The financial crisis and its aftermath have led to a decline in well-being for people across the developed world, but the impact has been more severe for those living in countries that share the euro than their counterparts in the U.S. or elsewhere, the Organization for Economic Cooperation and Development said Tuesday.
In terms of income, Americans weathered the crisis better than Europeans. U.S. real gross domestic product per capita—a broad measure of income—was almost back to its precrisis level at the end of 2012, and household disposable incomes—which includes benefits and payments provided by the state, as well as income from work and investments—were 2% above 2007 levels. However, in the euro zone, GDP per capita and household incomes were more than 4% lower. Within Europe, countries at the forefront of the euro zone’s fiscal and banking crises were hardest hit, with household disposable incomes in Greece down 10% in both 2010 and 2011.
The euro zone’s adoption of austerity as its main response to the crisis was the main reason for the gap with the U.S., since higher taxes and frozen benefit payments reduced disposable incomes.