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has been cited by the following article:

• TITLE: On the Efficient Unemployment Rates in Europe

  AUTHORS: George Agiomirgianakis, Georgios Bertsatos, George Sfakianakis

  KEYWORDS: Europe, Labor Markets, Unemployment, Vacancies

  JOURNAL NAME: Theoretical Economics Letters, Vol.13 No.7, December 28, 2023

  ABSTRACT: Given the high historical records in employment and job vacancies, as well as the low historical records in unemployment rates in 2022, much has been said about the labor markets in Europe recently. In this paper, we investigate the condition of labor markets in European countries; examining whether European economies are at (near) full employment and more specifically, whether their labor markets are efficient, slack, or tight. To this purpose, the novel methodology of Michaillat and Saez (2022) is implemented, and we calculate the efficient unemployment rates u*. It appears that most of the 19 examined EU labor markets are persistently inefficiently slack over the whole sample period or below full employment. However, there are also a few exceptions as a couple of European countries have exhibited temporarily inefficiently tight labor markets, i.e. the labor market is over full employment. Finally, policy implications are provided to achieve efficiency in labor markets and close the unemployment gaps, focusing especially on tools from the supply side.