This paper analyses the gender-, age- and educational attainment level-specific output–employment relationship and its dependence on foreign direct investment (FDI). The unbalanced panel covers 25 European Union countries’ data from 2000 to 2020. Empirical estimations are made using the pooled OLS estimator. The impact of FDI on gender-, age- and educational attainment level-specific output–employment elasticities is estimated by including the multiplicative terms between gross domestic product (GDP) and FDI in regression models. The main results indicate the positive impact of economic growth on employment, with the highest output–employment elasticities for males and youth regardless of gender. The estimation results also indicate limited abilities of economic growth to increase the employment of highly educated people and females older than 25 years regardless of their educational attainment level. Our results suggest that higher FDI level in the host countries is mostly associated with the decreasing employment reaction to economic growth. Although FDI is an important factor affecting the output–employment relationship, it does not help to solve the problem of unemployment in the EU, especially for youth.

This paper examines age- and gender-specific employment sensitivity to growth across different economic sectors. By applying a non-linear panel specification of Okun’s first-difference equation on EU-28 countries for 1995-2019, we estimate age-, gender-, and sector-specific employment intensities to growth. Our study examines the ability of growth in different sectors to generate total employment opportunities. Results show that regardless of gender or age, the employment growth is mainly driven by the services sector growth. Still, if we consider the share of a sector in the economy, the construction sector is found to be the most employment-intensive. Our estimates show that the male and female employment intensities of growth in services are quite equal. Considering the employment opportunities by gender, the main differences were found in the construction sector. Expansion and recession were confirmed to have a significantly different effect on the employment rate only in the construction sector regardless of age and gender.