Projected labour market imbalances in Europe: Policy challenges in meeting the Europe 2020

employment targets

Pascaline Descy Head of Research and Policy Analysis

EU-OECD dialogue on international migration and moblity Brussels 24-25 February 2014

Motivation

• How feasible are EU 2020 employment targets?

• Has the EU enough workforce to meet these?

Europe has considerable activation needs even if it

reduces unemployment!

Cedefop’s skill supply and demand forecasts

Projections of skill supply and demand trends up to 2025

Comparable across countries using harmonised data

Inform skills and labour market policies by providing LMI/policy scenarios

Produced every 2 years (mandate from Council)

Demand Supply

33 countries (EU28 + NO, CH, IS, CCs)

41 NACE sectors 5 year age bands

21 ISCO occupations Gender

3 broad ISCED level 3 broad ISCED levels

Replacement needs

Is the EU employment target feasible?

Simulation principles

Employment rate Activity rate Unempl. Rate 2012 68.5% 76.8% 10.8%

Cedefop baseline scenario

Employment rate Activity rate Unempl. Rate 2020 69.6% 77.6% 10.3%

‘Naive’ scenario

Employment rate Activity rate Unempl. Rate 2020 75% 77.6% 3.4%

Sustainable scenario 1

Employment rate Activity rate Unempl. Rate 2020 75% 80.3% 6.6%

Sustainable scenario 2

Employment rate Activity rate Unempl. Rate 2020 75% 83.3% 10%

Meeting targets and activation needs

Additional activation efforts

Labour market trends up to 2025 Cedefop baseline scenario

Conclusions • Workforce decline will require substantial activation

• But ceiling effect and dependence on skill needs

• Mobility and migration to be part of policy packages

• Other challenges – Labour shortages will result in greater mismatches – Increase labour productivity through HC investments

Thank you for your attention

pascaline.descy@cedefop.europa.eu

more information and forecasting results

www.cedefop.europa.eu