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Strong growth since the mid-1980s
The pattern of the curve tracing the annual growth rates in domestic employment
since 1970 shows that the remarkable dynamism of the past few years is not the
norm. During the 10 years following the onset of the steel industry crisis in
1975, employment stagnated or was even declining at certain points. It was only
later that employment recovered, with an average annual rate of increase of
3.5 % and a rise of over 110 000 between 1986 and 2001 (compared with 20 000
during the 1970-1985 period). In mid-2002, the domestic employment level reached
285 000.
Annual growth rates in domestic employment (in %) Employment by professional
status The remarkable nature of the growth in employment becomes even more apparent
when you compare it with that of bordering regions.
In Luxembourg, employment has risen by more than 40 %. Although the Rhineland-Palatinate
is still registering a slight rise with a rate of increase just above 15 %,
the Saar, Lorraine and Wallonia areas are stagnating.
Increasing employment in the service
sector
There have been profound changes in the distribution by activity sector. In
industry, the decline of the steel sector led to a distinct fall in employment
which slid from some 68 000 in 1975 to less than 55 000 ten years later. The
revival observed since then has been mainly in the construction industry.
However, the salient feature remains the extraordinary boom in services, where
the number of workers has doubled over the past 25 years. The development of
the financial market and the growing needs of the public sector have been the
driving force behind this trend.Today, the service sector accounts for more
than three-quarters of total employment.
These changes have had an effect on professional status, with a constant decrease
in the proportion of labourers and non-salaried workers. Whereas in 1970, half
the people employed on Grand Duchy territory were still workers, this proportion
had shrunk to around 38 % in 2000.At the same time, the proportion of employees
and civil servants grew by 30 % to more than 55 %. Between 1970 and 1990, the
course of non-salaried workers was affected above all by the decline in agriculture.
Stabilisation of their absolute number over the recent period cannot hide a
loss of relative importance in a situation where salaried employment is growing
strongly.
Employment by professional status
| |
1970 |
1981 |
1991 |
2001 |
| Professional
status |
Total |
Nationals |
Foreig-
ners |
Total |
Nationals |
Foreig-
ners |
Total |
Nationals |
Foreig-
ners |
Total |
Nationals |
Foreig-
ners |
| All statuses |
119 672 |
93 575 |
26 097 |
145 334 |
100 761 |
44 573 |
158 095 |
102 468 |
55 627 |
186 381 |
107 370 |
79 011 |
| Self-employed + employers |
13 526 |
12 443 |
1 083 |
14 401 |
12 194 |
2 207 |
14 917 |
11 689 |
3 228 |
20 011 |
13 906 |
6 105 |
| Workers |
60 962 |
42 175 |
18 787 |
67 718 |
38 155 |
29 563 |
63 526 |
32 101 |
31 425 |
64 582 |
25 783 |
38 799 |
| Employees + civil servants |
45 184 |
38 957 |
6 227 |
63 215 |
50 412 |
12 803 |
79 652 |
58 678 |
20 974 |
101 788 |
67 701 |
34 087 |
| All statuses |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
100.0% |
| Self-employed + employers |
11.3% |
13.3% |
4.1% |
9.9% |
12.1% |
5.0% |
9.4% |
11.4% |
5.8% |
10.7% |
10.9% |
7.7% |
| Workers |
50.9% |
45.1% |
72.0% |
46.6% |
37.9% |
66.3% |
40.2% |
31.3% |
56.5% |
34.7% |
29.9% |
49.1% |
| Employees + civil servants |
37.8% |
41.6% |
23.9% |
43.5% |
50.0% |
28.7% |
50.4% |
57.3% |
37.7% |
54.6% |
54.7% |
43.1% |
| All statuses |
100.0% |
78.2% |
21.8% |
100.0% |
69.3% |
30.7% |
100.0% |
64.8% |
35.2% |
100.0% |
57.6% |
42.4% |
| Self-employed + employers |
100.0% |
92.0% |
8.0% |
100.0% |
84.7% |
15.3% |
100.0% |
78.4% |
21.6% |
100.0% |
69.5% |
30.5% |
| Workers |
100.0% |
69.2% |
30.8% |
100.0% |
56.3% |
43.7% |
100.0% |
50.5% |
49.5% |
100.0% |
39.9% |
60.1% |
| Employees + civil servants |
100.0% |
86.2% |
13.8% |
100.0% |
79.7% |
20.3% |
100.0% |
73.7% |
26.3% |
100.0% |
66.5% |
33.5% |
| Source: STATEC |
Contribution made by foreigners
It’s not so much the growth of employment in the service sector (also observed
in other European countries) that characterises the Luxembourg economy,but more
the explosion in the demand for labour and the way in which this demand has
been satisfied. For many years, there has not been enough purely native labour
to meet labour requirements, as shown by the chart relating to total domestic
employment and native employment.
The supply of people living in Luxembourg is determined mainly by the number
of people of working age, which generally means 15 to 64 year-olds. Although
the relevant numbers of nationals varied little between 1970 and 2001, the level
of participation in economic life, measured by the rate of activity, underwent
profound changes. In the under-25 age bracket, further education for both men
and women has caused a drastic fall in rates of activity for the ages in question.
