Over the period 1996-2006 the euro area witnessed an improvement in labour utilisation, which increased by an average of 0.4% per year 2 compared with almost no growth in the United States when defined as total annual hours worked divided by the working age population.
Labour utilisation therefore accounts for 0.4 percentage point of the euro area-US growth differential, “in favour” of the euro area. This improvement in labour utilisation in the euro area mainly reflects the significant increase observed in the euro area’s overall employment rate, from 58% in 1996 to 64.4% in 2006, accompanied by a decline in the aggregate unemployment rate from 10.7% to 7.9%.