The European Commission has expressed its concerns about the impact of the rise in flexible employment contracts on the Dutch economy in a new report.

While total employment has risen steadily and the unemployment rate has continued to decline ‘rising long-term unemployment and the potential segmentation of the labour market are of concern,’ the report on the Dutch economy in 2016, states.

‘Low transition rates from temporary to permanent contracts pose a risk of labour market segmentation,’ the report says. ‘Self employed workers are more often under insured against disability,unemployment and old age, which could affect the sustainability of the social security system in the long run.’

Age, skill levels and migration background largely determine the status of employment contact and in this context, ‘the labour market integration of refugees and migrants poses a challenge,’ the commission report says.

The report also singles out Dutch spending on research and development for criticism. While the Netherlands has a strong education system and scientific basis, ‘private investment in R&D remains fairly low, while public investment in R&D is set to decline.’

Shifting public expenditure towards R&D has the ‘potential to improve the Netherlands’ long-term growth potential’, the report says.

Read the report (English)