Hidden Unemployment in Europe Which Countries Face the Most Labor Market Slack

While official unemployment rates across Europe appear relatively stable, a closer look reveals a growing problem of hidden unemployment workers who are underemployed, discouraged, or marginally attached to the labour market.

What Is Hidden Unemployment?

Hidden unemployment includes people who want to work but are not counted as unemployed under standard definitions. This group often consists of part-time workers seeking full-time jobs, discouraged workers who have stopped job hunting, and those in temporary or precarious employment.

Economists say these figures offer a more accurate picture of labour market health.

Countries With the Highest Labour Market Slack

According to recent data, several European countries show significant labour market slack despite low headline unemployment:

Southern Europe, including Spain and Italy, continues to struggle with underemployment and youth joblessness. Eastern European nations face workforce mismatches, with skills not aligning with available jobs.France shows elevated levels of part-time and temporary work, masking broader employment challenges.

Youth and Women Hit Hardest in Europe

Young people and women are disproportionately affected by hidden unemployment. Many are stuck in short-term contracts or involuntary part-time roles, limiting income stability and career progression.

High levels of labour slack reduce productivity, weaken consumer demand, and slow economic growth. Analysts warn that ignoring hidden unemployment could undermine Europe’s long-term competitiveness.

Governments face pressure to move beyond headline job numbers and address structural issues such as skills training, childcare access, and job quality.

Experts say targeted reforms are essential to convert underused labour into sustainable employment.

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