Data and anecdotal evidence suggest that Japan is suffering from labor shortages, which are large in an international perspective, have a negative impact on potential growth, and reduce the effectiveness of monetary and fiscal stimulus. This paper focuses on policy options to ease Japan’s...

The Greek unemployment rate rose from 2 percent in the 1960s to 9-10 percent in the 1990s. This reflected the increase in female participation rates, the slowdown in growth, the restructuring of production, and the increased mismatch between jobs and job seekers. But the most crucial factor was...

This paper studies whether labor market mismatch played an important role for labor market dynamics during the COVID-19 pandemic. We apply the framework of Sahin and others (2014) to the US and the UK to measure misallocation between job seekers and vacancies across sectors until the third...

Institutional and market frictions impose costs on the reallocation of labor from low to high productivity sectors, leading to suboptimal allocations and a loss in aggregate labor productivity. Using cross-country sector-level data, we use a dynamic panel error correction model to compute the...

The paper considers the issue of whether a supranational fiscal policy in Europe is needed, and, if so, what responsibilities it should undertake. The literature on endogenous growth and the principle of subsidiarity suggest that such a policy should be limited to externalities or economies of...

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...

The labor share in Europe has been on a downward trend. This paper finds that the decline is concentrated in manufacture and among low- to mid-skilled workers. The shifting nature of employment away from full-time jobs and a rollback of employment protection, unemployment benefits and...

This paper evaluates European structural reforms over the last 20 years, in light of economic theory predictions about interactions between labor and product market reforms. Reforms in labor markets occur at higher frequencies than in product market, which are, however, more coherent. These...

New firm formation is a critical driver of job creation, and an important contributor to the responsiveness of the economy to aggregate shocks. In this paper we examine the characteristics of the individuals who become entrepreneurs when local opportunities arise due to an increase in local...