[OVERLAP] - Overlapping crises (re)shaping the future of regional labour markets
Projects
August 2023 – June 2025
EUR 565,000.00
By 2050, the EU’s labour force is set to decrease by 35 million people. This demographic transition comes at a time when Member States are increasing their efforts to achieve their de-carbonization targets and are ramping up investments to digitalize the economy. These dynamics – together with other unexpected shocks or public interventions – will have far-reaching repercussions on the EU labour market. Most importantly, these effects will not be evenly distributed. Within this context, ESPON reinforces its commitment to generate high-quality and reliable territorial evidence to inform policymaking. In the context of the project “OVERLAP – Overlapping crises (re)shaping regional labour markets”, will apply a mixture of established techniques and innovative methodologies to forecast and analyse how these dynamics will impact regional labour markets until the year 2040. The goal of this initiative is to offer a thorough understanding of demographic dynamics in regional labour markets at the NUTS3 level, while simultaneously analysing prominent trends and potential impacts of diverse EU policies or shocks on the future of these labour markets.
In a first stage of the project, a top-down approach will be taken; namely, by employing a dynamic input-output model, we will study how the demographic, digital and green transitions will influence the size of the labour force and employment levels up until 2040. In this analytical phase, the project team will model each identified trend in isolation, to later include additional trends so as to test for the presence of non-linearities between the different transitions (for instance, to see whether the negative employment consequences of de-carbonization are lessened by the uptake of digital technologies). The national level results will then be applied to the NUTS-3 level through the use of a regionalization model. The latter will use existing information on employment by industry – available at the desired level of disaggregation through Eurostat – to redistribute the national level results to their regional counterparts. These figures will also be enhanced by national level information on the workforce. For example, by looking at the average gender share of an industry, it will be possible to determine whether male or female workers will be mostly impacted by the ongoing trends.
In a second stage of the project, we will develop detailed microsimulation models for four territories (i.e. Italy, Hungary, Poland, and Greece), using the United Kingdom modelling as a baseline. These models – which generate data based on an initial configuration of a population and apply biological, institutional, and behavioural rules to study dynamics within the population over time – can be used to generate predictions or to run counterfactual exercises. The advantage of this approach is that it provides a consistent framework to assess the impact of economic, social, and environmental change as well as the effects of policies on households and individuals. Furthermore, adopting a bottom-up perspective, one can focus on any aggregate of interest, allowing to study not only regional dynamics, but address also what happens between and within groups of interest. In a final stage of the project, through a co-creation process with selected policymakers to inform, refine and adapt the modelling assumptions as well as, based on the ensuing results, develop policy recommendations.
Please consult the infographic for more information.
Policy questions
Thus, the project should try and answer the following policy questions:
- Overlaying on the future demographic prospects, what are the main drivers and structural shifts that are redesigning the regional labour markets in the current context? To exemplify, how will the rapid technology changes and automation, (de)globalisation or glocalisation, new production models or the rise of the on-demand economy or gig economy reshape their future?
- What would be the impacts of implementing digital and environmental (smart and green transition) objectives or of different shocks (e.g. Covid-19 pandemic, Brexit, war in Ukraine, low-carbon economy objectives, circular economies, telework or automation, etc.) on regional labour markets and what is the level of exposure or resilience of European regions accordingly? What are the distributional effects and impacts on the different types of regions (for example, metro areas, sparsely populated areas or remote rural areas)?
- How can national and regional policymakers ensure that regional labour markets are as much as possible open, inclusive and resilient – and enabling the best premises of the working society, meaning the conditions for the prosperous future of people and places? How to mitigate rising levels of inequality – of unequal distribution of income and opportunity between different groups in society, in the future labour market?
- How to better implement EU and national policies/objectives at the regional level? How are regional policymakers able to support the implementation of the smart and green objectives, in a just and fair manner – within highly specific contexts where mismatches between labour demand and supply, are more likely to appear?
The geographical coverage of the study shall encompass all EU member countries and partner states participating in the ESPON 2030 Cooperation Programme. Where relevant, feasible and data available, the study shall also cover the United Kingdom and the EU’s Candidate and Potential Candidate countries. The analysis shall be done for NUTS 3 level and LAU level, whenever suitable.
More information
Contractor: Prognos AG
Joint Partners: Centre for Microsimulation and Policy Analysis (CeMPA) and Fondazione Giacomo Brodolini (FGB) ]
Contact:
- Andreea China (Research and Policy Manager) / [email protected];
- Laura Dimitriu (Administration and Contract Manager) / [email protected]