The Prospects of Achieving the European Social Inclusion Targets through Employment Growth: Lessons for the European Social Agenda

The European Pillar of Social Rights Action Plan proposes, among others, specific targets for poverty reduction (by 15 million) and employment growth (to 78%) to be reached by 2030. Utilising data from Eurostat and EU Statistics on Income and Living Conditions (EU-SILC) the paper presents analysis and empirical evidence to contribute towards an improved understanding of the relationship between the EU’s employment and social target (AROPE) indicators, including the implications of how the latter may be attained. Simulation models are applied to assess the instrumentality of further employment growth for reaching the AROPE targets in 2030. The paper finds that whether and to what extent employment growth leads to lower relative poverty levels largely depends on the distributional dynamics of job growth. For employment growth to effectively mitigate poverty, priority in job allocation should be given to individuals living in very low work-intensity households. Otherwise, the likelihood of employment growth translating into relative poverty reduction diminishes, a finding which aligns closely with empirical evidence from the past decades. However, even if jobs are primarily allocated to individuals in low-work-intensity households, attaining the employment targets alone is unlikely to be sufficient for the achievement of the 2030 poverty targets, calling for policies that improve the transmission mechanisms between individual employment and poverty.