaches  of  obligations.  In  Slovenia,  amendments  to  the  Labour 

Inspections Act aim to prevent illegal use of atypical forms of work, including work on the 

basis  of  civil  law  contracts,  and  to  sanction  those  employers  who  do  not  pay  wages  in  due 

time.  In  particular,  when  an  inspector  establishes  that  work  is  unlawfully  performed  on  the 

basis  of  a  civil  law  contract,  the  employer  is  mandated  to  offer  the  worker  an  adequate 

employment contract within three days. France enabled sector level bargaining to prevail over 

national labour law for setting framework of use of fixed-term and temporary contracts (see 

Chapter 3.1). Agreements at company-level can be less favourable than branch-level ones, by 

removing the capacity to set “lockdown clauses” for the latter. In Portugal, a comprehensive 

package of measures to tackle labour market segmentation was agreed with social partners in 

June  2018  (the  package  is  expected  to  be  legislated  by  the  end  of  2018).  Changes  include: 

reduction of the maximum duration of fixed-term contracts from three to two years (including 

renewals), with a total duration of renewals not exceeding the duration of the initial period; 

reduction of the maximum duration of undetermined contracts ("contratos de trabalho a termo 

incerto")  from  six  to  four  years;  limiting  the  scope  of  justifications  for  use  of  temporary 

contracts  for  younger  workers  and  the  long-term  unemployed.  At  the  same  time,  the 

probationary period will be increased to 180 days for first time contracts as well as for newly 

hired  long-term  unemployed.  The  tripartite  agreement  also  calls  for  taxing  excessive  labour 

turnover,  whereby  the  definition  of  excessive  (by  sector)  is  to  be  defined  under  regulatory 

decree,  with  the  involvement  of  social  partners.  Finally,  Greece  plans  to  increase  the 

protection of workers performing contracted work. For the first time, an integrated system of 

rules  will  be  introduced  establishing  mutual  and  joint  liability  of  the  contracting  entity,  the 

contractor and the subcontractor for workers in the performance of the contracted work. This 

broadens  the  protection  of  workers'  rights  as  concerns  wages,  insurance  contributions, 

redundancy  payments  and  compensation  in  the  event  of  an  accident  at  work.  In  Italy,  the 

maximum duration of temporary contracts was reduced from 36 to 24 months. The maximum 

number  of  extensions  was  reduced  from  5  to  4  and,  after  the  12th  month,  extensions  are 

allowed  only  if  new  justifying  reasons  are  formally  provided.  The  law  also  increased 

additional  social  security  contribution  paid  by  employers  for  the  renewal  of  temporary 

contracts  by  0.5  pp.  Finally,  the  quota  of  employees  under  temporary  contracts  has  been 

increased from 20% to 30% of total employees, but it now also includes agency workers. 

118 

 
 
Some  innovations  are  being  introduced  as  concerns  new  forms  of  work,  including 

platform workers and own account workers. In France, the voluntary adoption of a social 

charter by on-line platforms towards independent workers was introduced. This charter should 

consist of a set of principles applying to independent workers registered in on-line platforms, 

including  a  participation  of  the  platforms  to  work  accidents  insurance  and  the  compulsory 

financing by the platforms of training applying to independent workers. In Belgium the use of 

"flexi-jobs" (that already existed in the HORECA sector) has been extended to other sectors, 

notably  retail;  pensioners  and  any  worker  having  a  contract  for  at  least  four  fifths  of  a  full 

time may apply for a flexijob. Revenues from flexi-jobs are not subject to taxation and social 

security  contribution  on  the  employee  side,  while  the  employer  pays  reduced  social 

contributions.  In  Spain,  the  2017  reform  of  the  Law  on  Autonomous  Workers  seeks  to 

improve the job quality of self-employed, including social protection and safety at work. The 

new measures extend from 6 to 12 months the 50 EUR social security contribution flat rate, 

and introduce a higher degree of flexibility in deciding the amounts. The reform also makes 

pension  payments  compatible  with  free-lance  work,  promotes  work-life  balance  and  better 

access to training. In Ireland, the Employment Bill 2017 addresses a number of areas of the 

current  employment  legislation  as  concerns  low-paid,  more  vulnerable  employees.  The 

purpose of the Bill is to ensure that employees are better informed about the nature of their 

employment  arrangements  (and  their  core terms)  at  an early stage  –  a  new  offence  is  being 

created for non-provision by the employer of core terms within a specified period. In addition, 

zero  hours  contracts  are  prohibited  in  most  circumstances;  a  “banded  hours”  provision  is 

introduced so that employees on low-hour contracts who consistently work extra hours than 

provided for in their contracts, are entitled to be placed in a band of hours that better reflects 

the reality; an enhanced minimum payment is introduced for employees who are called in to 

work for a period but actually did not provide work. In Portugal, the planned introduction of 

"Contrato Geracao" includes two strands: the introduction of financial support to companies 

that  hire  simultaneously  a  young  unemployed  person  (or  a  young  person  looking  for  a  first 

job) and an older long-term unemployed person; and support to youth employment combined 

with a partial retirement of an older worker. 

Some Member States have taken measures in the area of organisation of working time, 

not  always  with  a  view  to  greater  adaptability.  In  Belgium,  a  number  of  obligations 

regarding  part-time  work  were  modernised  and  simplified  in  2017,  notably  reducing 

formalities in the determination of fixed or variable work schedules, the notification and the 

119 

 
 
surveillance  of  deviations.  In  addition,  the  legal  framework  for  "career  saving"  became 

applicable  as  from  February  2018.  Provided  there  is  an  agreement  at  sectoral  or  enterprise 

level, it allows employees to save some “leave time” for accumulation and use at a later stage. 

Finally, the procedure to introduce night work and Sunday work in the context of e-commerce 

has  been  simplified.  In  France,  the  remit  of  accords  de  competitivité  ("competitiveness 

agreements")  has  been  extended  (see  Chapter  3.1).  As  part  of  the  tripartite  agreement  with 

social partners on the reform of labour law, Portugal plans to eliminate the individual "bank of 

hours"  and  the  collective  ones  based  on  individual  agreements.  The  agreements  already  in 

force  will  expire  one  year  at  most  after  the  implementation  of  the  new  rules.  The  new 

agreements will be made under collective bargaining or group agreements, to be reached after 

worker’s consultation. The measure specifies daily hours' limits, rates of approval by workers 

and use of the most favourable treatment principle.  

Several Member States have adopted measures to prevent the use of undeclared work, 

improve safety at work and/or strengthen labour inspectorates.  In Bulgaria, since the end 

of  2017,  an  amendment  to  the  Law  on  Public  Procurement  regulates  the  removal  of  a 

participant  in  a  public  procurement  procedure,  when  in  the  previous  three-year  period  a 

penalty  was  imposed  for  the  use  of  undeclared  work.  This  requirement  also  applies  to 

subcontractors,  which  are  mainly  small  and  micro  enterprises  (often  in  the  construction 

sector). Information campaigns are also carried out to raise the awareness of the risk groups 

about the disadvantages related to envelope wages, notably in terms of lower social security 

contributions. Greece has completed in 2018 the automatic exchange of information between 

the  databases  of  various  ministries  and  labour  market  institutions,  as  well  as  the  police.  In 

addition,  the  system  of  fines  imposed  on  employers  who  have  not  declared  a  dependent 

worker  was  reviewed,  with  a  substantial  reduction  if  the  employer  recruits  the  undeclared 

worker  with  a  full-time  contract  within  10  days  from  the  inspection  (the  measure  aims  at 

incentivising  the  transformation  of  undeclared  into  formal  work).    In  Spain,  the  2018-2020 

Strategic  Plan,  agreed  with  the  autonomous  communities  and  in  consultation  with  social 

partners, aims at strengthening the labour inspectorates’ capacity and at structuring its actions 

in a concrete and measurable manner. It also pays attention to the challenges arising from the 

new forms of work, working conditions and non-discrimination in the job place. In Estonia, 

an  amendment  of  the  Occupational  Health  and  Work  Safety  Act,  adopted  in  May  2018 

improves  protection  against  health  hazards  in  the  workplace  and  ensures  that  safety 

instructions  and  the  provision  of  first  aid  training  are  adapted  to  the  specificities  of  the 

120 

 
 
company.  As  mentioned  above,  Slovenia  is  taking  action  to  prevent  illegal  use  of  atypical 

forms of work. In addition, the Labour Inspectorate is given extra powers to investigate cases 

of non-payment of wages (one of the most frequent violations since 2009). In Cyprus a review 

of the system of labour inspections will be promoted in order to improve their effectiveness 

and  efficiency  to  combat  undeclared  work.  This  would  include  increased  fines  and  the 

introduction of an electronic declaration of commencement of employment. In addition, a new 

bill  providing  for  the  creation  of  a  Centralized  Labour  Inspectorate  has  been  forwarded  for 

approval during the next months. In Portugal, a recruitment process of labour inspectors and 

the  opening  of  new  competitions  are  ongoing.  Moreover,  with  a  view  to  discourage 

undeclared  or  sub-declared  work,  Portugal  plans  to  extend  the  maximum  duration  of  very 

short-term contracts from 15 to 35 days (with a maximum annual duration of 70 days with the 

same  employer).  Transparency  in  the  use  of  temporary  agency  work  will  be  reinforced, 

making  information  of  worker  mandatory  about  the  reason  behind  the  termination  of  a 

contract between the user firm and the temporary work agency.  

Relatively  few  policy  measures  have  been  taken  by  Member  States  to  reinforce  their 

ALMP systems despite of persistent challenges.  Greece is implementing a new system of 

ALMP delivery aiming at increasing the effectiveness of activating policies through improved 

profiling and matching activities. A better targeting of ALMPs remains crucial for achieving 

better  outcomes  of  these  reforms  and  so  far  a  pilot  for  over  2000  unemployed  has  been 

launched  at  one  local  employment  office.  Cyprus  has  launched  the  pilot  phase  of  a  newly 

developed  monitoring  and  evaluation  system  for  active  labour  market  policies  enabling  to 

improve the effectiveness of labour market measures. This will allow policy makers to better 

design and revise on-going labour market programmes. In Spain, a broad strategic framework 

for the coordination of the National Employment System has been developed. This measure 

sets out the organisational framework for all actions implemented within the Spanish National 

Employment System during 2017-2020 and serves as a basis for designing and managing of 

active  labour  market  policies,  training  actions  and  many  other  strategies  of  regional  public 

employment services and sets the framework for defining principles, targets, instruments and 

financial resources. 

Member States are still prioritising the provision of more individual services. Estonia is 

extending  the  scope  of  ALMPs  to  certain  employed  persons  to  prevent  unemployment.  The 

target group includes people working under service contracts or authorisation agreement and 

those earning national average wage. Stable levels of PES expenditure on ALMPs as well as 

121 

 
 
human  resources  are  supposed  to  address  persisting  challenges.  Hungary  has  taken  further 

steps  to  address  the  challenges  of  the  Public  Work  Scheme  by  implementing  programmes 

which  enhance  the  transition  from  these  programmes  to  the  primary  labour  market.  A  job-

creation  programme  qualifies  the  employment  of  a  person  in  public  works  as  a  category  of 

primary  support  while  two  other  programmes  provides  either  recruitment  incentives  or 

bonuses or establish a mentoring for people coming from the Public Work schemes in order to 

facilitate their integration into the primary labour market.  

Measures to improve the training components of ALMPS are also still being promoted. 

In Croatia a new package of nine active labour market measures has been adopted. In the new 

package more focus is placed on training and workplace training, especially for youth, older 

workers  and  long-term  unemployed.  Self-employment  subsidies  will  be  more  stimulated  as 

well. In addition, subsidies will be given to employers support the employment of workers in 

the  age  category  50+.  France  continues  to  invest  in  vocational  training  and  apprenticeship, 

through the Plan d’Investissement dans les compétences ("Investment in Competences Plan", 

see chapter 3.2). The objective is to provide qualifying training to 1 million unemployed with 

low  levels  of  qualification  and  to  800  000  young  NEETs  partly  through  preparation  to 

apprenticeships.  

Public  Employment  Services  (PES)  are  following  their  reform  agenda,  aiming  to 

increase the institutional capacity in times of decreasing unemployment. To this end, PES 

are increasingly benefitting from their involvement in the "Benchlearning project" conducted 

in  the  framework  of  the  European  Network  of  Public  Employment  Services.  Since  2015 

Benchlearning supports PES in developing awareness of strengths as well as areas for further 

improvement aiming at better service delivery to PES customers. As the number of registered 

jobseekers  steadily  fell  over  the  past  years  Public  Employment  Services  are  requested  to 

strategically reallocate their resources according to the customers' needs. Certain target groups 

such  as  the  long-term-unemployed  and  an  increasing  number  of  older  workers  continue  to 

require intensive support as most PES are facing an aging client base. Lithuania is modifying 

the work of PES, optimising the resources with the aim to improve the work with the clients 

and  reduce  the  caseload  from  more  than  400  cases  to  fewer  than  300  per  case  handler.  In 

Cyprus they pursue the Enhancement and Modernization of PES 2014-2020 by implementing 

reform measures for the strengthening of its Public Employment Services. Recently additional 

20  counsellors/advisors  have  been  recruited  in  order  to  be  able  to  address  their  current 

mandate  more  effectively  and  efficiently,  in  implementing  the  Youth  Guarantee  and  the 

122 

 
 
Council  Recommendation  on  the  integration  of  the  long-term  unemployed  in  the  labour 

market.  Additional  measures  which  include  training  of  employment  counsellors,  training  of 

PES officers, enhancement of the PES Candidate Placement System (CPS) and the creation of 

an IT platform, improvement of services to both job-seekers and employers. Spain has taken 

steps to improve the public employment and working conditions 2018. The Ministry and the 

social partners signed a document committing them to promote measures for civil servants to 

recover their purchasing power and improve their working conditions. This measure precedes 

an agreement in April 2017 to reduce the overall share of temporary contracts in the Public 

Sector  down  to  8 %  in  2020  through  recruitment  competitions  for  permanent  posts  (some 

250,000). In Greece the process of PES re-engineering has continued throughout 2017-2018 

to  improve  the  functioning  of  Public  Employment  Services.  A  new  profiling  methodology 

was piloted in autumn 2017 and started being rolled-out in 2018. A new skill assessment tool 

is  under  development.  The  recruitment  of  additional  employment  counsellors  started  in  the 

first semester of 2018 should lead to an almost doubling of the counsellors' workforce by the 

end  of  2018.  Finally,  Austria  has  taken  steps  to  evaluate  and  design  a  more  effective 

management of the Public Employment Services, notably by reviewing and revising all PES 

instruments  for  efficient  and  effective  reintegration  into  the  labour  market.  Job-specific 

training and qualifications in cooperation with employers are being prioritised together with 

increased employment incentives.   

PES are requested to intensify their cooperation with employers and local authorities in 

order to better meet the requirements of tighter labour markets. On that account PES are 

developing comprehensive employer engagement strategies, defining different approaches as 

to  employer  segmentation  and  organisation  of  employer  services.  Most  Public  Employment 

Services  have  set  up  central  coordination  levels  of  employer  services  though  they  also  do 

provide services for employers at regional and local level. Additionally, PES ought to define 

common  minimum  standards  of  service  delivery  to  employers  including  measuring 

satisfaction. In Italy and Spain, the central PES agencies, respectively ANPAL and SEPE, are 

facilitating  mutual  learning  activities  between  the  regions  in  order  to  exchange  on  good 

practise allowing improving the services to employers. In Lithuania, the PES plans to create a 

model  on  municipality-PES  cooperation  on  common  provision  of  measures  to  activate  the 

recipients  of  social  assistance.  This  model  will  have  to  be  complemented  by  an 

implementation plan. 

