People outside the labour market
From Statistics Explained
- Data from July 2013. Most recent data: Further Eurostat information, Main tables and Database.
This article analyses labour market participation in the European Union (EU), broken down by sex and age, on the basis of the results of the EU Labour force survey (EU-LFS). 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. The economically inactive population remains a heterogeneous group, e.g. as regards age, reasons for inactivity and the level of attachment to the labour market.
Main statistical findings
Fewer people outside the labour force in 2012
This statistical article analyses the economically inactive population, i.e. the population that is neither employed nor unemployed. 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 (see Figure 1). 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. 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). As a consequence, the gender gap decreased continuously in the EU during this period of time, from 16.4 % in 2002 to 12.4 % in 2012. This decreasing trend in the gender gap is visible in almost all the Member States: while 11 countries had a gender gap above 15 % in 2002, only 6 countries exceed this limit in 2012. The situation remains however quite heterogeneous among countries: while the gender gap was lower than 7 percentage points in 2012 in the Nordic and Baltic countries, it remains well above the EU average in Malta (30.2 %), Italy (20.4 %) and Greece (19.0 %).
The inactivity rate depends heavily on sex, age and education level
This decreasing pattern in the inactivity rate hides very contrasting situations depending on the age group (see Figure 2). More than 50 % of men and women aged 15-24 are inactive. This high number is explained by the fact that many young people are still in education or training. Looking at the trend over the last decade, while the inactivity rate of women aged 15-24 remained very stable (close to 60 %), the inactivity rate of men aged 15-24 has increased, in particular since 2009 and the onset of the crisis. Looking at the age group 55-64, more than 40 % of men and women are inactive. This population has however experienced the strongest decrease since 2002, mostly explained by the widespread adoption of policies to promote active ageing. The inactivity rate of men aged 55-64 fell by 10 % (from 49 % in 2002 to 39 % in 2012) and by 14 % for women (from 69 % in 2002 to 55 % in 2012). The category 25-54 is by far the biggest of the three groups in terms of population, but it is also the age group experiencing the lowest inactivity rates. In this group, the inactivity rate of men is stable at a very low level (8 % in 2012). The inactivity rate of women aged 25-54 is continuously decreasing, but remains very high compared to that of men.
The consequence of very high inactivity rates for young and old people is even more visible in absolute figures, with a number of inactive persons being similar in the three age groups: in the EU-28 in 2012, the age group 15-24 encompasses 33 million inactive people out of a total of 57.5 million people. In the age group 25-54, 31.1 million persons out of 211.6 millions were inactive. Finally, 30 million persons out of 63.4 millions were inactive in the age group 55-64.
Another determining factor of inactivity is the educational level attained. Persons attaining a low educational level are more likely to be inactive. In 2012 and for the whole EU-28, the inactivity rate of persons in the age group 25-64 who had attained a low educational level (i.e. less than lower secondary) was 36.6 %, as compared to 20.6 % for persons with a medium educational level (at least lower secondary level, but less than tertiary) and 11.6 % for persons with a high (i.e. tertiary) level. This means that the likelihood of staying out of the labour market is more than 3 times greater for the poorly educated than for highly-educated people. This relationship between education and inactivity applies irrespective of sex and age.
Young people in education
Young people tend not to be in the labour force: in 2012 in the EU-28, 57.4 % of men and women aged 15-24 were inactive, making a total of 33 million persons. The rate of inactivity in this age group ranges from 30.1 % in the Netherlands and 35.9 % in Denmark to 74.1 % in Hungary and 72.9 % in Luxembourg. Differences between countries are largely explained by the number of young people combining studies with participation in the labour market (having or seeking a small side job).
The incidence of and reasons for inactivity of men and women in this age group 15-24 do not reveal gender differences comparable to those observed in older age groups. Being in education is by far the main reason that both sexes give for inactivity (43.8 % for women and 41.5 % for men in the EU- 28 in 2012). The biggest gender-related difference in this age group is that 3.5 % of women report family responsibilities as their main reason for not looking for a job, while for young men this is extremely rarely the case. Exceptionally, in Turkey a majority of inactive women aged 15-24 report family or personal responsibilities as the main reason for inactivity.
