THE PROBLEM WITH THE YOUTH UNEMPLOYMENT IN THE REPUBLIC OF MOLDOVA AND EUROPEAN MEMBER STATES AND THE

MEASURES FOR ITS OVERCOMING Tatiana Colesnicova PhD, IEFS, Moldova Aurelia uu-urcan PhD, Associate Professor, Academy of Science of Moldova Email:aurasofia@mail.ru Abstract: The comparable trends of the youth unemployment rates in the Republic of Moldova and EU-27 during the period 2002-2011 are analyzed in the paper. The main measures for the regulation of this phenomenon in the Republic of Moldova are proposed by the author in the context of integration in the European Union. Keywords: youth unemployment rate, Republic of Moldova and EU-27, comparative analysis, measures for overcoming youth unemployment.

INTRODUCTION
Young people face specific challenges in accessing the labour market and this lowers their chances of finding decent employment [7]. The main difficulties are: (a) a higher chance of losing their jobs during economic downturns (last in, first out); (b) specific barriers to entry, often stemming from lack of experience; (c) path dependence: early unemployment increases the likelihood of subsequent unemployment.

RESULTS AND DISCUTIONS

According to Global employment trends for youth: 2012 published by ILO: The global youth unemployment rate has proved sticky, and remained close to its crisis peak. At 12.6% in 2011 and projected at 12.7% in 2012, the global youth unemployment rate remains at least a full percentage point above its level in 2007. Nearly 75 million youth are unemployed around the world, an increase of more than 4 million since 2007 [1, p.11]. In many countries, this grim unemployment picture is further aggravated by the large number of youth engaged in poor quality and low paid jobs, often in the informal economy. Many youth are poor or underemployed: some 228 million working poor youth in the world, live on less than the equivalent of US$ 2 per day [2]. According to The Guardian, in the European Union 27 countries (EU-27): Three out of 10 people currently losing their jobs are under the age of 24, although the young represent only a tenth of the labour force. There are 5.5 million 15- to 24year-olds without a job in the EU, a rate of 21.4%, up from 15% in early 2008. But the overall figures mask huge national and regional disparities. While half of young people in Spain and Greece are out of work, in Germany, Austria and the Netherlands it is only one in 10. In a further six EU countries, youth unemployment is around 30%. Of those in work, 44% are on temporary contracts [5]. Youth unemployment rates are generally much higher than unemployment rates for all ages. High youth unemployment rates do reflect the difficulties faced by young people in finding jobs. However, this does not necessarily mean that the group of unemployed persons aged between 15 and 24 is large because many young people are studying full-time and are therefore neither working nor looking for a job (so they are not part of the labour force which is used as the denominator for calculating the unemployment rate). For this reason, youth unemployment ratios are calculated as well, according to a somewhat different concept: the unemployment ratio calculates the share of unemployed for the whole population (according to Eurostat). As the Republic of Moldova (RM) aspires to become an official European Union candidate country, it is interesting to analyze the youth unemployment rate with the same indicator of EU-27. Figure 1 shows that youth unemployment rate in the RM are much lower than youth unemployment rate in the EU; they have however also risen since 2008 due to the effects of the recent crisis on the labour market.

Figure 1: Evolution of the youth unemployment rate in the RM and EU-27 Source: created by the authors according to the EU-27 data from Eurostat Database; Moldovas data from NBS RM Database In 2011, the EU-27 youth unemployment rate stood at 21.4%, 0.5 p.p. higher than in 2010 and at its highest rate for the past 10 years. This shows that young people have borne the brunt of the crisis, with unemployment disproportionately affecting the 1524 year olds. One out of five young people in the labour force (21.4%) was not employed, but was available and looking for a job. Table 1 presents the distribution of annual average unemployment rates for both men and women in the Republic of Moldova and EU-27 for the 15-24 age groups in the period 2002-2011. Table 1. The annual average unemployment rates for both sexes by the age group less than 25 years in RM and EU-27, %

