General and regional statistics Population and social conditions Authors: Gorja BARTSCH, Daniela SCIRANKOVA

Stat ist ics in focus 54/2012

Large differences in regional labour markets show asymmetric impact of the economic crisis

Map 1: Unemployment rate, persons aged 15 to 74 years, by NUTS 2 regions, 2011 (%)

Source: Eurostat (online data code lfst_r_lfu3rt)

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The economic crisis continued to have a strong asymmetric impact on regional labour markets in the European Union (EU) in 2011. In the EU-27, the unemployment rate among the 15 to 74 age group remained stable at 9.6 % while the employment rate for the 20 to 64 age group rose slightly to 68.6 % in 2011 compared with the previous year. Many regions saw declining unemployment rates in 2011 while others recorded large increases. Overall, large disparities in regional unemployment and

employment rates persist between the 271 NUTS 2 regions of the EU-27. The development of regional unemployment rates since 2008 shows that labour markets in the Spanish and Greek regions have been hardest hit by the consequences of the economic downturn, but large increases in unemployment rates were also recorded in many other regions across the EU-27. Germany was the only country where unemployment rates have declined in all regions since 2008.

Unemployment rates declined in the majority of regions but rose in others in 2011 In 2011, the average unemployment rate for the EU-27 remained stable at 9.6 %, as in the previous year. However, regional unemployment shows a changing picture. Unemployment rates varied widely across the 271 NUTS 2 regions of the EU, ranging from 2.5 % in the Austrian regions of Tirol and Salzburg to 30.4 % in the Spanish region of Andalucía. Map 1 presents the distribution of unemployment rates by NUTS 2 regions in 2011.

Compared with 2010, unemployment rates decreased in more than half (142) of the NUTS 2 regions, while increases were recorded in 117 regions. In 12 regions, the unemployment rate did not change. However, the asymmetric impact on regional labour markets is highlighted by the fact that in 2011, declining unemployment rates were mostly observed in better-off regions with lower levels of unemployment while unemployment rates continued to rise mostly in those regions already experiencing high unemployment. As a result, existing disparities in regional unemployment became aggravated. The unemployment rate decreased in all regions in Belgium, the Czech Republic and Finland as well as in Estonia, Latvia, Lithuania and Malta. For Germany, Austria, Slovakia and Sweden, decreases were also recorded in all but one region. In contrast, the unemployment rate increased in all regions in Bulgaria, Ireland, Spain, Portugal and Slovenia as well as in Cyprus and Luxembourg. In Denmark and Greece, all but one region recorded increases as well. The change in the regional unemployment rates was mixed for France, Italy, Hungary, the

Netherlands, Poland, Romania and the United Kingdom.

The highest unemployment rates, over 25 % in some regions, were recorded in Spain and the French overseas regions. Very high unemployment rates (over 20 %) were also found in Greece, where Dytiki Makedonia (23.2 %) recorded the largest increase in percentage points of all NUTS 2 regions, up 7.7 percentage points (p.p.) compared with 2010.

In 2011, the number of regions with very low unemployment rates (below 4 %) increased. However, the geographical pattern remained largely unchanged, with the lowest rates recorded in some regions in Belgium, the Netherlands, Austria, and the south of Germany as well as in Praha (Czech Republic) and Provincia Autonoma Bolzano/Bozen (Italy). Low unemployment rates (below 6 %) were also found in Luxembourg and some regions in France, Italy, Romania, the United Kingdom and Slovakia.

In the EFTA countries, unemployment rates decreased from an already low level in all regions in Norway and all but one in Switzerland. In Iceland, the rate also decreased.

For the candidate countries, unemployment rates further increased from a high level in the Croatian regions, up to 19.9 % in Sredisnja i Istocna (Panonska) Hrvatska. Most Turkish regions saw a decline in unemployment rates, which ranged from 4.3 % in Balikesir, Çanakkale, to 13.7 % in Izmir.

Disparities in regional unemployment increase in most Member States in 2011 In 2011, the dispersion of regional unemployment rates increased in most Member States compared with the previous year. Dispersion measures the spread of regional rates within the same country or in the case of the EU-27 across all regions. An increase in dispersion indicates larger disparities,

while smaller dispersion shows better cohesion between regions.

