This article is part of our special report Youth unemployment.
SPECIAL REPORT / In recent years, the EU has suffered from unsustainably high rates of youth unemployment. A research project now aims to explore the consequences for those affected and for society at large.
Unemployment rates for young people aged 18-25 are generally much higher across European countries, ofentimes more than double the unemployment rate.
Youth unemployment can have many negative personal consequences for the individual, in terms of both material and mental wellbeing.
Before the economic crisis, in the first quarter of 2008, the youth unemployment rate in the EU’s 28 member states was already, reaching 15.2%.
But the economic crisis severely hit the young. Though youth unemployment rates have finally begun to decline in the EU – from 21.8% in 2014 to 20.4% in July – some countries still suffer from unsustainably high rates of youth joblessness.
Greece is the hardest hit, according to Eurostat, with 51.8% youth unemployment in May 2015. It is followed by Spain (48.6%), Croatia (43.1%), and Italy (40.5%).
This is in sharp contrast to the countries with the lowest rates: Germany (7.0%), Malta (8.7%) and Estonia (9.5%).
A research project called Strategic Transitions for Youth Labour in Europe, or STYLE, aims to provide a comprehensive understanding of the causes of very high unemployment among young people.
The researchers behind the project, who come from universities all across Europe, also want to assess the effectiveness of labour market policies designed to mitigate this phenomenon.
Some of the areas related to youth unemployment that it hopes to explore are over-education, skills incommensurability, and self-employment. The research indicates that there is no single factor contributing to youth unemployement in EU member states. Each situation has its own challenges.
While, for example peripheral countries such as Ireland, Spain and Greece have many over-qualified young people, Eastern European countries struggle with their labour markets being less ‘dynamic’.
Being unemployed as a young person can have many negative consequences for the individual, including later in life. Research has indicated that youth unemployment is likely to have a long-term impact on the individual’s life related to lower pay, higher unemployment and reduced life expectancy.
“The evidence of being unemployed when young, especially for longer periods, having scarring effects on future pay and employment prospects seems strong,” Ronald McQuaid, a professor of Work and Employment at the University of Stirling, wrote in a blog post.
“There is also considerable evidence that it may influence health and wellbeing, including psychiatric illness during young adulthood and psychological health and an increased likelihood of smoking as well as lower general satisfaction with life.”
McQuaid said that employers may consider periods of unemployment on someone’s CV to be a negative signal, for example, signalling perceived low productivity. This could increase the likelihood of a person not being hired, or being offered only a lower level job.
Unemployment at the start of a career may lead to having lower skills, McQuaid continued, or to a general loss of confidence.
Member states to do the work
The European Commission has recognised the damaging consequences of youth unemployment, with Commission President Jean-Claude Juncker making the issue one of the most important ones to tackle during his first term in office.
As he came into office in 2014, Juncker compared youth unemployment to having a 29th EU member state made up of unemployed young people. He promised that a significant part of his proposed Investment Plan for Europe would be targeted at tackling the issue.
Other initiatives were launched beforehand. During a summit in February 2013, EU heads of state and government set up a €6 billion Youth Employment Initiative (YEI) – a fund made available for the regions in the EU with the highest number of youth joblessness.
Another €2 billion were given to the fund four months later, at another summit, with the bulk available over a two-year period, starting in 2014, and the rest over the full seven years of the next EU budget.
EU countries also signed up to a proposed “Youth Guarantee” aimed at providing young people under 25 with a quality job offer, an apprenticeship or training within four months of leaving school or losing a job.
In February, Marianne Thyssen, the Commissioner for Employment, Social Affairs, Skills and Labour Mobility, proposed unlocking €1 billion from the YEI and increase the pre-financing rate by up to 30 times for eligible member states in order to boost youth employment.
EU countries with the highest rates of youth unemployment now have to do their part and implement the Youth Guarantee scheme.
Allan Päll, the Secretary General of the European Youth Forum, told EURACTIV that the labour market activation policies, such as promoted those by the Youth Guarantee, are vital.
“Member states still need to step up efforts to properly implement the youth guarantee by providing adequate funding for public employment services and by also targeting young people in more vulnerable situations far from the labour market,” Päll said.
Between 2007 and 2013, youth unemployment reached record highs across Europe, dramatically increasing from 15.7% to 23.4%, according to Eurostat.
EU heads of state and government agreed in February 2013 to launch a €6 billion Youth Employment Initiative (YEI) to get more young people into work. EU heads of state and government agreed in February 2013 to launch a €6 billion Youth Employment Initiative (YEI) to get more young people into work.
Greece, Spain and Italy will receive the biggest share of the YEI, with €3.4 billion in assistance.
London School of Economics and Political Science: Youth unemployment produces multiple scarring effects