Employment in the Baltics, Spain and Ireland: L and Λ shaped ‘recoveries’

Genuine economic recoveries are characterized by a fast increase of production, income and employment. At this moment there are no Eurozone or even European Union countries which fit this definition. When we look at total employment, recoveries in countries like Ireland or the Baltics (Estonia, Latvia, Lithuania) are ‘L’ shaped at best while employment in Spain and Greece is still rapidly declining (graph 1), despite the fact that Greece did not experience any kind of boom like the Baltics or Spain. The timing of the turning points suggests that the national booms and busts were part of an international ‘super cycle’, fuelled by flows of capital from the centre of the Eurozone.

In Spain and Ireland males have fared especially badly (graph 2). In both countries the participation rate for females is still somewhat above the 2000 level. For males it is more than 10%-point below it.

Total employment (paid jobs as well as the self-employed) in Spain was, at its maximum, 20.5 million. At present it is 16.6 million. Maximum employment in the Baltic states and Ireland was 3.4 and 2.1 million respectively. The Baltic data are somewhat influenced by (downward) data revisions.