Tracking the Upward Social Convergence

Sustainable Development and Social Rights in the Future of the EU

After the 2008 crisis, awareness of the role of social rights as a foundational component of the European Union has significantly increased. The debate on upward social convergence – convergence towards higher standards of social rights – within the EU has become central, not only as a prerequisite for the prosperity of European societies but also for the very existence of the European Union as a political entity.

The erosion of social rights and territorial inequalities, both between member states and within them, can be considered an existential threat to the EU as we know it today, and even more so to the process of integration.

“Tracking the Upward Social Convergence” delves into the evolution of social rights in the European Union, emphasising the vital link between social justice and the green transition. By using a multidimensional synthetic indicator based on the Social Scoreboard, the European Social Rights Indicator (ESRI), our data provide a comprehensive view of social rights progress at regional (NUTS2) and national (NUTS0) levels. To analyze the data on social and environmental convergence in the EU, we used the Environmental Performance Index (EPI) data, considering regional and temporal variations. These revealed the impact of post-Covid fiscal policies and the importance of integrated strategies to reduce territorial inequalities, promoting sustainable and inclusive development in Europe.

This research was conducted by Irene Fattacciu, Arianna Vivoli, Federico Ciani, Mario Biggeri, and Caterina Arciprete within the framework of the MAECI 2023 Call “Contributions to study, research, and analysis projects in the field of foreign policy and the promotion and development of international relations”.

Summary

What is the European Social Rights Indicator (ESRI) and how is it formulated?
What is the Environmental Performance Index (EPI) and how is it formulated?
How are social rights progressing in the EU?
The challenge of territorial convergence
Lessons from the pandemic: the importance of a coordinated response to crises
Gender equality as a cross-cutting priority for social convergence
The ESRI dashboard: key indicators
Environmental Performance Index (EPI) Insights
Northern Europe: a model of social and environmental convergence
Focus on Italy
Recommendations

The indicators have been first standardised and then aggregated using the geometric mean for the domains and the Multidimensional Synthetic Indicator (MSI) procedure for the pillars and the final indicator. This method allows for heterogeneity and substitutability between dimensions, providing a flexible and detailed assessment of the social situation in European countries. The final result is a positive aggregate index: the higher it is, the better the region’s performance in implementing the European Pillar of Social Rights.

1. What is the European Social Rights Indicator (ESRI) and how is it formulated?

The ESRI (European Social Rights Indicator) was developed by ARCO and UNIFI researchers within the EUROSHIP H2020 project. It is a composite indicator that measures the performance of European countries in implementing the European Pillar of Social Rights (EPSR). It synthesizes various indicators selected from the Social Scoreboard (SSB) – based on three main pillars, including equal opportunities, working conditions, and social protection – into a single unidimensional scale.

ESRI framework indicatori social rights diritti sociali UE

2. What is the Environmental Performance Index (EPI) and how is it formulated?

The EPI (Environmental Performance Index) was developed by researchers at Yale University and Columbia University in collaboration with the World Economic Forum . It is a composite indicator that measures the environmental performance of countries worldwide. It synthesizes various selected indicators covering ten main categories, including air quality, water resources, biodiversity and habitat, natural resources, and climate change – into a single unidimensional scale.

The data used come from EPI website and include data from various sources, including the World Bank, International Energy Agency, and World Health Organization. Website last accessed May 30, 2024.

3. How are social rights progressing in the EU?

Here we can see first the evolution of ESRI at the national level, as well as the EU trend (overall, by pillar, domain, gender). The Equal Opportunities pillar has shown consistent improvement, especially post-2016, aided by programs like the Youth Guarantee.

The Fair Working Conditions pillar exhibited a sluggish trend from 2010 to 2015 due to high unemployment and slow economic recovery from the 2008 crisis.

However, substantial improvements have been noted since 2016, particularly post-2020, thanks to EU interventions like the SURE and the broader European Recovery Plan.

Finally, the Social Protection pillar, encompassing living conditions, poverty, and healthcare, showed a general upward trend from 2010 to 2024, despite a noticeable dip during the pandemic years. The post-2020 recovery phase was robust, driven by the Next Generation EU recovery plan.

ESRI levels have improved across Europe, but regional and gender disparities persist. Greece stands out as an exception, with a lower ESRI in 2019 than in 2010, due to its severe debt crisis and subsequent austerity measures.

Eastern European countries experienced significant ESRI growth from 2010 to 2019, but this growth plateaued after Covid, as challenges related to social infrastructure and economic dependencies persist.

Nordic countries, along with Germany and the Netherlands, have shown consistent high performance in ESRI, in contrast to Southern countries, which struggled with economic challenges and high unemployment rates. Gender-wise, both male and female ESRI indices have followed similar growth trajectories, with women’s indices consistently lagging behind men’s.

4. The challenge of territorial convergence

Between 2010 and 2023, the ESRI showed widespread improvements across many regions, though the extent of progress varied significantly. Education indicators saw substantial improvements in Malta, Portugal, and Spain.

