This brief reviews the evolution of the US and the European labour markets since the beginning of the financial crisis.
In the US, the unemployment rate and the share of long-term unemployment grew very fast, during the crisis, thereby reaching levels close to those in the EU. Does that mean that the US labour market has split between jobs and permanent unemployment? In other words, is the US labour market in the process of becoming more "European" in terms of size, composition and dynamics? What would thus be the consequences in terms of outlook?
This brief analyses the unemployment response to the crisis in the US and Europe, also looking at the very different performance of labour markets across euro-area countries. In particular, while the Irish and Spanish labour markets suffered a burst of housing bubbles as the US that may have also aggravated labour mismatches, this was less a case in other EU countries, like Germany, Italy, France or the Netherlands.
This brief argues that the convergence in the unemployment situation in the US and the aggregate EU will not be long-lasting. As observed in the past, the US unemployment is expected to be relatively reactive in the coming quarters, while that of the EU, on aggregate, will be less.
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