Figure 1 presents the dispersion of regional unemployment rates in 2011 and 2010. For the EU-27, the dispersion of unemployment rates increased

Statistics in focus — 54/2012 3

from 50.8 % in 2010 to 56.7 % in 2011. This overall development was reflected at national level, where disparities in regional unemployment rates rose in most Member States. Decreasing regional disparities were observed in the Czech Republic, Spain, France and Portugal, where dispersion declined from 2010 to 2011. The highest dispersion of unemployment rates was recorded in Belgium (59.6 %), followed by Italy (43.0 %) and Germany (42.3 %). The geographic pattern of the disparities in these countries can also be seen in Map 1. In contrast, Denmark (7.3 %),

Greece (10.3 %) and Sweden (11.3 %) had the lowest disparities in regional unemployment rates in 2011. However, low dispersion should not be interpreted as a positive sign for labour markets per se. In the case of Greece, which has quite small regional disparities in unemployment rates, all NUTS 2 regions recorded high unemployment rates over 14 % in 2011. This shows that dispersion only indicates the disparities between regions and not the overall level of unemployment.

Figure 1: Dispersion of unemployment rates (persons aged 15 to 74 years) at NUTS 2 level (1) (%)

0 5 10 15 20 25 30 35 40 45 50 55 60

DK

EL

SE

PT

NL

NO

FI

PL

UK

BG

ES

HU

CZ

CH

TR

FR

SK

HR

RO

AT

DE

IT

EU-27

BE

2011 2010

(1) Estonia, Ireland, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Slovenia and Iceland have only one or two NUTS 2 regions, so dispersion does not apply to these countries.

Source: Eurostat (online data code lfst_r_lmdur)

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Map 2: Change in unemployment rate, persons aged 15 to 74 years, by NUTS 2 regions, 2008-11 (percentage points difference)

Source: Eurostat (online data code lfst_r_lfu3rt)

Development of regional unemployment rates since 2008

Between 2008 and 2011, the unemployment rate for the EU-27 rose from 7.0 % to 9.6 %. As shown on Map 2, this negative trend was also reflected at regional level, where the unemployment rate increased for the large majority of EU regions. The economic crisis has affected the EU regions very differently over the last four years. The

development of regional unemployment rates since 2008 shows which regional labour markets have been hardest hit by the economic downturn. The highest increase in percentage points from 2008 to 2011 was observed in several Spanish and Greek regions, where unemployment rates rose by more than 10 p.p. in the four-year period. In some of

Statistics in focus — 54/2012 5

these regions, unemployment rates more than doubled compared with 2008. While regional unemployment rates were generally at a lower level, large increases were also recorded in many regions of Bulgaria, Portugal and Ireland as well as in Lithuania, Latvia and Estonia. Some regions in Denmark and the United Kingdom, which had very low unemployment rates in 2008, also saw rates which had more than doubled by 2011.

By contrast, Germany is the only country where the unemployment rate decreased in all its 39 NUTS 2 regions between 2008 and 2011. At -4.4 p.p. in Mecklenburg-Vorpommern and -4.2 p.p. in Sachsen-Anhalt, the largest decreases in unemployment rates in percentage points were also

observed in Germany. Unemployment rates also fell between 2008 and 2011 in some regions in Belgium (Provinces of Vlaams-Brabant, Liège, Luxembourg and Namur), non-mainland regions of France (Corse, Martinique, Guyane) and Austria (Steiermark, Vorarlberg) as well as in the Netherlands (Zeeland) and Luxembourg.

In the EFTA countries, unemployment rates increased in all regions for which data are available from 2008, particularly in Iceland (from 2.9 % in 2008 to 7.0 % in 2011).

Regarding the candidate countries, the Croatian regions recorded increases of more than 4 p.p., while most Turkish regions saw a decrease in unemployment rates between 2008 and 2011.

Regions with already higher levels of unemployment more affected by the crisis Figure 2 shows the distribution of regional unemployment rates from 2006 to 2011. In 2011, the median of the unemployment rates of all 271 NUTS 2 regions was 8.5 %. The 10 % of the regions with the highest unemployment rates observed rates more than 16.9 % (9th decile) while the 10 % of the regions with the lowest unemployment rates had rates lower than 4.2 % (1st decile). In the same year, 25 % of regions registered unemployment rates over 11.9 % (3rd quartile) while at the other end 25 % of regions had rates lower than 5.9 % (1st quartile). From 2008 to 2009, the impact of the current economic crisis can be seen by rising unemployment rates in the median as well as all deciles and quartiles. From 2009 to 2011, the level of unemployment in the

10 % of the regions with the lowest unemployment rates (1st decile) has remained quite stable. In contrast, during the same period the share of the regions with the highest rates (9th decile and 3rd quartile) have recorded higher rates in every year since 2008. This shows that during the crisis, the situation became worse in those regions already observing high unemployment levels while many regions with low unemployment rates before the crisis were not negatively affected. This trend can be seen in particular when comparing figures from 2010 and 2011. While the median unemployment rate remained stable at 8.5 %, unemployment rates for the 10 % of regions with the highest rates increased from 15.1 % in 2010 to 16.9 % in 2011.

