People outside the labourforce Statistics Explained

Source : Statistics Explained (https://ec.europa.eu/eurostat/statisticsexplained/) - 07/05/2020 1

Data extracted in October 2019.Planned article update: May 2020.

This article analyses labour market participation in the European Union (EU) , broken down by sex and age,on the basis of the results of the EU Labour force survey (EU-LFS) . In 2018, the number of persons outsidethe labour market as a percentage of the working age population (15-64) in the EU-28 reached a new low of26.3 %, continuing the downward trend of the previous years. This development seems to be partly due to theincreased participation of women in the labour market. The population outside the labour market remains aheterogeneous group, e.g. as regards age, reasons for not working and the level of attachment to the labourmarket.

Fewer people outside the labour force in 2018This statistical article analyses the population outside the labour market, i.e. the population that is neitheremployed nor unemployed . Despite the economic crisis, the share of persons outside the labour market in thetotal population of working age1has fallen since 2002 from 31.4 % (in 2002) to 26.3 % (in 2018) in the EU-28(see Figure 1). This corresponds to a reduction of 16 million persons outside the labour market.

Figure 1: Persons outside the labour market aged 15-64 by sex, EU-28, 2002-2018 (% of totalpopulation) - Source: Eurostat

The decrease in persons outside the labour market is mainly explained by the rising participation of women inthe labour force. The share of women outside the labour market fell by 7.7 percentage points (p.p.), during

1The working age is conventionally set at 15-64 years of age. Above this age more than 90 % of persons are outside the labourmarket, hence supporting this convention.

2002-2018 from 39.5 % to 31.8 %, while the share of men outside the labour market decreased by only 2.4 p.p.(from 23.2 % in 2002 to 20.8 % in 2018). Consequently, the gender gap in the EU decreased continuously duringthis period of time, from 16.3 p.p. in 2002 to 11.0 p.p. in 2018.

The declining trend in the gender gap is visible in almost all EU Member States (see Figure 2). While 12EU Member States had a gender gap above 15 p.p. in 2002, only 4 of them exceed this gap in 2018: Malta(21.0 p.p.), Italy (18.9 p.p.), Romania (18.6 p.p.) and Greece (16.7 p.p.). These countries are the ones whereparticipation of women in the labour market is the lowest (less than 60 % of women aged 15-64 are in the labourmarket in Greece, Romania and Italy in 2018). Nevertheless, the situation remains quite heterogeneous amongcountries. The gender gap was the lowest in Lithuania (3.1 p.p.), followed by the Nordic countries (Finland 3.2p.p., Sweden 3.4 p.p. and Denmark 5.5 p.p.), Latvia (5.4 p.p.) and Portugal (5.7 p.p.).

Figure 2: Gender gap in people outside the labour market aged 15-64 in EU Member States,2018 (Difference in p.p. between the percentages of women and men) - Source: Eurostat

The number of persons outside the labour market largely depends on sex, age andeducation levelThe decreasing pattern in the number of persons outside the labour market conceals contrasting situationsdepending on the age group (see Figure 3).

The situation for the youngest age group, i.e. people aged 15-24, has been quite stable in the last coupleof years, even if the share of people outside the labour market in the age group 15-24 has been slightly increas-ing since 2002 for both women and men. More than half of men and women aged 15-24 are outside the labourforce in the EU-28 all over the period 2002-2018. This high rate is explained by the fact that most people in thisage group are still in education or training. Faced with a tightening labour market, young people differ theirentry into the labour market, remaining longer in education, staying longer at their parents’ home (see the ar-ticle on Youth unemployment ). Consequently, they are not available for work and/or do not actively seek work.

The population outside the labour market in the age group 55-64 has experienced the strongest decrease since2002. The percentage of men outside the labour market aged 55-64 fell by 17.7 p.p. (from 48.6 % in 2002 to30.9 % in 2018) and by 24.5 p.p. for women (from 69.3 % in 2002 to 44.8 % in 2018).

The category 25-54 is by far the largest of the three groups in terms of population, but it is also the agegroup experiencing the lowest rates of people outside the labour market. In this group, small part of men areoutside the labour force (8.3 % in 2018). This can be seen as a structural set of circumstances, as the ratioremains stable overtime and despite the economic situation (8.6 % in 2002). There are also less women aged25-54 outside the labour market, compared to the other age groups, showing a continuously decreasing trend(ratio of 26.0 % in 2002 compared with 19.9 % in 2018), yet still high in comparison to men.

