Employment and Social Developments in Europe (ESDE) 2024

1. Introduction ⁽⁵⁰⁾

Fostering economic and social convergence is a key objective of European integration. This reflects the expectation that, as a result of European integration, economic prosperity and social progress should be shared across all Member States, regions and citizens. Reducing differences between the best- and worst-performing regions ⁽⁵¹⁾ was outlined as a priority as early as the founding Treaty of Rome in 1957. ⁽⁵²⁾ Since the 1950s, enhancing convergence has been a major objective of the EU Funds policies. It was also explicitly set out in the 1992 Maastricht Treaty on European Union (TEU), which called on the Member States ‘to achieve the strengthening and the convergence of their economies’. Article 3 of the TEU states that the EU ‘shall promote economic, social and territorial cohesion, and solidarity among Member States’.

Decreasing economic disparity can lead to social convergence, but not always. The theory of economic convergence states that the gap in income per capita between poorer and wealthier economies is expected to diminish over time, as the former typically experience more rapid growth rates. ⁽⁵³⁾ Within this, upward economic convergence implies both an improvement in performance on average and a reduction of disparities across entities (countries or regions). Historically, it has been assumed that social progress was the logical outcome of economic growth. ⁽⁵⁴⁾ Such an assumption implied that the achievement of upward economic convergence would also lead to upward social convergence, defined as a decline in disparities in social indicators (for instance employment, skills and people at risk of poverty and social exclusion) accompanied by improvements on average. More recently, the empirical literature has found mixed evidence on the relationship between economic and social convergence, pointing to the fact that the is no strong link between the two. ⁽⁵⁵⁾

Since 2017, the EU has reinforced its efforts to strengthen upward social convergence and well-being. The European Pillar of Social Rights is the EU’s compass to foster upward convergence, setting out 20 principles in the areas of equal opportunities and access to the labour market, fair working conditions and social protection and inclusion. The action plan for the implementation of the European Pillar of Social Rights Action Plan was adopted in 2021 and contained more than 75 actions, 74 of which have already been adopted. Notably, the action plan includes three EU 2030 headline targets for employment, skills, and poverty reduction ⁽⁵⁶⁾ that aim to foster upward convergence in the EU. Monitoring social convergence has recently become a more prominent element of the EU’s multilateral surveillance framework, the European Semester for economic and social policy coordination, following the development of a Social Convergence Framework that allows for country-specific analyses of Member States’ social and labour market policies (see section 5. of this chapter).

Upward convergence and catching-up trends have been significant in the EU. Evidence across Member States and regions points to long-term converging trends in living standards. Greece and Spain caught up, with the 12 founding members of the euro area by 2007. Similarly, central and eastern European countries have converged with the EU-15 ⁽⁵⁷⁾ on citizens' welfare since the 2004, 2007 and 2013 enlargements. Research has also provided support for post-accession convergence, showing that the new EU Member States exhibited higher growth rates compared to the EU-15. In most cases, institutional reforms and integration into the EU market have been identified as the major drivers behind the ‘catching-up’. However, the same studies noted that convergence is not uniform, with certain regions in central and eastern European Member States benefiting more than others, leading to disparities within, as well as between, countries. ⁽⁵⁸⁾

This chapter provides a longer-term analysis of socio-economic convergence between and within Member States. It describes methodological approaches (see part A2.1. of the Technical annex) used in relevant literature to identify convergence trends. It then examines national and regional (NUTS 2 level) convergence in socioeconomic outcomes at EU level and assesses whether disparities across Member States and regions have increased or decreased over the last decade. It focuses on within-country variations in socioeconomic convergence, before taking a closer look at convergence in labour market outcomes from a gender-equality perspective as various EU level initiatives have been targeting gender disparities in the labour market over the past years. Finally, it presents a brief overview of EU initiatives supporting convergence including the European Pillar of Social Rights and the new Social Convergence Framework. Compared to previous analytical outputs, notably ESDE reports dedicated to this topic, the 9th Cohesion report, and Eurofound’s work on convergence, ⁽⁵⁹⁾ the chapter considers more recent developments (to 2023) and looks at additional labour market and social outcome indicators previously not considered. ⁽⁶⁰⁾