Employment in Europe 2006

The eighteenth edition of the Employment in Europe report is published in the autumn of 2006 at a time when employment performance in the EU appears to be picking up. Nevertheless, progress over recent years towards the Lisbon and Stockholm employment rate targets for 2010, although encouraging with respect to women and older workers, remains insufficient overall and greater
efforts are needed to provide the right impetus for further improvement. This is why, at the Spring 2006 European Council, Heads of State and Government reiterated the need for more effective and comprehensive implementation of the European Employment Strategy, particularly by emphasising a number of aspects, such as an adequate balance between security and flexibility in the labour market (i.e. “flexicurity”), mobility, education and skills, and a life-cycle approach to labour force
participation.

The need for increasingly adaptable European labour markets reflects a rapidly changing economic environment characterised by phenomena such as globalisation; the ageing of European societies; and the development of segmented labour markets. These key challenges require that Member States identify and carry through comprehensive reforms aimed at improving the balance between flexibility and security in their labour markets. In order to improve employment outcomes and facilitate
broader social acceptance, the pathways to higher “flexicurity” must be comprehensive and include four key elements – flexible contractual arrangements; effective active labour market policies; credible lifelong learning systems; and modern social security systems combining the provision of adequate income support with the need to facilitate labour market mobility and transition.

Against this background, the current edition of Employment in Europe addresses a number of politically prominent issues. The main conclusions are:

-Significant synergies/complementarities exist between flexibility and security outcomes in the labour market, for instance between employment rates and income equality.

-There is a need for furthering the culture of active labour market policy evaluation, using both the micro- and macro-economic approaches.

Economies close to the technology frontier need to focus more on creating new technologies by allocating a higher share of resources to tertiary education and fostering a highly adaptable work force.

Geographic mobility is a crucial element in the strategy to cope with the current labour market challenges, but it has to be combined with other relevant policies, such as education and immigration policies, in order to provide an efficient and consistent policy response.