ABSTRACT
Introduction Unemployment has been one of Europe’s most persistent problems since the late 1970s, rising to over 11 per cent for the EC on average. Much of the emphasis has been on the labour market; for example, examining the role played by trade unions, the unemployment benefit regime or the tax incentives for effort. Now in the late 1990s many of these labour market-supply side explanations are beginning to look unconvincing in the face of continued high unemployment. In the UK for example, unions are much weaker, membership has fallen significantly, but unemployment remains high. Equally, pinning an argument on the benefit regime would suggest that equilibrium unemployment would have fallen in the 1980s.
