1. US and European Economies in Comparative Perspective Berkeley 12/13 September The EU Labour Market Challenge Background Charts & Tables Karl Pichelmann

2. 2 The European Challenge mobilise labour supply AND increase productivity growth Very Unsatisfactory Performance Demographic Change Globalisation Will Systems Competition Help ? DG ECFIN

3. 3 EU GDP per capita in PPS (US=100) DG ECFIN

4. 4 EU GDP per capita in PPS (US=100) DG ECFIN

5. 5 Total Employment Rates DG ECFIN

6. 6 Employment Rates: Females DG ECFIN

7. 7 Employment Rates: Older workers DG ECFIN

8. 8 Long-term Unemployment Rate DG ECFIN

9. 9 Trend Growth Labour Productivity Per Hour DG ECFIN

10. 10 Decomposition of Labour Productivity Trends DG ECFIN

11. 11 Cumulated euro area employment shock DG ECFIN

12. 12 Cumulated euro area productivity shock DG ECFIN

13. 13 A flip-side of poor productivity growth DG ECFIN

14. 14 DG ECFIN Old-age dependency ratios in the EU-15

15. 15 DG ECFIN Projections of age related public expenditures

16. 16 The Impact of Ageing Ageing may reduce GDP by 20 % relative to baseline, and public expenditure on pensions as a share of GDP may increase by about 7 pp Parametric reforms can go quite some way to offset these effects and stabilise PAYG systems Increasing the effective retirement age is the single most potent reform option Impact on TFP growth ? DG ECFIN

17. 17 Globalisation: Threat to job and wages ? DG ECFIN

18. 18 Export Market Shares DG ECFIN

19. 19 Terms of Trade for Non-Oil Goods and Services DG ECFIN

20. 20 Extra-EU15 Trade Balances DG ECFIN

21. 21 Geographical Direction of Extra-EU15 Exports DG ECFIN

22. 22 Extra-EU15 Trade: Skill and Factor Intensity DG ECFIN

23. 23 Top 6 Contributors to Non-Fuel World Export Growth DG ECFIN

24. 24 Top 6 Contributors to Non-Fuel World Export Growth DG ECFIN

25. 25 Top 6 Contributors to Non-Fuel World Export Growth DG ECFIN

26. 26 EU15 RCA’s for Specific Product Groupings DG ECFIN

27. 27 Unemployment and Trade Openess DG ECFIN

28. 28 Displacement Rates by Industry DG ECFIN 14 EU countries 1994-2001 USA 1979-99 Manufacturing3.7 4.6 - High international competition 3.7 5.9 - Medium international competition 4.4 6.2 - Low international competition 3.5 4.3 Services (and utilities for USA) 3.2 1.7 Total employment2.8 2.2 Source: OECD Employment Outlook (2005)

29. 29 Labour Market Prospects of Displaced Workers DG ECFIN EU 1994-2001USA 1979-99 High C.Manuf.ServicesHigh C.Manuf.Services Share re-employed two years later 5257 636569 Share with no earnings loss or earnings more 444650363541 Share with earnings losses greater than 30% 57825 21 Notes: Columns are manufacturing with high international competition, total manufacturing and services (and utilities for USA) Sources: OECD Employment Outlook (2005) for EU-15 (excl SE) on the basis of ECHP data and Kletzer (2001, “Job Loss from Imports: Measuring the Loss”, Institute for International Economics, Washington, DC) for USA on the basis of bi- annual Displaced Worker Surveys.

30. 30 Systems Competition of Labour Compacts Despite quite widespread perceptions, only little evidence for “ a race to the bottom” (tax system ?) Leader-follower behaviour in order to maintain relative positions (wage setting ?) Regression towards the mean, “race to the top” ? (Open Method of) Co-ordination largely ineffective Heterogeneity of “Social Europe” likely to persist DG ECFIN