Chapter 1
Employment in the EU marked a new record in 2023 (the EU employment rate –individuals aged 20-64 reached 75.3%) benefitting all population groups regardless of age, educational attainment, origin and sex, with women’s employment surpassing the 70% mark for the first time. At the same time, unemployment rates were the lowest ever recorded, with the unemployment rate (people aged 15-74) declining to 6.1%. The risk of poverty or social exclusion (AROPE) and inequality, slightly decreased in 2023 (2022 income). Europe’s social protection systems have proven effective in protecting those who are vulnerable by helping them sustain their income. However, severe material and social deprivation and energy poverty slighlty increased, particulary for those with the lowest incomes in the context of high food and energy prices.
Chapter 2
Over the last decade, a number of economic, labour market and social outcomes have converged across EU Member States. In addition, poor performers caught up in terms of income and GDP per capita, as well as labour market and poverty outcomes. The chart below allows you to explore the trends of various indicators and the corresponding changes in disparities among Member States.
Trends in averages of various social and economic indicators and their respective disparities across Member States over time
Upward economic and social convergence is essential for European integration.
Income and wealth have increased as economic performance improved
Wealth distribution has been stable over time, with almost half of all wealth in the EU held by the top 10% of wealthiest individuals. At the same time, cross-country variation of income follows a rather ambiguous pattern, with catching-up in eastern countries but increasing overall disparities across countries particularly after the Covid-19 pandemic. Improvements in GDP per capita have resulted in some convergence of economic gains across Member States and regions.
Tertiary education attainment and adult learning participation improved in all Member States but with some divergence
Disparities in national tertiary education attainment and adult learning participation have grown over the last decade. At the same time, the differences have also increased between urban centres and rural areas largely due to the concentration of universities and a high demand for tertiary educated workers in urban centres, where people are also better paid. In addition, it has become more difficult for less urban regions to attract and retain highly qualified workers. This is due to the lack of universities and other opportunities for tertiary education, including in vocational education and training, and due to the outflow of highly qualified workers from these regions.
Over the last decade, there have been major advancements in the EU’s labour markets, with narrowing disparities across Member States
Employment, (youth) unemployment and NEET rates have improved across countries, although youth unemployment and NEET rates remain sizable and differences between countries have become more narrow, with improvements especially in countries that used to have particularly high youth unemployment and NEET rates (for example in Greece, Croatia, Spain and Italy). Both developments have also helped reduce the variation in the number of people at risk of poverty and social exclusion.
Improvements in social outcomes are accompanied by decreasing disparities.
The at risk of poverty or social exclusion (AROPE) rate at EU level decreased between 2015 and 2023 for both the population as a whole and for children. While the differences across Member States remain considerable, they have decreased, with a catching-up of the poorest-performing countries.
Nowadays Europeans are increasingly in favour of working motherhood; however, large differences remain across EU countries
More than 60% in the EU believe that children’s wellbeing is not adversely affected when mothers work, compared to less than 40% in 1990. These figures vary across countries, reaching over 80% of population in Northern Member States compared to 30% in Eastern Member States. The recognition of the importance of sharing household chores is less common. Just over 40% of the EU population believes that sharing household chores is important for a successful marriage or partnership, a minor improvement since 1990.
Considerable and persistent variation in attitudes across the EU
Chapter 3
Social investment, such as reforms and investments in up- and re-skilling, lifelong learning, active labour market policies, early childhood education and care, and active inclusion policies, can contribute to upward social convergence in the EU. For children, social investments lead to better education and job prospects, which in turn boost economic indicators like gross domestic product (GDP) per capita. To meet the 2030 targets for early childhood education and care, analysis suggests that the EU needs to invest additional spending of more than €11 billion per year.
In a context of deteriorating basic skills, investments in skills can help foster productivity, competitiveness, and economic growth
In 2022, the average PISA score across reading, mathematics and science, which measures the basic skills of 15-year-olds, decreased by 10 points compared to the last wave in 2018 and by 18 points over the last 10 years. This was accompanied by a sharp drop in the efficiency of spending on school education per student, with potential adverse impacts on EU’s competitiveness and wage developments. This points to the need for reforms and investment in education which could be deployed in the context of the EU cohesion policy. Simulations indicate that ESF+ funded investments in skills can lead to both long-term economic gains and a catching-up of regions with initially low levels of GDP per capita through increasing labour productivity. Analysis shows that investing in skills for young workers could further raise GDP by 0.18% and employment by 0.25%.
Basic skills and efficiency of expenditure on education per student decreased post-COVID-19 pandemic
Average EU PISA score across reading, mathematics and science, and PISA EU efficiency score, 2012-2022
Investing in effective active labour market policies can help people find new jobs and stay longer in jobs
These policies can include measures supporting access to employment as well as supporting labour market transitions. Simulations conducted with the European Commission’s RHOMOLO model show that planned ESF+ investments in such measures have the potential to lead to more people in employment across income groups, and this for at least 20 years after the start of the initial investment. At the same time, these investments also increase GDP.
ESF+ investment in ALMPs is projected to increase employment beyond the investment period, especially for lower income groups
Expected impact on employment of investment in labour supply increasing intervention fields of the ESF+, 2021-2027 programming period, by income quintile (% deviation from baseline)
Other social policies can complement and support social investment, including housing policies and social protection
Social housing is estimated to have reduced poverty risks by 0.4pp, while housing allowances are found to have decreased the at-risk-of-poverty rate by 1.4pp. The estimated impact of housing allowances is particularly strong for vulnerable households, such as those where no or only one adult is employed, and for tenants. According to simulations, tax-benefit systems could absorb almost half of the impact of a market income shock, with stabilisation properties varying substantially across countries.
Housing allowances contribute substantially to reducing poverty among vulnerable households, especially in those that do not include any working adults
Probability of a status change from not at-risk-of-poverty to at-risk-of-poverty after housing allowances are excluded from equivalised disposable income, 2014-2022
Social investment can help to advance the fair transition towards climate neutrality
It can take the form of direct investment in people such as re-skilling and up-skilling the workforce in sectors that are key to the green transition. It can also take the form of promoting changes in lifestyles and making more sustainable solutions accessible and affordable to everyone, especially low and middle-income groups.