123 

 
 
Member States have continued to implement the Council recommendation on long-term 
unemployment83.  A  2018  self-assessment  of  Member  States  showed  globally,  compared  to 

2016, a 15% increase in scores, with most important progress reached in Member States with 

less  advanced  systems.  More  specifically,  on  the  registration  of  the  unemployed,  countries 

have  adopted  different  approaches  and  incentives  to  encourage  registration.   The  most 

effective  are  those  where  registration  is  linked  to  entitlement  to  some  forms  of  benefits  or 

services.  However, there is still room for improvements in the outreach towards the inactive 

in  several  Member  States  (e.g.  Bulgaria,  Estonia  and  Romania).  There  are  also  multiple 

approaches to the provision of a single point of contact for services: some countries have tried 

to  integrate  all  services  into  one  point  (e.g.  Finland,  Germany  and  Ireland),  others  have  a 

“bridge  point” 

linking  different 

institutions  or  authorities  (e.g.  Cyprus  and 

the 

Netherlands).   Effective  co-ordination  between  social  and  employment  authorities  and 

services  is  still  a  challenge  in  many  Member  States  (e.g.  Croatia,  Greece,  Hungary,  Latvia, 

Romania and Spain); often complicated by challenges linked to data protection and resources. 

While  there  are  measures  planned  to  enhance  this,  implementation  on  the  ground  is  yet  to 

take-off.  Job  Integration  Agreements  in  some  form  or  another  are  established  in  almost  all 

Member  States  but  some  elements  are  missing,  in  particular  the  in-depth  (re)assessments 

when required. Some Member States (e.g. the Czech Republic, Greece and Slovakia) are yet 

to move towards a more targeted/individualised case-management approach dedicated to the 

long-term unemployed. There are a lot of different activities carried out under the heading of 

engagement with employers.  Agreements with social partners are generally in place, though 

these do not always translate to the local level.  Some Member States (e.g. Greece, Portugal, 

Slovenia and Sweden) are dedicating PES staff to working with employers: this seems a good 

approach; nevertheless, improvements, notably in the form of more strategic partnerships and 

approaches, are still required in some Member States (e.g. Croatia, France and Italy).  

Member States are providing more individualised support to long-term unemployed and 

better integrated services. In Bulgaria, Job Integration Agreements are now signed between 

the  long-term  unemployed  person  and  the  labour  office,  including  proposals  for  specific 

employment  services  and  referral  to  services  provided  by  other  institutions.  Since  January 

2018,  Family  and  Labour  Counselling  and  Mobile  joint  teams  of  Employment  Agency  and 

83  This  paragraph  is  based  on  the  conclusions  of  the  EMCO  Thematic  Review  on  the  implementation  of  the 
Council Recommendation on the integration of the long-term unemployed in the labour market of 3rd October 
2018.  An  in-depth  evaluation  is  underway  and  will  be  published  in  early  2019,  together  with  a  report  to  the 
Council. 

124 

 
 
                                                            
Social Assistance Agency staff provide comprehensive and integrated services to unemployed 

persons in remote areas. In Romania, a pilot is underway aiming to create integrated teams to 

address  several  challenges  at  the  same  time:  social,  educational  and  medical,  also  in 

partnership  with  the  PES.  The  project  will  pilot  this  approach  in  139  of  the  most 

disadvantaged communities selected based on the poverty maps and the criteria agreed upon 

by  the  Government.  A  scale-up  is  envisaged  later  on.  Slovenia  adopted  a  2017-2020  social 

activation  programmes  aiming  at  encouraging  social  and  labour  market  inclusion  of  the 

12 500 most-hard-to-employ and vulnerable people. The aim is to provide these persons with 

competences  that  will  bring  them  closer  to  the  labour  market  inclusion.  In  Ireland,  the 

voluntary  scheme  YESS  ("Youth  Employment  Support  Scheme")  is  aimed  at  young 

jobseekers  who  are  long-term  unemployed  or  who  face  significant  barriers  to  gaining 

employment. YESS aims to provide an opportunity to learn basic work and social skills in a 

supportive  environment  while  on  a  work  placement.  The  standard  duration  for  the  work 

experience placements will be three months although there will be an option to extend that to 

six or nine months following a review of progress by a departmental caseworker. 

Subsidies  and  incentives  have  become  a  common  policy  measure  for  integrating  long-

term  unemployed  into  the  labour  market.  Cyprus  has  launched  a  programme  about 

providing  incentives  for hiring  unemployed individuals in the private sector. The subsidy is 

granted  only  for  the  first  6  months  of  employment.  Through  the  scheme  946  enterprises 

benefited  and  about  2,472  participants  gained  employment.  In  Luxembourg,  new  measures 

aim  at  creating  subsidised  permanent  jobs  for  long-term  unemployed  that  match  the  new 

needs  of  employers  and  targets  30+  long-term  unemployed  and  the  scheme  has  a  specific 

provision  for  people  older  than  50  enabling  a  total  refund  of  wage  labour  costs  until 

retirement. On  the  other  hand, in  the  light  of  the  improving  labour  market  situation,  France 

has  reduced  the  volume  of  its  subsidised  job  schemes  (see  also  Section  3.1.2).  In  Austria, 

measures  have  been  taken  aiming  at  reducing  long-term  unemployment  by  tightening 

sanctions,  strengthening  constraints  on  unemployed  to  accept  job  offers  even  by  longer 

commuting distances up to 2.5 hours per day and combining unemployment benefit and social 

assistance. Generally, the aim is to create stronger incentives by unemployed to take up a job 

offer and reduce unemployment and increase effectiveness of labour market policy. Sweden 

introduced "Introduction jobs", targeting long-term unemployed or newly arrived immigrants 

that can be flexibly combined with education and training. The wage subsidy for introduction 

jobs is capped at a gross salary of SEK 20,000 per month (about EUR 1950), with a limit of 

125 

 
 
80%. Subsidies in Slovenia are aimed at the permanent employment of persons older than 58 

years  until  they  fulfil  the  conditions  for  retirement.  Priority  inclusion  is  foreseen  for 

unemployment  benefit-  and  cash  social  assistance  beneficiaries.  The  subsidy  amounts  to 

EUR 11 000 and is payed to the employer in two parts (half at the employment and half after 
18th salary). 

Cooperation  with  the  private  sector  continues  to  enhance  transitions  to  the  primary 

labour  market.  Entry  agreements  are  being  tested  in  Sweden  enabling  long-term 

unemployed,  with  a  particular  focus  on  foreign-born  women,  to  gain  employment  from  an 

employer covered by a collective agreement on entry agreements. Such agreements are based 

on  a  proposal  from  the  social  partners  and  aim  at  building  a  new  model  for  getting  more 

people  into  the  labour  market  and  to  ease  future  skills  supply  for  employers,  also  through 

Swedish courses and other short-term training programmes. In Malta, the Community Work 

Scheme that places long-term unemployed people in work is being revised to ensure those at 

risk of becoming detached from the labour market are formally employed and active. 

Recent  reforms  in  the  domain  of  unemployment  benefits  have  mostly  focused  on 

strengthening  activation  requirements.  In  Finland,  since  January  2018,  unemployed 

jobseekers  are  only  eligible  for  the  full  amount  of  unemployment  benefits  if  they  also  get 

some paid work income or take part in services improving their employment prospects (with 

some  thresholds).  If  a  jobseeker  fails  to  show  the  required  activity  during  the  65-day 

monitoring  period,  the  unemployment  benefit  paid  for  the  following  65  days  is  reduced  by 

4.65%. Furthermore, the government is preparing legislation that would require unemployed 

jobseekers to apply for one  job per week or  face  a cut in their unemployment benefits. The 

proposal  is  currently  under  consultation  with  social  partners,  but  both  employees'  and 

employers'  sides  have  expressed  reservations  on  it,  as  it  may  lead  the  employee  to  prepare 

applications without the intention of being hired. In Slovenia, since October 2017 dismissed 

workers are obliged to report to the employment  service already within the notice period in 

case  the  employment  contract  has  been  terminated  for  business  reasons  or  reasons  of 

incompetence.  Failure  to  do  this  will  result  in  the  first  three  months  of  unemployment  in 

lower unemployment benefits (60% rather than 80%) of the reference salary. In addition, low-

skilled persons whose professions are not in high demand are allowed to keep receiving 20% 

of their unemployment benefit for a maximum of 12 months when they find a job. France, as 

part  of  the  Law  Liberté  de  Choisir  son  Avenir  Professionnel  ("Freedom  to  Choose  one's  

Professional Future"), will apply a stricter control on job search, counterbalanced by increased 

126 

 
 
tailor-made  accompanying  measures.  Professional  branches  are  invited  to  negotiate 

agreements so as to foster more sustainable forms of work, but if collective bargaining fails, 

the government can intervene. People receiving unemployment benefit will also be allowed to 

run  a  part-time  activity,  under  more  restrictive  conditions.  Moreover,  the  unemployment 

benefit, previously exclusively financed by social security contributions, is supplemented by 

an  increase  on  the  broader  tax  "CSG-Contribution  sociale  généralisée".  Starting  from  1 

January  2019,  unemployment  insurance  negotiations  will  be  framed  by  the  government, 

which will determine the overall financial envelope to respect and the targets to meet. Access 

to benefit would also be granted to independent workers and to employees who resign, under 

certain conditions. Spain plans to introduce a "Universal Social Card" with the aim to gather 

information  on  social  benefits received  by  all  individuals  as  well  as  any  potential  situations 

giving  the  right  to  social  benefits  (e.g.  dependency,  disability,  unemployment  or  large 

families).  It  is  expected  to  improve  the  coordination  between  administrations,  increase  the 

effectiveness  of  social  benefits  and,  ultimately,  help  to  detect  vulnerable  situations.  The 

design and development of the Universal Social Card system finished at the end of 2017, with 

approval expected by Q4-2018.  

As  parts  of  the  ongoing  reforms,  eligibility  conditions  to  unemployment  benefits  have 

been modified in some cases, often making them stricter. Bulgaria has increased in 2018 

the  minimum  unemployment  benefit  from  BGN  7.2  (approximately  EUR  3.7)  to  BGN  9 

(EUR 4.6) per day, with a maximum of BGN 74.3 (EUR 38). At the same time, the eligibility 

requirements  have  been  tightened  –  the  insured  person  must  have  worked  for  at  least  15 

months  during  the  18  months,  and  not  9  months  of  the  last  15,  as  it  was  before.  This 

tightening  is  likely  to  affect  younger  workers  and  persons  who  are  more  likely  to  have 

interrupted  careers  –  notably  seasonal  workers  and  workers  on  precarious  jobs.  Going  in  a 

different  direction,  Portugal  has  reduced  the  guarantee  period  for  access  to  the  initial 

unemployment  benefit  upon  expiration  of  a  fixed-term  contract,  from  180  to  120  days.  In 

Austria, a package of measures is planned to reduce long-term unemployment by tightening 

the rules concerning mobility of unemployment benefit recipients (accepting job offers even 

by longer commuting distances up to  2.5 hours per day), abolishing the  prolongation of the 

UB  entitlement  due  to  sickness  (except  in-patient  stay)  and  restricting  the  duration  of 

marginal employment during receipt of UB. Generally, the aim is to create stronger incentives 

for unemployed to take up a job offer and reduce unemployment and increase effectiveness of 

labour market policy.  

127 

 
 
Some  Member States  took action to  promote  workers'  and learners' mobility (internal 

and  external),  with  the  aim  to  enhance  employability  and  improve  skills  development, 

and/or attract foreign workers in sectors showing labour shortages. In 2018, Finland has 

introduced measures to support regional mobility and commuting of unemployed jobseekers, 

including  the  provision  of  mobility  allowances  (now  also  available  for  part-time  work  with 

working hours less than 18 hours a week, work-related training) and targeted information on 

economic  support  for  mobility.  A  higher  mobility  allowance  can  be  provided  in  case  of 

exceptionally  long  commuting  distances.  Social  partners  were  consulted  on  the  reform.  In 

Latvia, mobility support measures for unemployed people were expanded in 2018 to include 

also the capital (Riga, previously excluded).  The measure covers regional mobility for people 

who  take  up  a  job  offer  in  other  regions,  but  also  those  who  are  enrolled  in  some  ALMP 

measures,  including  Youth  Guarantee,  subsidized  employment  and  vocational  training 

measures. Support measures aimed at attracting medical practitioners (doctors and nurses) for 

work in regions outside Riga started in December 2017. Moreover, a list of 237 high-skilled 

professions,  where  at  the  moment  there  is  a  significant  shortage  of  labour  force  and  which 

could attract third-country nationals, was approved in Latvia. Some preferential conditions are 

applied  to  employees  wishing  to  receive  an  EU  Blue  Card  in  those  cases.  In  Poland,  the 

creation of the National Agency for Academic Exchange in 2017 is expected to facilitate the 

internationalisation  of  Polish  universities  through  the  pro-quality  support  of  academic 

mobility.  In  Bulgaria,  a  simplified  Blue  Card  authorization  procedure  for  third-country 

nationals has been approved to overcome the identified shortage of qualified specialists in the 

field of information and communication technologies, engineers in industrial production and 

others relevant fields. The modifications will allow as well the issuance of the Blue Card for a 

period of up to 4 years, when in the past it was issued for a term of one year. In Estonia, an 

amendment  of  the  "Aliens’  Act"  exempts  top-level  specialists  from  immigration  quota  and 

extend  the  maximum  term  of  short-term  employment  to  12  months,  while  leaving  the 

immigration quota unchanged. 

The  involvement  of  national  social  partners  in  the  design  and  implementation  of 

employment  and  social  reforms  and  policies  varies  across  Member  States.  The  quality 

and  form  of  this  involvement  reflects  the  diversity  of  national  institutional  frameworks  and 

social  dialogue  practices,  with  a  marked  lack  of  timely  and  or  meaningful  dialogue  in  a 

number of Member States. At the same time, during the last 18 months social partners have 

128 

 
 
been  involved  in  the  design  of  relevant  policy  reforms  in  several  Member  States84.  New 

legislation and measures concerning the functioning of labour market have been discussed or 

agreed  for  instance  in  Bulgaria,  Croatia,  Denmark,  Finland,  the  Netherlands,  Portugal  and 

Sweden  (integration  of  migrants).  As  also  shown  in  Section  3.1,  social  partners  have 

negotiated  reforms  of  wage  setting  framework  in  a  number  of  countries.  In  Estonia,  the 

government  decided  to  restore  regular  tripartite  meetings  with  social  partners,  which  were 

interrupted since 2002. Negotiations related to the setting or increase of minimum wages have 

taken place for instance in Bulgaria, Estonia, Poland, Portugal and Spain. Social partners took 

part in the discussion of reforms of social protection and/or unemployment benefit in Croatia, 

France, Finland, Germany, Portugal and Slovenia, among others. Education and VET policies, 

as well as training, apprenticeship and life-long learning reforms and new policies have been 

discussed with the participation of  social  partners in  the Czech Republic, Denmark, France, 

Latvia, the Netherlands and Poland.  

84  A  detailed  analysis  of  involvement  of  social  partners  in  recent  reforms  can  be  found  in  Eurofound  (2019), 
“Social dialogue practices within the context of the EU Semester”, forthcoming. 

