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EU growth with a shrinking workforce GROWING FREE LABOUR MOBILITY AREAS AND

Dr. Jörg Peschner European Commission, DG EMPL/A1. EU growth with a shrinking workforce GROWING FREE LABOUR MOBILITY AREAS AND TRENDS IN INTERNATIONAL MIGRATION OECD/European Commission conference Brussels, 14-15 November 2011.

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EU growth with a shrinking workforce GROWING FREE LABOUR MOBILITY AREAS AND

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  1. Dr. Jörg PeschnerEuropean Commission, DG EMPL/A1 EU growth with a shrinking workforce GROWING FREE LABOUR MOBILITY AREAS AND TRENDS IN INTERNATIONAL MIGRATION OECD/European Commission conference Brussels, 14-15 November 2011

  2. EU’s workforce will inevitably shrink…(people aged 20-64 years) EU27 -42 m pot. workers over the next 50 years.. .. -96 m pot. workers without migration.. Source: Eurostat, EUROPOP2010 projection

  3. .. literally everywhere in Europe..Share of people aged 20-64 years in total population Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  4. .. literally everywhere in Europe..Share of people aged 20-64 years in total population Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  5. .. literally everywhere in Europe..Share of people aged 20-64 years in total population Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  6. .. literally everywhere in Europe..Share of people aged 20-64 years in total population Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  7. .. literally everywhere in Europe..Share of people aged 20-64 years in total population Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  8. .. literally everywhere in Europe..Share of people aged 20-64 years in total population Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  9. .. literally everywhere in Europe..Share of people aged 20-64 years in total population Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  10. EU2020 strategy: Focus on employment and productivity gains Employment guidelines as proposed by the Commission: . . . Guideline 7: Increase labour market participation and reduce structural unemployment (the EU headline target, on the basis of which Member States will set their national targets, is of aiming to bring by 2020 to 75% the employment rate for people aged 20-64 for EU27). Guidelines 8,9: Develop a skilled workforce responding to labour market needs, promoting job quality and lifelong learning; improve performance of education and training systems at all levels ... . . Shift employment rate! Increase productivity via skills development!

  11. National objectives & further assumptions Can we maintain welfare standards with EU2020?

  12. EU2020 Employment rate target: 75% for the 20-64 year-oldsUp to 2020 it will still be possible to shift employment,…. …. if the EU manages to achieve its EU2020 employment rate for the 20-64 year-olds of 75%, starting from 68% in 2010 (creating some 20m jobs). EU27 % increase p.a. Source: Own calculations based on LFS data

  13. EU2020 Employment rate target: 75% for the 20-64 year-oldsBut after 2020 employment will shrink… …. if employment rate will remain at 75%, i.e., will not shift further …. if the number of migrants will not further increase. Pressure on productivity will multiply! EU27 % increase p.a. Source: Own calculations based on LFS data

  14. Policy conclusions • In order to maintain welfare standards, Europe must • invest heavily in skills development, education, • Life-Long Learning in order to shift productivity • adopt a modern approach towards qualified migration • cushion to the largest possible extent the impact of the • workforce decline by further shifting employment rates • at all ages. Don‘t stop after 2020!

  15. Hypothetical migration meeds Hypothetically missing employment compared to EU2020 scenario if 2020 Economic Dependency Ratio (EDR) was to be maintained EDR = non-employed (all ages) / employed (20-64)

  16. Policy conclusions • In order to maintain welfare standards, Europe must • invest heavily in skills development, education, • Life-Long Learning in order to shift productivity • adopt a modern approach towards qualified migration • cushion to the largest possible extent the impact of the • workforce decline by further shifting employment rates • at all ages. Don‘t stop after 2020! • Further potential?

  17. Today’s employment rates in the regions Employment rate, people aged 20-64 years Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  18. What is the potential for further shiftingemployment rate beyond 75% if … … all regions (NUTS-2) contribute to make Member States reach their national employment rate target by 2020 (uniform progress across all regions within one country) EU27 average employment rate in 2020: 75% … regions not yet at 75% by 2020 will catch up by 2030 (latecomers)

  19. “Latecomer-scenario”: Further employment potential Employment rate, people aged 20-64 years Average 2010: 68.6% Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  20. “Latecomer-scenario”: Further employment potential Employment rate, people aged 20-64 years Average 2020: 75.0% Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  21. “Latecomer-scenario”: Further employment potential Employment rate, people aged 20-64 years Average 2030: 77.3% Source: LFS data, own calculations based on DG EMPL‘s regional projection software

  22. “Latecomer-scenario”: Further employment potential • Employment could be roughly stabe until 2030 despite workforce shrinkage • 7m more employed than at constant 75% employment rate • Pressure on productivity would ease (slightly). EU27 % increase p.a. Source: Own calculations based on LFS data

  23. Comprehensive strategy to prevent welfare losses vis-à-vis a shrinkingworkforce Foster productivity Cushion the impact on employment Boost mobility Qualified migrants Invest in skills & education Shift employment rate across all ages, exploit regional potential

  24. Thank you! Dr. Jörg Peschner Seconded National Expert European Commission DG Employment DG Employment, Social Affairs and Inclusion A1 - Employment Analysis J-27 02/111 B-1049 Brussels jorg.peschner@ec.europa.eu +32 - 2 29 64290 (phone) +32 - 2 29 94233 (fax)

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