Figure 2: Distribution of regional unemployment rates (persons aged 15 to 74 years), by NUTS 2 regions, 2006-11 (%)

0

2

4

6

8

10

12

14

16

18

2006 2007 2008 2009 2010 2011

Source: Eurostat (online data code lfst_r_lfu3rt)

3rd quartile

Median

1st decile

9th decile

1st quartile

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Map 3: Youth unemployment rate, persons aged 15 to 24 years, by NUTS 2 regions, 2011 (%)

Source: Eurostat (online data code lfst_r_lfu3rt)

Youth unemployment exceeds 50 % in parts of Spain and Greece in 2011

For the EU-27, the youth unemployment rate stood at 21.4 % in 2011, an increase of 0.5 p.p. compared with the previous year. Map 3 shows the distribution of youth unemployment rates by NUTS 2 regions in 2011. Young people aged 15–24 years are often disproportionally affected by

a shrinking labour market, and the youth unemployment rate was at least twice that for total unemployment in more than three quarters of the NUTS 2 regions in the EU. Regional differences in unemployment were also more pronounced for young people than for the rest of the population,

Statistics in focus — 54/2012 7

with unemployment rates for 15–24 year-olds ranging from 4.3 % in Tübingen and 4.5 % in Oberbayern (Germany) to 65.8 (u)1 % in Ciudad Autónoma de Ceuta (Spain) and 58.5 % in Réunion (France).

When looking at youth unemployment rates, it should be noted that a large share of young people is economically inactive (e.g. students). These persons are therefore not part of the labour force, i.e. they are neither employed nor unemployed. However, youth unemployment is still a useful measure since it indicates how difficult it is to find a job for those young people actually available for work and seeking employment.

The increase in youth unemployment was particularly striking in Spain and Greece. In 2011, the unemployment rate among the 15–24 age group reached over 50 % in the Spanish regions of Andalucía (54.4 %), Comunidad Valenciana (51.9 %), Extremadura (50.9 %) and Canarias (50.8 %). In Greece, the regions of Dytiki Makedonia (52.8 (u) %), Anatoliki Makedonia,

Thraki (52.4 %) and Kentriki Makedonia (51.2 %) saw the highest shares of jobless young people. With youth unemployment up by 17.3 p.p. compared with 2010, the Greek regions of Kentriki Makedonia and Dytiki Makedonia also recorded the largest increase in percentage points of all NUTS 2 regions.

In 2011, low unemployment rates for 15–24 year- olds, below 7 %, were found in some regions in Germany, Austria and the Netherlands.

In the EFTA countries, regional youth unemployment was relatively stable in 2011 except for Ticino (Switzerland), which saw a 6.6 p.p. increase to 17.3 (u) %. For the candidate countries, youth unemployment remained high in most regions, reaching 49.7 % in the Croatian region of Sredisnja i Istocna (Panonska) Hrvatska and 25.5 % in the Turkish region of Izmir. In most Turkish regions, however, youth unemployment fell in 2011, down to as low as 9.5 % in Sanliurfa, Diyarbakir.

Since 2008, many regions have observed large increases in youth unemployment Unemployment for young people aged 15–24 years increased by 5.8 p.p. to 21.4 % between 2008 and 2011 for the EU-27. As shown in Map 4, the severe impact of the economic crisis on youth unemployment can be observed mainly in Spain and Greece, where, over the four-year period, the rates of youth unemployment rates increased by more than 20 p.p. in eleven Spanish and five Greek regions. However, young people were also strongly affected in many other regions across the EU. Large increases of more than 10 p.p. were also recorded in regions of Bulgaria, Romania, Slovakia, the Czech Republic, Poland and in Estonia, Latvia and Lithuania as well as in Cyprus and regions in Portugal, Italy, France, Ireland and the United Kingdom.

Between 2008 and 2011, the unemployment rate among 15–24 year-olds fell in less than 15 % of the 271 NUTS 2 regions. The largest decline in

percentage points was recorded in the German regions of Dresden (-7.8 p.p.), Leipzig and Hamburg (both -5.3 p.p.). Furthermore, some other German, Belgian and Romanian regions saw a fall in youth unemployment from 2008, as did the Austrian region of Steiermark, Luxembourg and the Italian region of Molise.

With regard to youth unemployment in the EFTA countries, Iceland observed a large increase of 6.2 p.p. between 2008 and 2011 while the regional pattern was mixed for Switzerland and Norway.

