Beruflich Dokumente
Kultur Dokumente
July 2013
Forschungsinstitut
zur Zukunft der Arbeit
Institute for the Study
of Labor
Holger Hinte
IZA
Ulf Rinne
IZA
IZA
P.O. Box 7240
53072 Bonn
Germany
Phone: +49-228-3894-0
Fax: +49-228-3894-180
E-mail: iza@iza.org
The IZA Policy Paper Series publishes work by IZA staff and network members with immediate
relevance for policymakers. Any opinions and views on policy expressed are those of the author(s)
and not necessarily those of IZA.
The papers often represent preliminary work and are circulated to encourage discussion. Citation of
such a paper should account for its provisional character. A revised version may be available directly
from the corresponding author.
ABSTRACT
Youth Unemployment in Europe:
What to Do about It?*
Youth unemployment has become a severe economic and societal problem in many
European countries. This paper gives an overview of the current situation and assesses
different policy options. It emphasizes the role of stronger intra-EU mobility of young workers,
policies to make vocational training systems more effective and to adjust employment
protection as well as activating labor market policies. However, short-term remedies are not
available, despite the fact that the EU has announced massive European initiatives. Rather,
European countries should take the opportunity of the crisis to implement forward-looking
structural reforms.
JEL Classification:
Keywords:
Corresponding author:
Werner Eichhorst
IZA
Schaumburg-Lippe-Str. 5-9
53113 Bonn
Germany
E-mail: eichhorst@iza.org
The authors would like to thank Florian Buhlmann and Moritz Voelkerling for their able research
assistance.
Eichhorst/Hinte/Rinne (2013):
The dimension of the problem can be illustrated by some statistics: Currently in Spain
there are about one million people aged between 15 and 24 out of employment, in Italy
more than 600,000. There as well as in Greece and Portugal the number of young
people out of employment has significantly increased during the past five years (see
Figure 1, p.3). Adding the figures of only these countries especially affected by the
financial and economic crisis, one can observe an increase of nearly 800,000 persons to
about 2 million unemployed people aged 25 or younger. The situation in the United
Kingdom is problematic as well: The country is far away from its relatively low
unemployment rates continuing just till the middle of the last decade. A persistent
increase starting in 2004 has nearly doubled the number of unemployed young people
from 500,000 to nearly one million in 2012; the growth was 250,000 people from 2008
to 2012 alone. 1 The increase of unemployed adolescents in France was in fact lower in
the same period, but with a number of 700,000 young people without employment
stagnating for already four years, the country faces severe problems, too.
Unemployment among young people in the Netherlands has significantly
increasedalbeit on a much lower level. In Sweden it has been persisting for already
four years on a historic high level. Ireland recently managed to lower its youth
unemployment, but the increase since 2008 was all the more rapid. Although
unemployment among young people in Poland today ranges clearly below its peak
during the period from 2000 to 2006, it continues to rise measurably since its low in
2008. In contrast, Germany is the only country in the EUexcept from recently
decreasing rates in the Balticswhere youth unemployment has been continuously
decreasing. Actually, the number of unemployed young people was more than halved,
from its peak in 2005 to less than 370,000 people today. Notwithstanding, in the old
See, e.g., Bell and Blanchflower (2010, 2011a, 2011b) who analyze the situation of youths in the
United Kingdom. Their analyses also involve comparisons to the United States.
Page 1
Eichhorst/Hinte/Rinne (2013):
The European Foundation for the Improvement of Living and Working Conditions assumes
that the number of discouraged adolescents across the EU has doubled to more than 700,000
in the period from 2008 to 2011 alone (Eurofound, 2012). Because of complete inactivity they do
not appear in any official unemployment statistics.
Page 2
Eichhorst/Hinte/Rinne (2013):
Source: Eurostat.
Notes: In thousands. Youth unemployed aged 15 to 24 years.
Source: Eurostat.
Notes: In percent of youths aged 15 to 24 years.
Page 3
Eichhorst/Hinte/Rinne (2013):
Page 4
Eichhorst/Hinte/Rinne (2013):
Source: Eurostat.
Notes: In percent of youths aged 15 to 24 years.
Source: Eurostat.
Notes: In percent of youths aged 15 to 24 years.
