rapidly decreased, supported by market flexibility and the structural shift due to the opening up of the EUlabormarkets. Still the migration of Estonian workers has remained below that from most of the other new EU member states. In the future, further integration of European labor markets may add to labor supply in Estonia as well. From its part, the Estonian labor market is open to the intra-EU labor movement. In addition, the authorities have started discussion on a new Labor Contract Act, which among other changes simplifies the laying-off conditions for the
countries included Denmark, Germany, Ireland, France, the Netherlands, Portugal, Romania, Sweden, and Finland.
EU: LaborMarket Policy Interventions
In percent of GDP, Average
33. Most countries allocated the largest share of LMP resources on PLMPs, followed by ALMPs and PES, respectively . In 2017, Cyprus and Bulgaria allocated more than three-quarters of its LMP resources to PLMPs, in contrast with Hungary and Malta, where the shares of spending on PLMPs were about 20 and 15 percent of total labor market expenditure, respectively. For
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.
Front Matter Page European Department
II. LITERATURE REVIEW
III. MAJOR LABOR TRENDS IN THE EU
A. Evolution of Labor Share by Skill and by Industry Sectors
B. Shift-Share Analysis
C. The Changing Landscape of Structural Factors in the EULaborMarket
B. Cross-Country Panel Analysis
A. Expected Contribution of Structural Factors
B. Sectoral Labor Share
C. Skill Labor Share
VI. SUMMARY AND POLICY IMPLICATIONS
1. The Labor Share
wage growth, the authorities agree that recent productivity and real wage developments call for close monitoring. The employment level has shown a healthy increase over the last years, but is expected to level off as the pool of potential workers is limited. Opening of the EUlabormarket has contributed to a decline in unemployment to very low levels, but also to wage pressures, including in the public sector. In the future, integration with the EU market may increase labor supply, as Estonia’s labor market is fully open to workers from the EU, including the new
how population aging will affect EUlabormarkets, economic growth potential, and public finances. Published in early 2006, the projections—which assume no change in current policies and follow up on an assessment published in 2001—point to the need for substantial policy reform and adjustment.
Dramatic repercussions for growth and labor
Although most of the debate on aging concerns the budgetary cost, the most immediate impact will be felt in the labor market. EU projections, however, point to a mixed picture, with improvements in employment delaying somewhat