129 

 
 
 
                                                            
3.4. Guideline  8:  Promoting  equal  opportunities  for  all,  fostering  social  inclusion  and 

combatting poverty 

This  section  looks  at  the  implementation  of  the  employment  guideline  no.  8,  which 

recommends  to  Member  States  to  modernise  their  social  protection  systems,  in  order  to 

promote  equal  opportunities,  combat  poverty  and  social  exclusion.  It  first  presents  an 

overview  of  the  social  situation  in  Member  States  by  key  indicators,  including  disposable 

income, inequality, poverty and social inclusion, pension adequacy, access to housing, access 

to  healthcare  and  long-term  care.  Section  3.4.2  reports  on  policy  measures  from  Member 

States in the areas of social protection systems, including minimum income schemes, family 

benefits, housing policies, pensions, long-term care, healthcare and inclusion of people with 

disabilities. 

3.4.1  Key indicators 

Household  incomes  kept  rising  in  almost  all  EU  countries  in  201685.  Real  disposable 
household  income  (GDHI)  per  capita86  rose  for  all  Member  States  with  the  exception  of 

Greece, where it registered a small decrease. In general, improvements have been the fastest 

in countries which have more recently joined the EU, such as Bulgaria, Poland, Romania and 

Lithuania,  and  slower  for  longer-standing  Member  States  such  as  Austria,  Italy,  France, 

Belgium, Luxembourg, while even negative for Greece and the United Kingdom. This reflects 

ongoing  convergence,  with  Bulgaria  and  Poland  currently  being  the  best  performers  in  this 

regard. In a number of countries, real GDHI per capita remains significantly below the pre-

crisis levels. This is notably the case for Greece and Cyprus, where the levels in 2016 were, 

respectively,  at  around  69%  and  82%  of  the  levels  recorded  in  2008  (both  countries  are 

flagged  as  "critical  situations").  In  Italy,  Ireland,  Spain,  Austria,  Belgium,  Portugal  ("to 

watch" countries) and Slovenia ("on average") real GDHI per capita was in the range between 

90% and 100% of the 2008 value. In all these countries but Slovenia the growth rate in 2016 

lagged behind the (unweighted) EU average or was even negative in the case of Greece. 

85 On 26th October 2018 data for 2017 are available only for 18 Member States. An update will be provided in 
the final version of the Joint Employment Report. 
86  GDHI  is  measured  using  'unadjusted  income'  (i.e.  without  including  social  transfers  in  kind),  in  real  terms. 
Data not available for HR, and MT on 26th October 2018. 

130 

 
 
 
 
                                                            
Figure  59:    Real  GDHI  per  capita,  index  2008  =  100  and  yearly  change  (Social 
Scoreboard headline indicator) 

Source: Eurostat, National Accounts [nasq_10_nf_tr and namq_10_gdp], own calculations. Period: 2016 levels 
and yearly changes with respect to 2015. Note: Axes are centred on the unweighted EU average. The legend is 
presented in the Annex. Data for HR and MT not available on 26 October 2018. 

A  majority  of  countries  experienced  a  further  significant  improvement  in  the  share  of 
people  at  risk  of  poverty  or  social  exclusion  (AROPE)  in  201787.  The  effects  of  the 

economic recovery have become visible with falling risks of poverty or social exclusion now 

apparent  in  all  but  a  handful  of  Member  States  (also  see  Section  1.2).  Improvements  are 

particularly apparent in Romania,  Cyprus, and Poland, for which AROPE fell by more than 

2%. By contrast, for Denmark, the Netherlands and Austria, AROPE rates registered a modest 

increase on the year, albeit from a low level. The situation remains "critical" in Bulgaria and 

Greece,  in  view  of  still very  high  levels  but  only  moderate decrease  over  the last  year.  The 

negative correlation between trends and levels (see Figure 60) suggests ongoing convergence 

across Member States. Among the different age groups, young people aged 18-24 are most at 

87 See Chapter 1.2 for definitions of at-risk-of-poverty or social exclusion and its components. Note: the income 
statistics of EU SILC refer to the previous income year. Therefore, 2017 EU SILC figures for AROP, S80/S20, 
etc. refer to the 2016 income year. 

131 

 
 
 
 
                                                            
risk  of  poverty  or  social  exclusion  with  a  rate  of  29.1%.  This  indicator  registered 

improvements in a majority of Member States, reflecting falling youth unemployment.   

Figure 60: Percentage of the population at risk of poverty or social exclusion, 2017 and 
change from previous year (Social Scoreboard headline indicator) 

Source: Eurostat, SILC. Period: 2017 levels and yearly changes with respect to 2016. Note: axes are centred on 
the  unweighted  EU  average.  The  legend  is  presented  in  the  Annex.  Data  for  IE  and  UK  not  available  at  26 
October 2018. 

While declining, the AROPE rate for children (aged 0-17) remains well above the figure 

for  the  general  population  in  most  Member  States.  In  2017,  it  decreased  in  all  Member 

States  for  which  it  is  above  the  EU  average  (24.5%).  Yet  it  remains  particularly  high  in 

Romania  (41.7%),  Bulgaria  (41.6%)  and  Greece  (36.2%).  By  contrast,  in  some  Member 

States  with  below-average  levels  of  child  poverty,  the  trend  has  been  much  flatter,  largely 

reflecting the position of migrant children. This is the case in Austria, Belgium, France and 

Sweden. In the 25-54 age bracket the rate declined by 1 pp to 21.9%. People aged 55 and over 

remain the group least likely to be affected by poverty or exclusion with a rate of 20.5%.  

132 

 
 
 
 
People  with a migrant background experience a significantly  higher risk of  poverty or 

social exclusion. In 2017, the AROPE rate was more than twice as high among non-EU born 

than  among  natives  (41%  compared  to  20.7%).  This  gap  was  particularly  large  in  Belgium 

(37.1 pps), Sweden (29.6 pps) and Denmark (25.8 pps) but was smallest in Poland (4.6 pps), 

Portugal (6.8 pps) and the Czech Republic (7.8 pps). 

Figure 61: Sub-indicators of the at-risk-of-poverty or social exclusion rate 

Source:  Eurostat,  SILC.  Note:  Indicators  are  ranked  by  AROPE  in  2017.  Data  for  IE  and  UK  not 
available for 2017 on 26 October 2018. EU27 values used for 2008 (data for HR not available). 

The share of the EU population at risk of poverty fell in 2017 in a majority of Member 

States,  after  three  years  of  stability.  The  biggest  decreases  were  recorded  in  (Poland  -2.3 

pps), Romania (1.7 pps) and Hungary (-1.1 pps). On the contrary, the indicator increased in 

Luxembourg (+2.2 pps), Lithuania (+1.0), Bulgaria (+0.5) and the Netherlands (+0.5). In all 

but six Member States, the share of people at risk of poverty remains higher in 2017 than in 

133 

 
 
 
the pre-crisis period (2008) (Figure 61). Eurostat flash estimates point to further declines in 

AROP in Greece, Romania, and Portugal, and to an increase in the United Kingdom.  

The rate of severe material deprivation reached its lowest level so far. Almost all Member 

States  experienced  a  decline  in  2017.  Romania  was  the  country  with  the  largest  annual 

reduction by 4.1 pp. A significant variation remains among Member States, with Finland and 

the Netherlands having severe material deprivation (SMD) rates of less than 3%, while at the 

other  end  of  the  spectrum  Bulgaria  with  a  rate  of  30%,  followed  by  Greece  (21.1%)  and 

Romania  (19.4%).  A  slightly  higher  share  of  women  (6.9%)  experiences  severe  material 

deprivation compared to men (6.4%). A decrease took place across all age groups, with young 

people 18-24 still being most likely to experience SMD (7.9%), followed by children aged 0-

17 (7.2%), the prime age population (25-54) (6.7%) and the elderly; i.e., over 65 (6.3%).  

The share of people living in quasi-jobless households further decreased. In 20 Member 

States, the proportion of the population aged 0-59 living in households where adults work less 

than 20% of the potential has decreased in 2017. However, despite the improvements, only 9 

Member States have shares below pre-crisis levels. The biggest year-on-year reductions were 

registered in Spain (-2.1 pps), Greece (-1.6 pps) and Romania (-1.3 pps). At the same time, 

the poverty risk facing those who live in quasi-jobless households continues to increase in a 

majority  of  Member  States,  reaching  79.9%  in  Slovakia,  78.2%  in  Lithuania  and  77.8%  in 

Latvia.  

Reducing the rate of in-work poverty remains a challenge. As also shown in Section 3.1, 

in spite of an overall reduction in at-risk-of-poverty rate, the share of people at risk of in-work 

poverty remained stable in 2017. More than one in ten people in employment were at risk of 

poverty in seven Member States. Though declining, the rate of in-work poverty was highest in 

Romania,  (17.4%  in  2017,  down  from  19.7%  in  2014)  where  precarious  self-employment 

remains  a  key  driver.  High  rates  were  also  recorded  in  Luxembourg  (13.7%)  and  Spain 

(13.1%), where a key driver was the poverty risk facing employees with temporary contracts. 

On  the  other  hand,  three  countries  had  in-work  poverty  rates  below  5%  (Finland,  Czech 

Republic, and Ireland). 

The  depth  of  poverty  has  declined  for  the  first  time  since  2008,  yet  remains  high 

compared  to  pre-crisis  levels.  The  relative  at-risk-of-poverty  gap,  which  measures  the 

134 

 
 
average  distance  from  the  poverty  threshold  for  those  at  risk  of  poverty88,  has  been  on  an 

increasing trend in most Member States in the post-crisis period. Yet in the year to 2017, the 

figure  fell  for  11  Member  States,  and  remained  broadly  stable  for  5,  decreasing  on  average 

from 26.2% to 25.4%. The change was driven by improvements in the depth of poverty for 

the working age population and especially for children. The rate remains high (above 30%) in 

particular in Romania, Spain, Bulgaria and Greece. By contrast, the depth of poverty facing 

those age 65 and over remained stable. Improvements were strongest for Italy, Hungary and 

Romania.  

People  with  disabilities  are  significantly  more  likely  to  live  at  risk  of  poverty  or  social 

exclusion than those without disabilities. In 2016, 30.1% of persons with disabilities in the 

EU  were  at  risk  of  poverty  or  social  exclusion,  compared  to  20.9%  of  people  without 
disabilities,89 corresponding to a gap of 9.2 percentage points. This gap is more pronounced 

for working-age people (16-64) with 37.6% of people with disabilities in this group at risk of 

poverty or social exclusion in 2016, compared to 21% of persons with disabilities over the age 
of 65.90 The severity of disability is a very important explanatory factor, with 36.1% of those 

with  a  severe  disability  aged  16  or  over  in  the  EU  in  2015  at  risk  of  poverty  or  social 

exclusion,  compared  to  27.4%  of  those  with  a  moderate  disability  and  20.8%  without 

disabilities.  

Income inequality declined slightly in 2017, for the first time since the crisis. The share of 

income of the richest 20% compared to that of the poorest 20% fell in a majority of Member 

States (Figure 62), although most of them still had income quintile share ratios in 2017 above 

the levels of 2008. In 2017, the highest levels of income inequality, with S80/S20 ratios above 

6,  were  recorded  in  Latvia,  Estonia,  Lithuania  and  Bulgaria  (all  "critical  situations",  with  a 

significant  increase  in  the  latter  country).  Though  presenting  still  high  levels,  significant 

decreases occurred in Romania, Greece and Italy ("weak but improving"). The improvements 

were driven by faster increases in the incomes of poorer households relative to the median in 

10 Member States, suggesting the recovery was beginning to reach the most vulnerable.  

88 The relative median at-risk-of-poverty gap is calculated as the difference between the median equivalised total 
net income of persons below the at-risk-of-poverty threshold and the at-risk-of-poverty threshold, expressed as a 
percentage of the at-risk-of-poverty threshold (60% of the national median equivalised income). 
89  EU-SILC  (2017),  people  at  risk  of  poverty  or  social  exclusion  by  level  of  activity  limitation,  sex  and  age 
[hlth_dpe010]. 
90 ibid. 

135 

 
 
 
                                                            
Figure 62: Income quintile share ratio and yearly change (Social Scoreboard headline 
indicator)   

Source: Eurostat, SILC. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred on 
the  unweighted  EU  average.  The  legend  is  presented  in  the  Annex.  Data  for  IE  and  UK  not  available  at  26 
October 2018. 

Social  protection  expenditure  continued  to  increase  in  all  Member  States,  while  large 
differences persist between them91. In real terms, expenditure on social protection rose in all 
Member  States  from  2014  to  201592.  However,  as  a  percentage  of  GDP,  social  protection 

spending increased in only 7 countries while it fell in 16. This was mainly driven by a lower 

proportion  of  spending  on  unemployment  benefits,  in  line  with  improving  labour  market 

conditions. By contrast, spending as a percentage of GDP on sickness and health increased in 

10  countries,  and  decreased  in  12.  Social  protection  spending  as  a  percentage  of  GDP  was 

overall highest in France (31.9%), Denmark (31.1%) and Finland (31.1%). On the other hand, 

it  amounted  to  less  than  15%  of  GDP  in  Lithuania  (14.8%),  Latvia  (14.7%),  and  Romania 

(14.3%).  

91 Based on ESSPROS data. No 2015 data available for PL. 
92  See  also  European  Commission  (2018),  Employment  and  Social  Developments  in  Europe.  Annual  Review 
2018. Luxembourg: Publications Office of the European Union. 

136 

 
 
 
 
                                                            
The  impact  of  social  transfers  on  reducing  poverty  has  fallen  modestly,  in  line  with  a 

reduced  effect  of  automatic  stabilisers  in  a  phase  of  economic  expansion.  However, 

considerable variation persists among Member States (Figure 63). Social transfers excluding 

pensions reduced poverty risk by 32.4% in 2017, as against 33.2% in 2016, a continuation of 

a trend marked by improved labour market conditions and accordingly more dynamic labour 

income  increases  than  social  transfers.  The  size  of  the  poverty  reducing  impact  of  transfers 

varies considerably across Member States, and many countries with the highest poverty risk 

also  have  the  weakest  impact  of  social  transfers  (Greece,  Romania,  Italy,  Bulgaria  and 

Latvia). 

Figure 63: Impact of social transfers (other than pensions) on poverty reduction and 
yearly change (Social Scoreboard headline indicator)  

Source: Eurostat, SILC. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred on 
the  unweighted  EU  average.  The  legend  is  presented  in  the  Annex.  Data  for  IE  and  UK  not  available  at  26 
October 2018. 

137 

 
 
 
 
 
Self-employed  and  non-standard  workers  endure  greater  economic  uncertainty  with 
limited  access  to  social  protection93.  In  2017,  the  self-employed  did  not  have  access  to 

unemployment  protection  in  eleven  countries,  mandatory  sickness  protection  in  three 
countries, and protection against accidents at work and occupational injury in ten countries.94 

Non-standard workers usually have the same formal coverage by most social benefit schemes 

as  those  on  standard  contracts,  though  often  this  does  not  hold  for  certain  categories  of 

workers  (e.g.  casual and  seasonal  workers,  on-call  workers,  and  those on  temporary  agency 

contracts,  civil  law  contracts  or  zero-hour  contracts  are  often  excluded  from  membership  in 

the  relevant  schemes).  Overall,  obstacles  faced  by  non-standard  workers  and  the  self-

employed  in  relation  to  effective  coverage,  meaning  the  ability  to  build  up  and  take  up 

adequate entitlements in case of need, have been identified for at least twenty-four Member 
States95  (minimum  qualifying  periods,  waiting  times,  lack  of  transferability  of  social 

protection rights). 

