not the case. Although unemployment is low, the labor market is not 'tight'. On the contrary, we show that what matters … for wage growth are the non-employment rate and the under-employment rate. Both are high and act as brakes on wage growth …, just as in the Great Recession we anticipate deflation in the near future, coupled with rising joblessness and recession. …

Unemployment is notoriously difficult to predict. In previous studies, once country and year fixed effects are added to … panel estimates, few variables predict changes in unemployment rates. Using panel data for 29 European countries collected … just over 10000 observations, we predict changes in the unemployment rate 12 months ahead. We do so using individuals …