Gender gap reductions were notable in Luxembourg and Malta, while Estonia, Lithuania, and Latvia faced worsening conditions. The NEET domain saw significant reductions, particularly in Ireland, Latvia, and Estonia, which also improved in labor force structure and long-term unemployment indicators.

As concerning the NUTS2 analysis, Western Europe, Spain, Portugal, and parts of Central Europe have seen significant gains in ESRI scores, while some regions in Eastern Europe, such as Romania and Greece, have experienced limited improvements or even declines.

Southern regions of Spain and Italy, despite notable advancements, have not yet reached the average standard.

The Social Pillar aims to promote upward social convergence across Europe, encouraging regions with lower social rights standards to catch up, but the Sigma convergence reveals a different picture. Before the pandemic, there was a barely detectable overall convergence in the EU27, with Southern regions showing a greater divergence.

After a general improvement from 2014-2019, since 2020 average divergence started to rise again, driven especially by Eastern and Northern regions. Nevertheless, as we can see in the historical NUTS2 map, while the Northern divergence is fueled by overperforming regions, the Eastern area follows an opposite trend.

In data analysis, there are several types of convergence measures that can be used to assess the degree of closeness between economies or regions over time, such as sigma, beta and gamma convergence. The Sigma Convergence refers to the overall reduction in inequality between countries over time and is nothing more than the standard deviation of a variable (in this case of the regional ESRI). A decrease in the deviation indicates convergence, while an increase in the standard deviation signals divergence.

5. Lessons from the pandemic: the importance of a coordinated response to crises

Analyzing ESRI from 2010 to 2023, a pivotal shift occurred in 2020 for Southern Europe. Indeed, from 2010 to 2019, Italy and Greece had seen declines due to structural issues and austerity fallout.

The Covid-19 pandemic response instead, marked by expansive fiscal policies, facilitated a quicker recovery compared to the post-2008 austerity measures that prolonged economic and social difficulties, especially in Southern Europe. The EU’s unprecedented measures (including SURE, RRF etc.) provided critical financial support, helping nations mitigate negative impacts and recover faster.

This solidarity demonstrated the importance of coordinated European efforts in crisis management.

6. Gender equality as a cross-cutting priority for social convergence

Despite progress, significant gender disparities persist in labor market participation and wage equality, particularly in Southern and Eastern Europe. Indeed, women attain higher education levels but have lower participation and wages than men. Specific programs in Greece and Italy have shown improvements, but challenges remain.

Inclusive labor market policies, closing the gender pay gap, and supporting family responsibilities are essential, but it is also important to promote female participation in STEM fields. Furthermore, while we tried to catch the gender gap within the ESRI, there is still much to do in terms of gender-sensitive and regionally disaggregated indicators.

While overall ESRI scores for men and women show similar trends, deeper analysis reveals significant disparities and key indicators that are not gender sensitive. Post-pandemic recovery efforts have targeted female employment, yet disparities remain, highlighting the need for sustained policy focus.

7. The ESRI dashboard: key indicators

The European Social Rights Indicator (ESRI) comprises various key indicators that monitor the social performance of European countries. Analyzing the individual ESRI indicators reveals interesting trends. For instance, Nordic countries like Finland exhibit extremely high rates of education and continuous training participation, contributing to a highly skilled and flexible workforce.

On the other hand, countries like Italy show significant progress in reducing the number of NEETs. The social protection indicator, which includes measures like poverty reduction through social transfers, demonstrates how targeted policies can make a difference.

Finally, the employment indicator shows that countries like Germany have benefited from active labor market policies and vocational training programs, keeping unemployment rates low even during economic crises.

8. Environmental Performance Index (EPI) Insights

The Environmental Performance Index (EPI) provides a comprehensive measure of environmental health and ecosystem vitality. Denmark has maintained its position as the top EPI performer globally from 2012 to 2022, largely due to early adoption of wind power and comprehensive environmental regulations.

In 2022, all EU-27 countries were among the global top performers, with several countries, including Croatia and Malta, significantly improving their scores through EU environmental standards and targeted investments in sustainability. Air quality has seen significant improvements in cities like Berlin, where the introduction of low-emission zones and enhanced public transportation reduced NO2 concentrations by 30% over five years.

This has directly impacted public health, decreasing respiratory-related hospital admissions by 15%. Similar improvements have been noted in Germany and the Netherlands due to strict emission regulations. The renewable energy indicators in Spain and Portugal reflect their commitment in the field, with Spain producing 46% of its electricity from renewable sources (particularly solar) in 2020.

Environmental health indicators are high in Nordic countries, especially Sweden and Finland.

9. Northern Europe: a model of social and environmental convergence

Data indicate a strong correlation between environmental performance and social rights. Northern European countries like Denmark, Finland, and Sweden excel in both the ESRI and EPI, showing how investments in green technologies and welfare can boost a virtuous cycle where a healthy environment supports a healthy society.

However, scatter plots detailing ESRI and EPI data from 2012 to 2022, along with GDP figures, show how different countries manage the balance between environmental sustainability, social well-being, and economic growth.

