Employee remuneration remains the largest component of income in the EU

Employee remuneration remains the largest component of income in the EU

Employee remuneration has remained the main component of income in the European Union (EU) during 2023, representing 47.0% of GDP, according to data published today by Eurostat. This figure remains stable compared to the previous year, confirming the importance of this component in the European bloc's economy.

Twelve Member States They recorded a higher proportion of GDP than the EU average for employee remuneration. Among them, Slovenia (53.2%), Luxembourg (52.8%) and Germany (52.3%) took the lead, followed by countries such as France, Denmark and Latvia. At the far end, Ireland (26.2%), Greece (34.7%) and Romania (37.7%) were the countries with the lowest participation of employee compensation in GDP.

In a long-term analysis, it is observed that the proportion of employee compensation in GDP has experienced a slight decrease in the EU over the last 20 years (-0.3 pp), while in the euro area it has experienced a slight increase (+0.1pp). These divergent trends can be attributed to different economic and social factors specific to each region.

Other components of income

The taxes on production and imports (less subsidies) experienced a decrease of 0.2 percentage points in the EU compared to 2022, standing at 10.9% of GDP. In the euro area, this component remained stable.

For his part, the gross operating surplus and mixed income remained stable in both the EU and the euro area compared to 2022, representing 42.1% and 41.7% of GDP, respectively.

Long term trends

When observing the long-term evolution of each component, it is observed that:

• Employee remuneration: After a decreasing trend between 2003 and 2007, it experienced a significant increase during the economic crisis of 2008-2009, before gradually declining to its current level.
• Taxes on production and imports (less subsidies): They have experienced a general increase in the last 20 years, with specific exceptions such as the economic crisis of 2008-2009 and the COVID-19 pandemic in 2020.
• Gross operating surplus and mixed income: It suffered a significant decline during the 2008-2009 financial crisis, after a period of constant growth between 2003 and 2007. Since 2016, this component has experienced a gradual recovery.

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In conclusion, Employee remuneration continues to be the main component of income in the EU, with a significant share of GDP. Although a slight downward trend is observed in its long-term participation, this component remains crucial for the economy of the European bloc.

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Data extracted from the Statistical Office of the European UnionEurostat.hec.europa.eu/eurostat/statistics-explained/index.php?title=Annual_national_accounts_-_evolution_of_the_income_components_of_GDP#Shares_of_income_components_to_GDP_in_2023