László Andor, Member of the EC in charge of Employment, Social Affairs and Inclusion, gave a press conference on the EC’s proposal to help Member States’ Public Employment Services to maximise their effectiveness, (EC Audiovisual Services, 17/06/2013).
Labour market participation rates are socially sensitive variables and as such are slightly affected by short-term economic developments and modestly connected to cyclical changes. Because of that any attempt to follow the evolution of labour market participation percentages has to cover long periods incorporating more than one economic cycle. In view of that Eurostat, the EU statistical service, conducted a relevant study covering an entire decade from 2002 to 2012. The findings are very interesting and confirm the allegation that this variable is socially defined, not affected by short-term changes.
Inactivity rates (age 15-64) by sex, EU-28, 2002-2012 (%)
Source: Eurostat
According to this Eurostat work, labour market participation rate in the European Union has noticeably increased during the ten-year period under consideration and this tendency is explained not by economic determinants but rather by the socially defined parameter of women participation in the labour market. Eurostat found that “In 2012, the number of inactive persons as a percentage of the working age population in the EU-28 reached a new low of 28.3 %, continuing the downward trend of the previous years. This positive development is largely due to the increased participation of women in the labour market”.
More women in the labour market
The graph presented here shows clearly that during the financial crisis period, after 2008, the long-term tendency of the number of people staying away from the labour market (the exact opposite of labour market participation rate) was very slightly affected by the recent economic turbulence. Interestingly the largest part of the increase of the labour market participation rate has to be attributed, according to Eurostat, to the long-term tendency of more women joining the labour market. Accordingly the number of women staying out of the labour market as depicted by the relevant line in the graph was not at all affected by the crisis. Actually after 2011 the line’s falling angle becomes steeper.
At this point it has to be noted that Eurostat studied the labour market participation rate by following the exact opposite that is the rate of people staying outside the labour market not being employed nor unemployed. Coming back to the economic crisis and its role in the labour market, the bottom line of the graph representing the number of men staying outside the labour market shows an increasing tendency mirroring the sensitivity of this group of population to labour market problems.
In the same line of thinking it’s not clear to what extend the women labour market participation rate was affected by the economic crisis. The long-term tendency of this part of population to increase its labour market participation may have been so strong that it absorbed the possible inverse effects from the crisis. It is also possible however that the exact opposite happened, meaning that the economic crisis could have accelerated the tendency of women participating at increasing numbers in the labour market. It’s not clear which tendency of the two played a more important role. The observable phenomenon remains that the women labour market participation rate kept increasing all along the crisis years.
Summing up
Eurostat sums up the conclusion of this study like that, “Since 2002 and despite the economic crisis, the share of the inactive population in the total population of working age has fallen from 31.4 % to 28.3 % in the EU-28. This corresponds to a reduction of 7.9 million inactive persons. The decline in inactivity rates is mainly due to the rising participation of women in the labour force”.
What can be said about the overall evolution of the labour market participation percentage is that the women labour market participation rate will continue to grow during the coming years. Eurostat observes that “The share of women outside the labour market fell during that period by 5 percentage points, from 39.6 % to 34.5 %, while the share of men outside the labour force decreased by only 1 percentage point, from 23.2 % in 2002 to 22.1 % in 2012”. Obviously women constitute now the most important labour resource within the European population.
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