Home > unemployment > Finally: U-6 unemployment in Europe (chart)

Finally: U-6 unemployment in Europe (chart)

from Merijn Knibbe

Eurostat has, finally, published data on U-6 unemployment in Europe.  It was already possible to calculate U-5 unemployment (see this article). As Eurostat, probably because of unfathomable bureaucratic reasons, only does not calculate U-6 itself but only publishes its constituent parts, it’s worthwhile to publishe these data here (see graph, for a definition of U-6 see this post). U-6 is basically normal unemployment plus (unemployed, searching a job but not immedeately available) plus (unemployed, available but not searching) plus (people who work part time but want to work more).

Click here for a larger image

What shows when we look at U-6 instead of U-3 (2010 data!)? Do these data change our view of the situation in Europe?

* unemployment in quite some countries is extremely high. For ‘western’countries like Spain these are by far the highest levels since the Great Depression.
* it does make quite a differences if we look at U-6 instead of U-3, Italy is the best (in fact: the worst) example of this.
* differences between the ‘top’ and the ‘bottom’become larger, but differences in the middle become smaller. Especially ‘part time unemployed’ seems to mitigate differences in the middle.
* Italy does much worse, compared with the U-3 concept while Greece does relatively (!) better
* The Czech Republic does very well (surprise! Though I already did indicate on this blog that I do not considere the Czech Republic to be a transition country anymore, a statement especially based upon its high share of high tech exports. This data confirms this view). Belgium does better than indicated by U-3
* A high level of involuntary part time workers in Germany and the UK, which indicates that there is much more room for pro-growth policies than indicated by U-3 unemployment.

N.B. – the Netherlands know an extra-ordinarily amount of freedom for labor to negotiate individual part-time jobs with managers, which of course enhances the flexibility and efficiency of the labor market and which might be the main reason why part time working is so common in the Netherlands. Lowering unemployment might in many countries indeed well be possible by enhancing the freedom of labor en the flexibility of the labor market (flexibility ‘properly defined’ that is, not just as ‘more power to the managers’). But this does not only require other rules, it also needs cultural changes. In the USA labor does not have this freedom and at least one USA company in the Netherlands fires people who insist on shorter hours, paying hefty fines to employees of up to multiple yearly salaries to prevent labor to use its freedom as well as to save the face of the managers).

  1. November 13, 2011 at 3:50 pm

    A couple of observations: It would appear that the divorce between the Czechs and Slovacs some time ago (Czechoslovakia) into the Czech Republic and Slovakia has worked in favour of the Czechs. This could also become an indicator of what will happen when the Germans decide that they will no longer carry the rest of Europe on their back.
    Also, the Baltic states, Lithuania, Estonia and Latvia are not doing so well. Didn’t they accept the IMF “rescue” packages?

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