DEMOGRAPHIC DEVELOPMENTS and EUROPEAN LABOUR MARKETS

This review indicates that the aging of the European labor force does not appear to have major impacts. Compositional effects on average outcomes such as productivity are generally small and, where they are larger, small policy changes can usually eliminate their effects. The impacts of aging on age-specific earnings and unemployment profiles are also likely to be small to moderate, varying with a country's wage setting institutions. European labor markets do not appear to be very well integrated and there is little evidence that they are moving significantly in that direction.