5 Labour force and employment

The gap in employment rates between Europe and the United States has been debated intensively during the recent decades (Auer 1996; Blank and Freeman 1994; EC 1999). ¹ Most studies comparing labour market development in Europe and the two other regions of the so-called world economic triad — the United States and Japan — find that the EU countries are characterised by significantly lower rates of employment and higher rates of unemployment than the two other regions (Appelbaum and Schettkat 1994; Cornitz 1988; EC 1999; Nickell 1997; Norwood 1988). Even more remarkable, the European overall rate of employment has declined radically over the last 25 years while it has increased in the United States. In the time period from the early 1970s to the mid-1990s, US non-farm employment expanded by more than 40 million people. In the same period Europe created slightly more than 6 million jobs (Auer 1995: 18).