Labour market participation rate in the euro area : performance and outlook, a long-term view

Abstract

This article analyses the trajectory and the main explanatory factors of changes in the labour market participation rate in the euro area in recent decades. First, these changes are compared with the United States, highlighting the extraordinary convergence that has taken place between the two areas owing to the momentum in the European labour market and the declining secular trend on the other side of the Atlantic. Second, the increase in participation in the euro area was led by females, particularly as a result of the higher probability of new cohorts joining the labour market against a background of significant socio-educational changes. In any event, in view of the demographic ageing in progress and the progressive exhaustion of the above-mentioned changes, the focus is on the need for specific policies aiming to raise labour participation of such population groups where there is still room to do so, i.e. older workers, in general, and women in countries where the gender gap is still large