Preserving  and  transferring  accumulated  entitlements  to  another  scheme  following 

professional transitions remains difficult. As the world of work changes, this flexibility is 

becoming more important and a lack of transferability may impede labour market dynamism 

and  matching.  For  workers  moving  between  sectors  or  employment  forms,  a  lack  of 

regulation makes transfers difficult in at least four Member States, while extremely high cost 

and different rules governing different schemes create have also been identified as a barrier to 

these transitions in several Member States. Finally, the lack of transparent information about 

social security rights stops people from taking informed decisions in many countries. While 

generic  information  about  social  protection  schemes  is  available  in  all  but  five  Member 

States,  personalised  information  is  only  available  in  about  half  of  them  (e.g.  simulation  on 

pensions is available in Germany, France, Spain, United Kingdom and Poland). 

Minimum income schemes should combine an adequate level of support with access to 

enabling  goods  and  services  and  incentives  to  (re)integrate  into  the  labour  market  for 

those who can work, as underlined in the European Pillar of Social Rights. The comparative 

analysis of specific design features of minimum income schemes and their interplay with the 

provision  of  other  benefits  and  activation  support  measures  can  provide  useful  insight 

93 This topic is partly addressed also in Section 3.3. 
94  Evidence  in  this  paragraph  and  the  following  is  based  on  European  Commission,  SWD(2018)  70  final  – 
"Impact Assessment Accompanying the Proposal for a Council recommendation on access to social protection 
for workers and the self-employed". 
95 AT, BE, BG, CZ, DE, DK, EE, EL, ES, FI, FR, HU, HR, IT, LU, MT, NL, PL, PT, SE, SI, RO, SK and UK. 

138 

 
 
                                                            
regarding  their  performance.  The  analysis  in  the  following  paragraphs  draws  from  the 

benchmarking  exercise  of  minimum  income  benefits  conducted  in  2017-18  in  the  Social 
Protection Committee.96 This benchmarking framework focuses on minimum income benefits 

for the working age population with working ability not in employment and not entitled, nor 
eligible or having exhausted entitlements to social insurance benefits.  

The adequacy of minimum income benefits varies significantly between Member States. 

The  adequacy  of  minimum  income  benefits  can  be  measured  by  comparing  the  income  of 

beneficiaries  with  the  national  poverty  threshold  (as  an indication  of  the  poverty  alleviation 
effect of schemes) and with the income of beneficiaries to the income of a low-wage earner97 

(to provide an indication of the activation dimension and potential disincentive effects of the 

schemes).  Both  indicators  provide  similar  results  as  concerns  the  adequacy  of  minimum 
income  in  Member  States  in  201698  (Figure  64).  Looking  at  the  case  of  single-person 

households,  in  2016  adequacy  was  the  highest  in  the  Netherlands,  Ireland,  Denmark  and 

Luxembourg.  In  these  Member  States  the  level  of  benefits  exceeded  80%  of  the  national 

poverty threshold level (set at 60% of the national median equivalised disposable income after 

social  transfers).  In  the  case  of  the  Netherlands  in  particular,  the  level  of  the  benefit 

represented 106%  of  the  poverty  threshold,  actually  lifting  recipients  out  of  poverty.  At  the 

lower end, the adequacy of minimum income in Bulgaria, Romania, Hungary, Slovakia, and 

Lithuania  is  below  40%  of  the  poverty  threshold  or  one  third  of  the  income  of  a  low-wage 

earner in 2016.  

96 Approved by the SPC in June 2018. 
97  A  'low-wage  earner'  is  defined  in  the  benchmarking  framework  as  somebody  earning  50%  of  the  average 
national gross wage. 
98 The indicators are based on the latest available information in the OECD Tax-benefit model. Information is not 
available for CY. Information about IT and EL does not include the newly introduced minimum income schemes 
and they have not been included in this analysis. 

139 

 
 
                                                            
Figure  64:  Net  income  of  minimum  income  recipients  as  %  of  at-risk-of-poverty 
threshold (smoothed over three years) and of the income of a low wage earner (2016)  

Source:  Eurostat,  OECD.  Note:  Information  is  not  available  for  CY.  Information  about  IT  and  EL  does  not 
include  the  newly  introduced  minimum  income  schemes  in  2017.  Latest  available  information  about  poverty 
thresholds in IE, HR, and UK is for 2015 income year. 

The adequacy of minimum income benefits impacts, in particular, the depth of poverty 
among recipients. The relative at-risk-of-poverty gap99 for the working age population (16-

64)  decreases  marginally  for  the  first  time  in  2017,  in  line  with  the  overall  indicator,  but 

remains  well  above  pre-crisis  levels.  The  gap  is  significantly  larger  in  the  case  of  persons 

aged 18 to 59 living in quasi-jobless households (Figure 65). EU SILC 2016 data shows that 

the depth of poverty was highest among people from (quasi-)jobless households in Lithuania, 

Bulgaria, Latvia, Italy, and Romania (over 50%). By contrast, the smallest gap was observed 

in Finland, the Netherlands, and Ireland (under 20%). The poverty gap for persons living in 

quasi-jobless  households  tends  to  point  to  weaknesses  in  of  the  adequacy  and  coverage  of 

benefit systems (as also noted in the 2018 SPC annual report). 

99 See Footnote 88 for a definition of the relative at-risk-of-poverty gap. 

140 

 
 
 
 
 
                                                            
Figure  65:  Relative  at-risk-of-poverty  gap  for  persons  18-59  from  quasi-jobless 
households (2016) 

 Source: Eurostat, SILC. 

All  Member  States  make  use  of  means  testing  together  with  other  eligibility 

requirements  for minimum income schemes.  Stricter  eligibility requirements  imply lower 
coverage100  and  vice  versa.  Means-testing  is  the  most  commonly  used  way  to  target  those 
living  in  poverty101.  Means-testing  conditions  generally  assess  the  resources  (be  it  income, 

assets,  real  estate  or  movable  property)  of  all  household  members  and  not  just  of  direct 

claimants. In most Member States the threshold used in the means test is the maximum level 

of benefit provided (and the actual support amounts to the difference between the maximum 

level of the benefit and a person's or household's income), while several Member States also 

disregard  part  of  people's  earnings,  which  positively  affects  the  coverage  of  schemes  and 

contributes  to  reducing  in-work  poverty.  Other  eligibility  requirements,  such  as  those 

regarding  residence,  also  affect  the  coverage  of  schemes  (as  this  can  reduce  coverage  for 

people experiencing within-country mobility or homelessness).  

Minimum income recipients have greater difficulty in accessing various in-kind services. 

Access  to  services  (as  measured  by  the  unmet  needs  for  medical  care,  the  housing  cost 

100 Number of persons who meet the eligibility requirements and could potentially benefit from a scheme. 
101  This  differs  from  the  theoretical  concept  of  'universal  basic  income',  where  a  certain  level  of  income  is 
provided to every citizen, regardless of their situation. For more information please see European Commission 
(2018), Employment and Social Developments in Europe, Annual Review 2018, p. 142. 

141 

 
 
 
                                                            
overburden,  and  the  non-participation  in  training  related  to  professional  activity102)  is  an 

essential  component  of  integrated  active  inclusion  strategies.  In  2016,  the  access  to  these 

services  for  people  aged  18-59  at  risk  of  poverty  living  in  quasi-jobless  households  was 

generally lower than that of people of the same age group not at risk of poverty nor living in 

quasi-jobless households. Looking at performance across services, Finland, Hungary and the 

United Kingdom are the only Member States where the gap in access to services is below the 

EU average in  2016 in all three  areas. By contrast, the gaps in  access appear above the EU 

average  across  all  three  areas  examined  in  Greece  and  Latvia.  In  detail,  the  largest  gaps  in 

unmet  needs  for  medical  care  are  experienced  in  Latvia  (14.8  pps)  and  Greece  (34.1  pps), 

while the lowest ones were in Denmark, Spain, the Netherlands and the UK (less than 1 pp.). 

In the area of housing, the largest gaps in the housing cost overburden rate were observed in 

Denmark,  Greece,  Austria,  and  Italy  (over  50  pp),  while  the  smallest  gaps  were  in  Malta, 
Cyprus,  Ireland,  and  Finland  (under  20  pp)103.  In  the  domain  of  adult  learning,  in  2016 

Sweden and Denmark experienced negative gaps, showing better access for people at risk of 

poverty from very low intensity households, and in Malta and the UK there was no gap. The 

largest gaps observed were in Latvia, Spain, and Lithuania (over 16 pp).  

Access to housing of good quality has been improving since 2008, but in some countries a 

significant  proportion  of  population  reports  that  it  encounters  quality  problems  with 

their dwelling. In the EU, 13.1% of the population reports living in a dwelling with a leaking 

roof,  damp  walls,  floors  or  foundation,  or  rot  in  window  frames  or  floor  in  2017.  This  is 
2.3 pps less than in 2016104. This component of housing deprivation105 is a particular issue in 

5  Member  States  (Cyprus,  Portugal,  Hungary,  Latvia  and  Slovenia)  where  over  20%  of  the 

population  reports  that  it  encounters  this  quality  problem  with  their  dwelling.  In  2017, 

Romania  experienced  a  considerable  improvement,  with  the  proportion  of  the  population 

reporting  not  having  a  bath,  or  a  shower,  nor  indoor  flushing  toilet  in  their  household 

declining, yet at a considerable 27.2%. In Latvia, Bulgaria and Lithuania not having a bath or 

a  shower  in  the  dwelling  and  not  having  an  indoor  flushing  toilet  for  the  sole  use  of  the 

household is an issue for around 10% of the population.  

102 From the 2016 EU SILC ad-hoc module on access to services. Reasons taken into account for the purpose of 
the benchmarking: 'no suitable courses or programmes available' and 'cannot afford it'. 
103  A  more  comprehensive  discussion  of  the  issue  of  unmet  medical  care  needs  and  access  to  housing  are 
presented below in this section. 
104 Data in this paragraph is sourced from EU-SILC.  
105 The housing deprivation rate is a measure of poor amenities in a dwelling and is calculated by referring to 
those households  experiencing  at  least  one of  the  following: (i)  a  leaking roof, (ii) no bath, nor shower  in  the 
dwelling, (iii) no indoor toilet, (iv) a dwelling considered too dark.  

142 

 
 
                                                            
The  share  of  household  disposable  income  spent  in  housing-related  expenditures 

remains  significant  in  a  number  of  Member  States.  When  housing  costs  are  taken  into 

account, 156 million people are at risk of poverty, as against 85 million before housing costs 

are  taken  into  account.  This  condition  is  particularly  draining  for  households  with  lower 

income. In 2017, 10.2% of households in the EU spent over 40% of their disposable income 

on  housing  costs,  but  this  share  increases  to  37.8%  when  considering  households  at  risk  of 

poverty.  Despite  a  slight  improvement  compared  to  previous  years,  the  housing  cost 

overburden  rate  remains  the  highest  in  Greece,  at  39.6%  in  2017.  Bulgaria,  Denmark  and 

Germany are, after Greece, the Member States with highest rates of population experiencing 

housing  cost  overburden  (over  15%  of  the  population  in  each).  The  effect  is  particularly 

notable in Denmark and Germany, where the share of people at risk of poverty is below the 

EU average before housing costs, but above the EU average when housing costs are taken into 

account.  By  contrast,  in  Estonia,  Ireland,  Finland,  Cyprus  and  Malta  less  than  5%  of  the 

population  live  in  households  overburdened  by  housing-related  expenditure.  In  most 

countries, tenants  who rent  at market price  are considerably  more overburdened by housing 

related costs than owners with a mortgage or a loan (EU average of 25.1% for tenants paying 

market rent, compared to around 5% for owners). 

Rising  rents  represent  an  increasing  burden  on  the  poor  in  some  Member  States.  In 

2016,  in  7  countries  (Ireland,  Estonia,  Lithuania,  Slovenia,  Hungary,  Austria  and  Poland) 

rents  calculated  in  real  terms  have  increased  by  more  than  5%  since  2015.  High  rents  can 

compound the risk of poverty or social exclusion, particularly in countries such as Slovenia, 

Ireland,  Austria  and  Lithuania  where  the  poverty  risk  facing  tenants  is  significantly  greater 

than for those who own their homes. National figures may also hide challenges at the level of 

particular cities.  

The  recent  evolution  of  the  homelessness  indicates  that  the  situation  is  not  improving. 

Estimates of the number of homeless are not comparable country by country, due to a lack of 

official  sources  and  different  methodologies  for  counting  the  homeless.  Available  data  only 

allow monitoring the evolution of the issue over time (using, in most cases, 2017 or 2016 as a 

most recent year). They nonetheless indicate that homelessness has recently increased in all of 
the 25 covered Member States except in Finland, where the situation has improved106.  

106 Data compiled by FEANTSA, the federation of national civil society organisations working with the homeless 
in Europe. See FEANTSA (2018), Third overview of housing exclusion in Europe. 

143 

 
 
                                                            
Pension income provides older people with a relative protection against poverty risk. At 

the EU level, the at-risk-of-poverty (AROP) rate for older people is lower than for people of 

working age (14.6% compared to 16.7% in 2017). Over the last decade, this relation has been 

reversed  compared  to  the  pre-crisis  period,  partially  explained  by  the  fact  that  the  crisis 

reduced average household disposable real income levels, especially among the working-age 

population  across  almost  all  European  countries  while  pensions  remained  more  resilient. 

However, severe material deprivation also decreased among older people (from 7.4% in 2008 

to 6.3% in 2017), indicating that the decrease in poverty and social exclusion was not just a 

relative effect. 

Figure  66:    Percentage  of  population  aged  65  and  above  at-risk-of-poverty  or  social 
exclusion relative to the EU average, 2017 

Source: Eurostat, EU-SILC. Notes: data are standardised (EU28=0). Data for IE, UK are for 2016. 

The  risk  of  poverty  and  social  exclusion  risk  among  older  people  has  been  steadily 

decreasing for most Member States. Overall 148,000 fewer people aged 65 or older were at 

risk of poverty or social exclusion in 2017 compared to pre-crisis levels (2008). The headline 

improvement  masks  marked  differences  between  the  Member  States,  with  substantial 

decreases in old age poverty or social exclusion risk in Cyprus (-24.7 percentage points since 

2008),  Bulgaria  (-16.6  pps),  Romania  (-16.2  pps)  and  Latvia  (-14.9  pps),  while  there  were 

increases in Luxembourg (+6.4 pps) and Germany (+2.2 pps).  

144 

 
 
 
 
However,  of  particular  concern  is  the  situation  of  older  women,  as  one  in  five  women 

aged 65 or over is at risk of poverty or social exclusion in the EU. In 2017, the AROPE rate 

for women ranged from around 10 percent in Denmark, France and the Netherlands to over 50 

percent in Bulgaria, and over 40 percent in the Baltic States. The highest gender differences in 

the AROPE rate are observed in Lithuania (19.9 pps), Estonia (19.7 pps), followed by Latvia 

(16.6  pps)  and  Bulgaria  (16.2  pps).  Older  women  have  lower  incomes  than  older  men:  in 

2016, the median income for older women was 6 percentage points lower than for men in the 

EU relative to younger people of the same gender (90% for women and 96% for men). Thus, 

not only do women have lower incomes during their working lives, but they also have a lower 

income when in retirement, which contributes to gender inequalities in old-age income. 

