Euro Area Labor Market after crisis:

Impacts & Solutions

LABOR MARKET
 Objectives
The impacts of the crisis as the whole on Euro area economy and
labour market.
The labour market reforms and policy measures in different countries
and the success of the Hartz reform in Germany.
Impacts of crisis on Euro Area Labor Market
 GDP Growth Rate
6

- Two recessions:
4

EU (28 countries)
- The Great Recession
2 - Public Debt Crisis
Germany How did it affect to labor
0
2005 2006 2007 2008 2009 2010 2011 2012 2013
market?
France

-2
Italy

-4
United Kingdom

-6

-8

GDP Growth Rate

Source: Eurostat
Relationship between GDP growth rate
& employment rate

The stressed economies:

Ireland
Greece
Spain
Italy
Cyprus
Portugal
Slovenia
 Unemployment Rate

- Trend: Increasing of unemployment

rate

- Exception: Germany
- 2008: 7.53%
- 2011: 5.83%
- 2013: 5.23%
- 2016: 4.12%
Sectors
Education level
LABOR MARKET REFORMS &
POLICY MEASURES
 Euro area
Boost aggregate demand and employment
Encourage flexible working time
Reform both demand and supply sides of labour market
Strengthen public budgets to provide security for unemployees
Countries with the greatest public debt: Greece, Ireland and Portugal
welfare reforms, public sector reforms and privatization programs
 Differences across Euro area
Measures taken to combat the crisis
 Germany: A miracle
Euro area unemployment rate
The Hartz reforms in the early 2000s
2010: economy improved steadily
2011: employment increased and
unemployment fall

Source: Eurostat
 Short-time working allowance
A temporary reduction in working hours
Reduce salary expenses
Allowance for employees loss
Stricter requirements to receive allowance
Provide training during non-work hours
 Win-win situation
The government: save unemployment benefits
The employer: retain a qualified workforce and save salary costs
The employee: keep their jobs
 Other labour reforms
Promote wage restraint
Phase out early retirement options
Provide back-to-work incentives
Promote low paid part-time jobs (mini-jobs, midi-jobs, one-euro jobs)
Benefits:
Reduce employee social insurance contributions
Reduce unemployment insurance benefit and pension benefit
Increase employment
 Cash for clunkers program
Buy a new car
Exchange for at least 9yearold car
Receive a subsidy of 2,500
Objectives:
boost auto sales
save factory jobs
replace gas-guzzling
 THANK YOU FOR
YOUR ATTENTION