Mitigating Long-term Unemployment in Europe

Author/Editor:

Nujin Suphaphiphat ; Hiroaki Miyamoto

Publication Date:

August 21, 2020

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

While unemployment rates in Europe declined after the global financial crisis until 2018/19, the incidence of long-term unemployment, the share of people who have been unemployed for more than one year to the total unemployed, remained high. Moreover, the COVID-19 pandemic could aggravate the long-term unemployment. This paper explores factors associated with long-term unemployment in European countries, using panel of 25 European countries over the period 2000–18. We find that skill mismatches, labor market matching efficiency, and labor market policies are associated with the incidence of long-term unemployment. Among different types of active labor market policies, training and start-up incentives are found to be effective in reducing long-term unemployment.

Series:

Working Paper No. 20/168

Frequency:

regular

English

Publication Date:

August 21, 2020

ISBN/ISSN:

9781513554464/1018-5941

Stock No:

WPIEA2020168

Format:

Paper

Pages:

32

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