Using new statistical analysis of the youth unemployment picture across Europe, this report assesses the different roles played by education and training, business behaviour and labour market institutions in young people’s transitions from compulsory schooling to suitable employment.
Youth unemployment has increased substantially in most European countries since the 2008–2009 financial crisis, reaching 5.5 million across the EU in the first quarter of 2013. However, it has been rising relative to the unemployment rate of older adults for far longe. Countries may be starting to recover from recession in economic terms, but this will not itself be enough to fix the problems of European youth labour markets.
The picture of youth unemployment as it was in 2007 looks very different from what we might have expected. Spanish youth, for instance, had a lower unemployment rate (16.2 per cent) than their German peers (18.3 per cent), and French youth unemployment, at 23 per cent, was among the highest in the EU. The recession changed this pattern enormously. By 2011 there were very high unemployment rates among young people in southern and eastern Europe – up to 45 per cent in both Spain and Greece, for instance. By contrast, a small group of countries in Western Europe, including Norway, the Netherlands and Germany, had youth unemployment rates of less than 15 per cent.
Countries also differ in terms of the speed at which young people tend to find a job after they complete their education. In 2009, average ‘transition lengths’ in the UK were, at less than four months, very low. At the opposite end of the spectrum, in southern European economies like Spain, it took young people more than eight months on average to find their first job.
- The evidence supports the consensus view that a high level of company involvement in the vocational education system is good for youth transitions and employment;
- but overreliance on businesses’ involvement in vocational education and training leaves the system vulnerable to their potential withdrawal.
- This weakness has been exacerbated by a changing youth labour market that has moved away from the types of firms and industries that traditionally offer high-quality initial vocational education and towards lower-skilled and casualised employment.
- Experience of work combined, either formally or informally, with education is also good for youth employment and the transition from education to employment – but too few young people are currently working while they study.
- Helping the young to stay in work is just as important as helping them to move into work in the first place.
- The structure of youth employment has shifted towards lower-skilled work.
- Neither strict employment regulation nor youth minimum wages can be blamed for high levels of youth unemployment.
The nature of youth transitions is diverse across different European countries, and is not only affected by short-term changes in the economy such as those experienced in the last five years. There are much deeper structural differences in how the education system prepares people for employment, the institutional underpinnings of the labour market, and the impact of the changing structure of the economy on both the types of job available and the workings of the education system.
In most European countries, youth unemployment rates have a long way to fall before they return to pre-crisis levels – and even then the problem of Europe’s malfunctioning transition systems will be far from solved. Fixing Europe’s youth unemployment issues therefore requires deeper reforms, not just short-term labour market programmes or changes to individual aspects of policy such as the dismantling of employment protection legislation (as is taking place in southern Europe). Specifically, Germany’s very low levels of youth unemployment, which are driven by the effectiveness of its ‘dual apprenticeship’ system, offer lessons for other countries.
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