Unemployment rates in many continental European countries have been consistently higher compared to the United States.The difference is mostly

Question

Quizplus · Accepted Answer

The persistent higher unemployment rates in continental European countries compared to the United States are mainly due to structural unemployment. This is caused by underlying features of the economy, such as rigid labor markets, generous social welfare systems, and high levels of regulation, which make it difficult for employers to hire and fire workers, especially during economic downturns. Cyclical unemployment might be a factor during recessions, but it does not explain the long-term difference between the two regions. Frictional and seasonal unemployment also do not play a significant role in the comparison. Monetary policy might affect unemployment rates in the short run, but it is not the main driver of the structural differences between the labor markets.

Unemployment Rates in Many Continental European Countries Have Been Consistently