These plots reveal that economic growth doesn’t uniformly correlate with EPI or ESRI improvements. Furthermore, countries needing significant transitions may see ESRI growth at the expense of EPI. Although several higher GDP countries show better EPI and ESRI scores, GDP alone isn’t a definitive predictor, as seen in Ireland’s moderate EPI and ESRI scores. The same apply to Germany and the Netherlands, where policy effectiveness, innovation, and governance quality are crucial for sustainability outcomes.

10. Focus on Italy

We have decided to use NUTS2 analysis to focus on the situation in Italy, examining the trends in various regions over the period from 2010 to 2023. By analyzing the evolution of all ESRI dimensions, we can indeed gain insights into the progress and ongoing challenges, examining regional variations and identifying specific trends within the country.

The ESRI data for 2023 highlights a mixed performance in social rights, with significant variations between regions. The most positively changed indicators are those related to education and gender equality, while income inequality and youth conditions show the most marked worsening. Labor force structure, income, and living conditions remain indeed the most critical indicators impacting the overall ESRI score.

Many Regional Inequalities

Regional inequalities in Italy are evident. While some northern and central regions demonstrate substantial improvements, southern regions continue to face significant challenges. For example, the gender equality index is significantly higher in the northwest and northeast compared to the south and the islands.

This gap is also evident in educational opportunities and working conditions, indicating a need for targeted policies to reduce these regional inequalities. There is also a strong positive correlation between education scores and those of working conditions, suggesting that quality education can translate into better job opportunities and positive employment dynamics.

The Positive Impact of Post-Covid-19 Expansionary Fiscal Policies and the Effect of the Citizenship Income

Post-Covid expansionary fiscal policies have had a significant impact, particularly in areas related to living conditions and social inclusion. Regions in the northeast, such as Trentino and Emilia-Romagna, and some in the northwest, like Valle d’Aosta, show high scores in living conditions. This indicates that support policies and fiscal transfers have significantly improved quality of life and reduced poverty.

Between 2019 and 2023, Italy saw significant changes in poverty reduction, also thanks to the introduction of the Citizenship Income. The significant increase in the indicator on the impact of public policies on poverty reduction compared to previous trends suggests that the Citizenship Income has played a key role in improving the economic conditions of the most vulnerable families. Comparing Italy with other European countries during the same period, the increase is among the highest.

Gender Equality

Gender equality is another area where significant disparities are observed across different regions of Italy.

The northwest and northeast regions show greater gender equality compared to the south and the islands. This gap can be attributed to various factors, including cultural, economic, and differences in access to education and employment.

Policies to promote gender equality need to be strengthened, especially in the south and the islands, to ensure equal opportunities for all women in Italy.

Recommendations

For Policy-makers

Address the persistent regional disparities in social rights by implementing targeted policies that focus on education, employment opportunities, healthcare access, and infrastructure improvements in underperforming regions, particularly in Southern and Eastern Europe.
Strengthen gender equality policies, particularly in regions where disparities are most pronounced, such as Southern and Eastern Europe. This could include promoting female participation in STEM fields, closing the gender pay gap, and improving work-life balance support.
Build on the success of post-Covid-19 recovery measures. These initiatives have shown the effectiveness of coordinated fiscal policies in mitigating social and economic disparities. Furthermore, develop and institutionalize mechanisms for rapid and coordinated EU-wide responses to future crises, ensuring that social rights and regional equity are maintained during recovery efforts.
Align social and environmental policies to foster a virtuous cycle where improvements in social rights are coupled with advancements in environmental performance. Northern Europe serves as a model in this regard, demonstrating how investments in green technologies can coexist with robust social welfare systems.
Utilize the ESRI as a tool to monitor progress and ensure that all EU regions are on a path towards upward social convergence. Regularly update and refine the ESRI to include more granular, regionally disaggregated data, particularly in gender-sensitive indicators.

For academics

Conduct more granular studies at the regional (NUTS2) level to better understand the local dynamics that contribute to regional disparities in social rights. Explore factors that lead to successful upward convergence in some regions and stagnation or divergence in others. Moreover, broaden the scope of research to encompass a comprehensive gender-sensitive analysis. This should involve the development and use of gender-disaggregated indicators that account for the full spectrum of gender identities. Such an approach is essential for generating more meaningful and inclusive insights, particularly within established frameworks like the ESRI.
Innovate in the methodologies used to measure social and environmental convergence, potentially incorporating qualitative data, big data analytics, and machine learning to offer deeper insights.
Expand research to include comparisons with non-EU countries to understand how different political, social, and economic contexts affect social rights and sustainability outcomes. This could provide valuable insights for both EU policymakers and those in other regions.

For Civil society

Raise awareness about the importance of upward social convergence and the risks of regional disparities within the EU. Mobilize communities around key issues such as gender equality, social protection, and environmental justice.
Act as a watchdog to ensure that policies aimed at reducing regional and social inequalities are effectively implemented. Use tools like the ESRI to track progress, regularly publishing reports and findings that highlight ongoing disparities in social rights, environmental performance, and regional development.

This project is financed by the Ministry of Foreign Affairs and International Cooperation within the MAECI 2023 Call “Contributions to study, research, and analysis projects in the field of foreign policy and the promotion and development of international relations”.