The Effect of Long-term Unemployment

The proportion of long-term unemployed is rising and this may have implications that will persist long after the economy recovers, says Prof. Núria Mas. Older workers may effectively drop out of the labour market while younger ones may emigrate or join the shadow economy. In Spain the long-term unemployed make up 40% of the total whereas in Germany they have mitigated the worst effects by reducing working hours rather than opt for wholesale redundancies.