Family responsibilities main cause of inactivity of women aged 25-54
The prime working age in the EU is between 25 and 54 years. This is also the age when families are started and children are raised. It is in this age group that the gender differences of the inactivity rate are more pronounced. In 2012, 8.4 % of men in this age group were inactive in the EU-28 compared to 21.1 % of women. The inactivity rate of men was lowest in the Czech Republic (4.5 %) and Luxembourg (5.2 %) and highest in Croatia (16.3 %) and Bulgaria (15.2 %). The inactivity rates of women aged 25-54 ranged in 2012 from 10.9 % in Slovenia and 11.0 % in Lithuania to 41.6 % in Malta and 33.6 % in Italy. Turkey recorded 63.3 % of women aged 25-54 being outside the labour market.
In the EU-28, almost half of the inactive women aged 25-54 were inactive for personal or family reasons (9.4 % out of the 21.1 % of inactive women), whereas only 0.5 % of men give this as the main reason. The EU-LFS only collects the main reason although other reasons might exist.
Aside from personal or family responsibilities, the differences between the genders are minimal. Approximately the same number of men and women in this age category are inactive due to sickness/disability, education or retirement: 4.8 million men and 4.9 million women.
Women aged 25-54 have higher inactivity rates if they are mothers of young children aged 6 or under: 29.5 % compared to 18.5 % in the EU-28 in 2012. For men the opposite is true: if there is one or more young children in their household, men's inactivity rate in the EU-28 was 4.0 %, compared to 9.7 % if no such child was present in the household. Those patterns, due to the presence of children, work in the same direction in every country. In addition, the inactivity rates of women with children increase if there is more than one child, whereas inactivity rates of men hardly change.
39.8 % of men and 55.4 % of women in the age group 55-64 are inactive
Persons aged 55-64 years are less active on the labour market than the younger age groups. This is particularly true for women, as more than half of the women aged 55-64 are inactive (55.4 %, compared with 39.8 % for men in the EU-28 in 2012).
The inactivity rates of men were highest in Slovenia (56.4 %), Hungary (53.6 %) and Belgium (52.1 %) and they were lowest in Sweden (29.1 %) and Germany (26.4 %). On the women’s side, the inactivity rates were as high as 83.2 % in Malta, 73.5 % in Slovenia and 70.1 % in Greece, and as low as 27.0 % in Sweden, 35.3 % in Estonia and 37.9 % in Finland. Inactivity rates are particularly low in Iceland: only 12.9 % of men and 22.0 % of women in this age group are inactive.
Retirement is the main reason given by men in this age category for being outside the labour market. 23.2 % of the total male population in this age group were retired. The second most common reason is illness or disability, with 8.5 % of the male population in this age category inactive for this reason.
Retirement is also the main reason for the inactivity of women in this age group, with 26.6 % of them giving this as the main reason. Personal or family responsibilities (7.4 %) and own illness or disability (8.0 %) are other reasons of similar importance for inactivity among women in the EU-28 in this age category in 2012. Unlike for men, however, the pattern for women is less consistent across the Member States. Cultural or specific national factors might lead survey respondents to distinguish differently between their main reason for inactivity and other reasons. In some countries, personal or family responsibilities are the main reasons given in this age group for female inactivity, with retirement being the prevailing reason in other countries.
76 % of inactive persons aged 25-54 have not worked during the last two years
The concept of an economically inactive population encompasses people with very varying degrees of attachment to the labour market. This can be seen, for instance, by looking at their previous working experience, i.e. how many of them have previously worked and how long ago.
Among the young inactive persons aged 15-24 in the EU-28 in 2012, the overwhelming majority (90 %) have never worked before; 7 % have worked during the last 2 years and only 2 % last worked over 2 years ago. This means that most of these persons have not yet entered the labour market, and those who have done so retain some attachment in the form of a relatively recent previous job. Among inactive persons in the prime working age group 25-54, the distribution shifts significantly: 23 % have worked in the last two years, 48 % last worked more than two years ago and 28 % have never worked. This shows a rather high degree of detachment, as 76 % have not worked during the last 2 years. Finally, among the inactive population aged 55-64, 18 % have worked in the last two years and 74 % have worked more than two years ago and only 8 % have never worked. This shows that, with age, most people do eventually have some contact with the labour market, but for many the connection does not last. This type of analysis shows hardly any difference between men and women.