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Figure 3: Persons outside the labour market by sex and age, EU-28, 2002-2018 (%) - Source:Eurostat

The consequence of very high number of people outside the labour market aged 15-24 and 55-64 is even morevisible in absolute figures, with a number of people outside the labour market being similar in the three agegroups despite the different population size. Indeed, in the EU-28 in 2018, the age group 15-24 encompassed31.4 million people outside the labour market out of a total of 53.9 million people. In the age group 25-54, 29.2million persons out of 206.4 millions were outside the labour market. Finally, 25.5 million persons out of 66.9millions were outside the labour market in the age group 55-64.

Another determining factor of being outside the labour force is the educational level attained. Persons with ahigher educational level are less likely to be outside the labour market. In 2018, for the whole EU-28, personsoutside the labour market in the age group 25-642who had attained a low educational level (i.e. less than lowersecondary ) was 35.2 %, as compared to 19.2 % for persons with a medium educational level (at least lowersecondary level, but less than tertiary ) and 10.7 % for persons with a high (i.e. tertiary) level (see Figure 4).This relationship between educational attainment level and the fact to be outside the labour market appliesirrespective of sex and age.

Figure 4: People outside the labour market by education level attained aged 25-64, EU-28, 2018(%) - Source: Eurostat

Young people mainly in educationYoung people tend to be outside the labour force: in 2018 in the EU-28, 55.7 % of men and 61.1 % women aged15-24 were outside the labour market (corresponding to 58.3 % of people aged 15-25), with a total of 31 millionpersons. The rate of persons outside the labour market in this age group ranges from 31.1 % in the Netherlandsto 76.7 % in Greece, 76.3 % in Bulgaria and 73.9 % in Italy (see Figure 5). Differences between countries arelargely explained by the number of young people combining studies with participation in the labour market(having or seeking a small side job)3.

2Young persons aged 15-24 are omitted from this comparison as many of them are still in education.

3On the interplay between participation in education and in the labour market for young people, see ’ Participation of youngpeople in education and the labour market ’.

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Figure 5: Persons outside the labour market aged 15-24 by country, 2018 (%) Source: Eurostat

The incidence of and reasons for being outside the labour market for men and women in this age group do notreveal gender differences comparable to those observed in older age groups. Being in education is by far themost frequent reason that both sexes give for being outside the labour force (52.4 % for women and 49.3 % formen in the EU-28 in 2018). The gender-related differences in this age group are on one hand that 3.2 % ofwomen report family responsibilities as their main reason for not looking for a job, while for young men thisis extremely rarely the case (0.5 %) and on the other hand a bigger share of women is in education (52.4 %)compared to the men (49.3 %). Exceptionally, in Turkey 25.5 % of women outside the labour market reportpersonal or family responsibilities as the main reason for not working (see Figure 6).

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Figure 6: Persons outside the labour market aged 15-24 by sex and main reason for not lookingfor a job, 2018 (% of total population) Source: Eurostat

Family responsibilities is the main reason for women aged 25-54 being outside thelabour marketRegardless the gender, in 2018, the share of people outside the labour market aged 25-54 was higher than 15% in Italy, Ireland, Croatia, Romania and Bulgaria, while it was below the 10 % in Sweden and Slovenia (seeFigure 7).

Figure 7: Persons outside the labour market aged 25-54 by country, 2018 (%)Source: Eurostat

The main working age in the EU is between 25 and 54 years. This is also the age when families are started andchildren are raised. It is in this age group that the gender differences of the inactivity rate are more pronounced.In 2018, 8.3 % of men in this age group were outside the labour market in the EU-28 compared to 19.9 % of total

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women. Percentage of men outside the labour market was the lowest in Malta (3.6 %) and in Czechia (4.1 %)and the highest in Croatia (13.6 %), Bulgaria and Italy (11.7 % and 11.6 % respectively) and also Montenegro(12.7 %). Women aged 25-54 that were outside the labour market ranged from 10.1 % in Slovenia, 10.8 % inSweden and 11.7 % in Lithuania and 12.0 % in Iceland to 25.4 % in Malta, 25.8 % in Romania and 32.6 % inItaly. Montenegro, North Macedonia and Turkey recorded high rates of women outside the labour market at28.3 %, 34.2 % and 55.4 % respectively.

In the EU-28, almost half of women outside the labour market aged 25-54 were not in the labour marketfor personal or family reasons (48.5 % of women outside the labour market, corresponding to 9.7 % of allwomen aged 25-54), while only 7.7 % of men outside the labour market gave this as the main reason (corre-sponding to 0.6 % of all men aged 25-54), (see Figure 8). It is important to note that the EU-LFS only collectsthe main reason although other reasons may exist.

Figure 8: Persons outside the labour market aged 25-54 by sex and main reason for not lookingfor a job, 2018 (% of total population) Source: Eurostat

The gender difference is much less significant for the other reasons than for "personal or family responsibilities":figures reported for the reasons "own illness or disability", "in education" and "retirement" are similar for menand women. For example, 3.4 % of all women aged 25-54 reported to be outside the labour market for "ownillness or disability" reason while 3.2 % of men were in this situation. In total, 5.0 million men and 5.2 millionwomen gave "own illness or disability", "in education" or "retirement" as main reason for being outside thelabour market (see Figure 9).

