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The unbearable divergence of unemployment in Europe

Listed author(s):
  • Tito Boeri
  • Juan Francisco Jimeno

Unemployment in Europe is not only “too high”, it is also too different across countries that belong to a monetary union. In this paper we i) document this increasing heterogeneity, ii) try to explain it and iii) draw from our diagnosis indications as to the appropriate set of policies to reduce unemployment and labour market disparities. Our analysis suggests that the divergence in labour market outcomes across Europe is the by-product of interactions between, on the one hand, shocks of varying size and nature, and, on the other hand, country-specific labour market institutions. We argue that EU policy coordination and conditionality during the Great Recession and the euro area debt crisis did not properly take into account these interactions. We also propose a change in the European policy approach for fighting unemployment.

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File URL: http://eprints.lse.ac.uk/65001/
File Function: Open access version.
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 65001.

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Length: 32 pages
Date of creation: Nov 2015
Handle: RePEc:ehl:lserod:65001
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  28. repec:iza:izawol:journl:y:2015:p:101 is not listed on IDEAS
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