Danish Presidency of the Council of the European Union
“Youth: Employment and Inclusion in Times of Crisis”
26-27 April, 2012, Horsens, Denmark
Youth labour market developments during the jobs crisis: trends and policy challenges
Stefano Scarpetta
Deputy Director for Employment, Labour and Social AffairsOECD
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Structure of the presentation
Youth unemployment during the crisis: some key stylised facts
Structural challenges pre-existing the crisis
Short-term policy tools and long-term concerns
Conclusions
In general, youth face a much higher risk of unemployment than adults…
Youth and adult unemployment rate, 2011 Q4Percentages of labour force
AUS
AUT
BEL
CAN
CHL CZE
DNK
EST
FINFRA
DEU
GRC
HUN
ISL
IRLITA
JPNKOR
LUX
MEX NLDNZL
NOR
POL
PRT SVK
SVN
ESP
SWE
CHE
TUR
GBR
USA
0
10
20
30
40
50
60
0 5 10 15 20 25
Yout
h (a
ged
15/1
6-24
) une
mpl
oym
ent r
ate
Adults (aged 25 and over) unemployment rate
4 times as high
2 times as high
Equal
…and young people have been hard hit by the global crisis…
1. Not seasonally adjusted data for Chile, Iceland, Israel, Mexico and Switzerland.
Countries shown in ascending order of the youth unemployment rates at its peak.
Youth (age group 15/16-24) unemployment rates in 2007 Q4, at its peak and in 2011 Q4 Seasonally adjusted1 data, percentage of the youth labour force
CHE*NLD NOR
JPN
AUTDEU
MEX*AUS
KORDNK
CANCZE
ISL*SVN
ISR*NZL
LUX
USAGBR FIN BEL
TURFRA
CHL* POLSWE
HUN IRLPRT
SVK ITAEST
GRCESP
OECD G7
Euro ar
eaEU-27
0
10
20
30
40
50
60
2007 Q4 Peak Latest%
…and a many are facing long spells of joblessness
Source: OECD Labour Force Statistics Database.
Incidence of long-term unemployment1 among youth, selected G-20 countries, 20102
Percentage of total youth and adult unemployment (aged 15-24 and 25-54, respectively)
Korea
Mexico
Canad
a
Austral
ia
Sweden
Denmark
Turkey
United S
tates
United K
ingdo
mJap
anFran
ce
Europe
an Unio
n (21
)Spa
in
German
yIta
lyIre
land
0
10
20
30
40
50
60
Youth (aged 15/16-24) Prime-age (aged 25-54)%
1. Unemployed persons for one year or more.
2. 2008 for Korea and the Russian Federation.
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Labour market difficulties for youth go beyond unemployment
Youth neither in employment nor in education or training (NEET)
Percentage of youth aged 15-24
Source : OCDE (2010), Off to a good start! Jobs for Youth
NEET 2008 breakdown
Italy Spain United States
United Kingdom
OECD France Europe Germany0
5
10
15
20
25
Short-term unemployed
Long-term unemployed
Inactive
2011-Q1
The “quality” of jobs also matters…The share of working youth in temporary jobs is high in many EU countries
Icelan
d
Irelan
d
Austria
United
King
dom
Slovak
Rep
ublic
Hunga
ry
Denmark
Greece
Belgium
German
y
Netherl
ands
France
Finlan
dIta
ly
Poland
Portug
al
Sweden
Spain
0
20
40
60
80
100Voluntary Involuntary Other temporary
Source: Estimations based on the European Union labour force survey
Percentage of employed youth aged 15-24, by reason for temporary status, 2010
…as the matching of qualifications with the demand Many youth uth are over-qualified for their job, more so than adults
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Source: European Survey of Working Conditions, 2010
Percentage of employed in age group, 2010
Slovak
Rep
.
Estonia
Austria
Finlan
d
United
King
dom
Czech
Rep
.
German
y
Poland
Belgium
Norway
Sloven
ia
Hunga
ry
Sweden
France
Denmark
Luxe
mbourg
Irelan
d
Netherl
ands
Greece
Spain
Italy
Portug
al
Turkey
0.00
0.10
0.20
0.30
0.40
0.50
0.60
Over-qualified 25-34 Over-qualified 35-54
Key short-term challenges in the jobs crisis
– Prevent the current generation of school leavers from becoming a “scarred generation”• Job-search assistance programmes are found to be the
most-cost effective for young people who are job ready• Temporary extensions of the safety nets are vital to
prevent poverty among unemployed youth. But it is essential to apply “mutual obligations”
• Apprenticeships and other dual vocational education and training (VET) programmes can facilitate the school-to-work transition
• More in-depth options are needed for most disadvantaged youth – second-chance education opportunities are expensive but could be
effective in helping youth cumulating several disadvantages
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Going forward, a number of structural problems should be tackled
– Ensure that everyone leaving the education system has the skills needed on the labour market Basic “qualifications guarantee” up to a given age Promote second-chance learning opportunities for school
drop-outs – Make the transition from school to work less abrupt
More opportunities to work while studying Strengthen internships and apprenticeships for smoother
and efficient pathways from school to work– Address over-qualification
Better guidance to inform youth of work opportunities by field of study
Strengthen links between universities and the labour market
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Going forward, a number of structural problems should be tackled
– Addressing labour demand barriers for youth Reduce the cost of employing low-skilled youth,
through youth sub-minimum wages and/or lower social security contributions at low wages
Tackle discrimination at hiring (e.g. mentorship for graduates with an immigrant background)
Continue efforts to reduce labour-market duality – With particular focus on reducing the gap in
employment protection between temporary and permanent contracts
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Summing up
• Most OECD countries have acted swiftly during the crisis by scaling up resources for youth programmes.
• Strong need to keep the momentum and provide adequate resources for cost-effective youth measures. Actions are needed to prevent most school-leavers from being trapped in long spells of unemployment.
• In a long-term perspective, the target group for intensive assistance should be the hard-core group of youth cumulating disadvantages and at high risk of long-term unemployment and inactivity.
• It is therefore crucial that governments tackle the structural barriers this hard-core group faces in education and in the labour market.
• Better school guidance and improved links between the education sector and employers are also needed to tackle over-qualification.
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