Country/Year Republic of Moldova EU-27 Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 15.2 18.1 19.7 18.7 17.1 14.4 11.2 15.4 17.8 14.9 17.8 17.7 35.2 16.9 7.4 9.9 17.6 8.4 26.8 22.2 17.2 22.0 8.0 23.6 23.0 7.0 12.7 17.1 5.4 6.7 42.5 14.3 21.0 16.5 38.1 21.0 16.4 18.6 21.8 26.6 18.6 9.2 11.6 20.6 8.7 26.8 22.6 19.1 23.6 8.8 19.9 24.8 11.2 13.4 17.4 7.3 8.1 41.9 17.8 19.5 17.3 33.8 21.8 17.4 19.0 21.2 24.3 21.1 8.2 13.8 21.7 8.7 26.9 22.0 20.8 23.5 10.2 20.0 22.5 16.4 15.5 16.6 9.0 9.7 39.6 18.9 21.0 16.1 33.4 20.7 20.4 18.8 21.5 21.0 19.3 8.6 15.6 15.9 8.6 26.0 19.7 21.3 24.0 13.9 15.0 15.7 14.6 19.4 16.8 9.4 10.3 36.9 19.8 19.7 15.9 30.4 20.1 22.6 17.5 20.5 18.3 17.6 7.7 13.8 12.0 8.6 25.2 17.9 22.4 21.6 9.9 13.5 9.8 15.5 19.1 15.9 7.5 9.1 29.8 20.1 21.0 13.9 27.0 18.7 21.5 15.7 18.8 14.1 10.8 7.5 11.9 10.0 8.9 22.9 18.2 19.8 20.3 10.2 11.9 8.2 15.6 18.0 13.9 7.0 8.7 21.7 20.4 20.1 10.1 20.6 16.5 19.2 15.8 18.0 11.9 9.9 8.0 10.6 12.0 13.3 22.1 24.6 19.3 21.3 9.0 14.5 13.4 17.3 19.9 12.2 6.3 8.0 17.3 20.2 18.6 10.4 19.3 16.5 20.2 20.1 21.9 15.1 16.7 11.8 11.2 27.5 24.4 25.8 37.8 23.9 25.4 13.7 36.2 29.2 16.5 26.5 14.4 7.7 10.0 20.6 24.8 20.8 13.6 27.6 21.5 25.0 21.1 22.4 21.8 18.4 14.0 9.9 32.9 27.8 32.9 41.6 23.7 27.8 16.6 37.2 35.1 15.8 26.6 13.1 8.7 8.8 23.7 27.7 22.1 14.7 33.9 21.4 25.2 21.4 18.7 25.0 18.1 14.2 8.6 22.3 29.4 44.4 46.4 23.0 29.1 22.4 31.0 32.9 16.4 26.1 13.8 7.6 8.3 25.8 30.1 23.7 15.7 33.6 20.1 22.9

United Kingdom

12.0 12.2 12.1 12.8 14.0 14.3 15.0 19.1 19.6 21.1

Source: created by the authors according to the EU-27 data from Eurostat Database; Moldovas data from NBS RM Database Countries differences in the unemployment rate for young people are however very marked. In 2011, the average unemployment rate for young people aged between 15 and 24 in the EU-27 were extremely high in Spain (46.4%), in Greece (44.4%). High rates were also recorded in Slovakia (33.6%), in Lithuania (32.9%), in Ireland (29.4%) and in Italy (29.1%). The lowest youth unemployment rates were recorded in Netherlands (7.6%), in Austria (8.3%) and Germany (8.6%). The gap between the lowest and the highest values of youth unemployment rates was more than 38 p.p. In the Republic of Moldova the average unemployment rate for young people in 2011 was 14.9%. The gap between youth jobless rate in the Republic of Moldova and EU-27 is 7.5 p.p. Table 2. The annual average unemployment rates for males by the age group less than 25 years in RM and EU-27, %

