has been shown to lead to easier financing conditions for companies, to stronger entrepreneurship and to higher productivity. 2 reforms have generally been stepped up in the euro area. the oecd ’ s going for growth – which identifies and reviews progress on five key priorities in areas including labour, product markets, and tax and transfer systems as well as on financial sector reform for all oecd countries – shows an increase in the reform momentum in most euro area countries since the start of the crisis. results from the european commission ’ s labour market reforms database ( labref ) show a similar trend. in addition, the commission has assessed that at least “ some progress ” has been made on around two - thirds of the country - specific recommendations issued between 2011 and 2016. 3 even more important, an increasing number of empirical studies confirm the positive economic 1 / 5 bis central bankers'speeches impact of these reforms. for instance, in italy the introduction of a new permanent contract in 2015 led to a 5 % increase in new gross hires. 4 along similar lines, the spanish labour market reform is found to have increased the likelihood of exiting from unemployment to employment, while the direct transition from temporary to permanent positions is also eased by the reform. 5 meanwhile, evidence based on micro - data for portuguese firms shows that the liberalisation of product markets has lifted the productivity of downstream industries, even in the short run. and research has shown that even smaller - scale reforms and in particular those that can reduce the fixed costs of firms, such as measures to reduce red tape, can have significant positive effects. 6 these positive developments should not mask the long - term challenges that the euro area is still facing. our estimate of potential growth has declined substantially over the past two decades – in part due to the decline in multifactor productivity growth. the public sector debt ratio remains elevated, while our population is ageing. overall, structural indicators still reveal substantial gaps, both between euro area countries and relative to best performers. this matters not just for welfare and social cohesion within individual countries. it also matters for the functioning of monetary union. if countries have very different economic structures, their business cycles will diverge when faced with common shocks : some will return quickly to trend growth and full employment, while others will require a longer period of recession for prices and quantities to fully adjust. by contrast, better, mutually compatible economic structures among countries support growth on a sustainable basis and produce less dispersion when recessions hit. reforms which

saving and investing than their predecessors. young people are living with their parents longer, which helps conserve their limited resources but likely places a strain on their parents ’ budgets. also troubling is research showing that many consumers who should be saving for retirement instead have been forced to take hardship withdrawals from their 401 ( k ) plans. according to an analysis by vanguard, hardship withdrawals increased by 49 percent between 2005 and 2010. other types of withdrawals increased by 56 percent. the increasing use of retirement savings for other purposes is particularly troubling given that the responsibility for saving for retirement has shifted away from employers to individual employees. having a secure retirement is a high priority and a significant long - term goal for many americans, so it is especially important that they have an understanding of what level of resources they will need in retirement and the investment options available to them. bis central bankers ’ speeches individuals who are approaching retirement age, in particular, are being forced to make changes to their plans for retirement. social security administration data indicate that in 2009 and 2010, the proportions of men and women claiming social security benefits at age 62 began to rise again after several years of decline. workers have either chosen to leave the work force early in the last few years or, more likely, have applied for social security benefits as early as possible because of the weak job market. 1 opting to receive a smaller social security annuity earlier in life is just one of many hard decisions americans have had to make in order to balance their short - term and long - term financial needs. the recession has clearly disrupted the future expectations and financial plans of millions of americans, but even in the best of circumstances, effectively managing one ’ s longevity risk requires a level of financial knowledge well beyond that required of any previous generation. the pending retirement of baby boomers means that millions of older households will need to assess pension distributions and make decisions about payout options for their defined benefit plans. those with defined contribution plans will need to make decisions about the purchase of annuities or rates of withdrawal from these plans. younger workers, a majority of whom will not have pensions, will need to make complicated decisions about their target amounts of retirement savings, portfolio allocation, and asset management using 401 ( k ) plans, individual retirement accounts, and other, non - tax advantaged, accounts. financial products have also become more complex, adding a significant degree of difficulty to the important task of managing one ’ s own retirement savings. consumers need information and