The EU in the world - labour market
From Statistics Explained
- Data from June - July 2012. Most recent data: Further Eurostat information, Main tables and Database.
The article focuses on the labour market statistics in the European Union (EU) and in the 15 non-EU countries from the Group of Twenty (G20). It covers the key indicators on employment, unemployment and wages and gives an insight into the European economy and society in comparison with the major economies in the rest of the world, especially with the EU's counterparts in the so-called Triad, the US and Japan, and with the BRIC countries Brazil, Russia, India and China (or BRICS if South-Africa is also included).
Main statistical findings
The activity rate in Brazil of 68.6 % was the second highest, below the 71.2 % rate recorded for the EU‑27
The labour force in the EU‑27 in 2011 was composed of around 240.4 million persons aged 15 to 64 of whom 216.7 million were in employment. The activity rate is the share of active persons in the total population and in 2011 for the EU‑27 this ratio stood at 71.2 %. The employment rate is generally calculated as the share of employed persons in the total population of working age and was 64.3 % in 2011 in the EU‑27 – see Table 1.
Particular care should be taken when comparing labour market data between different countries given there are differences in the age criteria used to calculate activity and employment rates. Furthermore, care should be taken if the most recent data are not for the same year, as is the case in most of the analysis presented in this article. The global financial and economic crisis impacted strongly on labour markets and this can be seen clearly in employment and unemployment indicators. For example, the employment rate for the EU‑27 peaked at 65.8 % in 2008, dropped to 64.5 % in 2009 and further still to 64.1 % in 2010, before recovering slightly to reach 64.3 % in 2011.
Among the G20 members the activity rate among persons aged 15 or more was below 50 % in Turkey and Saudi Arabia (both 2009). At the other end of the scale the Brazilian rate of 68.6 % (2009 data) was the second highest, below the 71.2 % activity rate recorded for the EU‑27 (2011 data).
In all G20 members the activity rate of men was higher than the corresponding rate for women, in other words a greater proportion of the male population was active in the labour force than the proportion of the female population. Only in Canada was the difference between male and female activity rates less than 10 percentage points. The gender difference was over 30 percentage points in Indonesia and Mexico, reached 43.2 percentage points in Turkey, and peaked at 56.8 percentage points in Saudi Arabia.
The high gender difference in Indonesia was, in part, due to a particularly high activity rate for men (83.6 %). Brazil and Mexico had the next highest male activity rates, both around 80 %. Most of the other G20 members recorded male activity rates between 70 % and 80 %, with South Africa’s male activity rate of 61.2 % well below this range.
By contrast, the high gender differences in Saudi Arabia and Turkey reflected exceptionally low female activity rates in these countries, 17.4 % in Saudi Arabia and 27.6 % in Turkey. For the remaining G20 members the female activity rate ranged from 43.5 % in Mexico to 58.7 % in Australia, with Canada (62.4 %) and the EU‑27 (64.9 %) above this range.
The relative position of the G20 members in terms of the employment rate was similar to that for the activity rate. The main difference was in South Africa, where the employment rate was just 40.5 % (2009 data), some 12.6 percentage points below the activity rate and this was the lowest employment rate among the G20 members. South Korea, Saudi Arabia (2009 data), Japan and Mexico recorded employment rates that were particularly close to their activity rates, indicating low unemployment.
Figure 1 focuses on a particular part of the working age population, namely persons aged 15 to 24. Although this age group is considered to be part of the working age population, many young people are not part of the labour force because they are involved in other activities, notably secondary or tertiary education or compulsory military service. In comparison with the activity rates presented in Table 1, in all of the G20 members (with data available) the gender difference in activity rates was smaller among the younger population than the whole population. In fact, for South Korea, Japan and Canada the female activity rate was higher than the male activity rate. The gender difference in the activity rate for younger persons was over 20 percentage points in Mexico and Turkey, and between 10 and 20 percentage points in Indonesia, Saudi Arabia, Brazil and Argentina.
Employment by working status
In the EU‑27 in 2011 83.5 % of persons in employment were paid employee
Among the 216.7 million persons aged 15 to 64 in employment in the EU‑27 in 2011 around five in every six (83.5 %) were wage and salary earners, in other words paid employees; the remainder were mainly self-employed persons (including employers) while family workers (who are not paid employees) made up 1.5 % of total employment. An analysis by working status shows very different patterns across the G20 members, with only Canada and South Africa reporting a similar pattern to that observed for the EU‑27.