On  average  across  the  EU,  people  aged  65  and  over  have  slightly  lower  incomes  than 

younger  age  groups.  The  median  disposable  income  of  those  aged  65  and  above  was  92 

percent  of  the  younger  population's  income  in  2017.  The  total  relative  median  income  ratio 

was below 75 percent in five countries (Denmark, Malta, Lithuania, Latvia and Estonia) and 

below  80  percent  in  a  further  four  (Belgium,  Sweden,  Cyprus  and  the  Czech  Republic).  In 

contrast,  older  men  in  nine  Member  States  (Luxembourg,  Greece,  France,  Spain,  Hungary, 

Italy,  Austria,  Poland  and  Romania)  and  older  women  in  two  Member  States  (Luxembourg 

and Greece) enjoyed a higher median income than those aged below 65 in 2017. 

While, on average, pensions amount to more than half of late-career work income, the 

income replacement capacity of pensions varies significantly among Member States. In 
2017,  the  aggregate  replacement  ratio107  (ARR)  averaged  59  percent  in  the  EU,  with 

significant cross-country differences. The ratio ranged from above 80 percent in Luxembourg 
to less than 40 percent in Ireland, Bulgaria and Croatia108. 

In a context of rising life expectancies, pensions need to adapt; working lives start later 

and  become  longer  while  people  live longer overall. In  addition  to  poverty  reduction  and 

income  replacement,  the  third  relevant  dimension  of  pension  adequacy  is  the  duration  of 

retirement.  The  ratio  between  time  spent  in  retirement  and  time  spent  working  presently 

averages  51%  in  the  EU.  Figure  67  provides  an  overview  of  average  life  time  spent  before 

working, in work and after retirements in Member States (drawing on an estimate of the start 

107 Ratio of the median individual gross pensions of 65-74 relative to the median individual gross earnings of 50-
59. 
108 Data for Croatia and Ireland are for 2016. 

145 

 
 
                                                            
of employment/entry into labour market, an estimate of the average exit age from the labour 

market, and life expectancy at age 60). 

Figure 67: Life time spent under different activity statuses, 2017 

Source: Ageing Report 2018 for labour market entry and exit ages; Eurostat for life expectancy projections. 
Note: ‘while working’ means between labour market entry and exit ages.   

People  in  non-standard  or  self-employment  often  face  less  favourable  conditions  for 

accessing and accruing pension rights than those in open-ended, full-time job contracts. 
SHARE survey data109 allow measuring the impact of self-employment on retirement income 
and  living  standards  by  comparing  the  situation  of  retired  self-employed  people110  and  of 
retired employees in most Member States.111 The retired self-employed report lower incomes 

than  retired  employees  in  almost  all  countries  covered.  The  highest  income  gaps  can  be 

observed  in  Luxembourg,  Denmark  and  France,  and  in  nine  countries  the  gap  exceeds  20 

109 Survey of Health, Ageing and Retirement in Europe. Data source: SHARE wave 7, 2017. 
110 For the purposes of this comparison, ‘retired self-employed’ are defined as retirees who have spent 50% or 
more of their working careers as self-employed. 
111 The Survey of Health, Ageing and Retirement in Europe (SHARE) is a multidisciplinary and cross-national 
panel  database  of  micro  data  on  health,  socio-economic  status  and  social  and  family  networks  of  more  than 
120,000  individuals  aged  50  or  older  (more  than  297,000  interviews).  SHARE  covers  27  European 
countries.SHARE wave 7 survey excluded IE, NL and UK. In some Member States, sample sizes do not allow 
for a comparison. 

146 

 
 
 
 
                                                            
percent.  Only  in  Hungary  and  Estonia  do  the  retired  self-employed  enjoy  slightly  higher 

incomes than retired employees (see Figure 68 below). The income gap, together with higher 
income  inequality,112  leads  to  substantially  higher  levels  of  poverty  risk  for  retired  self-

employed, around twice that of retired employees on average. The retired self-employed have 

lower pensions than retired employees in every country observed and, despite higher asset-to-

income  rations,  are  more  exposed  to  financial  hardship  in  old  age.  The  financial  distress 

index, which measures the difficulty in making ends meet on a scale of 1 to 4, averages 2.3 
for the retired self-employed and 2.1 for retired employees in the Member States surveyed113. 

Figure  68:  Relative  difference  in  the  median  equivalised  disposable  income  between 
retired employees and retired self-employed, 2017, % 

Source: SHARE. Notes: EU* does not include IE, NL and UK. Sample sizes in BG, LV, LT, PT, RO, SI and SK 
do not allow a distinction to be drawn between retirees.  

112 The S80/S20 ratio is one third higher among retired self-employed than among retired employees. 
113 EU-28 except IE, NL and UK. 

147 

 
 
 
 
 
 
                                                            
Figure  69:  Self-reported  unmet  needs  for  medical  care  (Social  Scoreboard  headline 
indicator) 

Source: Eurostat, SILC. Period: 2017 levels and yearly changes with respect to 2016. Note: Axes are centred on the 
unweighted EU average. The legend is presented in the Annex. Data for IE and UK not available at 26 October 2018. 

There are signs of convergence in the share of the population reporting perceived unmet 
needs  for  medical  care114.  Reversing  a  previous  tendency,  a  weak  negative  correlation  has 

emerged  between  level  and  changes  in  unmet  needs  for  medical  care,  with  those  countries 

where  unmet  needs  are  highest  showing  the  most  positive  trend  (see  Figure  69).  In  some 

Member  States,  costs  and  waiting  time  remain  important  barriers  for  the  accessibility  of 

healthcare. Nonetheless, the proportion of the EU population facing self-reported unmet needs 

for medical care due to either too high costs, too long waiting time or travelling distance, on 

average  decreased  in  2017  to  1.6%.  The  share  of  the  people  impacted  still  exceeded  5%  in 

Estonia  and  Greece  (above  10%)  and  Latvia.  Increases  to  2017  were  recorded  only  for 

Slovenia, Cyprus and Slovakia. 

114  Self-reported  unmet  needs  for  medical  care  concern  a  person's  subjective  assessment  of  whether  he  or  she 
needed examination or treatment for a specific type of health care, but did not have it or did not seek it because 
of  the  following  three  reasons:  ‘Financial  reasons’,  ‘Waiting  list’  and  ‘Too  far  to  travel’.  The  problems  that 
people report in obtaining care when they are ill often reflect significant barriers to care. 

148 

 
 
 
 
                                                            
Activity  status  may  also  play  an  important  role  in  explaining  problematic  access  to 

medical care in some countries. Although the majority of countries do not show significant 

differences according to activity status, in some of them unemployed people (and to a lesser 

extent pensioners) may encounter higher difficulties in accessing healthcare (see Figure  70). 

Even in countries where the percentage of unmet needs among the entire population is below 

the EU average, figures suggest that the unemployed may face difficulties accessing medical 

care (e.g. Belgium, France, Italy, and Hungary). 

Figure  70:  self-reported  unmet  needs  for  medical  examination  according  to  activity 
status (2016)  

Source: Eurostat [hlth_silc_13].  

The healthy life years (at the age of 65) increased further in the EU for men to 9.8 years 

and for women to 10.1 years.  While the  highest number of healthy life years at 65 can be 

expected  in  Sweden,  Malta  and  Ireland  (about  12  years  for  both  gender),  the  healthy  life 

expectancy is particularly low in Latvia, Slovakia and Croatia (around 5 years).  

Healthcare is financed through different schemes, while the relative importance of each 
scheme  varies  among  Member  States.  In  2016,  out-of-pocket  payments115,  i.e.  household 

expenditure  for  health  (including  medical  goods)  not  reimbursed  by  any  scheme  or  paid  as 

cost-sharing with an organised scheme, measured as a share of current health expenditure is 

above 30% in Bulgaria, Greece, Cyprus, Latvia and Lithuania (Figure 71). 

115 Out-of-pocket spending refers to direct payments for goods and services from the household primary income 
or  savings,  where  the  payment  is  made  by  the  user  at  the  time  of  the  purchased  of  goods  or  the  use  of  the 
services either without any reimbursement or as cost-sharing with an organised scheme. 

149 

 
 
 
 
 
                                                            
Figure 71: Healthcare expenditure by financing source, 2016 

Source: Eurostat [hlth_sha11_hf]. Notes: data are collected according to Commission Regulation (EC) 2015/359 
as regards statistics on healthcare expenditure and financing (System of Health Accounts 2011 manual). 

The need for Long Term Care (LTC) is growing as the population in the EU ages. Over 

the next six decades (by 2070), the number of Europeans aged 80+ is set to double and the 

old-age dependency ratio (people aged 65+ relative to those aged 15-64) is projected to jump 
from 29.6% in 2016 to 51.2% in 2070116 (the EU would go from 3.3 to only 2 working-age 

people for every person aged 65+). The risk of becoming dependent is higher towards older 

age, when people are more likely to become frail (60% people aged 75-84 and 70% aged 85+ 

report a disability). 

A significant rise in LTC needs is projected.  LTC is the fastest-rising social expenditure 

compared to health and pensions. The EU public expenditure on LTC is projected to increase 

from 1.6% to 2.7% of  GDP between 2016 and 2070, with  marked variations across  the EU 

(see Figure 72).  

116 Ageing Report 2018, European Commission. 

150 

 
 
 
 
                                                            
Figure 72: Projected public expenditure on LTC as % of GDP, in 2016 and 2070   

Source: based on data from the 2018 Ageing Report. Note: AWG reference scenario   

Long-term  care  sustainability  will  also  be  challenging  for  those  Member  States  which 

now rely heavily on informal care. The pool of informal carers is shrinking due to changing 

family patterns (fewer children, family members living further apart), with increasing female 

employment and the increase in the retirement age. Informal care also entails important costs 

for the economy, as informal carers reduce or leave formal employment, and thus pay little or 

nothing in taxes and contributions. There are also challenges in recruiting and retaining carers. 

The  sector  is  affected  by  the  prevalence  of  part-time  work  and  temporary  contracts,  which 

reduces its attractiveness.  

3.4.2  Policy response 

Reforms  in  several  Member  States  aim  to  strengthen  the  active  inclusion  approach. 

Some Member States are enhancing integrated delivery of services (such as social assistance, 

employment and other social services) in particular by undertaking a person-centred approach 

aimed  at  addressing  complex  needs  of  the  most  vulnerable  people.  In  Bulgaria,  the 

implementation  of  the  Employment  and  Social  Assistance  Centres  providing  integrated  and 
mobile  services117  is  ongoing.  By  February  2018,  73  such  centres,  established  with  the 

117  Joint  teams  of  Social  Assistance  and  Employment  Agency  offer  comprehensive  integrated  services  to 
unemployed people in  remote areas of Bulgaria. 

151 

 
 
 
 
 
                                                            
support  of  the  ESF  were  operational118  and  provided  employment  and  social  assistance 

services.  As  of  2018  the  centres  offer  Job  Integration  Agreement  for  the  long-term 

unemployed  linking  the  long-term  unemployed  with  specific  employment  services  and 

referrals  to  services  provided  by  other  institutions.  In  Ireland,  the  Action  Plan  for  Jobless 

Households extends activation services to people who are not working, but are not defined as 

unemployed  on  the  traditional  measures.  It  focuses  in  particular  on  improving  employment 

rates of households with children – both the traditional ‘nuclear’ family and the lone parent 

family  and  people  with  disabilities.  In  Finland,  the  one-stop  guidance  centres  for  youth 

("Ohjaamo"), originally operating under ESF funding, have been made a permanent measure 

and  is  being  expanded  with  the  psychosocial  support  network.  In  Greece  the  Community 

Centres,  serving  as  one-stop-shops  for  social  services  at  municipal  level  started  opening  in 

2017. The Centres are supporting the implementation of the Social Solidarity Income scheme 

(SSI), connecting the beneficiaries to complementary social services. By February 2018, 203 

out of the 240 planned centres were operational. Additionally, more and more municipalities 

across the EU provide integrated social services focusing on complex needs of the vulnerable 

groups  (e.g.  single  entry  points  in  Athens  or  health  promotion  services  in  Essen).  These 

operations were supported by the ESF. 

Modernisation and increases in adequacy of some benefits continue in several Member 

States,  though  in  some  cases  there  have  been  delays.  In  Lithuania,  the  state-supported 

income, as well as family-related benefits, have been increased in 2018. In Bulgaria, a 15% 

increase  in  the  minimum  income  in  2018  follows  a  9-year  freeze.  In  continuity  with  the 

multiannual plan to fight poverty established in 2013, in France the minimum income (Revenu 

de solidarité active – RSA socle) has undergone a 1.6% increase in September 2017 followed 

by  a  1%  increase  in  April  2018.  These  increases  are  the  last  of  a  series  that  enabled  an 

increase  of  the  minimum  income  relative  to  inflation  and  are  complemented  by  a  renewed 

focus on activation of beneficiaries (‘Garantie d’activité’), as part of the recently announced 

anti-poverty plan. However, in Romania, the planned consolidation of existing social benefits 

has  been  postponed  to  April  2019,  while  in  Croatia  the  implementation  of  the  new  Social 

Welfare  Act  will  not  come  into  effect  until  December  2019.  Latvia's  planned  Minimum 

Income  Improvement  Plan  (submitted  in  May  2018  and  to  take  effect  in  2020)  has  not  yet 

been  adopted  by  the  Government.  A  draft  law  in  Luxembourg  seeks  to  reorganize  the 

Guaranteed Minimum Income (RMG) mechanism, with the aim to reduce the high inactivity 

118 Supported by the ESF. 

152 

 
 
                                                            
traps generated by the current scheme and address the problems of housing cost overburden 

and insufficient income for one-parent households.  

The coverage of social protection increases in several Member States. Belgium adopted a 

law removing limitations on the access to enterprise pension's schemes for young persons and 

short-term contracts. Other countries plan to introduce or have adopted measures in favour of 

self-employed or small-business owners. These measures include reduced contributions below 

a  certain  threshold  (Latvia,  Poland),  the  coverage  of  independent  workers  in  the 

unemployment scheme (France), or the possibility to include independent workers in a work 

accident insurance via a social charter of on-line platforms (France, see also Section 3.3.2). 

Measures  aimed  at  tackling  income  inequality  and  in-work  poverty  address  both  tax 

design and benefit adequacy. In addition to minimum wage setting, a number of inequality-

reducing  policies  related  to  the  tax-benefit  system  can  help  alleviate  in-work  poverty.  In 

Lithuania, a reform of the flat tax income regime was adopted in June of 2018, introducing a 

progressive,  two-band  structure  which  should  help  reduce  income  inequality.  In  Latvia,  the 

introduction of progressive personal income tax is accompanied by non-taxable allowances of 

the  personal  income  tax  and  for  dependants.  A  proposed  reform  by  the  Czech  Republic  to 

revamp  the  Personal  Income  tax  system  should  add  a  further  degree  of  progressivity,  in 

particular through adding a new tax rate of 23% for higher incomes. 

Some Member States have taken measures specifically targeting child poverty. In Spain, 

the 2018 national budget allocates EUR 100 million to fight severe poverty with a particular 

attention  to  families  with  children.  Lithuania’s  Law  on  Benefits  for  Children  introduces  a 

universal child benefit system. Furthermore, a child benefit to families raising and/or fostering 

three  and  more  children  shall  be  paid  disregarding  the  family  income.  A  supplement  to  the 

state benefit for families with two or more children has been introduced in Latvia. Greece has 

adopted  a  reform  of  child  benefits  system,  replacing  the  former  two  benefits  (the  "unified 

child benefit" and "large family benefit") with a single means-tested child benefit. This reform 

aimed to improve targeting and increase equity among supported children. 

