Daily chart: Europe's long-term unemployed: Continental drift
OVER the past six years, long-term unemployment in Europe has swelled. Around half of Europe's 25m unemployed have been jobless for over a year. Over 12% have not worked for more than four years. Aside from rising poverty levels, the problem brings a further set of difficulties that can render it self-sustaining. Skills are forgotten, confidence drains, fertility slows and the risk of poor health increases. The challenge for policymakers is to stop this cyclical unemployment from becoming structural.
Unsurprisingly, the problem is most acute in southern Europe. More than 60% of jobless Italians have not worked in over a year; in Greece the rate is over 70%. The high long-term unemployment rate is due in part to the fact that Italy simply has high overall unemployment rates, brought on by a severe recession and inflexible labour markets. Moreover, economic woes feed into political ones. Unemployed people are more likely to distrust their politicians and the European Union. This has strengthened the hand of euro-sceptics and populists.
The problem is also acute in the new EU member states of eastern Europe. But unlike southern Europe, many of these countries have recent experience of high long-term unemployment after recessions in the late 1990s and early 2000s. In some places long-term joblessness persisted despite economic recoveries. Slovakia experienced a …<div class="og_rss_groups"></div>
Source: The Economy