Drivers of participation. Facts, figures & policy issues affecting the labor market

Lately, it seems that every economic policy discussion is dominated by the economic crisis, and understandably so. The severity of the current recession was unforeseen, and we still don’t know how deep it will be, what damage it will do or when it will be over. The European Union’s 2010 Lisbon employment targets, originally agreed upon in 2000 by the then fifteen Member States, are all affected by the recession in an important way. Just as some targets were about to be realized, the economic downturn washed away this possibility.

In this paper, we will examine the current European labor market, in relation to the economic crisis and the Lisbon targets. We will show that the targets will not be met in the short term, and that in the long term, they will not be sufficient to match labor demand. The aging population will continue to challenge our labor markets and underscore the need to increase labor participation post-crisis.