1. DALE T. MORTENSEN BERGAMO CONFERENCE JUNE 18, 2013 The Real EU Crisis: Youth Unemployment

2. Introduction It is almost four years since the end of the Great Recession, yet global employment continues to be well below trend. In the EU, there has been no recovery and indeed unemployment continues to rise, particular among the youth in the southern tier. What are the explanations for the continuing unemployment problem in the EU?

3. Unemployment Rates EU 17-Dk blue EU 25-Yellow US-Black Japan-Lt blue

4. Another (German) Economic Miracle? Source: Rinne and Zimmermann, IZA Journal of Labor Policy 2012, 1:3

5. EU-US GDP Growth Rates

6. Change in Unemployment Rate vs Change in GDP Growth Rate, 2011-2012 Difference in GDP Growth Rates Difference in Unemployment Rates Red-EU Blue-non EU

7. EU Youth Unemployment Rates

8. EU: Youth Unemployment Rates by year 10 0 20 30 40 50 60 GR SP IT PT FR IR UK GE EU

9. “Scarring” Effects of Youth Unemployment Boeri, OECD Policy Forum for Jobs for Youth, Oslo, Sept 20, 2011

10. Unemployment Rates: Ages 15-24 Source: OECD

11. Unemployment Rates: Ages 25-34 Source: OECD

12. Unemployment Rates: Ages 35-44 Source: OECD

13. Unemployment Rates: Ages 45-54 Source: OECD

14. Short term contract reform in Italy Tealdi, “How Do Employment Contract Reforms Affect Welfare?,” 2011

15. Boeri, SZW-CDB Conference on the Danish Model, February, 2011.

16. Boeri, “Do we need more flexibility and security?,” March 2011 GR NL ES IT PT FIN AU DK BE GE LX UK

17. Tealdi Conclusions Tealdi, “How Do Employment Contract Reforms Affect Welfare?,” May 2011 Based on a quantitative Mortensen-Pissarides model before and after reform …

18. Boeri, “Do we need more flexibility and security?,” March 10, 2011

20. Summary of EU Unemployment Experience Unlike the US, EU unemployment rates increased sharply after the Great Recession. Increased unemployment has been born primarily by the young in the “financially distressed” countries. These facts call into questions the efficacy of EU and IMF imposed “austerity” policies. Still, rigid “two-tier” labor market structures also a major problem in need of reform.