Page 5
Eichhorst/Hinte/Rinne (2013):
Source: Eurostat.
Notes: In percent of youths aged 15 to 24 years.
Page 6
Eichhorst/Hinte/Rinne (2013):
Page 7
Eichhorst/Hinte/Rinne (2013):
See for international evidence Card et al. (2010). For an evaluation of job creation schemes in
Germany, see Caliendo et al. (2008). Using such measures for young people is also seen very
critical (Caliendo et al., 2011).
Page 8
Eichhorst/Hinte/Rinne (2013):
4
5
See Constant and Rinne (2013) for an analysis of information deficits in the German context.
See Parey and Waldinger (2011) for mobility enhancing effects of the ERASMUS program.
Page 9
Eichhorst/Hinte/Rinne (2013):
Page 10
Eichhorst/Hinte/Rinne (2013):
Page 11
Eichhorst/Hinte/Rinne (2013):
For more details on the single contract, see Cahuc and Kramarz (2005) for France, Dolado
and Felgueroso (2010) for Spain, and Boeri and Garibaldi (2008) for Italy.
Page 12
Eichhorst/Hinte/Rinne (2013):
See Heyer et al. (2012) for a general overview. Schneider et al. (2007) and Caliendo et al. (2011)
provide assessments of measures to promote vocational training in Germany. Caliendo and
Knn (2011) evaluate start-up subsidies for the unemployed in Germany.
10
See Card et al. (2010) for international evidence and Caliendo et al. (2011) for evidence from
Germany.
Page 13
Eichhorst/Hinte/Rinne (2013):
11
Page 14
Eichhorst/Hinte/Rinne (2013):
Conclusions
Against the backdrop of the crisis, youth unemployment has developed into a dangerous
threat in many European countries. There is little evidence for high unemployment rates
to decrease quickly and easily. On the contrary: Rigid labor markets, the impacts of the
Great Recession and tight budgets are likely to result in enduring youth unemployment.
This poses serious risks for Europa: A great share of the young generation is running the
danger to become labor market outsiders and socially degraded.
Besides large direct costs of youth unemployment and substantial indirect costs in
terms of long-lasting scars for those that are affected, costs for society are even greater.
Continuous systemic discouragement may lead to eroding political participation or
even to distancing from democratic values. A European Union that is already in a
legitimacy crisis (Ritzen and Zimmermann, 2013) has to respond to that by focusing on
bringing much more young people into employment. But with a Youth Guarantee the
EU raises more expectations than it can fulfillto guarantee employment, training, or
Page 15
Eichhorst/Hinte/Rinne (2013):
Page 16
Eichhorst/Hinte/Rinne (2013):
References
Balakrishnan, R. and H. Berger (2009): Regional Economic Outlook Comparing Recessions in Germany,
Spain, and United Kingdom, IMF Survey Magazine (http://www.imf.org/external/pubs/ft/survey/so/
2009/num111809a.htm).
Bell, D.N.F. and D.G. Blanchflower (2010): Youth Unemployment: Dj Vu?, IZA Discussion Paper No. 4705.
Bell, D.N.F. and D.G. Blanchflower (2011a): Youth Unemployment in Europe and the United States, IZA
Discussion Paper No. 5673.
Bell, D.N.F. and D.G. Blanchflower (2011b): Young People and the Great Recession, IZA Discussion Paper No.
5674.
Bentolila, S., J.J. Dolado and J.F. Jimeno (2012): Reforming an Insider-Outsider Labor Market: The Spanish
Experience, IZA Journal of European Labor Studies, 1, Article 4, 1-29.
Boeri, T. and P. Garibaldi (2008): Un nuovo contratto per tutti. Turin: Chiarelettere.
Boeri, T. (2011): Institutional Reforms and Dualism in European Labor Markets, in: Handbook of Labor
Economics, Vol. 4, Part B, S. 1173-1236.
Cahuc, P. and F. Kramarz (2005): De la prcarit la mobilit: vers une Scurit sociale professionnelle. La
documentation Franaise.
Cahuc, P., S. Carcillo and K.F. Zimmermann (2013): The Employment of the Low-Skilled Youth in France,
IZA Policy Paper No. 64.