Country/Year Republic of Moldova EU-27 Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 17.5 17.6 17.2 38.3 16.7 7.3 11.8 14.3 9.1 19.9 17.9 16.9 : 8.0 21.9 23.1 5.8 13.2 17.5 5.7 6.4 41.9 12.7 20.7 15.0 39.7 21.2 17.3 19.0 18.5 22.2 29.4 18.4 9.2 13.9 16.9 9.4 18.9 18.9 18.5 : 8.7 18.3 22.5 9.9 13.8 16.9 7.7 7.3 40.9 16.0 19.1 15.6 35.0 21.9 18.2 21.5 18.7 20.2 25.5 22.3 8.9 15.3 21.2 9.1 19.1 18.2 20.0 20.6 9.0 17.6 22.3 12.0 16.2 15.9 9.1 9.3 37.7 17.4 22.4 13.9 34.9 22.0 21.3 19.1 18.7 21.0 22.0 19.4 8.6 16.9 16.6 9.2 18.7 16.7 20.2 21.5 13.2 13.0 16.0 12.6 19.6 17.2 9.5 10.7 35.7 17.6 20.5 14.5 31.2 20.6 22.6 18.0 17.2 18.8 17.7 16.7 7.9 14.8 10.0 8.9 17.7 15.0 21.1 19.1 8.9 11.6 10.0 16.0 18.6 17.2 6.7 8.9 28.3 18.8 21.6 11.6 26.6 19.0 21.0 14.9 15.4 17.1 13.5 10.6 7.6 12.6 12.1 9.8 15.7 15.2 19.1 18.2 10.9 12.4 7.0 13.8 17.6 15.8 6.3 8.3 20.0 17.5 21.1 9.4 20.6 16.4 18.7 10.2 15.8 17.3 12.8 9.9 7.4 11.0 12.6 16.1 17.0 23.7 19.2 18.9 8.7 14.5 12.6 13.4 19.1 13.7 6.3 7.9 15.2 17.2 18.8 9.9 18.6 17.1 19.7 15.8 21.2 21.5 16.7 16.7 13.3 12.5 31.7 31.1 19.4 39.1 24.7 23.3 13.5 40.2 35.1 15.0 28.2 15.9 8.1 10.5 20.2 24.1 21.2 13.8 27.9 24.1 26.3 20.0 21.8 22.4 22.8 18.3 16.1 10.9 35.2 34.0 26.7 43.2 23.0 26.8 16.0 38.0 38.5 17.2 27.9 14.1 8.8 8.9 22.4 27.4 22.3 15.2 34.8 23.8 26.7 14.2 21.9 18.7 26.0 18.2 15.7 9.3 23.7 35.3 38.5 48.2 22.0 27.1 23.3 31.3 34.6 14.5 27.2 13.7 7.5 7.9 23.6 28.7 23.7 15.0 33.2 21.8 23.8

