Employment boosted by influx of cross-border workers

In recent decades, paid employment has more than doubled in Luxembourg, primarily because of the influx of cross-border workers coming from France, Germany and Belgium.

Labour shortage needs to be filled

The Luxembourg labour market is unlike any other such market in Europe. Whereas most jobs in neighbouring countries are filled by their residents, in Luxembourg there are a very large number of cross-border workers, mainly from the Greater Region. This unusual situation stems primarily from the strong economic growth experienced by the country in the late ’80s and early ’90s.

Cross-border has quadrupled in 29 years

Since 1994, the number of paid jobs in Luxembourg has more than doubled (2.6), rising from around 190,000 to around 488,000. While the number of jobs filled by residents has been multiplied by 1.8; the number filled by cross-border workers grew fourfold (4.6). Consequently, while cross-border workers represented 26% of the people working inside the country on March 31, 1994, the figure had risen to 47% in 2023.

National employment consists of both Luxembourgish and foreign-resident workers, while domestic employment considers Luxembourgish, foreign-resident and cross-border workers (those who commute mainly from the Greater Region labour pool). The present indicator focuses on statistics for domestic employment.

Moreover, these age pyramids specifically concern paid employment in Luxembourg, i.e. employees, workers and civil servants. The self-employed, the unemployed and other self-employed persons are not included in this indicator.

Over the last two decades, domestic paid employment has more than doubled, from approximately 190000 workers on March 31, 1994, to around 488000 workers on March 31, 2023 (source: IGSS). Though the employment of residents has multiplied by 1.8 over this period, the employment of cross-border workers has experienced a more than fourfold increase (4.6 exactly). Therefore, while cross-border workers accounted for 26% of domestic employment in March 1994, their proportion has risen to 47% in twenty-nine years (see Age pyramid (%) and main indicators on domestic employment in Luxembourg (1994, 2003, 2007-2023)).

The atypical composition of the active population, both residents and cross-border workers, makes Luxembourg a special country in Europe. This specificity can be largely explained by the economic growth the country has known during the late 1980s and early 1990s, which led the Grand-Duchy to recruit an external workforce to remedy the labour shortage. Therefore, the number of cross-border workers has risen each year. Between 1994 and 2008, the number of cross-border workers nearly tripled, with an average annual growth rate of 8% over the period. Concerning the number of residents, they experienced a less sustained growth, with an average annual growth rate of 2.0% over the same period, resulting in a population increase by a factor of 1.3 (1.1 for Luxembourgish residents and 1.7 for foreign residents). After the global crisis of 2008, the increase in the number of cross-border workers stabilized at 1% to 3% annually until 2015, and the growth rate for residents followed the same trend. Since 2015, the growth of the number of cross-border workers has once again increased (around 4% per year on average), while the growth in the number of residents has remained stable at around 2%.

As regards the nationality of the cross-border workers, French workers make up the majority by accounting for more than 50% of the total of cross-border workers in any particular year. Their number has increased fivefold in 29 years. In 1994, German cross-border workers accounted for less than one-fifth of cross-border workers but this proportion has increased to 24% in 2023. Germans have experienced the most significant growth over the period 1994-2023 since their number has multiplied by 6. Finally, though the number of Belgian cross-border workers has more than tripled (3.7) between 1994 and 2023 their share among cross-border workers has decreased, from 30% (1994) to 23% (2023) of the total of cross-border workers.