ABSTRACT
Concern over the long-term trend in the European employment rate emerged in the early 1990s as a central issue for European policy as a consequence of three interrelated developments. The first area to arouse concern was the evidence of apparent failure within European economies to create jobs in contrast to the job creation record of Europe’s competitors, particularly that of the US (CEC 1994, 1995a; OECD 1994a, 1994b). Europe was identified as moving into a period of jobless growth and this failure on the job creation front was likely to lead to a worsening of the two other related problems: the high and rising level of unemployment in Europe and the increasing burden of the non-working population on European welfare state regimes. The latter problem relates to the share of the population not in employment and not solely to the share in unemployment, and an increasing share of new jobs are taken by those outside the labour force instead of those inside. In recognition of these relationships the employment problem in Europe is increasingly considered to be best addressed by focusing not on the unemployment rate but on the employment rate: that is the share of the population in work, with various definitions of the appropriate population according to whether the focus is on the ability to create jobs for the working-age population or on the problems of a high dependency ratio.