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Figure 9: Persons outside the labour market, by age, sex and main reason for not looking for ajob, EU-28, 2018 (%) Source: Eurostat

More women aged 25-54 are outside the labour market if they are mothers of young children aged 6 or under:28.4 % compared with 17.2 % for women aged 25-54 without small children in the EU-28 in 2018. For menthe opposite is found: if there is one or more young children in their household, men’s inactivity rate in theEU-28 was 4.1 %, compared to 9.5 % if no such child was present in the household. Those patterns, due to thepresence of children, are evident in every country except for women in Portugal and Slovenia (see Figure 10).

Figure 10: Persons outside the labour market aged 25-54 by presence of own young children (0-6years), 2018 (% of total population) Source: Eurostat - EU-LFS

30.9 % of men and 44.8 % of women aged 55-64 are outside the labour marketAmongst the EU Member States, Luxembourg, Croatia, Romania, Greece and Slovenia recorded the highestshare of people outside the labour market that are above 50 % in 2018. On the other hand, the 5 countriesin the European Union with the lowest shares are Sweden with 18.4 % of people aged 55-64 being outside the

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labour market, Lithuania, Germany, Denmark and Estonia all 4 with a share lower than 28 % (see Figure 11).

Figure 11: Persons outside the labour market aged 55-64 by country, 2018 (%) Source: Eurostat- EU-LFS

When data is analysed by sex, it appears that nearly half of the women aged 55-64 are outside the labourmarket (44.8 %) in the EU-28 in 2018 which is such case of 30.9 % of men in the same age group.

Amongst EU Member States , the highest share of men aged 55-64 outside the labour market was foundin 2018 in Luxembourg (52.5 %) and Croatia (46.6 %) while the lowest was recorded in Sweden (15.6 %)and the Netherlands (20.0 %). The number of women outside the labour market were as high as 65.9 % inMalta, 63.8 % in Luxembourg, 63.6 % in Romania, 63.3 % in Croatia and 63.1 % in Greece. The highestrate for women can nevertheless be found in North Macedonia (66.2 %) and in Turkey (79.7 %). On theother hand, the lowest rates for women were 21.2 % in Sweden and 25.4 % in Estonia. There was also a lowshare of people outside the labour market in Iceland: only 11.8 % of men and 23.2 % of women in this age group.

Retirement is the most frequent reason given by men in this age category for being outside the labour market.16.0 % of the total male population in this age group were retired. The second most common reason was "ownillness or disability", with 9.0 % of the male population in this age category outside the labour market for thisreason (see Figure 12).

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Figure 12: Persons outside the labour market aged 55-64 by sex and main reason for not lookingfor a job, 2018 (%) Source: Eurostat - EU-LFS

Retirement is also the most frequent specific reason for women in this age group, with 18.1 % of them givingthis as the main reason in 2018. Own illness or disability (8.9 %) and personal or family responsibilities (7.5%) are other non-negligible causes for being outside the labour market among women in the EU-28 in this agecategory. In contrast to men, however, the pattern for women is less consistent across the Member States.In some countries, personal or family responsibilities are the main reasons given in this age group for womenoutside the labour market, with retirement being the prevailing reason in other countries (see Figure 12).

77.2 % of persons outside the labour market aged 25-54 have not worked during thelast two yearsThe concept of persons outside the labour force encompasses people with varying degrees of attachment to thelabour market. This can be seen, for instance, by looking at their previous working experience, i.e. how manyof them have previously worked, the duration of their work and how long ago they were last working.

Among the young population 15-24 who were outside the labour market in the EU-28 in 2018, the overwhelmingmajority (90.2 %) have never worked before; 8.2 % have worked during the last 2 years and only 1.6 % lastworked over 2 years ago. This means that most of these persons have not yet entered the labour market, andthose who have done so retain some attachment in the form of a relatively recent previous job.

Among persons outside the labour market in the prime working age group 25-54, the distribution shifts signifi-cantly: 22.8 % have worked in the last two years, 45.8 % last worked more than two years ago and 31.4 % havenever worked. This shows a rather high degree of labour market detachment, as 77.2 % have not worked duringthe last 2 years.

Finally, among the population aged 55-64 who are outside the labour market, 21.4 % have worked in thelast two years and 68.6 % have worked more than two years ago and only 9.9 % have never worked. Thisshows that, with age, most people do eventually have some contact with the labour market, but for many theconnection does not last.

