INEQUALITY, UNEMPLOYMENT AND CONTEMPORARY EUROPE

Unemployment penalizes people well beyond the obvious financial aspect of income loss, a loss which transfer payments can offset. The unempl oyed are liable to suffer psychological harm, social exclusion and fam ily breakdown, and loss of skills, motivation and political voice. The se entail major social costs when unemployment is massive, as it is no w in many European countries. Related but even less apparent costs inc lude exacerbated racial and gender inequality, technological conservat ism and the premature retirement of able-bodied adults. Thus, Sen argu es, the penalties of unemployment are enormous and reducing unemployme nt would contribute to solving many of Europe's social ills.