As for the candidate countries, the youth unemployment rate in the Croatian regions surged by more than 10 p.p. while the majority of the regions in Turkey reported a decline from 2008 to 2011.

⎯⎯⎯⎯⎯⎯⎯⎯⎯⎯⎯ 1 (u) denotes data with reduced reliability due to sample size

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Map 4: Change in youth unemployment rate, persons aged 15 to 24 years, by NUTS 2 regions, 2008-11 (1) (percentage points difference)

(1) Notio Aigaio (EL42), Provincia Autonoma Bolzano/Bozen (ITD1), Algarve (PT15), Bratislavský kraj (SK01), Cumbria (UKD1), Vestlandet (NO05) and Zentralschweiz (CH06), percentage points difference between 2011 and 2009.

Source: Eurostat (online data code lfst_r_lfu3rt)

Statistics in focus — 54/2012 9

Map 5: Employment rate, persons aged 20 to 64 years, by NUTS 2 regions, 2011 (%)

Source: Eurostat (online data code lfst_r_lfe2emprt)

Europe 2020: More regions reached the employment target in 2011

The employment rate among the 20–64 age group is one of the headline indicators for the Europe 2020 strategy. The overall target for the employment rate for the EU-27 has been set at 75 %, to be reached by 2020. Map 5 presents the distribution of employment rates for the 20–64 age group at NUTS 2 level, where the darkest colour denotes regions that have already reached the target. However, it should be noted that Member States have set national targets in addition to the

overall EU-27 target. These national targets can be higher or lower than the EU-27 target, taking into account the different situations in each Member State. There are no targets at regional level, but a look at regional data reveals wide disparities in employment rates across the EU-27.

In 2011, the EU-27 employment rate for the 20–64 age group rose slightly to 68.6 %, an increase of 0.1 p.p. over the previous year. Thus, the overall downward pattern that started in 2009 had come to

10 54/2012 — Statistics in focus

a halt. At regional level, 11 more NUTS 2 regions reached or exceeded the 75 % target in 2011 compared with 2010. These regions were in Austria, Germany, Slovakia and the United Kingdom. During the same period, Burgenland (Austria), Centro (Portugal), Lancashire (United Kingdom) and Cyprus dropped back below the 75 % target. Overall, employment rates in more than 70 % of NUTS 2 regions in the EU-27 were

still below the Europe 2020 target, with 74 regions more than 10 p.p. below.

The lowest employment rates in 2011 were observed in the south of Italy, down to 43.1 % in the region of Campania and 46.2 % in Sicilia and Calabria. The highest rates were found in the Finnish island region of Åland (84.1 %), the Swedish region of Stockholm (82.8 %) and the German region of Freiburg (81.6 %).

Female employment rates lower than male rates in all EU regions In 2011, employment rates among the 20–64-year age group were lower for females than for males in every single NUTS 2 region. For the EU-27, the female employment rate stood at 62.2 % while the employment rate for males was at 75.0 %, hitting the overall EU 2020 employment target. Figure 3 shows the development of female and male employment rates between 2008 and 2011. Since 2008, the gender gap in employment rates has narrowed steadily, from 14.9 p.p. to 12.8 p.p. in 2011. During the same period, female employment rates decreased to a lesser extent than male rates, even rising from 2010 to 2011, thus accounting for the 0.1 p.p. rise in the total employment rate compared with the previous year. These results show that male employment seems to be more

volatile than female employment and has been more strongly affected by the economic downturn.

The highest female employment rates in 2011 were recorded in the Finnish island region of Åland (81.3 %) and the Swedish regions of Stockholm (80.5 %) and Övre Norrland (79.2 %). The lowest female rates were observed in the south of Italy, in Campania (27.7 %), Sicilia (31.3 %) and Puglia (32.5 %).

The lowest gender gap in 2011 was observed in the Swedish region of Övre Norrland (0.3 p.p.), in Lithuania (1.0 p.p.) and in the Finnish region of Itä-Suomi (1.7 p.p.). The highest differences in percentage point terms were recorded in Malta (35.4 p.p.) as well as Puglia (32.7 p.p.) and Campania (31.4 p.p.) in the south of Italy.

Figure 3: Gender gap in employment rates, persons aged 20 to 64 years, EU-27 (%)

0

10

20

30

40

50

60

70

80

2008 2009 2010 2011

Females Males Total

Source: Eurostat (online data code lfst_r_lfe2emprt)

Europe 2020 target (75 %)

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METHODOLOGICAL NOTES

Source: The source of regional labour market information presented in this publication is the European Union Labour Force Survey (EU-LFS). The EU-LFS is a large-sample quarterly survey of the population in private households in the EU, EFTA, and the Candidate Countries. Conscripts in military or community service are not covered.

