In the last decade, the percent of the U.S. working age population that is employed has decreased by about 10 percent (from about 74 percent to about 68 percent) and the percent receiving government benefits such as Unemployment Insurance, disability, and food stamps has increased. This is a growing issue among American men, where 20 percent of men in their prime working age (25-54) and 49 percent of all men without a high school diploma are now not employed. Flat high school graduation rates and poor college graduation rates suggest that reduced rates of employment may continue, at least for the near future. Moreover, the labor market is increasingly polarized, with increases in both high-skill high-wage jobs and low-skill low-wage jobs but a relative decline in middle-wage jobs. In contrast, rates of employment in many European countries and in the EU as a whole have increased. (For Germany, from about 66 percent to about 71 percent; for the Netherlands, from about 72 percent to about 75 percent; and for the EU-15, from about 64 percent to about 66 percent). Many attribute these increases to changes in labor policies that seek to encourage participation in the labor force: (1) On the supply side, activating recipients of government benefits by tightening eligibility requirements, limiting the duration of benefit receipt, and mandating recipient participation job search and other work-first activities; (2) on the demand side, reducing employer costs for either hiring or keeping employees by providing job training, partially subsidizing employment through job sharing and short-time work, and lowering social security taxes for employers; and (3) changing program administration by consolidating programs and funding streams, decentralizing authority, outsourcing services, and incentivizing systems of financing and reimbursement. In the United States, as federal, state, and local governments continue to face difficult budget decisions, these European reforms may provide useful models for increasing employment. The panelists in this session will discuss various European programs and their applicability to the U.S.