The eminent policy scientist Hugh Heclo, once famously defined policy making as “a form of puzzlement on society’s behalf”; including both “deciding” and “knowing”. Fundamental to Heclo’s conception of the policy process isuncertainty:“men collectively wondering what do” (Heclo, 1974: 305). Finding a feasible course of action is as much a matter of “puzzling”, diagnosing the nature and magnitude of problem loads, setting priorities, and identifying potentially effective solutions of what to do in complex policy environments, as it is a matter of “powering”, skillfully rallying political and societal support for selected solutions. The aftermath of the first economic...

The Lisbon Strategy guided European social and employment policy over the decade to 2010. It aimed to make Europe ‘the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010’ (European Council, 2000). This objective, articulated as full employment by 2010, was based on three pillars: economic, social and environmental. The Lisbon Strategy identified a number of objectives at the outset, including investing in human capital, modernising labour markets, unlocking business potential, investing in knowledge and innovation, investing in energy and infrastructure, promoting social integration...

Labour markets in the EU have undergone remarkable changes over the last 40 years. The increasing incidence of part-time and casual work, the greater importance of educational attainment as a precursor to employment, and the shift in employment from manufacturing to services are all trends that were evident during the 1970s and have, for the most part, continued into the 2000s. Furthermore, female labour force participation has been increasing considerably. In 1970 only 41 per cent of women participated in the labour market in the EU-19, whereas in 2006 labour force participation was around 64 per cent of females. The...

In this chapter we explore the labour force participation of particular vulnerable groups further. As we stated in the introduction, progress on the Europe 2020 agenda requires targeting the problems of social inclusion of vulnerable groups. Here, we look particularly at the dimension of age. Age is of particular interest to European policy makers because of the background of its ageing population and the associated increasing pressure on welfare and pension systems. The interest in age arises from three main policy concerns: a desire to increase the participation of older people in the labour force in order to relieve pressure...

In this chapter, we focus on the second of the objectives of interest in this report, reducing income inequality. Income inequality can be seen as providing an incentive to work. However, sustained inequality is seen as limiting social mobility in society and leading to social stratification. Combating income inequality, poverty and social exclusion in the EU have been long-standing objectives for the EU. In 1975 the EU Council of Ministers defined poverty as ‘individuals or families whose resources are so small as to exclude them from the minimum acceptable way of life of the Member State in which they live’...

Chapter 4 implies that there could be trade-offs between reducing income inequality and several labour market outcomes. The most important of these is unemployment. There is some academic debate about an ‘inequality–unemployment tradeoff’ in which governments must accept higher levels of unemployment in order to achieve lower levels of inequality because redistribution reduces a firm’s ability to invest and thus lowers employment. Other trade-offs are also debated – for instance, between reducing income inequality and economic output and labour market productivity. Finally, there are also assumptions about a number of associated benefits of income inequalities.Income inequalities are thought to have...

In the previous chapters we used insights from recent history to look at how certain trends relate to outcomes such are labour force participation and income inequality. Going forward, it is obvious that there is significant uncertainty around developments. Since the success of any future strategic orientation will depend on an interplay of factors beyond the control of policy makers, these trends or events need to be anticipated.

In this chapter we highlight a number of trends, issues and developments that will inevitably play a role in EU employment and labour market policy over the next ten years. Some of...

This report has looked at two important aspects of the EU policy agenda: promoting labour force participation, in particular the participation of young (16–24) and old (55–64), and reducing sustained income inequality between groups and territories in the EU. In this chapter we shall collate the findings of a review of past and future trends and developments, and assess their significance for the future of EU employment and labour market policy.

The preceding chapters have shown some progress against the main targets set out in the Lisbon Strategy. In terms of employment, rates steadily climbed until the start...