Edited by Ellen Kalisperati
Explaining European Unemployment
Olivier J. Blanchard(1)
Anybody attempting to explain the evolution of unemployment in
Europe over the last 30 years must confront the following set of facts: First, high unemployment is not a European trait. Until the end of the 1960s, unemployment was very low in Europe and the talk then was of the "European unemployment miracle." The miracle came to an end in the 1970s, when unemployment steadily increased. It kept increasing in the 1980s. It appeared to turn around in the mid-1990s, but the decline is (temporarily?) on hold. For the European Union as a whole, the current unemployment rate is still very high, around 8 percent.