The labor market in the European Union has gone through a profound transformation in the last three decades, managing to add almost 30 million net jobs from 1995 to the present, in an apparently unfavorable context. Since 2009, the EU's working-age population has shrunk by almost 10 million people, under the pressure of demographic aging and falling birth rates. However, employment continued to grow, a sign that the European economy has structurally adjusted faster than demographic indicators suggest. This expansion of employment was not, however, doubled by a similar evolution of productivity. On the contrary, in recent years, the European Union has registered a slowdown in productivity growth more pronounced than other developed economies, which raises questions regarding the sustainability of this model. More jobs do not automatically mean more added value, and the challenge for Europe remains the transition from a labour-intensive economy to one based on efficiency, skills and technology. According to the latest Eurofound report – Structural change in EU labor markets: A generation of employment shifts – this evolution was accompanied by a major reconfiguration of the structure of the economy. Between 1995 and 2024, employment has steadily shifted from traditional industries – manufacturing, agriculture and the extractive sector – to a booming service economy. All 27 member states registered decreases in the share of employment in these traditional sectors, a sign of a generalized transformation at European level.
The construction sector is a special case: despite the cyclical booms of certain periods, the number of employees is today almost two million less than before the global financial crisis. Automation, changes in supply chains and cost pressures have profoundly reshaped this field. The most extensive structural changes can be found in the member states that joined the EU after 2004, where the process of deagriculture took place later and more quickly. Romania is one of the most relevant examples: if in 2002 agriculture had approximately 2.8 million workers, currently the sector employs less than 900,000 people. Similar developments can also be observed in Lithuania, Poland, Croatia or Latvia, economies that in a relatively short time have gone through the transition from a predominantly agrarian model to a service-oriented one. In contrast, in countries such as Italy, the Netherlands or Sweden, the decline in the share of agriculture and extractive industries is much more moderate. There, the transfer of labor from agriculture to other sectors took place decades ago, and the structure of the economy was already stabilized in the early 2000s. The growth of employment in services is the dominant phenomenon of the last 30 years, but not all services have evolved in the same way. The Eurofound report shows that predominantly private services – such as trade, business services, tourism, logistics or IT – have grown faster than predominantly public services such as education, health or public administration. Again, the largest increases in the share of private services are found in Central and Eastern European economies, including Romania, Bulgaria, Lithuania, Latvia or Poland, but also in Southern European states, such as Portugal and Italy. On the one hand, the transition to services has created more diverse employment opportunities, more flexibility and, in many cases, better working conditions. On the other hand, without a jump in productivity and without consistent investments in skills, occupational health and balance between professional and personal life, this model risks becoming vulnerable. The European labor market has demonstrated that it can create jobs even in a difficult demographic context. The next challenge is for these jobs to support not only economic growth, but also the long-term well-being of the people who occupy them.