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Figure 13: Persons outside the labour market by age group and previous work experience, EU-28,2018 (% of total persons outside the labour market) - Source: EurostatNote: the sum of sharesmay differ from 100% because of rounding effects

18.3 % of the population outside the labour market are interested to workPeople outside the labour market are defined by the fact that they do not have a job and are either not ac-tively looking for a job or are not immediately available to work (or both), i.e. they are neither employed norunemployed. Most of them, but not all, are not interested to work. Persons who are outside the labour markethave a varying degree of attachment to the labour market, which can be analysed from the viewpoint of theirbehaviour with regard to the three interrelated main variables: Do they want to work? Are they actively seekinga job? Are they available to start immediately in a new job? For instance, some people who are not availableto work do not even consider whether they want to work (this is the case for many students). Instead, for otherjobless persons, the lack of immediate availability is not an impediment to seeking a job, which indicates a muchstronger attachment to the labour market. Similar percentages of people outside the labour market that areinterested to work are observed for people aged 15-24 and 55-64 i.e. 11.7 % and 10.5 % respectively while thisshare is much higher for people aged 25-54 (32.3 %) (see Figure 14).

Figure 14: Persons outside the labour market by degree of attachment to the labour marketand by age, EU-28, 2018 (%) - Source: EurostatNote: the sum of shares may differ from 100%because of rounding effects

Source data for tables and graphs• People outside the labour market - Graphs and tables

Data sourcesSources

All statistics presented in this article are derived from the European Union Labour Force Survey (EU-LFS).The EU-LFS is a quarterly, large sample survey providing results for the population in private households inthe EU, EFTA and the candidate countries (except Liechtenstein).

Reference periods

Data in figures 1 and 2 are annual averages of quarterly EU-LFS data. Data in figures 3 to 8 are annualdata because the variable ’reasons for not working’ is not collected on a quarterly basis. Figures 5 and 7 use

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annual data for consistency with other reported data.

Definitions

The concepts and definitions used in the EU-LFS follow the guidelines of the International Labour Organi-zation (ILO) .

• Outside the labour market rate is the share (in %) of the population outside the labour market inthe total population in the same age group living in private households.

• Young Child is any individual younger than 7 years at the end of the reference week.

• Parent (father or mother) is any person who lives in a private household with one or more children whoare that person’s own children or the children of his or her spouse.

• Level of education is defined according to the International standard classification of education, version2011 (ISCED 2011) . Eurostat’s online tables and databases present data on educational attainment forthree aggregates (low, medium and high levels of education).

• Reason for being outside the labour market is the main reason why somebody is not seekingemployment. The main reason may or may not be the only reason. Only the main one is retained foranalysis in this article.

• Willingness to work is assumed if a person explicitly states that he or she is willing to work.

• Availability to work means availability to start working in the next 2 weeks.

ContextCouncil Decision 2010/707/EU of 21 October 2010 on guidelines for the employment policies of the MemberStates demands that policies be put in place to increase the labour market participation of women and men,and to promote labour market participation for those furthest away from the labour market.

The EU headline target, on the basis of which Member States will set their national targets, taking intoaccount their relative starting positions and national circumstances, is to aim to raise the employment rate forwomen and men aged 20-64 to 75 % by 2020, including through the greater participation of young people, olderworkers and low-skilled workers and the better integration of legal migrants . Calculating employment rates forthese specific groups will help monitor the success of Member States’ policies.

Other articles• All articles on employment

• Employment statistics

• Employment rates and Europe 2020 national targets

• Underemployment and potential additional labour force statistics

• Labour market statistics at regional level

• Participation of young people in education and the labour market

• Youth unemployment

Tables• Employment and unemployment (LFS) , see:

LFS main indicators (t_lfsi)

LFS series - Detailed annual survey results (t_lfsa)

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Database• Employment and unemployment , see:

LFS main indicators (lfsi)

LFS series - Detailed annual survey results (lfsa)

Dedicated section• Labour market (including Labour force survey)

Legislation• Commission Regulation (EC) No 377/2008 of 25 April 2008 on the organisation of a labour force sample

survey in the Community as regards the codification to be used for data transmission from 2009 onwards,the use of a sub-sample for the collection of data on structural variables and the definition of the referencequarters

• Commission Regulation (EC) No 1897/2000 of 7 September 2000 implementing Council Regulation (EC)No 577/98 on the organisation of a labour force sample survey in the Community concerning the opera-tional definition of unemployment

• Council Regulation (EC) No 577/98 of 9 March 1998 on the organisation of a labour force sample surveyin the Community ( Summary )

• Regulation (EC) No 1372/2007 of the European Parliament and of the Council of 23 October 2007 on theorganisation of a labour force sample survey in the Community

• Regulation (EC) No 2257/2003 of the European Parliament and of the Council of 25 November 2003 on theorganisation of a labour force sample survey in the Community to adapt the list of survey characteristics

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