Why Europe's Young Are Leaving

France is holding presidential and parliamentary elections in a few weeks. But plenty of young French people have already voted--with their feet. The number of French living abroad has risen 30% since 1995, as hundreds of thousands of twenty- and thirtysomethings seek their fortunes in London, New York, and Silicon Valley. No wonder they're leaving: The unemployment rate for French people 25 and under is nearly 21%. And those with jobs are having to pay for the generous pensions of a fast-growing retiree population.

It's a big problem for France's young people, and they're not alone. Across Europe, even during the economic boom of the late 1990s, youth unemployment never got below 15%. Now it's rising again, and a pension crisis looms as baby boomers get set to retire.

Europe needs to get moving fast to spur job creation and economic opportunity for its young people. It has made an encouraging start, with a wave of deregulation and tax-cutting in the past few years. But there's much left to do. Germany, for example, needs to loosen rigid labor laws, while Italy should get on with privatization.

France offers a lesson in what not to do. Its 35-hour workweek law has already cost the government some $20 billion in subsidies to companies designed to create 300,000 jobs, while clobbering small businesses that have created 1.6 million jobs since 1996. As that experience shows, Europe won't help its young people by offering them thinner slices of the same economic pie. The pie has to get bigger.

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