United Kingdom

13.7 13.8 13.3 14.4 15.7 15.8 17.0 21.8 21.5 23.5

Source: created by the authors according to the EU-27 data from Eurostat Database; Moldovas data from NBS RM Database;: - dates are not available Table 2 presents the distribution of unemployment rates for males in the Republic of Moldova and EU-27 for the 15-24 age group during last 10 years. In 2011, the average unemployment rate for young males aged between 15 and 24 in the EU-27 were extremely high in Spain (48.2%), in Greece (38.5%). High rates were also recorded in Ireland (35.3%), in Lithuania (34.6%), in Slovakia (33.2%), and in Portugal (28.7%). The lowest youth unemployment rates were recorded in Netherlands (7.5%), in Austria (7.9%) and Germany (9.3%). The gap between the lowest and the highest values of youth unemployment rates of males was about 40.7 p.p. Table 3. The annual average unemployment rates for females by the age group less than 25 years in RM and EU-27, % Country/Year Republic of Moldova EU-27 Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 12.6 18.1 18.3 31.4 17.3 7.5 7.6 22.5 7.6 35.3 28.2 17.6 : 8.0 25.9 22.9 8.6 11.9 16.6 5.1 7.1 43.3 16.5 21.3 18.6 36.2 20.9 15.4 17.1 18.7 21.3 23.3 18.9 9.2 8.9 26.0 7.8 36.6 27.9 19.9 : 8.8 22.1 28.1 12.5 12.8 17.9 6.9 8.9 43.1 20.1 20.1 19.8 32.3 21.6 16.5 17.6 19.3 22.4 22.8 19.5 7.4 12.2 22.4 8.3 36.3 27.3 21.7 27.2 11.5 23.4 22.7 21.5 14.4 17.4 8.9 10.1 41.9 20.8 18.9 19.2 31.7 19.4 19.5 18.3 19.0 22.1 19.7 19.1 8.6 14.1 14.9 7.9 34.8 23.4 22.7 27.4 14.7 17.9 15.3 17.2 19.0 16.2 9.4 9.9 38.3 22.5 18.4 17.8 29.4 19.5 22.5 15.9 18.0 22.6 18.9 18.7 7.5 12.6 14.7 8.2 34.7 21.6 23.9 25.3 11.1 16.3 9.6 14.9 19.8 14.3 8.4 9.3 31.6 21.7 20.2 16.8 27.5 18.4 22.0 13.8 16.1 20.9 14.8 11.0 7.4 11.1 7.1 7.8 32.1 21.9 20.7 23.3 9.4 11.2 10.0 18.2 18.6 11.6 7.8 9.1 23.8 24.0 18.7 11.2 20.7 16.6 19.8 12.4 15.8 18.7 10.5 10.0 8.7 10.0 11.3 10.3 28.9 25.8 19.4 24.7 9.4 14.6 14.6 22.0 20.9 10.4 6.4 8.2 19.9 23.8 18.3 11.3 20.3 15.8 20.8 15.0 18.9 22.5 12.8 16.7 10.3 9.8 22.0 17.3 33.9 36.4 23.0 28.7 13.9 30.9 21.6 18.2 24.2 12.5 7.3 9.4 21.2 25.5 20.1 13.4 27.1 19.0 23.7 15.0 20.2 22.4 20.3 18.5 11.8 8.8 30.0 21.5 40.6 39.8 24.5 29.4 17.2 36.3 30.8 14.3 24.9 11.9 8.6 8.8 25.4 28.0 21.8 13.8 32.6 19.0 23.7 15.8 20.8 18.7 23.6 18.0 12.7 7.8 20.7 23.3 51.5 44.4 24.1 32.0 21.5 30.6 30.4 18.6 24.6 13.8 7.8 8.8 28.9 31.7 23.8 16.8 34.3 18.4 22.0

