In developed economies, the job recovery has been insufficient to recuperate the losses from the financial crisis. The employment rate (employment-to-population ratio) declined significantly after the financial crisis in developed economies and remains below the pre-crisis level, with the exception of Japan.
The overall decline in employment rates since the beginning of the financial crisis is explained by weak labour demand, but also by structural factors and lower labour force participation. A case in point is the United States, where the labour force participation rate is near its lowest level in the past 10 years due to population ageing, an increase in skills upgrading and a higher number of discouraged workers.
Employment has been improving slowly in developed economies, although significant challenges remain. While the unemployment rate in the United States has decreased to below 6 per cent, the unemployment rate in the euro area remains elevated, with several economies in the euro area featuring extremely high unemployment. In addition, youth unemployment rates remain high in several European countries, with 53 per cent in Spain, 44 per cent in Italy and 35 per cent in Portugal, for example.