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EACEA National Policies Platform


3. Employment & Entrepreneurship

3.1 General context

Last update: 9 November 2022
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  1. Labour market situation in the country
  2. Main concepts

Labour market situation in the country

The Luxembourgish labour market is characterised by its large number of cross-border commuters living in the neighbouring countries (France, Belgium, Germany) and working in Luxembourg (about 70% of the workforce). The number of newly created jobs has increased during the past years (from 264 000 in 2000 to 465 000 in 2019). Most of these jobs require high qualifications (Statec, 2021a; Hury et al., 2015).

The Covid-19 pandemic has led to a sharp economic downturn and an increase of unemployment rates in Luxembourg. Young people are disproportionately affected. The unemployment rate among young people (under 25 years of age) increased from 17.5% in the second quarter of 2019 to 23.3% in the second quarter of 2020. After this downturn in 2020, the Luxembourg economy and employment market recovered quickly. According to Statec, the Grand Duchy continues to report one of tho most dynamic employment growth rates in Europe (but also a resurgence of recruitment difficulties) as well as unemployment that is firmly on the decline for the year 2021. Statec forecasts expect these positive trends to continue, with employment rising by nearly 3% in 2021 and 2022 and unemployment rates dropping to 5.2% for the labour force in 2022 (Statec, 2021b). 

These forecasts are favourable conditions for the future development of the employment situation of young people. However, compared to other European countries, the current unemployment rate of the overall population is rather low, whereas for the group of young people it is relatively high (Statec, 2021c). The significant difference between the overall unemployment rate for the population and the youth unemployment rate indicates that the transition from the education system into employment still represents a critical phase for many young people in Luxembourg. It can be expected that the pandemic has aggrevated the situation and is particularly true for young people with poor qualifications. This group is at increased risk of becoming unemployed (MENJE & UL, 2015).

Luxembourg has a strong tradition of social peace. Social problems are usually resolved within the framework of wide-ranging consultations between the social partners, in the form of a Tripartite Coordination Committee. This committee brings together representatives from the government (minister of Finance, minister of the Economy, minister of Labour and Employment) employers (Chamber of Commerce, trades) and labour (trade unions).

Main concepts

In the domain of employment and labour market policy (under the responsibility of the Ministry of Labour, Employment and the Social and Solidarity Economy), people under 25 years of age are defined as 'young people'.

This definition differs from the characterisation of the age group 'young people' in the 2016 youth law: persons no longer attending primary education or special schools who are younger than 30 years (see: 1.1 Target population of youth policy).