Employment and Social Developments in Europe (ESDE) 2024

Chapter 2 - Structural drivers of labour shortages in the context of changing skills needs
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Structural drivers of labour shortages in the context of changing skills needs

6. Conclusions

Social and economic convergence is a long-standing objective of the EU, drawing on the goal of economic prosperity and social progress for all citizens. Since the 1950s, socio-economic convergence is a major objective of EU cohesion policy, gaining importance during the EU enlargements in 2004 and the 2008 financial crisis, which had disproportionate impacts on certain Member States, regions and population groups. Accordingly, the notion of upward social convergence (i.e., a change in social outcomes towards a desirable policy target accompanied by reduced disparities within the Union) was placed at the heart of the European Pillar of Social Rights. The 2021 action plan to implement the pillar directly links the targets and actions needed to implement the Pillar’s principles to ‘fostering ‘upward convergence and well-being’ in the EU.

Labour market outcomes have contributed to upward convergence across the EU in the latter half of the period covered by this report (2007-2022). The post-2014 period saw sustained improvements in employment, (youth) unemployment and NEET rates, accompanied by reduced cross-country disparities and catching-up of worse performing labour markets with better performing ones. These developments gradually erased the negative labour market impacts of the 2008 financial crisis. There were also gradual improvements in skill supply (measured by tertiary education attainment and adult learning participation) at EU level between 2007 and 2022, but these did not translate into sustained reductions in disparities between countries.

Positive labour market developments are often associated with upward convergence in living standards. Both GDP and real GDHI per capita have increased since 2007 at EU level, although this translated into reduced disparities across countries only in terms of household income. The prevalence of poverty risks, social exclusion, or housing cost overburden have declined since 2007, as have the differences in national prevalence rates. For each of these outcomes, poorly performing countries saw larger improvements, on average, than better performers, leading to a catching-up effect across the Member States.

Converging outcomes at EU level do not always lead to regional convergence within Member States. Tertiary education attainment diverged in almost all countries between 2007 and 2022 because of sharper increases in capital regions than in rural or peripheral regions. This contributed to talent development traps in regions with persistently low shares of university and higher-education graduates. Developments in labour market outcomes varied by Member State, converging in some but diverging in others. In-depth analysis of income data within several Member States shows that regional median incomes increased in all of these countries, but regional income disparities fell only in about half. Regional GDP per capita diverged within most Member States, reflecting a similar trend at EU level.

Gender gaps in employment and pay are narrowing and converging, but the pace of progress has slowed. Further progress in achieving gender equality is impeded by persistent gender segregation of the EU labour market and by different career trajectories of parents. Member States have made little progress in reducing gender segregation in their labour markets over the last decade. Women remain more involved than men in housework and unpaid caregiving, with limited improvements at EU level and few signs of convergence across Member States. Such inequalities stem form entrenched stereotypes that foster gender differences in involvement in paid and unpaid work and contribute significantly to existing gender employment and pay gaps.

Progress towards gender equality is bolstered by increasingly positive attitudes towards women’s paid work. The majority of the EU population believes that children are not negatively affected by mothers working and that women are not primarily interested in housework and taking care of children rather than paid work, which were still minority opinions in 1990. However, less than half of the EU population considers sharing household chores important and women are often regarded as the primary providers of unpaid care work. The prevalence of beliefs supporting gender equality in the world of work varies considerably across countries and population groups and these disparities have persisted over time.