Employment rates continue to increase across Europe

For the last decade and a half, there has been a consistent upward trend in employment rates throughout Europe. Although the pandemic caused a slight dip in the curve, the impact was minimal and short-lived.

By mid-2021, about a year after the pandemic began, employment rates had exceeded pre-pandemic levels. Today, a new peak has been reached with 3 out of every 4 Europeans between the ages of 20 and 64 now employed.

employment rate on steady rise in the EU
Sources: Eurostat: Employment and activity by sex and age - quarterly data, Eurostat: Employment - annual statistics

When analysing economic trends, it is essential to consider the nuances of employment rates. The employed and unemployed populations do not represent the entirety of the workforce since many fall outside the labour force. Consequently, a one percent rise in the employment rate may not correspond to an equally substantial drop in the unemployment rate. 

Increased labour force in the EU

Over the past 15 years, there has been a significant decrease in the percentage of individuals outside the labour force. In fact, since 2009, the EU has seen an increase in its employment rate by 7.4 percentage points, from 67 to 75 percent. This increase can be attributed mainly to the steady decline of individuals categorized as 'outside the labour force' rather than a decrease in unemployment rates. 

Geographical differences

Yet, there are big differences between countries. Somewhat simplified, southern Europe exhibits both lower employment rates and higher unemployment rates, compared to northern Europe. But there are exceptions, as explained above. Romania, among the countries with the lowest employment rate in Europe, has a lower unemployment rate than the EU average, but a large share of its population is classified as outside of the labour force. Sweden on the other hand, among the countries with the highest employment rate in Europe, has an unemployment rate that exceeds the EU average.1

Economic insights

These insights are taken from April’s issue of Economy in Focus – Intrum’s commentary on the current macroeconomic trends. Read the report in full today.

Economy in Focus issue 4
Insights based on April's issue of the report 'Employment remains strong in Europe'


1 Eurostat: Unemployment statistics and beyond, Eurostat: Unemployment by sex and age – quarterly data