Untapped potential on the European labour market

As the European economy recovers and the labour market is tightening, attracting the right talent will become an increasingly important issue for businesses. In the second issue of the Europe Monitor we discuss indices which map the degree to which countries have managed to make use of the full potential of their workforce through the active participation of women, young workers and workers aged over 55 on the labour market. Moreover, we will discuss several possible measures aimed at further raising these participation-rates.

More women in full-time work could boost GDP growth

Since the launch of the first edition of the PwC Women In Work Index in 2000, Nordic countries such as Sweden, Iceland and Norway have been the top performers in the index. Their female participation rates have been high for decades. Among EU members, the long-term economic benefits from increasing the female employment rate to match that of Sweden, could increase GDP by at least US$ 2.4 trillion.

Let us not waste our young talent

During the economic crisis, youth unemployment has risen sharply in most European countries. Southern European economies experienced - and still experience - high levels of youth unemployment and NEET (Not in education, employment or training) rates, reflecting the particularly long-lasting impact of the recession on young people. PwC’s Young Workers Index shows that Europe could add at least US$ 456 billion to total GDP if member states with higher NEET rates among 20-24 year olds lowered their rates to German levels.

The potential of 55+

Between 2015 and 2050 the number of people aged 55 and above in OECD countries will grow by almost 50% to around 538 million. This trend is certain to have a profound effect on European labour markets. Participation of older workers on the labour market could help ease the labour shortage in an environment where the old-age dependency ratio in all Eurozone economies is increasing. Likewise, keeping people in work for longer will be an important measure to ease the strain that this development has on the welfare state. PwC’s Golden Age Index shows the degree to which countries have already harnessed the potential of older workers as part of their work force.

The European economy is gathering steam

The strong growth figures for the first quarter of 2017 were no incident. The economic upswing continued into the second quarter of 2017 and is exhibiting few signs of slowing down. In this edition we will also be looking more closely at the recent growth spurt of the Dutch economy.