Social inclusion measures for persons with disabilities have been undertaken in order to 

complement  employment  policies  and  prevent  suffering  due  to  poverty.  To  improve 

efficiency  and  ensure  that  people  receive  the  benefits  they  are  entitled  to,  Spain  has 

implemented  a  test  phase  of  the  Universal  Social  Card,  which  allows  the  gathering  of 

information on all the benefits that a person receives in one place, as well as indicating which 

153 

 
 
other benefits they may be entitled to. For 2018, the work ability allowance for those who are 

unable  to  work  or  whose  ability  is  limited  has  been  raised  in  Estonia.  In  2017,  Malta 

implemented a further reform to disability pensions, whereby a three-tier payment system was 

introduced, with those unable to work due to disability set to receive steadily increasing sums 

per  month  until  their  pension  reaches  the  equivalent  of  the  minimum  wage.  A  2016  Polish 

government Act provides a grant of 4000 złoty (approximately EUR 940) to the parents of a 

severely disabled child in its first year of life. In Portugal, a new Independent Living Support 

Model (MAVI) was adopted in 2017, funded through the ESF, whereby every person with an 

incapacity score of 60% or above is entitled to 40 hours support per week from a dedicated 

support  worker,  aiding  them  with  personal  care,  health,  nutrition,  travel,  higher  education, 

vocational  training,  cultural  activities,  sports,  job  search,  participation  in  society  and 

citizenship activities. Additionally in 2017, the Portuguese government brought together three 

disability benefits  – the disability allowance, the social invalidity pension and the invalidity 

pension  – into  one benefit, the Social Benefit for Inclusion. Romania  has  switched to  using 

the  Social  Reference  Indicator  to  calculate  disability  benefit,  instead  of  the  Consumer  Price 

Index, which resulted in a rise in benefit for adults with disability. 

A number of Member States have undertaken reforms in the field of access to housing. 

Denmark  has  adopted  an  action  plan  to  fight  homelessness,  based  on  strengthening  of 

preventive  measures  and  improving  the  guidance  on  how  to  exit  homelessness.  Greece  has 

introduced  a  new  means-tested  housing  benefit  intended  for  low-income  families  living  in 

rented  dwellings  and  those  paying  a  mortgage.  Spain  has  adopted  a  national  plan  which 

includes aiding the low-income families to pay the rent and prevent eviction, financial aid for 

young  people  buying  houses  in  sparsely  populated  areas  and  aid  to  renovate  housing  for 

special vulnerable groups. The Swedish government has allocated additional funds to support 

non-profit organisations to combat homelessness among young adults.  

The dynamic of pension reforms is shifting towards addressing the adequacy challenges. 

While  measures  to  improve  financial  sustainability  are  still  high  on  many  Member  States’ 

pension agendas, this process has been coupled with measures recalibrating the scope of the 

pension  mix  to  respond  to  some  key  labour  market  and  pension  system  challenges: 

safeguarding  pension  adequacy,  combining  work  with  pensions,  and  tailoring  pensionable 

rights to specific categories of workers. 

154 

 
 
Some  Member  States  continue  to  focus  on  rebalancing  pension  duration  with  life 

expectancy. For instance, the 2017 reform in the Czech Republic capped the ongoing increase 

of  pensionable  age  at  65,  to  be  reached  in  2030,  to  be  linked  to  life  expectancy  afterwards, 

although further legislation will be required to enact the link. Other countries are increasing 

career-length  requirements.  In  Lithuania,  for  example,  the  length  of  the  contributory  period 

will  gradually  increase,  from  30  years  in  2017  to  35  years  by  2027.  In  contrast,  Poland 

reintroduced  lower,  differentiated  pensionable  ages  for  men  and  women  (65  and  60  years, 

respectively)  as  of  October  2017.  This  triggered  a  sharp  increase  in  pension  take-up,  the 
newly granted pensions for women being much lower on average than for men.119 

More pension reform measures are aimed at reducing poverty (e.g. minimum guarantees) 

and  improving  income  maintenance  (e.g.  favourable  indexation,  enhancing  the  role  of 

supplementary  pensions).  Latvia,  Malta  and  Romania  have  raised  the  non-taxable  minima, 

which should benefit the recipients of lower pensions. Minimum pensions were increased in 

Bulgaria,  Poland  and  Romania,  where  a  significant  30%  raise  was  granted  in  2017.  Other 

measures,  such  as  additional  safeguards  for  pensioners  with  long  careers,  were  introduced; 

e.g. Austria in 2017 raised the minimum pension from EUR 883 to EUR 1000 per month for 
people with at least 30 years of contributions.120  

Improving the  effectiveness of  healthcare  by better  coordination and giving a stronger 

role to primary care has become a guiding principle in a number of Member States. In 

Estonia,  current  plans  for  health  centres  and  hospital  networks  seek  to  create  multi-

disciplinary  teams,  to  redefine  the  roles  of  family  physicians  vis-à-vis  specialists  and  to 

improve  training.  Ireland  is  stepping  up  capital  investment  with,  inter  alia,  the  creation  of 

Primary Care Centres across the country. Bulgaria and France presented in the autumn 2018 

fundamental  reform  proposals  for  the  health  system,  including  more  efficient  hospital  care 

and a better integration of care. In Slovakia, efforts to strengthen the weak gatekeeping role of 

general  practitioners and avoid unnecessary referrals to  specialist physicians  are continuing. 

In Latvia, the transforming primary care practices into larger health centres with 3-6 family 

doctors, at least two nurses, and potentially including specialists in the team is ongoing, so are 

reforms to re-configure inpatient services in hospitals. In Croatia, the functional integration of 

hospitals  (still  in  the  pilot  phase)  and  improved  primary  care  should  improve  quality  of 

119  European  Commission  and  the  Social  Protection  Committee  (2018).  The  2018  Pension  Adequacy  Report: 
current and future income adequacy in old age in the EU. 
120 Ibid. 

155 

 
 
                                                            
services,  bring  savings  and  financial  stability  as  well  as  increase  the  level  of  safety  and 

patients' satisfaction.  In Austria, 75 centres based on multi-professional teams will be opened 

by 2021. 

Measures  are  being  taken  to  improve  the  training  and  working  conditions  of  health 

workers.  In  Italy,  competencies  of  general  practitioners,  specialists  and  nurses  have  been 

combined to provide care in the community. Also Hungary and Sweden have a major focus 

on  bolstering  skills  supply  in  the  healthcare  sector  and  improving  working  conditions  and 
salaries. In Romania, as of March 1st 2018, gross salaries of doctors and nurses, gross salaries, 

were  increased  considerably  (by  70%-172%).  In  Latvia,  the  government  plans  substantial 

(almost threefold) increases of health professionals’ wages by 2023. Support measures aimed 

at attracting medical practitioners and nurses to work in peri-urban or rural are on the way in 

Latvia, Poland, Portugal and Romania. 

Specific  measures  to  improve  the  access  to  healthcare  include  the  reduction  of  out-of-

pocket payments, specifically co-payments, in some Member States.  An example is Cyprus, 

which adopted in 2017 a major reform to, inter alia, provide universal access to healthcare by 

2020. In Estonia, the additional reimbursement of costs of prescription pharmaceuticals was 

widened  as  of  2018.    In  Lithuania,  a  number  of  measures  were  undertaken  in  2017  to  curb 

out-of-pocket payments on medicines and increase the transparency of pharmaceutical policy. 

They  included  a  reduction  of  VAT  on  expensive  medicines  and  caps  put  on  the  difference 

between the prices at  which medicines  are offered in  pharmacies  and  their reference  prices, 

promotion of generics and the rational use of medicines.  

Some Member States aim at a holistic approach for long-term care. Bulgaria has adopted 

an  action  plan  for  the  implementation  of  the  National  Long  Term  Care  Strategy  which 

includes  the  strengthening  of  the  institutional  framework  for  provision  and  development  of 

integrated  social  services.  Poland  has  designed  a  social  policy  for  older  dependent  people 

based on a system of support for informal carers by public institutions and on a network of 

community and institutional services. 

To  increase  the  pool  of  carers,  Member  States  are  proposing  different  policy  options. 

The Czech Republic adopted a special leave (paid up to three months) for informal carers of 

family dependants. Estonia provides a possibility to have 5 additional paid carers' leave days 

for  employed  carers  (relative,  spouse,  registered  partner  or  carer)  per  calendar  year.  In 

Germany,  the  education  and  training  of  nurses  is  being  reformed  in  order  to  establish  a 

156 

 
 
common curriculum and training for nurses in health care, paediatric care and long-term care, 

and reduce labour shortage. 

157 

 
 
 
 
ANNEXES 

Annex 1. Social scoreboard headline indicators, levels 

Source: Eurostat. 
Note: EUnw and EAnw refer to the non-weighted averages for EU and the euro area. 
Flags – b: break in time series; e: estimated; p: provisional; u: low reliability (small number of observations). 

158 

Year201520162017201520162017201520162017201520162017201520162017EU2811.010.710.611.611.611.55.25.25.123.823.522.5 e12.011.610.9EA1911.611.111.011.211.211.25.25.25.123.123.122.1 e12.211.711.2EUnw9.89.59.410.710.610.55.15.05.024.323.822.911.711.010.4EAnw10.19.59.410.410.310.15.05.04.923.623.122.311.510.810.2BE10.18.88.9 b8.39.39.8 b3.83.83.821.120.720.312.29.99.3 bBG13.413.812.76.67.38.07.17.7 b8.241.340.4 b38.919.318.215.3CZ6.26.66.716.616.015.83.53.53.414.013.312.27.57.06.3DK7.87.2 b8.8 b7.66.7 b6.5 b4.14.14.117.716.817.26.25.8 b7.0 bDE10.110.310.18.78.27.94.84.64.520.019.719.06.26.76.3EE12.210.910.87.98.27.36.25.65.424.224.423.410.89.19.4IE7.06.25.1 b12.312.112.14.54.4:26.024.2:14.312.610.9 bEL7.96.26.018.019.019.76.56.66.135.735.634.817.215.815.3ES20.019.018.311.211.511.96.96.66.628.627.926.615.614.613.3FR9.28.88.97.27.57.94.34.34.417.718.217.112.011.911.5HR2.8 u2.8 u3.19.59.610.65.25.05.029.127.926.418.116.915.4IT14.713.814.020.020.119.85.86.35.928.730.028.921.419.920.1CY5.27.68.58.39.79.55.24.94.628.927.725.215.316.016.1LV9.910.08.64.12.94.36.56.26.330.928.528.210.511.210.3LT5.54.85.42.41.91.07.57.17.329.330.129.69.29.49.1LU9.3 b5.57.311.7 b11.07.94.35.0 b5.018.519.8 b21.56.2 b5.45.9HU11.6 b12.412.513.714.015.34.34.34.328.226.325.611.6 b11.011.0MT20.219.217.7 b26.825.524.14.24.24.222.420.119.210.58.88.6 bNL8.28.07.111.111.010.53.83.9 b4.016.416.7 b17.04.74.64.0AT7.36.97.48.27.88.04.04.14.318.318.018.17.57.76.5PL5.35.25.013.814.214.64.94.84.623.421.919.511.010.59.5PT13.714.012.66.76.87.56.05.95.726.625.123.311.310.69.3RO19.118.518.117.517.617.18.37.26.537.438.835.718.117.415.2SI5.04.94.38.66.67.23.63.63.419.218.417.19.58.06.5SK6.97.49.314.714.212.83.53.63.518.418.116.313.712.312.1FI9.27.98.22.13.33.53.63.63.516.816.615.710.69.99.4SE7.07.47.74.23.84.04.14.34.318.618.317.76.76.56.2UK10.811.210.611.211.010.35.25.1:23.522.2:11.110.910.3Equal opportunities and access to the labour marketEarly leavers from education and training (% of poulation aged 18-24)Gender employment gap(pps)Income quintile ratio (S80/S20)At risk of poverty or social exclusion (in %)Youth NEET (% of total population aged 15-24) 
 
 
 
 
Annex 1 (continued). Social scoreboard headline indicators, levels 

Source: Eurostat, OECD. 
Note: EUnw and EAnw refer to the non-weighted averages for EU and the euro area. Real GDHI per capita is 
measured using  'unadjusted  income'  (i.e.  without including  social  transfers  in kind)  and  without correction  for 
purchasing power standards. Net earnings of a full time single workers earning the average wage should be read 
and interpreted in conjunction with other indicators, such as the in-work poverty rate, the ratio between the fifth 
and the first decile of the wage distribution (D5/D1) and other relevant EPM/SPPM and JAF indicators. For this 
indicator 3-year averages are used to smooth out short-term fluctuations. 
Flags – b: break in time series; e: estimated; p: provisional; u: low reliability (small number of observations). 

159 

Year201520162017201520162017201520162017201420152016201420152016EU2870.171.172.29.48.67.64.54.03.498.7100.7102.5:::EA1969.070.071.010.910.09.15.55.04.496.798.099.5:::EUnw70.071.172.59.78.77.64.84.13.497.7100.2103.5190631926719671EAnw69.670.672.010.59.78.65.34.74.094.496.298.4201182057420987BE67.267.768.5 b8.57.87.1 b4.44.03.5 b96.796.397.0243552477225082BG67.167.771.39.27.66.25.64.53.4110.4120.1133.6816487429329CZ74.876.778.55.14.02.92.41.71.0100.9104.9108.2134961380914111DK76.577.4 b76.9 b6.26.25.71.71.4 b1.3 b104.1107.5110.9254912617026568DE78.078.679.24.64.13.82.01.71.6104.2105.3106.9259352652827040EE76.576.678.76.26.85.82.42.11.9101.0105.7109.4130481374114373IE69.971.473.010.08.46.75.34.23.089.892.093.7247262499425510EL54.956.257.824.923.621.518.217.015.670.469.468.7181691844718577ES62.063.965.522.119.617.211.49.57.790.392.794.3219992258423077FR69.570.070.610.410.19.44.64.64.2100.3100.8102.3237612429124579HR60.661.463.616.113.411.110.26.64.6::::1278913113IT60.561.662.311.911.711.26.96.76.588.589.690.7205972076221070CY67.968.770.815.013.011.16.85.84.575.978.082.1:::LV72.573.274.89.99.68.74.54.03.391.698.5103.96994850210082LT73.375.276.09.17.97.13.93.02.7103.5108.2114.699121051711151LU70.9 b70.771.56.56.35.61.9 b2.22.1103.1102.5101.5313673192232320HU68.971.573.36.85.14.23.12.41.7101.2103.4109.8112561148011712MT69.071.173.05.95.24.62.41.91.6:::212842121821243NL76.477.178.06.96.04.93.02.51.998.9100.1101.5278002857028768AT74.374.875.45.76.05.51.71.91.896.495.296.3253792603926859PL67.869.370.97.56.24.93.02.21.5113.4117.7124.8126061322113757PT69.170.673.412.611.29.07.26.24.592.094.797.0162071604315984RO66.066.368.86.85.94.93.03.02.0100.4102.8114.2862189879609SI69.170.173.49.08.06.64.74.33.192.894.699.1147411495815049SK67.769.871.111.59.78.17.65.85.1101.8105.8108.6116981210612446FI72.973.474.29.48.88.62.32.32.1101.4102.6103.5241542434624545SE80.581.281.87.46.96.71.51.31.2111.6113.3115.9256122589225992UK76.877.578.25.34.84.41.61.31.1100.0104.4103.5282552877029177Net earnings of a full-time single worker earning the average wage (PPS)Dynamic labour markets and fair working conditionsUnemployment rate (% active population aged 15-74) Real GDHI per capita (2008 = 100)Employment rate (% population aged 20-64)Long term unemployment rate (% active population aged 15-74) 
 
 
 
 
Annex 1 (continued). Social scoreboard headline indicators, levels 

Source: Eurostat. 
Note: EUnw and EAnw refer to the non-weighted averages for EU and the euro area. 
Flags – b: break in time series; e: estimated; p: provisional; u: low reliability (small number of observations). 

