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Explaining the resilience of the euro area labour market between 2022 and 2024

Author

Listed:
  • Berson, Clémence
  • Botelho, Vasco
  • Da Silva, António Dias
  • Foroni, Claudia
  • Mohr, Matthias
  • Schroeder, Christofer
  • Weißler, Marco

Abstract

In the aftermath of the COVID-19 pandemic, the euro area labour market showed remarkable resilience despite weak economic growth and various challenges, including supply chain disruptions, the energy crisis and geopolitical tensions. The relative strength of the labour market compared with economic activity led to a marked decline in measures of labour productivity. Factors such as reduced real wages, increased profit margins, lower average hours worked and strong labour force growth contributed to favourable labour market dynamics, encouraging firms to hire or retain workers. Looking ahead, there are signs of easing in the labour market as some of the factors sustaining employment subside, aligning labour market dynamics more closely with economic activity. Nevertheless, structural issues, such as declining average hours worked and labour force dynamics, may persist. JEL Classification: E24, J2

Suggested Citation

  • Berson, Clémence & Botelho, Vasco & Da Silva, António Dias & Foroni, Claudia & Mohr, Matthias & Schroeder, Christofer & Weißler, Marco, 2025. "Explaining the resilience of the euro area labour market between 2022 and 2024," Economic Bulletin Articles, European Central Bank, vol. 8.
    • Handle: RePEc:ecb:ecbart:2025:0008:2
    Note: 686280
    as

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    More about this item

    Keywords

    average hours worked; labour hoarding; Labour market; labour productivity;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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