Employment growth in the EU is accompanied by an increase in hidden unemployment
Arlington Research, Unsplash
According to new Eurostat data released on 13 June, the European Union's labour market in the first quarter of 2025 shows mixed dynamics: on the one hand, the employment rate among people aged between 20 and 64 rose to 76.1%, while on the other hand, the so-called "hidden unemployment" also increased, reaching 10.9% of the expanded workforce;
By the term "extended labour force" Eurostat means not only the employed and officially unemployed, but also those who are looking for a job but cannot immediately start working, as well as those who are ready to work but for various reasons are not actively looking for work. Thus, the hidden unemployment rate reflects underlying problems of access to labour that go beyond the formal boundaries of employment.
Against the background of the overall growth of employment in the EU, the picture by countries remains uneven. The most noticeable positive changes were recorded in Ireland (+0.9 p.p.), Italy (+0.7 p.p.), as well as in Hungary, Sweden, Greece and Portugal, where the growth was 0.4 p.p. each. At the same time, employment remained stable in Germany, Luxembourg and the Netherlands, while Estonia, Romania, Poland and Lithuania recorded slight decreases (from -0.3 to -0.5 p.p.).
The rise in employment rates observed against the backdrop of the overall economic recovery does not yet guarantee that all distortions have been eliminated. On the contrary, a parallel increase in hidden unemployment indicates that many labour resources remain underutilised. This may reflect both imperfect recruitment mechanisms and difficulties in integrating certain categories of citizens, such as young people, women, people with disabilities or migrants.
These data serve as a reminder that quantitative measures of employment do not always provide a complete picture and that sustainable development requires not only job creation, but also job availability and quality. Eurostat underlines the importance of further analysis of the labour structure in EU countries, from temporary employment to overwork and regional imbalances.
