Employment

Summary

Driver description
Interactions with the Economy Domain
Interactions within the Social Domain
Interactions with the Environment Domain
Interactions with the Technology Domain
Impacts on Mobility and Transport

Driver description

  • “Employment contributes to economic performance, quality of life and social inclusion, making it one of the cornerstones of socioeconomic development. Labour market participation widens people’s range of freedoms and resources in striving to achieve life goals and aspirations.” (Ref: CO_0197)
  • “Between 2000 and 2008, employment among 20 to 64 year olds in the EU rose from 66.6 % to 70.4 % (...) The economic crisis had a pronounced effect when in 2009 the employment rate fell to 69.1 % – below the 2006 level. The employment rate has continued to fall since then, reaching 68.6 % in 2010.” (Ref: CO_0197)
Figure 1‑37 Total employment rate, by country

Source: Sustainable development in the European Union (Ref: CO_0197)

  • “Unemployment by age and gender show the labour market situation is worst for young people aged 15 to 24. More than 20% of people in that group were unemployed throughout the second half of 2009 and 2010.” (Ref: CO_0197)
  • “The number of people being put to work will vary substantially across economies in the coming years. Perhaps the most striking way to see what’s going on is to look at the total change over the whole 40-year period.” (Ref: CO_2026)
  • “Unemployment can be caused by other drivers of social exclusion such as ill-health, low educational attainment and lack of skills.” (Ref: CO_0176)
Figure 1‑38 Change in working population between 2010 and 2050

Source: The world in 2050. Quantifying the shift in the global economy (Ref: CO_2026)

  • “In the EU27, the number of persons employed (using the LFS[1] definition) is projected to record an annual growth rate of only 0.3% over the period 2010 to 2020 (compared to 0.9% over the period 2000-2009), which is expected to reverse to a negative annual growth rate of a similar magnitude over the period 2020 to 2060. The outcome of these opposite trends is that employment will peak at 228.3 million in 2026 and go down to 208.7 millions in 2060. This implies a decline of about 10.5 million workers over the period 2010 to 2060. The negative prospects for population developments, including the rapid ageing of the population, will only be partly offset by the increase in (older workers) participation rates and migration inflows, leading to a reduction in the number of people employed during the period 2020 to 2060 (about 18.2 millions).” (Ref: CO_0050)
  • “The employment rate of women is projected to rise from 62.1% in 2010 to 65.9% in 2020 and to 69.4% in 2060. The employment rate for workers aged 55-64 years is expected to increase by even more, from 46.3% in 2010 to 56.1% in 2020 and to 62.7% in 2060, reflecting the expected impact of recent pension reforms in many Member States, aimed at increasing the retirement age. For the euro area, the increase in the employment rate of older workers (55-64) is higher than in the EU27, rising by 18.1 p.p. compared with 16.4 p.p. in the EU27.” (Ref: CO_0050)
  • “There is a limit to how far the employment rate can be improved in the long term in developed countries, so long term growth is driven primarily by productivity. (“Productivity isn’t everything, but in the long run it is almost everything.” Paul Krugman). Over the longer term, growth will be determined primarily by the factors which determine productivity, and secondly those which improve labour participation. The drivers of productivity growth are factors which either improve the quality of outputs, or the efficiency with which inputs (such as capital, labour and materials) are transformed into outputs. The contribution of some of these factors to output growth can be captured by appropriate input measures, with everything else (eg unmeasured inputs and technological progress) allocated to a residual called Total Factor Productivity (TFP).” (Ref: CO_0179)

[1] Labour Force Survey

Interactions within the Economy Domain

GDP trends

  • “Employment contributes to economic performance, quality of life and social inclusion, making it one of the cornerstones of socioeconomic development. Labour market participation widens people’s range of freedoms and resources in striving to achieve life goals and aspirations.” (Ref: CO_0197)
  • “The simultaneous curbing of investment and consumption leads to low growth and endemic unemployment. This trend has been thwarted in the Anglo-Saxon countries by the development of household debt, and by asset bubbles that create fictional wealth, allowing for a growth of consumption without wages, but ending up with crashes.” (Ref: CO_0242)

