Many academic papers are still being written on mass unemployment in Europe. Meanwhile, unemployment in the EU15 has been falling dramatically. Not only academics, but also European workers at large do not seem to appreciate these labour market developments. I offer two explanations for this puzzling deterioration of workers perceptions of the labour market in spite of disappearing unemployment: i) labour market risk increased, and ii) employment growth occurred at the cost of stagnating labour productivity. This means that the new labour market offers a worse risk-return combination. Strategies to address these issues are discussed in the final section of the paper.
What Happened to European Unemployment?
BOERI, TITO MICHELE
2009
Abstract
Many academic papers are still being written on mass unemployment in Europe. Meanwhile, unemployment in the EU15 has been falling dramatically. Not only academics, but also European workers at large do not seem to appreciate these labour market developments. I offer two explanations for this puzzling deterioration of workers perceptions of the labour market in spite of disappearing unemployment: i) labour market risk increased, and ii) employment growth occurred at the cost of stagnating labour productivity. This means that the new labour market offers a worse risk-return combination. Strategies to address these issues are discussed in the final section of the paper.
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