Labour market situation in the country

Over the past decade, Austria has kept unemployment low by promoting a skilled workforce and a strong safety net. However, there are concerns about job security and income stability due to more flexible employment arrangements such as part-time and temporary work. The labour market also faces labour shortages, particularly in the health and construction sectors, which vary across regions. Changing demographics - characterised by low birth rates, increased longevity and an ageing population - present policymakers with the challenge of creating an accommodating labour market landscape. The AMS Annual Report 2022 (Die Arbeitsmarktlage 2022) provides a comprehensive insight into the labour market situation in Austria.

The recent economic crisis, marked by the global financial downturn and the Covid-19 pandemic, has significantly impacted Austria's labour market. In response, the government has implemented measures such as job protection programs and financial aid for businesses. Despite these initiatives, sectors deeply affected by cutbacks and closures have experienced increased unemployment rates, posing a notable challenge.

Young people have been particularly affected by these circumstances, with youth unemployment rising by 43.5% during the Covid-19 pandemic. Although overall unemployment rates fell in 2021 and 2022, the decline in unemployment for young jobseekers under 25 was less pronounced than for other age groups. For those with vocational training, unemployment fell by 22.6%, while for those with only compulsory education it fell by 19.8%. For young people under 25 with the same qualifications, the decline was only 10%, which is lower than for other age groups.

In April 2023, Austria recorded a slight increase in total unemployment for the first time in two years. However, this increase is still considered moderate given the weak economic development and high inflation. According to the latest overview from the Austrian Public Employment Service (AMS Übersicht aktuell), around 308 000 people were registered as unemployed or in training in June 2023, representing a 3.1% increase compared to the previous year. Among young people under 25, there were 49 297 individuals in this category, reflecting a relative increase of 5.5%.

When compared to other EU countries, Austria's seasonally adjusted youth unemployment rate was 10.3% in June 2023, ranking 9th among the EU Member States listed by Eurostat (Arbeitslosenquote nach Eurostat). While the youth unemployment rate in Austria is relatively low, it still presents a significant challenge for young people seeking employment opportunities.

One of the major challenges faced by young people in Austria is the transition from education to work. Limited work experience often makes it difficult for them to find their first job. Additionally, there is often a mismatch between the skills acquired through education and the demands of the labour market, leading to underemployment or unemployment among young people. To address these challenges, the Austrian government has implemented various measures, including vocational training programs, apprenticeships, and initiatives aimed at improving the alignment between education and the labour market. Chapter 3.6 provides detailed information on the specific measures taken to better integrate young people into the labour market.

For valuable insights into the current labour market situation in Austria, the Analysis, Forecasting, and Research (APF) team of the Labour Market Section provides up-to-date information and databases (Arbeitsmarktdaten Österreich). Information on the Austrian labour market is also available from EURES.

Main concepts

In the following, specific features of employment, entrepreneurship and the labour market in Austria are presented in order to provide a deeper understanding of the Austrian situation.

Social partnership (Sozialpartnerschaft)

Austria's labour market policy is rooted in a strong tradition of social partnership, in which trade unions, employers' associations and the government work together to shape labour market policy. This cooperative model actively seeks consensus between workers, employers and the government, thereby promoting lasting industrial stability. Austria's short-time work scheme (Kurzarbeit Modell) is an example of this collaborative approach to retaining skilled workers and preventing unemployment during economic downturns. It was renegotiated several times between the government and the social partners during the Covid-19 crisis (see also chapter 3.2 cross-sectorial cooperation).

'Dual vocational training system' (Duales Ausbildungssystem)

By combining classroom learning with on-the-job training, Austria's 'dual vocational training system' prepares young people for the labour market. Apprenticeships are a common way for young people to enter the labour market, giving them the opportunity to learn practical skills while earning a wage. This approach promotes a skilled workforce and encourages entrepreneurship by providing businesses with a trained and competent workforce.

Social security system (Sozialversicherung Österreich)

Both employees and employers are required to register and contribute to the social security system. The system involves shared payments that cover medical treatment and sickness benefits. For treatment, an electronic health insurance card is required, which is linked to the occupational insurance institution.

Work-Life-Balance (Umsetzung der Work-Life-Balance Richtlinie)

Austria maintains a good work-life balance with a 38-40 hour working week and ample paid time off, supported by strong government regulations that enforce labour laws and support families. The country is actively addressing gender equality through efforts to reduce the pay gap and increase women's leadership roles, supported by parental leave policies. However, challenges and criticisms still need to be addressed to ensure all workers have access to secure, flexible employment and women have equal opportunities at work.

Youth Strategy and 'Employment' (Handlungsfeld 'Beschäftigung')

The Austrian Youth Strategy places great emphasis on providing young people with opportunities that lead to purposeful employment and entrepreneurship. The aim is to equip them with the necessary skills, knowledge and support to facilitate a seamless transition into the labour market. This means fostering a strong link between education and employment to ensure that young people are well equipped to meet the demands of the labour market. The implementation of the strategy is characterised by cross-sectoral cooperation with the involvement of several ministries, particularly in the implementation of youth-centred objectives within the ‘education and employment’ strand.