The European Commission has recently released a new report focused on key themes and developments linked to employment and social objectives of the Europe 2020 strategy, in order to provide analytical underpinning to the European semester process, in particular to the preparation of the Annual Growth Survey 2014 and the Joint Employment Report.
According to the report, nearly a quarter of the EU population is at risk of poverty or exclusion. The biggest increase has been among those of working age as unemployment has risen and the number of jobless households has increased. In-work poverty has also risen, partly reflecting the fact that those who remain in work have tended to work fewer hours and/or for lower wages. Divergences between countries have also been growing, especially within the euro area. Southern EU Member States have been particularly hard hit.
The report also looks at how effectively the welfare systems in the EU in recent years fulfilled their economic and social objectives, and what possible lessons can be drawn for the future. After resisting the first phase of the recession better than some other OECD countries, the EU has seen a comparatively worse labour market performance since 2011. Unemployment has risen rather than fallen and employment rates have declined. Poverty has also been on the rise since 2007 in the EU overall while it has fallen moderately in several other OECD countries.
The report analyses social expenditure trends, the size structure and design of social expenditure, confirming that combining adequate income support, and measures promoting inclusive labour markets and access to enabling services, is needed to reduce working age poverty and its drivers.
The report recognises the limitations of measuring key societal goals such as well-being and sustainable development, recommending that additional indicators need to be discussed to complement the standard socio-economic accounting, so as to better measure the progress of societies, and in particular to integrate distributional measures in the monitoring of growth.