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Mitigating Long-term Unemployment in Europe

Author

Listed:
  • Miyamoto Hiroaki

    (Tokyo Metropolitan University, 1-1 Minami-Osawa, Hachioji-shi, Tokyo192-0397, Japan)

  • Suphaphiphat Nujin

    (International Monetary Fund, 700 19th Street NW, Washington, DC20431, United States)

Abstract

While unemployment rates in Europe declined after the global financial crisis until 2018/2019, the incidence of long-term unemployment, the share of people who have been unemployed for >1 year to the total unemployed, remained high. Moreover, the COVID-19 pandemic could aggravate the long-term unemployment. This paper explores the factors associated with long-term unemployment in European countries using a panel of 25 European countries over the period 2000–2018. We find that skill mismatches, labor market matching efficiency, and labor market policies are associated with the incidence of long-term unemployment. Among the different types of active labor market policies, training and startup incentives are found to be effective in reducing long-term unemployment.

Suggested Citation

  • Miyamoto Hiroaki & Suphaphiphat Nujin, 2021. "Mitigating Long-term Unemployment in Europe," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-27, May.
    • Handle: RePEc:vrs:izajlp:v:11:y:2021:i:1:p:27:n:3
    DOI: 10.2478/izajolp-2021-0003
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    Cited by:

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    2. Cochrane, William & Poot, Jacques & Roskruge, Matthew, 2022. "Urban Resilience and Social Security Uptake: New Zealand Evidence from the Global Financial Crisis and the COVID-19 Pandemic," IZA Discussion Papers 15510, Institute of Labor Economics (IZA).
    3. Di Domenico, Lorenzo & Gahn, Santiago José & Romaniello, Davide, 2024. "Testing the Waters of Positive Hysteresis: The Effects of Autonomous Demand Shocks on Inflation, Accumulation, and Labor in the US Economy," Centro Sraffa Working Papers CSWP64, Centro di Ricerche e Documentazione "Piero Sraffa".
    4. Paternesi Meloni, Walter & Romaniello, Davide & Stirati, Antonella, 2022. "Inflation and the NAIRU: assessing the role of long-term unemployment as a cause of hysteresis," Economic Modelling, Elsevier, vol. 113(C).
    5. Elena Jianu & Ramona Pîrvu & Gheorghe Axinte & Ovidiu Toma & Andrei Valentin Cojocaru & Flavia Murtaza, 2021. "EU Labor Market Inequalities and Sustainable Development Goals," Sustainability, MDPI, vol. 13(5), pages 1-17, March.

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    More about this item

    Keywords

    long-term unemployment; labor market matching efficiency; active labor market policy;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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