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Decomposition of the Employment Trends in the EU25 including Croatia in 2003-2006

The main aim of this paper is to unveil the employment growth trends in the European Union (EU) in the context of the Lisbon strategy. The analysis focuses on the distribution of employment among the main economic sectors over the period 2003 - 2006 in the 25 European member states including Croatia. This study utilizes the shift-share technique in order to provide policy makers with systematic insights into the employment characteristics of the individual EU member states. Understanding the dynamics and characteristics of the EU employment is an important step toward reaching the Lisbon long-term targets regarding employment. The shift-share results, i.e. sectoral components, indicate the EU employment exhibits growing tendency in services (market and non-market), while at the same time negative effects are observed in industry and especially in agriculture. Competitive effects show there are states which succeeded to build strong and competitive economic sectors not only in services, but also in agriculture and industry as compared to that of the same sectors in the EU as a whole. However, the EU member states that have positive sectoral and competitive components have the greatest employment potential.

employment change; EU; Croatia; Lisbon strategy; shift-share analysis

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