A Closer Look

Eurozone – Why long-term unemployment is so high

Of the 19m jobless Europeans, more than half have not worked for the last year. And over 15% have not had a job for more than four years. Unsuprisingly, the problem is most severe in southern Europe where a protracted crisis pushed up overall unemployment, and with it long-term joblessness. But in contrast the number of people who have been looking for work for a long time in America fell when its economy recovered; the long-term joblessness rate now sits slightly above 20% of the total. So why is it so tough for Europeans to get back to work?

Part of the reason lies in labour mobility. Almost 30% of Americans reside in a different state to the one in which they were born. But a mere 2.8% of Europeans have moved to a different country in the EU. Language barriers, cultural differences and non-transferable qualifications make it much harder for them to upsticks to find a new job. Generous unemployment benefits in Europe also tie would-be workers to one place and make getting work less urgent. In most American states jobless workers qualify for only 26 weeks of unemployment benefits (though this was increased between 2008 and 2013). Many euro-area countries support the unemployed for more than a year.

Another factor in the divergent long-term unemployment rates is a higher job turnover in America than in Europe.

Chosen excerpts by Job Market Monitor. Read the whole story at The Economist explains: Why long-term unemployment in the euro area is so high | The Economist.


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