160 

Year201520162017201420152016201520162017201520162017EU2833.733.232.4 e28.430.332.93.22.51.6 e55.056.057.0EA1933.132.331.3 e32.333.938.22.62.31.3 e:::EUnw35.234.333.427.328.029.93.43.12.555.255.657.3EAnw35.034.232.529.229.432.33.43.42.756.757.059.7BE44.241.139.548.850.143.82.42.42.160.061.061.0BG22.517.9 b19.911.29.012.54.72.8 b2.131.026.029.0CZ42.340.542.44.42.94.70.80.70.557.054.060.0DK52.752.251.069.677.370.01.31.31.075.078.071.0DE33.534.833.227.525.932.60.50.30.367.068.068.0EE22.324.927.319.521.530.212.715.311.865.060.060.0IE55.052.2:27.430.628.62.82.6:44.044.048.0EL16.115.915.812.811.48.912.313.110.044.046.046.0ES26.624.423.937.039.739.30.60.50.154.053.055.0FR43.142.444.839.541.848.91.21.31.057.056.057.0HR35.528.624.817.111.815.61.91.71.651.055.041.0IT21.721.419.422.927.334.47.25.51.843.044.0:uCY36.235.635.925.520.824.91.50.61.543.043.050.0LV17.621.621.921.622.828.38.4 b8.26.249.050.0 b48.0LT22.421.523.222.99.715.22.93.11.551.052.055.0LU43.839.1 b35.549.051.950.90.90.4  b0.386.086.085.0HU42.043.846.414.315.315.62.61.31.050.051.050.0MT31.230.729.118.217.931.40.81.00.252.049.056.0NL48.042.5 b39.744.646.353.00.10.2 b0.172.077.079.0AT45.746.442.216.022.220.50.10.20.264.065.067.0PL23.124.537.55.65.47.87.36.63.3 b40.044.046.0PT26.124.022.544.947.249.93.02.42.348.048.050.0RO13.314.216.62.69.417.49.46.54.726.028.029.0SI42.342.844.637.337.439.50.20.43.551.053.054.0SK35.331.029.16.51.10.52.12.32.453.055.059.0FI53.757.056.933.232.632.64.3 b4.13.674.073.076.0SE45.345.846.156.764.051.01.31.61.472.069.0 b77.0UK43.343.4:28.930.428.52.81.0:67.069.071.0Self-reported unmet need for medical care (%)Individuals who have basic or above basic overall digital skills (% of population aged 16-74)Public support / Social protection and inclusionImpact of social transfers (other than pensions) on poverty reduction (%)Children aged less than 3 years old in formal childcare (%) 
 
 
 
 
 
Annex 2. Social scoreboard headline indicators, changes and distance to EU 

Source: Eurostat. 
Note:  EUnw  and  EAnw  refer  to  the  non-weighted  averages  for  EU  and  the  euro  area.  On  26th  October  2018, 
statistical significance estimates for changes of LFS and SILC-based indicators are not available. 
Flags – b: break in time series; e: estimated; p: provisional; u: low reliability (small number of observations). 

161 

YearY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUEU28-0.11.20.0-0.11.00.0-0.10.10.0-1.0-0.40.0-0.70.50.0EA19-0.11.60.00.00.70.1-0.10.10.0-1.0-0.80.0-0.50.80.2EUnw-0.10.00.0-0.10.00.0-0.10.00.0-1.00.00.0-0.70.00.0EAnw-0.10.00.0-0.2-0.4-0.1-0.10.00.0-0.8-0.60.2-0.6-0.20.1BE0.1 b-0.50.20.5 b-0.70.60.0-1.20.1-0.4-2.60.6-0.6 b-1.10.1BG-1.13.3-1.00.7-2.50.80.53.20.6-1.516.0-0.5-2.94.9-2.2CZ0.1-2.70.2-0.25.3-0.1-0.1-1.60.0-1.1-10.7-0.1-0.7-4.10.0DK1.6 b-0.61.7-0.2 b-4.0-0.10.0-0.90.10.4-5.71.41.2 b-3.41.9DE-0.20.7-0.1-0.3-2.6-0.2-0.1-0.50.0-0.7-3.90.3-0.4-4.10.3EE-0.11.40.0-0.9-3.2-0.8-0.20.4-0.1-1.00.50.00.3-1.01.0IE-1.1 b-4.3-1.00.01.60.1::::::-1.7 b0.5-1.0EL-0.2-3.4-0.10.79.20.8-0.51.1-0.4-0.811.90.2-0.54.90.2ES-0.78.9-0.60.41.40.50.01.60.1-1.33.7-0.3-1.32.9-0.6FR0.1-0.50.20.4-2.60.50.1-0.60.2-1.1-5.8-0.1-0.41.10.3HR0.3-6.30.41.00.11.10.00.00.1-1.53.5-0.5-1.55.0-0.8IT0.24.60.3-0.39.3-0.2-0.40.9-0.3-1.16.0-0.10.29.70.9CY0.9-0.91.0-0.2-1.0-0.1-0.3-0.4-0.2-2.52.3-1.50.15.70.8LV-1.4-0.8-1.31.4-6.21.50.11.30.2-0.35.30.7-0.9-0.1-0.2LT0.6-4.00.7-0.9-9.5-0.80.22.30.3-0.56.70.5-0.3-1.30.4LU1.8-2.11.9-3.1-2.6-3.00.00.00.11.7-1.42.70.5-4.51.2HU0.13.10.21.34.81.40.0-0.70.1-0.72.70.30.00.60.7MT-1.5 b8.3-1.4-1.413.6-1.30.0-0.80.1-0.9-3.70.1-0.2 b-1.80.5NL-0.9-2.3-0.8-0.50.0-0.40.1-1.00.20.3-5.91.3-0.6-6.40.1AT0.5-2.00.60.2-2.50.30.2-0.70.30.1-4.81.1-1.2-3.9-0.5PL-0.2-4.4-0.10.44.10.5-0.2-0.4-0.1-2.4-3.4-1.4-1.0-0.9-0.3PT-1.43.2-1.30.7-3.00.8-0.20.7-0.1-1.80.4-0.8-1.3-1.1-0.6RO-0.48.7-0.3-0.56.6-0.4-0.71.5-0.6-3.112.8-2.1-2.24.8-1.5SI-0.6-5.1-0.50.6-3.30.7-0.2-1.6-0.1-1.3-5.8-0.3-1.5-3.9-0.8SK1.9-0.12.0-1.42.3-1.3-0.1-1.50.0-1.8-6.6-0.8-0.21.70.5FI0.3-1.20.40.2-7.00.3-0.1-1.50.0-0.9-7.20.1-0.5-1.00.2SE0.3-1.70.40.2-6.50.30.0-0.70.1-0.6-5.20.4-0.3-4.20.4UK-0.61.2-0.5-0.7-0.2-0.6::::::-0.6-0.10.120172017201720172017Equal opportunities and access to the labour marketGender employment gap(pps)Income quintile ratio (S80/S20)At risk of poverty or social exclusion (in %)Youth NEET (% of total population aged 15-24)Early leavers from education and training (% of poulation aged 18-24) 
 
 
 
Annex 2 (continued). Social scoreboard headline indicators, changes and distance to EU 

Source: Eurostat, OECD. 
Note: EUnw and EAnw refer to the non-weighted averages for EU and the euro area. Real GDHI per capita is 
measured using  'unadjusted  income'  (i.e.  without including  social  transfers  in kind)  and  without correction  for 
purchasing power standards. Net earnings of a full time single workers earning the average wage should be read 
and interpreted in conjunction with other indicators, such as the in-work poverty rate, the ratio between the fifth 
and the first decile of the wage distribution (D5/D1) and other relevant EPM/SPPM and JAF indicators. For this 
indicator, the distance to the EU average is expressed in purchasing power standards (PPS) while the changes are 
expressed in real terms in national currency; 3-year averages are used for both levels and changes to smooth out 
short-term fluctuations. On 26th October 2018, statistical significance estimates for changes of LFS and SILC-
based indicators are not available. 
Flags – b: break in time series; e: estimated; p: provisional; u: low reliability (small number of observations). 

162 

YearY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUEU281.1-0.3-0.4-1.00.00.1-0.60.00.11.9-1.0-1.4:::EA191.0-1.5-0.5-0.91.50.2-0.61.00.11.5-4.1-1.8:::EUnw1.50.00.0-1.10.00.0-0.70.00.03.30.00.02.60.00.0EAnw1.4-0.6-0.1-1.10.90.0-0.70.70.02.3-5.1-1.01.91315-0.6BE0.8 b-4.0-0.7-0.7 b-0.50.4-0.5 b0.10.20.7-6.5-2.60.15411-2.4BG3.6-1.22.1-1.4-1.4-0.3-1.10.0-0.411.230.07.98.6-103426.0CZ1.86.00.3-1.1-4.70.0-0.7-2.40.03.14.6-0.22.2-5560-0.3DK-0.5 b4.4-2.0-0.5-1.90.6-0.1 b-2.10.63.27.4-0.11.36896-1.3DE0.66.7-0.9-0.3-3.80.8-0.1-1.80.61.53.4-1.81.77369-0.9EE2.16.20.6-1.0-1.80.1-0.2-1.50.53.65.90.35.2-52982.7IE1.60.50.1-1.7-0.9-0.6-1.2-0.4-0.51.9-9.9-1.52.05839-0.6EL1.6-14.70.1-2.113.9-1.0-1.412.2-0.7-1.1-34.9-4.40.0-1094-2.5ES1.6-7.00.1-2.49.6-1.3-1.84.3-1.11.8-9.2-1.51.93406-0.6FR0.6-1.9-0.9-0.71.80.4-0.40.80.31.4-1.3-1.90.64908-2.0HR2.2-8.90.7-2.33.5-1.2-2.01.2-1.3:::2.3-6558-0.3IT0.7-10.2-0.8-0.53.60.6-0.23.10.51.2-12.8-2.10.71399-1.9CY2.1-1.70.6-1.93.5-0.8-1.31.1-0.65.3-21.42.0:::LV1.62.30.1-0.91.10.2-0.7-0.10.05.60.42.27.4-95904.8LT0.83.5-0.7-0.8-0.50.3-0.3-0.70.46.011.12.76.5-85214.0LU0.8-1.0-0.7-0.7-2.00.4-0.1-1.30.6-1.0-2.1-4.30.712649-1.8HU1.80.80.3-0.9-3.40.2-0.7-1.70.06.16.22.84.5-79601.9MT1.90.50.4-0.6-3.00.5-0.3-1.80.4:::0.41572-2.2NL0.95.5-0.6-1.1-2.70.0-0.6-1.50.11.4-2.0-1.91.29097-1.4AT0.62.9-0.9-0.5-2.10.6-0.1-1.60.61.1-7.3-2.22.17188-0.4PL1.6-1.60.1-1.3-2.7-0.2-0.7-1.90.06.121.32.84.9-59152.3PT2.80.91.3-2.21.4-1.1-1.71.1-1.02.5-6.5-0.8-0.6-3688-3.2RO2.5-3.71.0-1.0-2.70.1-1.0-1.4-0.311.110.77.88.5-100636.0SI3.30.91.8-1.4-1.0-0.3-1.2-0.3-0.54.8-4.41.51.2-4622-1.4SK1.3-1.4-0.2-1.60.5-0.5-0.71.70.02.65.0-0.73.1-72250.5FI0.81.7-0.7-0.21.00.9-0.2-1.30.50.90.0-2.40.34874-2.3SE0.69.3-0.9-0.2-0.90.9-0.1-2.20.62.312.4-1.01.56321-1.1UK0.75.7-0.8-0.4-3.20.7-0.2-2.30.5-0.90.0-4.20.99506-1.6201720172017Unemployment rate (% active population aged 15-74) Long term unemployment rate (% active population aged 15-74)Employment rate (% population aged 20-64)Real GDHI per capita (2008 = 100)Net earnings of a full-time single worker earning the average wage20162016Dynamic labour markets and fair working conditions 
 
 
 
Annex 2 (continued). Social scoreboard headline indicators, changes and distance to EU 

Source: Eurostat. 
Note: EUnw and EAnw refer to the non-weighted averages for EU and the euro area.  
Flags – b: break in time series; e: estimated; p: provisional; u: low reliability (small number of observations). On 
26th  October  2018,  statistical  significance  estimates  for  changes  of  LFS  and  SILC-based  indicators  are  not 
available. 

163 

YearY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUY-Y changeDistance to EU averageY-Y for MS to Y-Y for EUEU28-0.8-1.0-1.02.63.00.7-0.9-0.9-0.21.0-0.3-0.3EA19-1.0-2.1-1.24.38.32.4-1.0-1.2-0.3:::EUnw0.20.00.01.90.00.0-0.70.00.01.30.00.0EAnw-0.7-1.0-0.92.92.41.0-0.70.20.11.92.30.6BE-1.56.1-1.7-6.313.9-8.2-0.3-0.40.40.03.7-1.3BG1.9-13.61.83.5-17.41.6-0.7-0.40.03.0-28.31.7CZ1.99.01.71.8-25.2-0.1-0.2-2.00.56.02.74.7DK-1.217.6-1.4-7.340.1-9.2-0.3-1.50.4-7.013.7-8.3DE-1.6-0.2-1.86.72.74.80.0-2.20.70.010.7-1.3EE2.4-6.12.28.70.36.8-3.59.3-2.80.02.7-1.3IE:::-2.0-1.3-3.9:::4.0-9.32.7EL0.0-17.6-0.2-2.5-21.0-4.4-3.17.5-2.40.0-11.3-1.3ES-0.5-9.5-0.7-0.49.4-2.3-0.4-2.40.32.0-2.30.7FR2.411.42.37.119.05.2-0.3-1.50.41.0-0.3-0.3HR-3.8-8.6-3.93.8-14.31.9-0.1-0.90.6-14.0-16.3-15.3IT-1.9-14.0-2.17.14.55.2-3.7-0.7-3.0:::CY0.32.50.14.1-5.02.20.9-1.01.67.0-7.35.7LV0.3-11.50.15.5-1.63.6-2.03.7-1.3-2.0-9.3-3.3LT1.6-10.31.55.5-14.73.6-1.6-1.0-0.93.0-2.31.7LU-3.62.1-3.8-1.021.0-2.9-0.1-2.20.6-1.027.7-2.3HU2.613.02.40.3-14.3-1.6-0.3-1.50.4-1.0-7.3-2.3MT-1.6-4.3-1.713.51.511.6-0.8-2.3-0.17.0-1.35.7NL-2.86.3-3.06.723.14.8-0.1-2.40.62.021.70.7AT-4.28.7-4.4-1.7-9.4-3.60.0-2.30.72.09.70.7PL13.14.112.92.4-22.10.5-3.3 b0.8-2.62.0-11.30.7PT-1.5-11.0-1.72.720.00.8-0.1-0.20.62.0-7.30.7RO2.4-16.82.28.0-12.56.1-1.82.2-1.11.0-28.3-0.3SI1.811.11.62.19.60.23.11.03.81.0-3.3-0.3SK-1.8-4.3-2.0-0.6-29.4-2.50.1-0.10.84.01.72.7FI-0.123.5-0.30.02.7-1.9-0.51.10.23.018.71.7SE0.312.60.1-13.021.1-14.9-0.2-1.10.58.019.76.7UK:::-1.9-1.4-3.8:::2.013.70.72017201620172017Self-reported unmet need for medical care (%)Individuals who have basic or above basic overall digital skills (% of population aged 16-74)Impact of social transfers (other than pensions) on poverty reduction (%)Children aged less than 3 years old in formal childcare (%)Public support / Social protection and inclusion 
 
 
 
 
 
Annex 3. Methodological note on the identification of trends and levels in the scoreboard  

In  mid-2015  the  European  Commission,  the  Employment  Committee  and  the  Social  Protection  Committee 
agreed on a methodology for assessing Member States' performance on the scoreboard of key employment and 
social indicators. As part of the agreement, the methodology aimed at providing, for each indicator, a measure of 
the relative standing of each Member State within the distribution of the indicator values (scores) of the EU. The 
methodology is applied jointly to year-levels (levels) as well as to one-year changes (changes), thus enabling a 
holistic assessment of MS performance121.  