Caliendo, M., Hujer, R. and Thomsen, S. (2008): The Employment Effects of Job Creation Schemes in Germany
A Microeconometric Evaluation, in: Millimet, D., Smith, J. and Vytlacil, E. (eds.), Advances in
Econometrics, Volume 21: Estimating and Evaluating Treatment Effects in Econometrics, 383-430.
Caliendo, M. and S. Knn (2011): Start-Up Subsidies for the Unemployed: Long-Term Evidence and Effect
Heterogeneity, Journal of Public Economics 95(3-4), 311331.
Caliendo, M., S. Knn and R. Schmidl (2011): Fighting Youth Unemployment: The Effects of Active Labor
Market Policies, IZA Discussion Paper No. 6222.
Card, D., J. Kluve and A. Weber (2010): Active Labour Market Policy Evaluations: A Meta-Analysis, Economic
Journal 120(548), F452-F477.
Constant, A.F. and U. Rinne (2013): Labour Market Information for Migrants and Employers: The Case of
Germany, IZA Research Report No. 50.
Constant, A.F., O. Nottmeyer and K.F. Zimmermann (2013): The Economics of Circular Migration, in: A.F.
Constant und K.F. Zimmermann (Hrsg.), International Handbook on the Economics of Migration, Cheltenham:
Edward Elgar, 55-74.
Dolado, J.J. and F. Felgueroso (2010): Propuesta para la reactivacin laboral en Espaa. Libro electrnico
(http://www.crisis09.es/PDF/Propuesta_reactivacion_laboral.pdf).
Dolado, J.J., M. Jansen, F. Felgueroso, A. Fuentes and A. Wlfl (2013): Youth Labour Market Performance in
Spain and its Determinants: A Micro-Level Perspective, OECD Economics Department Working Papers No.
1039.
Eichhorst, W., T. Boeri, M. Braga, A. De Coen, V. Galasso, M. Gerard, M.J. Kendzia, C. Mayrhuber, J.L.
Pedersen, R. Schmidl and N. Steiber (2013): Combining the Entry of Young People in the Labour Market
with the Retention of Older Workers, IZA Research Report No. 53.
Eurofound (2012): NEETs Young People not in employment, education or training: Characteristics, Costs and Policy
Responses in Europe, Dublin/Luxembourg: European Foundation for the Improvement of Living and
Working Conditions.
European Commission (2010): Youth on the Move An initiative to unleash the potential of young people to achieve
smart, sustainable and inclusive growth in the European Union. (http://europa.eu/youthonthemove/docs/
communication/youth-on-the-move_EN.pdf).
Heyer, G., S. Koch, G. Stephan and J. Wolff (2012): Evaluation der aktiven Arbeitsmarktpolitik: Ein
Sachstandsbericht fr die Instrumentenreform 2011, Journal for Labour Market Research 45(1), 41-62.
IAB (2013): Befristete Beschftigung Aktuelle Zahlen aus dem IAB-Betriebspanel 2012 (as of June 2013;
http://doku.iab.de/aktuell/2013/Befristung_2012.pdf)
Junod, B. (2006): Le CDD: un tremplin vers le CDI dans deux tiers des cas... mais pas pour tous, DARES Study
No. 117, Paris.
Parey, M. and F. Waldinger (2011): Studying Abroad and the Effect on International Labor Market Mobility:
Evidence from the Introduction of ERASMUS, Economic Journal 121(551), 194222.
Rinne, U. and K.F. Zimmermann (2013): Is Germany the North Star of Labor Market Policy?, IZA Discussion
Paper No. 7260.
Ritzen, J. and K.F. Zimmermann (2013): European labor market policy 2014-2020: muddling through or a
vibrant alternative?, Background paper for the IZA/VEF Workshop A European Labor Market with Full
Employment, More Income Security and Less Income Inequality in 2020 (Bonn, July 11-12, 2013).
Schmillen, A. and M. Umkehrer (2013): The Scars of Youth: Effects of Early-Career Unemployment on Future
Unemployment Experiences, IAB Discussion Paper No. 6/2013.
Schneider, H., K. Brenke, B. Jesske, L.C. Kaiser, U. Rinne, M. Schneider, J. Steinwede and A. Uhlendorff (2007):
Evaluation der Manahmen zur Umsetzung der Vorschlge der Hartz-Kommission Bericht 2006, IZA
Research Report No. 10.
Page 17