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While unemployment rates in Europe declined after the global financial crisis until 2018/2019, the incidence of long-term unemployment, the share of people who have been unemployed for >1 year to the total unemployed, remained high. Moreover, the COVID-19 pandemic could aggravate the long-term unemployment. This paper explores the factors associated with long-term unemployment in European countries using a panel of 25 European countries over the period 2000–2018. We find that skill mismatches, labor market matching efficiency, and labor market policies are associated with the incidence of long-term unemployment. Among the different types of active labor market policies, training and startup incentives are found to be effective in reducing long-term unemployment.

Although a public long-term care (LTC) program is a potentially important factor for the labor supply of female informal caregivers, there are only a handful of individual-level studies on this topic and the macro-level impacts of LTC programs are still largely unknown. Exploiting the introduction of nationwide long-term care insurance (LTCI) in Japan and utilizing a synthetic control method, we examine how LTCI introduction has altered the trends of public expenditures on in-kind benefits for the elderly, public health expenditure, and female labor force participation. The estimation results using the panel data of OECD countries (1980–2013) suggest that LTCI introduction substantially increased the in-kind benefits for the elderly by around one percentage point of GDP 10 years after LTCI introduction, but we do not find a positive effect on the labor force participation for middle-aged women. The fact that we do not observe any positive LTCI effects on middle-aged female labor force participation on a macro level implies that positive LTCI effects on female labor supply observed in some previous microlevel studies may be cancelled out by some other factors or are small enough to be detected under a general-equilibrium setting.

Using firm-level data from a large-scale European survey among 20 countries, we analyse the determinants of firms using short-time work (STW). We show that firms are more likely to use STW in case of negative demand shocks. We show that STW schemes are more likely to be used by firms with high degrees of firm-specific human capital, high firing costs, and operating in countries with stringent employment protection legislation and a high degree of downward nominal wage rigidity. STW use is higher in countries with formalised schemes and in countries where these schemes were extended in response to the recent crisis. On the wider economic impact of STW, we show that firms using the schemes are significantly less likely to lay off permanent workers in response to a negative shock, with no impact for temporary workers. Relating our STW take-up measure in the micro data to aggregate data on employment and output trends, we show that sectors with a high STW take-up exhibit significantly less cyclical variation in employment.

Non-contributory pensions are becoming increasingly prevalent worldwide. As their effects are likely to be context-dependent, evaluating their effects in a wide range of settings is important for establishing the external validity of the non-contributory pension literature. We use a new monthly panel dataset and a difference-in-differences strategy to study the effect of a new non-contributory pension in Singapore (the Silver Support Scheme or SSS) on labour supply, work expectations, private cash transfers, and expenditure, 1 year after its implementation. We find no evidence that receiving SSS payouts led to a fall in labour supply, work expectations, or the receipt of private cash transfers in the first year after SSS implementation—our estimated effects for these outcomes are statistically insignificant and are either negative but close to zero or positive. Our point estimates of the effects of receiving SSS payouts on expenditure are positive but too imprecise to allow us to make any definitive conclusions. Lastly, we do not find evidence of anticipatory effects among younger individuals who are not age-eligible for payouts yet. These results, when coupled with our finding in a companion paper that the SSS improved recipients’ subjective well-being, suggest that the SSS was successful in improving recipients’ welfare without substantial crowding out of private transfers or changes in labour market behaviour of current and future SSS beneficiaries.

Increasing evidence shows that in the aftermath of the global financial crisis, in the euro area, the relationship between price inflation and economic slack became stronger. Instead, there is no clear evidence of a strong(er) relationship between wage inflation and unemployment. In this paper, we estimate a Phillips curve with time-varying coefficients separately for Italy, Spain, Germany and France and we find that, with the exception of Germany, after the global financial crisis, the sensitivity of hourly wage changes to labour market slack increased. Second, by the use of administrative microdata, available only for Italy, we relate daily wage changes to the local unemployment rate. The results confirm the steepening of the Phillips curve after 2008, also when controlling for composition effects.