On the face of it, Austria’s labour market performs very well, which is reflected in one of the lowest unemployment rates in the EU. However, while many of the euro area members have recently succeeded in reducing unemployment, the Austrian jobless rate has been on a clearly rising path since the early 1980s and in 2005 reached its highest level in the post-war era. In addition the unemployment statistics are distorted by the relatively low labour force participation of older workers and the comparatively long average duration of university education. Pressures on the labour market will increase due to recent and possibly future pension reforms aimed at raising employment among older workers, restructuring of universities resulting in shorter courses of study, staff cutbacks in public administration and continued immigration. In September 2005 the government responded to the situation by introducing a package of measures aimed in particular at reducing youth and female unemployment. However, more needs to be done.

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