Recent Labour Market Developments in Europe

This study analyses the labour market developments of selected 22 European countries during the last ten years. The developments in employment and unemployment as well as the most essential distributive effects are presented. The labour market policy reforms of Denmark, the Netherlands, Finland, the United Kingdom and Germany are studied more into detail by assessing the similarities and differences and gathering together the main experiences. Interconnections between incentives and the functioning of the labour market are analysed through the strictness of the employment protection legislation, replacement rates of unemployment insurance benefits and early retirement schemes. There is wide dispersion in employment and unemployment across countries. Female participation in the labour market is rising. Employment rates for the aged workforce have increased during the last few years, but the situation of the young people has not been improved. Common factors for successful labour market policy reforms seem to be benefit reforms, changes in the organisation of the public employment service and activation policies. Employment protection legislation should not be discussed in isolation, but rather in interconnection with the functioning of the labour market.