In the case of 15 to 19 year-old men, for instance, it has decreased from 51.9
% to 18.0 %.At the same time, more and more men of Luxembourg nationality are
leaving the labour market between the ages of 55 and 64. As a result, their
socio-demographic potential has diminished considerably, so that the clear increase
in female activity has, in the end, only resulted in a relatively modest rise
in the supply of native labour.
Working population aged 15 - 64
| |
Total
population |
Nationals |
Foreigners |
| Year |
Working population |
People age 15-64 |
Rate of activity |
Working population |
People age 15-64 |
Rate of activity |
Working population |
People age 15-64 |
Rate of activity |
| Both sexes |
| 1970 |
126 461 |
221 835 |
57.0% |
99 686 |
179 917 |
55.4% |
26 775 |
41 918 |
63.9% |
| 1981 |
151 729 |
247 558 |
61.3% |
105 727 |
180 865 |
58.5% |
46 002 |
66 693 |
69.0% |
| 19911 |
167 240 |
266 460 |
62.8% |
106 466 |
180 187 |
59.1% |
60 774 |
85 887 |
70.8% |
| 20012 |
193 900 |
295 300 |
65.7% |
109 700 |
176 200 |
62.3% |
84 200 |
119 100 |
70.7% |
| Men |
| 1970 |
93 638 |
110 298 |
84.9% |
74 165 |
89 088 |
83.2% |
19 473 |
21 210 |
91.8% |
| 1981 |
101 347 |
123 864 |
81.8% |
71 284 |
90 225 |
79.0% |
30 063 |
33 639 |
89.4% |
| 19911 |
105 864 |
135 200 |
78.3% |
68 719 |
91 251 |
75.3% |
37 145 |
43 734 |
84.9% |
| 20012 |
114 100 |
149 400 |
76.4% |
65 800 |
89 500 |
73.5% |
48 300 |
59 900 |
80.6% |
| Women |
| 1970 |
32 823 |
111 537 |
29.4% |
25 521 |
90 829 |
28.1% |
7 302 |
20 708 |
35.3% |
| 1981 |
50 382 |
123 694 |
40.7% |
34 443 |
90 640 |
38.0% |
15 939 |
33 054 |
48.2% |
| 19911 |
60 742 |
131 260 |
46.3% |
37 747 |
88 936 |
42.4% |
22 788 |
42 153 |
54.1% |
| 20012 |
79 800 |
145 900 |
54.7% |
43 900 |
86 700 |
50.6% |
35 900 |
59 200 |
60.6% |
Source: STATEC
1 In the 91 PC, nationality details are missing for a certain number of
people listed.
2 The working population is estimated by applying the rates of activity
obtained from respondents to the overall numbers of people known. |
Foreigners established in the Grand Duchy accounted for more than 85 % of the
increase of 67 500 units of total resident labour available between 1970 and
2001.
These foreigners have made a decisive contribution to increasing the numbers
of people of working age. Each year, there is net positive immigration and immigrants
born abroad are reaching the age of entry into the labour market. Finally, we
should take into consideration the growing proportion of births among immigrant
women. Fifteen years later, these births swell the numbers of people of working
age.
In addition to this demographic contribution, foreigners’ higher rates of activity
should be noted.
However, even this very large amount of immigration is not enough to meet a
demand for labour that is growing at an extremely rapid pace. Since 1985, reliance
on cross-border workers living in one of the three adjacent countries has increased
continually. There are more than 100 000 of these workers, and their share of
total salaried employment exceeds 37 %. More than half originate from France,
just under 30 % from Belgium and nearly 20 % from Germany.
This massive influx of cross-border workers holds the key to the change in
the Luxembourg labour market over the past 20 years. Coupled with the continual
expansion of immigrant labour established in the Grand Duchy, this has led to
a drop in the natives’ relative share of total salaried employment. This has
fallen from some 70 % around 1970 to less than 35 %.
Low level of unemployment
The vigorous growth in the demand for labour explains why unemployment remains
relatively low in Luxembourg. The unemployment rate rarely exceeds 3 %. It should
be noted that a certain number of people who are unemployed, or threatened with
unemployment, benefit from various work programmes and are not included in the
unemployment figures. For example, during the recession in the steel industry,
employees assigned to the Anti-Crisis Division (ACD) could escape unemployment.
Since 1997, job-seekers benefiting from a remunerated work programme are no
longer included in the official unemployment figure published by the Employment
Office. By including them, it’s possible to obtain the “official expanded” unemployment
figure, which is also shown on the related chart. Although the profile of the
unemployment trend in the Grande Region (Saar-Lor- Lux/Rhineland-Palatinate/Wallonia)
barely differs from that of national unemployment, it does remain at a higher
level.
National Action Plan for Employment
The main recommendation addressed to Luxembourg by the EU relates to levels
of employment, i.e. the proportion of people exercising a paid activity.These
levels are judged too low for the 55 to 64 age group and for women in general.
To analyse the reasons older workers quit their professional life early, the
government and social partners have decided to have an in-depth study conducted
on this subject. As regards female employment, they were of the opinion that
the steady progress observed over the past few years shows that Luxembourg is
on the right track.
Although Luxembourg’s level remains below the EU target (over 60 %), the female
employment rate increased by 8.3 % between 1995 and 2001, and is more than 50
%. According to EU targets, the employment rate for older workers (age 55 to
64) should reach about 50 %.
In Luxembourg, the level was 24.4 % in 2001 and has hardly increased since
1995.Among the 15 EU countries, only Belgium has a lower level (24.1 %).
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