The Netherlands boasts highest levels of resilience in EU as COVID-19 crisis unfolds

The high levels of resilience reported by the Netherlands may be of long-term benefit to the country as the outbreak of the Coronavirus (COVID-19) pandemic continues to present enormous social, economic and health challenges. The Netherlands reports the highest level of resilience across the EU, with just 17% of respondents reporting difficulty managing their lives when things go wrong, in findings from the European Quality of Life Survey (2016).

High levels of resilience in the Netherlands are further complemented by the high levels of trust reported in the country; with the level of trust in national government the fifth highest in the EU and the level of trust in media the second highest across the EU in 2016. Furthermore, there have been improvements to overall social cohesion, with the share of respondents reporting tension between rich and poor declining to 15% in 2016 – which was half that of the EU average in that year. These indicators suggest that the Netherlands is well placed to tackle the immense challenges the current crisis presents. Nevertheless, Eurofound’s recent research shows that there has been a significant increase in the share of workers engaged on temporary contracts in the Netherlands over the last decade. Additionally, the high level of household debt that existed prior to the onset of the pandemic may become increasingly problematic as the full extent of the economic impact becomes apparent.

Eurofound’s new flagship report Labour market change: Trends and policy approaches towards flexibilisation highlights that there has been an increase in the number of people engaged in non-standard employment across the EU over the last decade. This has been particularly the case in the Netherlands, where in 2018, only one in three workers was in a standard employment relationship, much of which can be attributed to the high rate of permanent part-time employment – however temporary employment has grown significantly over the last decade. The report shows that the share of workers on temporary contracts in the Netherlands has increased at the second highest rate in the EU between 2008 and 2018 to make up 21.6% of all dependent employment. The report highlights previous Eurofound research which shows that temporary employees’ hourly wages were on average 20% lower than that of their permanent counterparts in 2010, and in the case of the Netherlands, hourly wages were around 30% lower, albeit sector and educational attainment levels are important factors. In addition, during the decade covered by the research there was also an increase to the share of workers who are self-employed. The increased number of workers who are self-employed, and the larger proportion employed on temporary contracts, who may receive lower hourly wages, could be more exposed to financial hardships in light of the COVID-19 crisis.

As well as increased levels of precarity in employment, the COVID-19 crisis comes at a time when many vulnerable groups in Europe were exposed to debt and arrears, as shown in Eurofound’s research on household over-indebtedness. Although the Netherlands has one of the lower levels of over-indebtedness in the EU, it is noteworthy that the Netherlands along with a number of other high income countries, has a high level of household debt not in arrears. The report highlights that household debt in the Netherlands was 106% of GDP in 2017, second only to Denmark which reported household debt at 128% of GDP. Hence, in the current context where unemployment is rising and economies are rapidly contracting, high levels of household debt could become increasingly difficult to manage and some could find themselves slipping into arrears.

Overall, the robust economic situation prior to the current crisis coupled with high levels of resilience, trust and social cohesion suggest that the Netherlands may be well placed to tackle the challenges that this crisis presents. However, the increased share of workers on temporary contracts, and ensuing wage penalties, could mean such workers are at greater risk of the impact of economic shocks due to the current circumstances. Furthermore, the high level of household debt reported in the Netherlands could pose a significant challenge for many as the full extent of the crisis unfolds.

Eurofound has been monitoring and reporting on living and working conditions in the Netherlands, in comparison to other EU Member States, since the inception of the agency in 1975.

Read more:

Publication: Labour market change: Trends and policy approaches towards flexibilisation

Publication: Addressing household over-indebtedness

Explore the data: European Quality of Life Survey 2016

Country profile: Living and working conditions in the Netherlands