Reference period: Yearly results are obtained as annual averages of quarterly results. Definitions: The concepts and definitions used in the survey follow the guidelines of the International Labour Organisation. Employment (LFS concept) covers persons aged 15 years and over (16 and over in Spain, Italy and the United Kingdom, 15-74 years in Estonia, Latvia, Hungary, Finland, Sweden, Norway, Denmark, and 16-74 years in Iceland), living in private households, who during the reference week performed work, even for just one hour, for pay, profit or family gain, or were not at work but had a job or business from which they were temporarily absent, for example because of illness, holidays, industrial dispute or education and training. Employment rates are calculated for different age groups as a percentage of the population in the same age group. The LFS employment concept differs from national-accounts domestic employment, as the latter sets no limit on age or type of household, and also includes the non-resident population contributing to GDP and conscripts in military or community service. Unemployment covers persons aged 15-74 (16-74 in Italy, Spain, the United Kingdom and Iceland) who were without work during the reference week, were currently available for work and had either been actively seeking work in the past four weeks or had already found a job to start within the next three months. Definitions of indicators reported in this publication are available on the Eurostat website. The dispersion of unemployment rates is the coefficient of variation of regional unemployment rates. The coefficient of variation is defined as the ratio of the standard deviation to the mean. This coefficient of variation is multiplied by 100 to make a percentage. This indicator measures the spread of regional unemployment rates as regards the national or EU-27 unemployment rate. If all the regional unemployment rates of a country are equal, the dispersion is zero. Significant differences between regional unemployment rates within a country imply a fairly large dispersion. The median is the middle value in a group of numbers ranked in order of size. The median is that value of the variate which divides the total frequency into two halves, i.e. it is the number in a range of scores that falls exactly in the middle so that 50% of the scores are above and 50% are below.

The decile is any of the nine points that divide sorted data into ten parts while a quartile is any of the three points that divide sorted data into four parts.

The EU 2020 strategy aims to promote smart, sustainable and inclusive growth in the EU and includes five headline targets, to be reached by 2020. One of these targets is to raise to 75 % the employment rate of persons aged 20 to 64 for the EU as a whole. For detailed data on the indicators for all headline targets, see the dedicated Eurostat website.

NUTS (Nomenclature of territorial units for statistics) is a hierarchical classification subdividing the economic territory of the European Union into regions at three different levels (NUTS 1, 2 and 3, respectively, moving from larger to smaller territorial units). NUTS 0 is the national level of the Member State. The version used in this publication, NUTS 2006, subdivides the economic territory of the 27 Member States into 97 NUTS 1 regions, 271 NUTS 2 regions and 1303 NUTS 3 regions. The classification is regularly revised to adapt to administrative territorial changes within the Member States. The next version of the classification (NUTS 2010) is applicable for reference periods from 1 January 2012. The legal base of the classification is Regulation (EC) 1059/2003 establishing the common classification of territorial units for statistics (NUTS).

The NUTS classification was defined only for the Member States of the EU. Eurostat, in agreement with the countries concerned, has also defined a coding of statistical regions for countries that do not belong to the EU but are either candidate countries awaiting accession to the EU or countries belonging to the European Free Trade Association (EFTA). The regions in this classification of statistical regions have been defined according to principles similar to those for the NUTS classification.

Country codes (in protocol order): EU-27: Belgium (BE), Bulgaria (BG), the Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Ireland (IE), Greece (EL), Spain (ES), France (FR), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Romania (RO), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE), the United Kingdom (UK). EFTA: Iceland (IS), Liechtenstein (LI), Norway (NO), Switzerland (CH). Candidate countries: Montenegro (ME), Croatia (HR), The former Yugoslav Republic of Macedonia (MK), Serbia (RS), Turkey (TR).

Croatia is an acceding state and will join the EU on 01.07.2013. For Serbia, no agreement on statistical regions has yet been concluded. The abbreviation MK used for the former Yugoslav Republic of Macedonia is a provisional code which does not prejudge in any way the definitive nomenclature for this country, which will be agreed following the conclusion of negotiations currently taking place on this subject at the United Nations.

Further information

Eurostat website: http://ec.europa.eu/eurostat Data on 'Regional statistics': http://epp.eurostat.ec.europa.eu/portal/page/portal/region_cities/regional_statistics/data/database Further information about 'Regional statistics' http://epp.eurostat.ec.europa.eu/portal/page/portal/region_cities/regional_statistics

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Manuscript completed on: 20.12.2012 Data extracted on: 30.11.2012 ISSN 1977-0316 Catalogue number: KS-SF-12-054-EN-N © European Union, 2012