Unemployment in the European Community: Counting the Costs

In the past few years unemployment has grown rapidly and reached post-war record levels in the European Community (EC). The total registered unemployment in the EC in February 1988 was 16.6 million while the total in the ‘big four’ (France, Germany, Italy and the United Kingdom) was 11.5 million. An especially worrying feature has been the growth of youth unemployment as well as the increase in long-term unemployment. Table 10.1 gives a summary picture of these trends: These high levels of unemployment have imposed significant costs on individuals (both unemployed and employed), on their families, on social classes, on the Government, and on society in general. The costs of unemployment are not only economic but also social and political. The aim of this paper is to discuss these costs of unemployment and to provide some estimates for the economic costs. The chapter is structured as follows: Section 10.2 discusses the problem of assessing the costs of unemployment, Section 10.3 provides some estimates for the output loss costs of unemployment, and Section 10.4 concludes the chapter.