¿La Generación Perdida?

Foundation Findings: Youth and work
European Foundation for the Improvement of Living and Working Conditions
ISBN 978-92-897-1040-4 ISSN 1830-8805 doi:10.2806/27724
European Foundation for the Improvement of Living and Working Conditions, 2011
Images: Erik Luntang/ETF/istock/Getty Images
The European Foundation for the Improvement of Living and Working Conditions (Eurofound) is an autonomous body of the European Union, created to assist in the formulation of future policy on social and work-related matters. Further information can be found on the Eurofound website at www.eurofound.europa.eu
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The paper used in this publication is chlorine-free and comes from managed forests in northern Europe. For every tree felled, at least one new tree is planted.
Key findings
The unemployment rate for young people aged between 16 and 24 years in the EU27 is twice as high as the overall rate of unemployment. The recession has exacerbated this problem significantly. The number of young people not in education, employment or training (socalled NEETs) has increased over the last few years; this group also includes young people with higher levels of educational attainment. Active inclusion measures for young people who are furthest removed from the labour market the long-term unemployed, the low skilled, people with disabilities or mental health problems, and migrants are not equally developed in all Member States and some programmes have suffered due to austerity measures. Promising approaches exist, however, and could be expanded. Young people are disproportionally more likely to be offered a non-standard form of employment. They are more likely to start out with temporary contracts and more likely to fear losing their jobs. Yet young workers are also more optimistic than older workers about being able to find a similar job should they lose their current one. Social partners agree on responses that promote reforms to education systems in order
to improve transitions developing and expanding vocational training, apprenticeships and work placements. However, disagreements have emerged in some Member States between employer organisations and trade unions about whether job creation for young people should include removing such perceived barriers as minimum wages and length of contract. Trade unions stress their concerns about the quality of available jobs, especially after apprenticeships end. While social partner involvement has suffered through the recession, government involvement has increased. Active labour market policies have been the main tool that governments have used to create more jobs and upskill young people. Such programmes require better evaluation to determine how successful they are; dead weight loss and lack of follow-on jobs after training remain important issues. Social partners and governments face competing pressures to create new jobs for young people while also maintaining older workers in employment for longer. Austerity measures in many Member States have led to cuts in public spending, which have increased these pressures.
1 / Foundation Findings: Youth and work
Policy background
EU policies on youth unemployment

Young people face difficult challenges when they first want to enter the labour market; many do not succeed at first. The unemployment rate for young people is systematically higher than the overall rate of unemployment (currently it is twice as high in the EU27) and this is irrespective of the overall economic climate. The recent recession has, however, made the issue even more pertinent, as unemployment now affects more than a third of young people in some Member States. In January 2011, the youth unemployment rate (for those aged 1524 years) was 19.9% in the euro area and 20.6% in the EU27. The lowest rate was observed in the Netherlands (7.8%), and the highest rates in Spain (43.1%), Slovakia (37.7%) and Lithuania (34.4% in the last quarter of 2010).1 This issue is not restricted to the EU: the unemployment rate in OECD countries is more than twice as high for young people than the average adult population (17% estimated for 2011 as against 8.6%).2 These numbers point to possible structural problems in labour markets
1 2
and lack of proper transitions from education to employment. These issues have been on the EU policy agenda for quite some time. The European Employment Strategy has made reference to tackling youth unemployment since 1998 and the topic is still high on the agenda for example, in the Council decision on guidelines for employment policies of Member States published in 2008. Here, the challenges facing young peoples entry into the labour market are addressed as part of a life cycle approach (or life course approach) to employment, in which more needs to be done to address specific employment issues relating to different life stages. The problem is also seen in the context of a more general need to upskill the European working population to maintain competitiveness. The text of the guidelines states: Further increasing the employment rates of older workers and young people, as part of a new intergenerational approach, and promoting active inclusion of those most excluded from the labour market is also important. Intensified action is also required to improve the situation
Eurostat, Euro area unemployment rate at 9.9% (press release), 1 March 2011 OECD, Invest in youth to tackle jobs crisis (press release), 15 December 2010
of young people in the labour market, especially for the low skilled, and to significantly reduce youth unemployment. The guidelines also state that every unemployed person should be offered a job, apprenticeship, additional training or other employability measure; in the case of young persons who have left school, this should happen within no more than four months and in the case of adults within no more than 12 months. Moreover, governments should work on improving educational attainment levels and equipping young people with the necessary key competences, in line with the European Youth Pact. At least 85% of 22-yearolds should have completed upper secondary education by 2010. The European Commissions Employment Committee, which was set up in 2000 to help develop the European Employment Strategy, has since issued various country-specific recommendations and points to watch to Member States to help realise these goals. The European Youth Pact, adopted by the European Council in 2005 aimed to implement a bundle of measures as part of the wider Lisbon strategy. Focusing on the themes of employment, integration and social advancement, the Council called on the EU and Member States to implement concrete policies, such as: monitoring policies for the sustained integration of young people into the labour market; endeavouring to increase the employment rate of young people; giving priority under national social inclusion policies to improving the situation of the most vulnerable young people particularly those in poverty and to initiatives to prevent educational failure;
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inviting employers and businesses to display social responsibility in the vocational integration of young people.3 Following the Youth Pact, in May 2005 the European Commission published a communication entitled Addressing the concerns of young people in Europe implementing the European Youth Pact and promoting active citizenship,4 and another in September 2007 Promoting young peoples full participation in education, employment and society.5 The Europe 2020 strategy, which will provide the policy guidelines for the EU in the years to come, makes explicit reference to increasing employment rates for all age groups in particular, young people. The main strategy for improving employment possibilities is to make sure that young people do not leave the education system early and without qualifications. Two particular benchmarks have been set: to reduce the early school drop-out rate to below 10% it currently stands at around 15% and to ensure that at least 40% of the 3034 age group have completed third-level education, whether in universities, colleges of further education or the equivalent.6 With its flagship initiative Youth on the Move, the Commission has set out how the EU can reach the EU 2020 targets by improving education and training systems, making stronger policy efforts to combat youth unemployment and promoting both at national and European level greater mobility within the EU for education and work. The initiatives strategies include concrete recommendations addressed at Member States, new legislative initiatives, better information tools for young people and promoting greater involvement on the part of business.
Council of the European Union, 2005, Presidency conclusions of the European Council Brussels, 7619/1/05, 23 March 2005, pp. 1920, available at http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/84335.pdf European Commission, Addressing the concerns of young people in Europe implementing the European Youth Pact and promoting active citizenship, COM (2005) 206 final, 30 May 2005 European Commission, Promoting young peoples full participation in education, employment and society, COM (2007) 498 final, 5 September 2007 European Commission, Commission launches action plan to reduce early school leaving (press release), 31 January 2011
Young people and social exclusion