In 2017  the  Commission  in  agreement  with  the  Employment  Committee  and  the  Social Protection Committee 
has  decided  to  apply  the  methodology  to  the  social  scoreboard  accompanying  the  European  Pillar  of  Social 
Rights. 

For  each  indicator,  levels  and  changes  are  converted  to  standard  scores  (also  known  as  z-scores)  to  apply  the 
same  metric  to  all  the  indicators.  This  is  achieved  by  standardising  raw  values  of  both  levels  and  changes 
according to the formula: 

𝑧 − 𝑠𝑐𝑜𝑟𝑒 𝑓𝑜𝑟 𝑀𝑆𝑋 =  

[𝑀𝑆𝑋 𝑖𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟  − 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 (𝑀𝑆 𝑖𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟)]
𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 (𝑀𝑆 𝑖𝑛𝑑𝑖𝑐𝑎𝑡𝑜𝑟)

Then  the  distributions  of  scores  (separately  for  levels  and  changes)  are  analised.  This  approach  enables 
expressing for each Member State its raw indicator value in terms of how many standard deviations it deviates 
from  the  (unweighted)  average.  The  performance  of  each  MS  is  assessed  and  classified  on  the  basis  of  the 
resulting z-scores against a set of pre-defined thresholds, set as standard deviation multiples.  

The most important issue within this approach is setting cut-off points. Given that no parametric assumption can 
be made about the distribution of the observed raw values122, it is common to use a “rule of thumb” in selecting 
the thresholds. According to the analysis of the key indicators used in the scoreboard, it was agreed to consider:   

1.  Any score below -1 as a very good performance  
2.  Any score between -1 and -0.5 as a good performance 
3.  Any score between -0.5 and 0.5 as a neutral performance 
4.  Any score between 0.5 and 1 as a bad performance 
5.  Any score higher than 1 as a very bad performance123 

Table 4: Z-scores threshold values 

z-scores threshold values 

-1.0 

- 0.5 

0 

0.5 

1.0 

(lower than) 

(lower than) 

(between) 
Assessment 

(Higher than) 

(Higher than) 

Levels 

Very Low 

Low 

On average 

High 

Very High 

Changes 

Much lower 
than average 

Lower than 
average 

On average 

Higher than 
average 

Much higher 
than average 

121 With the exception of the new indicator "net earnings of a full-time single worker without children earning an 
average  wage"  for  which  3-year  averages  are  used  for  both  levels  and  changes  to  smooth  out  short-term 
fluctuations. 
122 Both normality and T-shaped distribution tests were carried out resulting in the rejection of any distributional 
hypothesis. 
123 In case of normality, chosen cut-off points roughly corresponds to 15 %, 30%, 50%, 70% and 85% of 
cumulative distribution. 

164 

 
 
 
 
  
  
 
 
 
 
  
                                                            
By combining the evaluation of levels and changes it is then possible to classify the overall performance of a 
country according to each indicator within one of the following seven categories. The colour coding is reflected 
in the respective figures in the body of the report.  

The  tables  below  provide  the  classification  based  on  z-scores  for  those  indicators  for  which  a  low  value  is 
assessed as a good performance (e.g. unemployment rate, AROPE, etc).  

Best performers   

scoring  less  than  -1.0  in  levels  and  less 
than 1.0 in changes 

Better than average 

Good but to 
monitor 

scoring  between  -1.0  and  -0.5  in  levels 
and  less  than  1  in  changes  or  scoring 
between  -0.5  and  0.5  in  levels  and  less 
than -1.0 in changes 
scoring  less  than  -0.5  in  levels  and  more 
than  1.0  in  changes,  and  presenting  a 
change higher than zero124 

On average / 
neutral 

scoring between -0.5 and 0.5 in levels and 
between -1.0 and 1.0 in changes 

Weak but 
improving 

scoring  more  than  0.5  in  levels  and  less 
than -1.0 in changes 

To watch 

scoring between 0.5 and 1.0 in levels and 
more  than  -1.0  in  changes  or  scoring 
between    -0.5  and  0.5  in  levels  and  more 
than  1.0  in  changes  (and  presenting  a 
change higher than zero125) 

Critical situations 

scoring  more  than  1.0  in  levels  and  more 
than -1.0 in changes 

the 

the  situation  not 

Member  States  with  levels  much  better 
than the EU average and with the situation 
improving or not deteriorating much faster 
than the EU average 
Member  States  with  levels  better  than  the 
EU  average  and  with 
situation 
improving or not deteriorating much faster 
than the EU average 
Member  States  with  levels  better  or  much 
better  than  the  EU  average  but  with  the 
situation deteriorating much faster than the 
EU average 
Member States with levels on average and 
with 
improving  nor 
deteriorating  much  faster  than  the  EU 
average 
Member  States  with  levels  worse  or  much 
worse  than  the  EU  average  but  with  the 
situation  improving  much  faster  than  the 
EU average 
This category groups two different cases: i) 
Member  States  with  levels  worse  than  the 
EU  average  and  with 
situation 
deteriorating  or  not  improving  sufficiently 
fast;  ii)  Member  States  with  levels  in  line 
with the EU average but with the situation 
deteriorating  much  faster  than  the  EU 
average 
Member  States  with  levels  much  worse 
than the EU average and with the situation 
deteriorating  or  not  improving  sufficiently 
fast 

the 

124  The  latter  condition  prevents  a  Member  State  presenting  "low"  or  "very  low"  level  to  be  flagged  as 
"deteriorating" when showing a change "much higher than average", but still improving. 
125 The latter condition prevents a Member State presenting  an "on average" level to be flagged as "to watch" 
when showing a change "much higher than average", but still improving. 

165 

Much lower than averageLower than averageOn averageHigher than averageMuch higher than averageVery lowLowOn averageHighVery highLevel Change 
 
 
 
 
 
                                                            
The  tables  below  provide  the  classification  based  on  z-scores  for  those  indicators  for  which  a  high  value  is 
assessed as a good performance (e.g. employment rate, participation into childcare, etc).  

Best performers   

scoring  more  than  1.0  in  levels  and  more 
than -1.0 in changes 

Better than average 

Good but to 
monitor 

scoring between 1.0 and 0.5 in levels and 
more  than  -1.0  in  changes  or  scoring 
between  -0.5  and  0.5  in  levels  and  more 
than 1.0 in changes 
scoring  more  than  0.5  in  levels  and  less 
than  -1.0  in  changes,  and  presenting  a 
change lower than zero126 

On average / 
neutral 

scoring between -0.5 and 0.5 in levels and 
between -1.0 and 1.0 in changes 

Weak but 
improving 

scoring  less  than  -0.5  in  levels  and  more 
than 1.0 in changes 

To watch 

scoring  between  -0.5  and  -1.0  in  levels 
and  less  than  1.0  in  changes  or  scoring 
between    -0.5  and  0.5  in  levels  and  less 
than  -1.0  in  changes  (and  presenting  a 
change lower than zero127) 

Critical situations 

scoring  less  than  1.0  in  levels  and  less 
than 1.0 in changes 

the 

the  situation  not 

Member  States  with  levels  much  better 
than the EU average and with the situation 
improving or not deteriorating much faster 
than the EU average 
Member  States  with  levels  better  than  the 
EU  average  and  with 
situation 
improving or not deteriorating much faster 
than the EU average 
Member  States  with  levels  better  or  much 
better  than  the  EU  average  but  with  the 
situation deteriorating much faster than the 
EU average 
Member States with levels on average and 
with 
improving  nor 
deteriorating  much  faster  than  the  EU 
average 
Member  States  with  levels  worse  or  much 
worse  than  the  EU  average  but  with  the 
situation  improving  much  faster  than  the 
EU average 
This category groups two different cases: i) 
Member  States  with  levels  worse  than  the 
EU  average  and  with 
situation 
deteriorating  or  not  improving  sufficiently 
fast;  ii)  Member  States  with  levels  in  line 
with the EU average but with the situation 
deteriorating  much  faster  than  the  EU 
average 
Member  States  with  levels  much  worse 
than the EU average and with the situation 
deteriorating  or  not  improving  sufficiently 
fast 

the 

126  The  latter  condition  prevents  a  Member  State  presenting  "high"  or  "very  high"  level  to  be  flagged  as 
"deteriorating" when showing a change "much lower than average", but still improving. 
127 The latter condition prevents a Member State presenting  an "on average" level to be flagged as "to watch" 
when showing a change "much lower than average", but still improving. 

166 

Much higher than averageHigher than averageOn averageLower than averageMuch lower than averageVery highHighOn averageLowVery lowLevelChange 
 
 
 
 
 
                                                            
Cut-off points summary table 

Very low 

Low 

On average 

High 

Very high 

Early leavers from education and training  
(% of poulation aged 18-24) 

Levels 

less than 5.4% 

less than 7.4% 

between 7.4% and 11.4% 

more than 11.4% 

more than 13.4% 

Changes 

less than -1.0 pps 

less than -0.5pps 

between -0.5pps and 0.4pps 

more than 0.4pps 

more than 0.8pps 

Gender employment gap (pps) 

Income quintile ratio (S80/S20) 

At risk of poverty or social exclusion (%) 

Youth NEET (% of total population aged 15-24) 

Employment rate (% population aged 20-64)  

Unemployment rate (% active population aged 15-74)  

Long-term unemployment rate (% active population aged 
15-74) 

Real GDHI per capita (2008 = 100) 

Net earnings of a full time single worker earning the 
average wage (levels in PPS, changes in national currency 
in real terms) 

Impact of social transfers (other than pensions) on poverty 
reduction (%) 

Children aged less than 3 years in formal childcare (%) 

Self-reported unmet need for medical care (%) 

Levels 

less than 5.2pps 

less than 7.8pps 

between 7.8pps and 13.2pps 

more than 13.2pps 

more than 15.9pps 

Changes 

less than -1.0pps 

less than -0.5pps 

between -0.5pps and 0.4pps 

more than 0.4pps 

more than 0.9pps 

Levels 

less than 3.7 

less than 4.3 

between 4.3 and 5.6 

Changes 

less than -0.3 

less than -0.2 

between -0.2 and 0.0 

more than 5.6 

more than 0.0 

more than 6.2 

more than 0.2 

Levels 

less than 16.1% 

less than 19.5% 

between 19.5% and 26.3% 

more than 26.3% 

more than 29.7% 

Changes 

less than -1.9pps 

less than -1.4pps 

between -1.4pps and -0.5pps 

more than -0.5pps 

more than 0.0pps 

Levels 

less than 6.5% 

less than 8.4% 

between 8.4% and 12.3% 

more than 12.3% 

more than 14.2% 

Changes 

less than -1.5pps 

less than -1.1pps 

between -1.1pps and -0.2pps 

more than -0.2pps 

more than 0.2pps 

Levels 

less than 67.0% 

less than 69.8% 

between 69.8% and 75.3% 

more than 75.3% 

more than 78.0% 

Changes 

less than 0.5pps 

less than 1.0pps 

between 1.0pps and 1.9pps 

more than 1.9pps 

more than 2.4pps 

Levels 

less than 3.6% 

less than 5.6% 

between 5.6% and 9.6% 

more than 9.6% 

more than 11.7% 

Changes 

less than -1.7pps 

less than -1.4pps 

between -1.4pps and -0.8pps 

more than -0.8pps 

more than -0.4pps 

Levels 

less than 0.5% 

less than 1.9% 

between 1.9% and 4.8% 

more than 4.8% 

more than 6.3% 

Changes 

less than -1.3pps 

less than -1.0pps 

between -1.0pps and -0.4pps 

more than -0.4pps 

more than -0.1pps 

Levels 

less than 90.7 

less than 97.1 

between 97.1% and 110.0 

more than 110.0 

more than 116.4 

Changes 

less than 0.0pps 

less than 1.6pps 

between 1.6pps and 4.8pps 

more than 4.8pps 

more than 6.3pps 

Levels 

less than 12,559 

less than 16,115 

between 16,115 and 23,228 

more than 23,228 

more than 26,784 

Changes 

less than -0.1% 

less than 1.2% 

between 1.2% and 3.9% 

more than 3.9% 

more than 5.2% 

Levels 

less than 22.0% 

less than 27.7% 

between 27.7% and 39.2% 

more than 39.2% 

more than 44.2% 

Changes 

less than -3.1pps 

less than -1.5pps 

between -1.5pps and 1.9pps 

more than 1.9pps 

more than 3.5pps 

Levels 

less than 12.8% 

less than 21.4% 

between 21.4% and 38.4% 

more than 38.4% 

more than 46.9% 

Changes 

less than -3.6pps 

less than -0.9pps 

between -0.9pps and 4.6pps 

more than 4.6pps 

more than 7.4pps 

Levels 

less than 0.4% 

less than 1.0% 

between 1.0% and 3.9% 

more than 3.9% 

more than 5.4% 

Changes 

less than -2.2pps 

less than -1.5pps 

between -1.5pps and 0.0pps 

more than 0.0pps 

more than 0.7pps 

Individuals who have basic or above basic overall digital 
skills (% of population aged 16-74) 

Levels 

less than 43.4% 

less than 50.4% 

between 50.4% and 64.3% 

more than 64.3% 

more than 71.3% 

Changes 

less than -3.0pps 

less than -0.9pps 

between -0.9pps and 3.5pps 

more than 3.5pps 

more than 5.6pps 

167 

 
 
 
 
 
Annex  4:  Summary  overview  of  the  ‘employment  trends  to  watch’  and  number  of 
Member  States  with  deterioration  or  improvement  as 
identified  by  the  2018 
Employment Performance Monitor (EPM). 

Note: 2016-2017 changes, except 2015-2016 for at-risk-of poverty rate of unemployed, unemployment trap and 
gender pay gap. 

168 

 
 
 
 
 
 
Annex  5:  Summary  overview  of  the  ‘social  trends  to  watch’  and  number  of  Member 
States  with  deterioration  or  improvement  over  2015-2016  as  identified  by  the  August 
2018 update of the Social Protection Performance Monitor. 

Note: for EU-SILC based indicators the indicated changes for 2015-2016 generally actually refer to 2014-2015 
for income and household work intensity indicators, and similarly for unmet needs for medical care. For LFS-
based indicators (LTU rate, early school leavers, youth unemployment ratio, NEETs (15-24), ER (55-64)) and 
severe material deprivation (not yet final for 2017 for several MS in August 2018) the changes refer to the period 
2016-2017. 

169