The impact of the economic crisis on EU labour markets: A comparative perspective

Using a crisis management index to rank the combined GDP and labour market performances of the EU's 27 Member States, the author considers why some countries performed better than others in managing the economic crisis over the period 2007-11. Based on empirical correlations and regression analysis, he concludes that the best performers share a coordinated market economy model: they feature a mix of economic policies and social institutions - including coordination mechanisms and tighter financial regulation - which helped to stabilize their levels of consumption and aggregate demand. Moreover, they do not have flexible labour markets and thus managed to maintain stable employment levels.