Forbes:
Jobs up, unemployment rate up, here's why US economy has more room to grow
7 July 2017
At which point a little thumbnail sketch of what we're worried about in the US labour market. Traditionally the US has had very little long term unemployment. Sure, the general rate rose in recessions, fell in the booms, but there has always been a difference with the European labour markets as my old professor, Richard Layard, points out: The evidence for the first proposition is everywhere around us. For example, Europe has a notorious unemployment problem. But if you break down unemployment into short term (under a year) and long-term, you find that short-term unemployment is almost the same in Europe as in the U.S. – around 4% of the workforce. But in Europe there are another 4% who have been out of work for over a year, compared with almost none in the United States. The most obvious explanation for this is that in the U.S. unemployment benefits run out after 6 months, while in most of Europe they continue for many years or indefinitely.
Related publications
‘Welfare-to-work and the New Deal’, Richard Layard, Centre for Economic Performance Occasional Paper No.15, January 2001