Already before the crisis, the employment trend in Europe has been downwards for an extended period. The EU27 area has lost 5.8 million manufacturing jobs since the year 2000. This persistent weakness on the labour market and the slow relocation of labour into potential growth sectors is harmful to both labour productivity and labour supply.
The loss of young people’s labour input, in particular, will have long-lasting consequences. Restructuring is a factor behind the perhaps strikingly large and persistent employment consequences of deep recessions Implies mismatches evidenced by outward shifts of Beveridge curves As Reinhart and Rogoff (2009) point out, restructuring during deep recessions is a factor behind the large and persistent employment consequences of deep recessions.