One explanation for the persistently high unemployment rates in Europe during the 1990s is
A)hysteria over downsizing
B)the persistently high price levels there
C)legislation that makes it difficult to lay off workers in Europe
D)a continuing recession that lasted most of the decade
E)that the natural rate of unemployment is too low in Europe

Question

Quizplus · Accepted Answer

Legislation that makes it difficult to lay off workers in Europe is a factor that contributed to the persistently high unemployment rates. The high cost of dismissing a worker, along with generous unemployment benefits, can disincentivize employers from hiring in the first place, leading to higher unemployment rates.

One Explanation for the Persistently High Unemployment Rates in Europe