This research priority aims at a better understanding of the functioning and the players of the labour market and the social systems. It will support evidence-based policy and decision making. Improving the match between labour supply and labour demand, as well as coping with future challenges on the labour market is in the focus of this research domain. Important issues related e.g. to an ageing workforce but also to the dependency of Luxembourg’s economy on cross-border workers, as well as labour participation of immigrants have to be addressed. Research should help adapting education and training in Luxembourg to the needs of the knowledge society and service economy, as well as to create new models for work and social protection. New methodologies able to tackle Luxembourg’s peculiarities should also be developed.