The United States and Russia stand out with very high shares of paid employees, in excess of 90 %; at the other end of the ranking, around two thirds of persons in employment were paid employees in Brazil and Mexico, this share falling to three fifths in Turkey and down to one third in Indonesia. The self-employed contributed close to one half of all employment in Indonesia and more than one quarter in Mexico and Turkey, but less than one tenth in Japan, Russia and the United States. In many G20 members a relatively small proportion of employment is made up of family workers, generally less than 2 %. Nevertheless, family workers contributed 13.6 % of total employment in Turkey and 17.3 % in Indonesia.
Data availability for part-time employment is relatively weak. In the EU‑27, part–time employment accounted for 9.0 % of male employment in 2011 and 32.1 % of female employment. For men, this share was relatively low compared with other G20 members, although lower rates were observed in South Korea and Turkey. For women, the rate in the EU‑27 was one of the higher rates observed, although in Australia, Argentina and Japan more than one third of women in employment worked on a part-time basis.
The unemployment rate increased most strongly in the United States, more than doubling from 4.6 % in 2007 to 9.6 % by 2010
Unemployed persons are those without work, but actively searching work. The unemployment rate is calculated as the number of unemployed persons as a proportion of the labour force (comprising all employed and unemployed persons). In 2011 the number of unemployed persons in the EU‑27 was 23.2 million, equivalent to an unemployment rate of 9.7 %. Among the G20 members (no data available for China or India) the unemployment rate in 2010 ranged from 5.0 % in Japan to 11.9 % in Turkey, with South Korea (3.7 %) below this range and South Africa (23.8 %, 2009 data) above it.
In the EU‑27 male and female unemployment rates were relatively similar, 9.6 % for men and 9.8 % for women; this pattern was also observed in Australia and Mexico. In G20 countries where there was a larger difference between unemployment rates for men and women it was generally the rate for women that was highest, notably in Saudi Arabia, but also in Brazil and South Africa and to a lesser extent in Argentina. Unemployment rates were more than 1.0 percentage point lower for women than for men in the United States, Canada and Russia.
The level of unemployment and the unemployment rate reflect economic developments, with unemployment generally rising after a fall in output and unemployment reducing again after output starts to increase. The time series presented in Table 4 shows the impact of the global financial and economic crisis. The unemployment rate fell or was stable in all G20 members (based on available data) in 2006 and this downward path was extended into 2007 and 2008 in most cases; nevertheless, the unemployment rate for the United States and Turkey rose in 2008. In 2009, all G20 members witnessed a rise in their respective unemployment rates except for Indonesia (for which there is a break in series in 2009). For 2010 the development in unemployment rates was more varied: the EU‑27 and the United States recorded further increases in unemployment rates, while the rate fell most strongly in Turkey. Between 2007 and 2009 or 2010 (depending on data availability) the unemployment rate increased most strongly in the United States, more than doubling from 4.6 % in 2007 to 9.6 % by 2010.
The impact of the global financial and economic crisis on the youth unemployment rate has attracted particular attention. It should be remembered that a large share of persons between these ages of 15 and 24 years are outside the labour market, for example, young people are more likely to be studying full-time and therefore are not available for work, while some may undertake other activities outside of the labour market, such as travel. Figure 2 provides a comparison between youth unemployment rates and adult unemployment rates; all G20 members shown in the figure recorded a higher youth unemployment rate. The largest differences between youth and adult unemployment rates, all in excess of 10 percentage points, were recorded in the EU‑27, Turkey, Russia and the United States.
Persons who have been unemployed for one year or more are considered as long-term unemployed. Prolonged periods of unemployment may be linked with reduced employability of the unemployed person as well as having a sustained impact on income and social conditions. Among the G20 members with data available (see Table 5) Mexico and South Korea reported long-term unemployment rates close to zero, while this rate reached 4.1 % in the EU‑27.
China recorded double-digit annual real wage growth between 2000 and 2009
Wages are the main source of income for most workers. Wage statistics may be compiled from a variety of sources and may differ in terms of their methodology, for example, the definitions used and the coverage of workers. The data for the four EU Member States that are G20 members are presented separately in Table 6 as they are based on the average wages of full-time employees (and therefore exclude part-time employees) and concern workers within industry and services (excluding, for example, workers in agriculture, forestry or fishing). Wage information is presented in euro terms having been converted using market exchange rates and so the indicators do not represent purchasing power, although recipients of wages face different price levels for their expenditure.
As well as information on average wages, Table 6 shows the minimum wage for those countries where one exists. The minimum wage may be set on an hourly, daily or monthly basis and the figures shown have been converted to a monthly average, again expressed in euro. As of the second half of 2011 a minimum wage existed in 20 of the 27 EU Member States, ranging from EUR 123 per month in Bulgaria to EUR 1 758 in Luxembourg; among the countries without an economy-wide minimum wage there may be sectoral collective agreements.