Regional differences in economics

  • “Regional disparities in employment rate fell from 13.0% in 2000 to 11.8% in 2009. Improvement has been achieved by the progressively more stable position of women in regional economies.” (Ref: CO_0197)
  • “Differences between EU Member States are large. The Netherlands, Sweden, Denmark, Cyprus, Germany and Austria are all close to or even above the 75% target, while Malta, Hungary, Italy, Romania, Spain, Greece, Lithuania, Poland, Slovakia and Ireland are all below 65%.” (Ref: CO_0197)
  • “(...) unemployment is spatially very concentrated and there are still areas with a considerable ‘jobs gap’.” (Ref: CO_0176)

Interactions with the Social Domain

Migration flows

  • “Labour immigration may be permitted or encouraged by destination countries as a way to fill gaps in the national labour market. This labour migration may take a variety of forms, possibly being aimed at recruiting migrant workers from particular origin countries or workers with particular skills.” (Ref: CO_0066)

Income structure and distribution

  • “When ‘excessive’ Keynesian macro-stabilities, government regulations (such as more effective financial regulation, tougher competition laws, strong capital controls and greater accounting transparencies), labour-securities and social safety nets laid the grounds for both an increased degree of ‘compulsion’ for capital, […] what capital urgently needed was […] a return to precarious jobs, with (among other anxieties) the constant threats of the transfer of jobs to China, India or Mexico, higher levels of unemployment, highly-constrained unions, increasingly porous safety-nets, insufficient and insecure pensions and so on – and, of course, high levels of persecutory personal debt could also be of great help.” (Ref: CO_0303)
  • “There has been an increase in pay differentials with more low pay and the risk of low pay affecting certain groups more – women, young people, older males, long-term sick and disabled, and ethnic minorities. The low paid are also more likely to experience unemployment. Unemployment has knock on effects in other dimensions of social exclusion including homelessness, health, crime, and drug and alcohol problems.” (Ref: CO_0176)

Urbanisation

  • “In more remote areas, there is migration from rural to urban areas by those in search of jobs. In more central areas larger and more specialised labour markets are enabled by peri-urban development and road based mobility. Employment and occupation patterns also affect the trends of peri-urbanisation. For example, the spread of teleworking in the service industries can encourage out-migration to peri-urban or rural areas.” (Ref: CO_0097)

Interactions with the Environment Domain

  • “(...) there is no evidence that environment policy is a job-killer overall but instead it seems to have a neutral or even mildly positive impact on the overall number of jobs. This is especially true if environmental policy is well designed and hence is cost-efficient. Some environmental policies may be particularly favourable from the point-of-view of employment policies: for example, policies to promote environmental innovation or environmental tax reform. Broadly though, the biggest impact of environmental policy is likely to be on the composition of the labour market rather than its size.” (Ref: CO_0170)

Interactions with the Technology Domain

Technology development in general and innovation diffusion

  • “Positive technology shocks lead to a decline in employment, and tend to generate a negative comovement between that variable and productivity.” (Ref: CO_0188)
  • “(...) high unemployment rate of engineers has encouraged the formation of new technology based companies.” (Ref: CO_0190)
  • “Data on total employment in the United States show robust and nearly uninterrupted growth between 1948 and 2000. During this period of rising productivity, mechanization, and computerization, total employment more than doubled from less than 60 million to more than 135 million, and there has been no obvious slackening of the pace in the past two decades, during which computers became much more common in the workplace.” (Ref: CO_0193)
Figure 1‑39 Total employment 1948-2000 USA

Source: SRI International (Ref: CO_0193)

  • “Employee entrepreneurship is widely heralded as an important driver of innovation, firm formation and growth.” (Ref: CO_0192)

Impacts on Mobility and Transport

Network accessibility and labour participation

  • “The results show that high initial levels of congestion dampen subsequent employment growth” and “... congestion has a broad negative impact on economic growth.” (Ref: CO_0103)
  • “(...) access to public transit is a significant factor in determining average rates of labour participation within (...) cities.” (Ref: CO_0104)
  • “(...) the positive correlation between access to public transit and labor participation may not be coincidental.” (Ref: CO_0104)

Employment in the transport sector

  • “Up to one in ten workers in developed countries works in transport.” (Ref: CO_5019)
  • “Globally, the transport sector is hiring in unprecedented numbers, despite the crisis. Prospects remain good for job growth in the sector.” (Ref: CO_5019)