United Kingdom

10.2 10.5 10.7 11.1 12.0 12.5 12.7 16.0 17.3 18.4

: - dates are not available Source: created by the authors according to the EU-27 data from Eurostat Database; Moldovas data from NBS RM Database In the Republic of Moldova the average unemployment rate for young males in 2011 was 14.2%. The gap between youth jobless rate of males in the Republic of Moldova and EU-27 is 7.7 p.p. Table 3 presents the distribution of unemployment rates for females in the Republic of Moldova and EU-27 for the 15-24 age groups during last 10 years. In 2011, the average unemployment rate for young females aged between 15 and 24 in the EU-27 were extremely high in Greece (51.5%), in Spain (44.4%). High rates were also recorded in Slovakia (34.3%), in Italy (32.0%), in Portugal (31.7%) and in Lithuania (30.4%). The lowest youth unemployment rates for females were recorded in Netherlands (7.8%), in Austria (8.8%) and Germany (7.8%). The gap between the lowest and the highest values of youth unemployment rates of females was 43.7 p.p. In the Republic of Moldova the average unemployment rate for young females in 2011 was 15.8% (high on 1.6 p.p. than for Moldovas males). The gap between youth jobless rate of females in the Republic of Moldova and EU-27 is 5.0 p.p. The measures for overcoming youth unemployment in the EU and RM: In many important acts note the purpose and measures to overcoming the youth unemployment. The Millennium Development Goals notes that it is necessary to achieve full and productive employment and decent work for all, including women and young people. The European Commission has announced a plan to tackle youth unemployment in the 27 EU member countries. The Youth Opportunities Initiative promises to create 370,000 work placements across the EU. It proposes a youth guarantee to put young people in work, study or training within four months of leaving school [4]. It will be paid for by 30bn euro ($39bn; 25bn) from the European Social Fund. "The current situation for young people in many EU countries today is becoming dramatic," said Laszlo Andor, EU commissioner for employment, social affairs and inclusion. "Without decisive action at EU and national level we risk losing this generation, with a heavy economic and social cost" [4]. The Commission estimates that the cost to society of youth unemployment is around 2bn euro per week or 1% of the entire EU's economic output. The ILO helps member States with the following steps:

Figure 2. Country-level model for technical assistance on youth employment Source: ILO: Youth Employment Programme [2, p.34]

CONCLUSIONS AND RECOMMENDATIONS:

Homegrown solutions and policy recommendations: Moldova's problem with the youth unemployment is specific. The analysis show that youth unemployment rate in the Republic of oldova is not high in comparison with the EU countries due to influencing of such phenomena as mass youth emigration from the country. Many youth citizens are not officially registered in Employment Agency. Unemployment payments are low. The main solutions for the Republic of Moldova include the reforms to the educational system, which is uncoordinated with labour marker requires and lower taxes to help businesses grow. The following measures can be taken among priority directions of the state policy with the purposes to overcoming the youth unemployment [6]: (a) creation of new jobs by opening new or modernizations of the old enterprises; (b) stimulation of development of small and medium enterprises; (c) implementation of balanced investment and tax policy, development of credit system for youth; (d) making the average wages and unemployment benefits equal with the cost of living; (e) introduction the tax benefits to the enterprises granting jobs to the most vulnerable categories of the population, including youth; (f) assistance to young specialists in their adaptation and integration on the labour market; (g) creation of the technique of long-term forecasting of a market demand; (h) concentration of efforts in overcoming the unemployment in rural areas; (i) placement in a free press of the information on existing vacancies; (j) creation of active personnel services at the country enterprises.

United efforts of the state, Employment Agencies, personnel services of employers, and public organizations can lead to positive results in this field.

Reference: 1. Global Employment Trends for Youth 2012. ILO: Geneva. May 2012, p.55,
ISBN 978-92-2-126325-8 (print), http://www.ilo.org/wcmsp5/groups/ public/--dgreports/---comm/documents/publication/wcms_180976.pdf 2. Youth employment programme. http://www.ilo.org/employment/ areas/youthemployment/lang--en/index.htm 3. The Youth Employment Crisis: Time For Action. ILO Report. 2012. ISBN 97892-2-126345-6 (print). p.40 EU launches youth employment plan. BBC. News Business. 20 December 2011. http://www.bbc.co.uk/news/business-16274113 4. TRAYNOR IAN. Unemployment of Europe's young people soars by 50%. The guardian, Monday 16 April 2012, http://www.guardian.co.uk/ business/2012/apr/16/european-youth-unemployment-soars 5. COLESNICOVA T. Comparative analysis of unemployment rates between the Republic of Moldova and EU-27: challenges and perspectives. n: Analele institutului de Economie, Finane i Statistic. Chiinu: IEFS, 2012. 6. CLARK K., SUMMERS L. The dynamics of youth unemployment. The Youth Labour Market Problem: Its Nature, Causes and Consequences, Freeman, R. and D. Wise (eds.), University of Chicago Press, 1982, pp.199234