Econometric Analysis of the Employment Rate for the E.U. Countries

Abstract In this paper we focus on analysing the evolution of the main relevant macroeconomic E.U. indicators by studying the changes occurred in the last years. We first apply a Hierarchical cluster analysis in order to classify the E.U. countries in two distinct groups. We then estimate a panel data model for each cluster, highlighting the indicators affecting the employment rate. The results indicate a positive influence of earning on employment rate for both clusters, while some particularities were also noticed. Further on, we build a simulation scenario to predict the employment rate for the E.U. member countries.