After a brief COVID-induced slump, employment rates in the EU have trended upwards once more, according to Eurostat. While the EU employment rate fell to 71.7% in 2020, a drop of one percentage point compared to 2019, job markets in the region rebounded to 73.1% in 2021.
In a statement accompanying the release of the European bloc’s 2021 employment data, the EU’s statistics office noted that three member states – the Netherlands (81.7%), Sweden (80.7%), and Czech Republic (80%) – experienced particularly strong gains. And overall, 16 member states achieved or exceeded pre-COVID employment levels, which I believe indicates the incredibly resilient nature of the European job market.
Impact of the pandemic on EU employment
COVID-19 was a destabilizing event for most economies and a wide spectrum of industries. The EU employment landscape was no different. “The labour market was affected by COVID-19 restrictions in 2020”, says Eurostat, as lockdown mandates and dwindling demand in certain industries led to furloughs and layoffs.
According to bloc data, only four of 27 member states exceeded 2019 employment levels during 2020, and that by less than 0.5 percentage points. For the majority of states within the bloc, the year brought about a fall in the number of employed individuals, a common response to the pandemic pressures that reverberated worldwide.
However, certain member states experienced worse outcomes. Austria, Spain, Greece, and Ireland recorded the highest falls in employment, with rate falls of between two to three percentage points.
EU job market recovery
The EU employment rate did not remain depressed for long though. As Reuters reports, the EU posted stronger rate growth in 2021, surpassing pre-pandemic levels and instilling greater confidence in the region’s labor market and the policies set in motion to manage market flux during COVID.
As I’ve stated above, the European bloc experienced majority positive growth in employment rates during 2021, with 16 member states showing greater growth than 2019. Interestingly, Greece – amongst the low-fliers in 2020 – experienced one of the highest results in 2021 with a rate growth of nearly two percentage points (pp) over 2019 figures. Poland (+3.1 pp), Romania (+2.0 pp), and Malta (+1.8 pp) also experienced solid gains compared to 2019.
The results were not all positive though. Eurostat says 11 countries showed worse growth rates than 2019, led by Latvia, Estonia, Austria, Bulgaria, and Slovakia, which experienced the largest declines. Regardless, it’s critical to maintain context, even with these worse than expected results. While some of these states may not have surpassed pre-pandemic levels, the majority showed recovery from the 2020 depression, and this is in line with the promising job growth in the EU market.
Resilience and robustness in EU market
In my opinion, the results reported by Eurostat indicate remarkable robustness in the EU market. Compared to other regions, such as North America, which experienced more drastic falls in employment rates during COVID, the single percentage point decrease recorded in the EU shows very little job displacement during a trying period for countries around the world.
The IMF also notes these “astonishing” results, which it attributes to job retention schemes and “a rapid and forceful policy response at both EU and national levels…” And, with increasing industrial and economic activity, the EU job market has seen markedly improved conditions, which I believe will help launch greater stability and more growth in the next reporting period.
Overall, the data indicates that the EU did much that was right during the height of the pandemic, and those efforts are bearing fruit now. As the IMF notes, the EU now enjoys, by virtue of these results, “a potentially crucial head start in navigating the structural transformations that lie ahead and in making sure that nobody gets left behind.”
by Doğan Erbek and STF Team