18.6 % of the economically inactive population are interested to work
Economically inactive persons are defined by the fact that they do not have a job and are either not actively looking for a job or are not immediately available to work (or both), i.e. they are neither employed nor unemployed. Most of them, but not all, are not interested to work. Actually people economically inactive have a varying degree of attachment to the labour market, which can be analysed from the viewpoint of their behaviour with regard to the three following main variables: Do they want to work? Are they actively seeking a job? Are they available to start immediately in a new job? These variables are interrelated. For instance, some people who are not available to work do not even consider whether they want to work (this is the case for many students). Instead, for other jobless persons, the lack of immediate availability is not an impediment to seeking a job, which indicates a much stronger attachment to the labour market.
Figure 8 sheds more light on those groups with breakdowns by age, sex and resons for not seeking a job or wanting to work. The sum of those who found a job to start later, those seeking a job but not immediately available to work and those wanting to work is 17 549 million persons, or 18.6 % of the economically inactive population.
Data sources and availability
All statistics presented in this article are derived from the European Union Labour Force Survey (EU-LFS). The EU-LFS is a quarterly, large sample survey providing results for the population in private households in the EU, EFTA, and the candidate countries (except Liechtenstein).
Data in figures 1 and 2 are annual averages of quarterly EU-LFS data. Data in figures 3 to 8 are annual data because the variable 'reasons for not working' is not collected quarterly. Figures 5 and 7 use annual data for consistency with other reported data.
The concepts and definitions used in the EU-LFS follow the guidelines of the International Labour Organization (ILO).
- Inactivity rate is the share (in %) of the inactive population in the total population in the same age group living in private households.
- Child is any individual younger than 7 years at the end of the reference week.
- Parent (father or mother) is any person who lives in a private household with one or more children who are that person’s own children or the children of his or her spouse.
- Level of education is defined according to the International standard classification of education, version 1997 (ISCED 1997). Three levels are distinguished in this article:
- low (ISCED 00 to 21);
- medium (ISCED 22 to 43);
- high (ISCED 51 to 60).
- Reason for inactivity is the main reason why somebody is not seeking employment. The main reason may or may not be the only reason. Only the main one is retained for analysis in this article.
- Willingness to work is assumed if a person explicitly states that he or she is willing to work.
- Availability to work means availability to start working in the next 2 weeks.
Council Decision 2010/707/EU of 21 October 2010 on guidelines for the employment policies of the Member States demands that policies be put in place to increase the labour market participation of women and men, and to promote labour market participation for those furthest away from the labour market.
The EU headline target, on the basis of which Member States will set their national targets, taking into account their relative starting positions and national circumstances, is to aim to raise the employment rate for women and men aged 20-64 to 75 % by 2020, including through the greater participation of young people, older workers and low-skilled workers and the better integration of legal migrants. Calculating employment rates for these specific groups will help monitor the success of Member States' policies.
Further Eurostat information
- Fewer people outside the labour force in 2009 - Statistics in focus 57/2010
- EU-LFS publishing guidelines
- LFS main indicators (t_lfsi)
- LFS series - Detailed annual survey results (t_lfsa)
- LFS main indicators (lfsi)
- LFS series - Detailed annual survey results (lfsa)
- Council Regulation (EC) No 577/98 of 9 March 1998 on the organisation of a labour force sample survey in the Community
- Regulation (EC) No 1372/2007 of the European Parliament and of the Council of 23 October 2007 on the organisation of a labour force sample survey in the Community
- Regulation (EC) No 2257/2003 of the European Parliament and of the Council of 25 November 2003 on the organisation of a labour force sample survey in the Community to adapt the list of survey characteristics
- Commission Regulation (EC) No 377/2008 of 25 April 2008 on the organisation of a labour force sample survey in the Community as regards the codification to be used for data transmission from 2009 onwards, the use of a sub-sample for the collection of data on structural variables and the definition of the reference quarters
- Commission Regulation (EC) No 1897/2000 of 7 September 2000 implementing Council Regulation (EC) No 577/98 on the organisation of a labour force sample survey in the Community concerning the operational definition of unemployment
- ↑ The working age is conventionally set at 15-64 years of age. Above this age more than 95% of persons are economically inactive, hence supporting this convention.
- ↑ Young persons aged 15-24 are omitted from this comparison as many of them are still in education.
- ↑ On the interplay between participation in education and in the labour market for young people, see this article.