Short- and medium-term sectoral employment forecasts in the aftermath of the COVID-19 pandemic

Client/Funding Institution

European Trade Union Institute (ETUI)

Abstract

The economic shock induced by the pandemic has plunged the European economies into a recession. Lockdowns and social distancing measures have affected economic life in a substantial way where industries have faced varying economic difficulties. This study explores potential employment dynamics across European industries and employment groups for the period up to 2026 by drawing on past sectoral trends and the latest macro-economic forecast results from IMF and the European Commission. A scenario analysis also takes into account the large uncertainty and risks that are related to the baseline forecasts. The baseline results indicate that in most countries employment is expected to reach its pre-pandemic level already in 2021 or 2022 based on high projected GDP growth rates up to 4% in 2021 and 2022, while hours worked will lag behind with a full catching up only in 2022 and 2023. Even though these predictions suggest a relatively quick recovery from the economic disturbance caused by the pandemic, high uncertainty is related to these numbers. As indicated by the scenario analysis, the recovery of employment could turn out to be rather sluggish. More negative scenarios predict only a limited recovery for persons employed and an incomplete recovery for hours worked even in 2026. The results further suggest that younger and low-skilled workers have been the hardest hit population subgroups. For these groups also the recovery is expected to take longer as compared to other age and education groups. A more negative economic development, as it is assumed in the negative scenarios, would put even more pressure on these most affected employment groups.

Duration

April 2021 - September 2021

wiiw team Leader

Robert Stehrer

wiiw Staff

Stefan Jestl

External Publications

EU employment dynamics by Stefan Jestl and Robert Stehrer, The European Trade Union Institute (ETUI), October 2021
(Post-)Pandemic Employment Dynamics in a comparative perspective, wiiw Opinion Piece

Countries covered: EU-27

Research Areas: Labour, Migration and Income Distribution


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