Time series of changes in wages are less sensitive to methodological differences between countries. Furthermore, rates of change based on data in national currencies are not influenced by changes in exchange rates and real rates of change (adjusted for changes in consumer prices) reflect changes in the purchasing power of the working population.
Developments in real wage rates between 2000 and 2009 were very varied among the G20 members as can be seen in the time series presented in Table 7. China, with the largest workforce among the G20 members, recorded double-digit annual real wage growth throughout the period studied, while Russia recorded similar developments until 2009 when real wages fell. Indonesia started the decade with an annual increase of 10.4% but then experienced four consecutive annual reductions in real wages. The two South American G20 members, Argentina and Brazil, experienced the reverse situation, moving from negative rates of change in the first half of the decade to real wage growth between 2006 and 2009; Argentina experienced double-digit annual wage growth from 2007 to 2009. In most of the other G20 members the rates of change were generally more subdued, with 8.3 % wage growth in India in 2008 the only rate of change greater than +/- 5 %. Several of the G20 members recorded a fall in real wages in 2008 and or 2009, reflecting the impact of the global financial and economic crisis, as inflation exceeded any (upward) change in nominal wages.
Data sources and availability
The statistical data were mainly extracted during June and July 2012.
The indicators are often compiled according to international – sometimes global – standards, for example, UN standards for national accounts and the IMF’s standards for balance of payments statistics. Although most data are based on international concepts and definitions there may be certain discrepancies in the methods used to compile the data.
EU‑27 and euro area data
Almost all of the indicators presented for the EU‑27 and EA-17 aggregates have been drawn from Eurobase, Eurostat’s online database. Eurobase is updated regularly, so there may be differences between data appearing in this publication and data that is subsequently downloaded. In exceptional cases some indicators for the EU have been extracted from international sources, for example, when values are expressed in purchasing power parities. Otherwise, European Commission sources have been used.
G20 countries from the rest of the world
For the 15 G20 countries that are not members of the EU, the data presented have generally been extracted from a range of international sources listed in the Introduction. In a few cases the data available from these international sources have been supplemented by data for individual countries from national statistics authorities. For some of the indicators a range of international statistical sources are available, each with their own policies and practices concerning data management (for example, concerning data validation, correction of errors, estimation of missing data, and frequency of updating). In general, attempts have been made to use only one source for each indicator in order to provide a comparable analysis between the countries.
Labour market statistics measure the involvement of individuals, households and businesses in the labour market, where the former generally offer their labour in return for remuneration, while the latter act as employers. The market outcomes – for example, employment, unemployment, wage levels and labour costs – of these relationships heavily affect not only the economy, but directly the lives of practically every person.
The economically active population, also know as the labour force, is made up of employed persons and the unemployed. Employed persons include employees as well as employers, the self-employed and family workers (persons who help another member of the family to run a farm or other form of business). Members of the population who are neither employed nor unemployed are considered to be inactive. Persons in employment are those who, did any work for pay or profit, or were not working but had a job from which they were temporarily absent. The amount of time spent working is not a criterion and so full-time and part-time workers are included as well as persons on temporary contracts (contracts of limited duration).
Further Eurostat information
- Earnings (t_earn), see:
- Average gross annual earnings in industry and services, by sex (tps00175)
- LFS main indicators (lfsi)
- Population, activity and inactivity - LFS adjusted series (lfsi_act)
- Population, activity and inactivity - annual averages (lfsi_act_a)
- Employment - LFS adjusted series (lfsi_emp)
- Employment (main characteristics and rates) - annual averages (lfsi_emp_a)
- Unemployment - LFS adjusted series (une)
- Unemployment rate, annual average, by sex and age groups (%) (une_rt_a)
- Unemployment, annual average, by sex and age groups (1 000 persons) (une_nb_a)
- Long-term unemployment - annual average, by sex (%) (une_ltu_a)
- Population, activity and inactivity - LFS adjusted series (lfsi_act)
- LFS series - Detailed annual survey results (lfsa)
- Employment - LFS series (lfsa_emp)
- Employment by sex, age and professional status (1 000) (lfsa_egaps)
- Employment - LFS series (lfsa_emp)
- Earnings (earn), see:
- Minimum wages (earn_minw)
- Monthly minimum wages - bi-annual data (earn_mw_cur)
Source data for tables and figures (MS Excel)
- International Labour Organisation (ILO):