The active inclusion approach taken by the EU provides another policy perspective on improving young peoples transitions into the labour market. Since the Joint Report on Social Protection and Social Inclusion 2009 emphasised an active, joined-up approach to inclusion, the concept has become widely disseminated throughout EU and national policies. In the Europe 2020 integrated guidelines for economic and employment policies, launched in April 2010, active inclusion policies are acknowledged as an important mechanism for combating poverty and enhancing the social and economic participation of those most vulnerable to exclusion (Guideline 10). One of the EU headline targets, which aims to raise the employment rates of both men and women aged between 20 and 64 years to 75% by 2020, includes a specific reference to greater participation by young and low-skilled workers. One of the aims of the Europe 2020 strategy is to promote inclusive growth a concept that includes access and opportunities for all throughout the life course, by removing barriers to labour market participation (especially for women, older workers, young people, people with disabilities and legal migrants). In fact, each of the employment guidelines specifically target young people and/or people with disabilities. Some of the recommendations include employment services open to all (including young people and those threatened by unemployment), policies to promote the labour market integration of young people, disabled people,
legal migrants and other vulnerable groups, the provision of affordable care, and innovation in work organisation aimed at raising employment rates particularly among young people (Guideline 7). Support for young people is stressed, particularly for those not in employment, education or training (NEETs), in cooperation with the social partners, including early intervention when young people exit employment (Guideline 8). A key element is ensuring the learning mobility of young people enabling flexible learning pathways, developing partnerships between the worlds of education/training and work, and reducing the number of young people not in employment, education, or training (Guideline 9). The guidelines also state Equally, to fight social exclusion, empower people and promote labour market participation, social protection systems, lifelong learning and active inclusion policies should be enhanced to create opportunities at different stages of peoples lives and shield them from the risk of exclusion (Guideline 10). In addition, the guidelines stress the importance of modernising social security and pension systems to ensure adequate income support and access to healthcare. And it is recommended that benefit systems focus on ensuring income security during transitions and reducing poverty among groups most at risk of social exclusion including people with disabilities, children and young people (Guideline 10).
Exploring the issues
Challenges for young people

Young people are faced with specific problems regarding access to the labour market. Youth unemployment is systematically higher than average unemployment. Young people do not profit as much from phases of economic growth and suffer disproportionally during times of economic crisis. And moving from education to employment is often not straightforward, as labour market requirements and educational or vocational achievements do not always match. Young people are often competing with fully trained, experienced workers and can lose out; in addition, workers under 25 years of age tend to have a lower level of educational attainment, and fewer in the way of professionally gained qualifications. In addition, if they do succeed in finding a job, they are often offered less secure contracts for example, as temporary agency workers. This poses the risk that they may get caught in a cycle of periods of employment followed by unemployment. Research has shown that these early labour market experiences can have long-term effects on further career pros7
pects, health, income and social mobility. Delays in finding a first job and long periods of unemployment often can manifest themselves even decades later in so-called scarring.7 A certain amount of youth unemployment is perhaps inevitable, as many young people go through transition periods after finishing education and training. These can be due to the fact that their skills do not match the requirements of the jobs on offer, especially with regards to work experience (an issue raised by employers in many Member States when the issue of youth unemployment is debated, who point to a mismatch of skills provided by the education systems and those required by the kind of jobs on offer). These transition periods are often characterised by internships, vocational training, temporary jobs and (often short) periods of unemployment. Generally, employment rates do increase markedly once people reach their mid-twenties. While people in the 1624 age group in the EU27 have an employment rate of 41.9%, this rises to 73.8%
Scarpetta, S., Sonnet, A. and Manfredi, T. (2010), Rising youth unemployment during the crisis: How to prevent negative long-term consequences on a generation?, OECD Social, Employment and Migration Papers, No. 106, available at: www.oecd.org/dataoecd/10/8/44986030.pdf
for those in the 2529 age group.8 In part, this increase is due to young people moving out of a prolonged period of initial education in many countries. However, those who have negative experiences of these transition periods might well suffer from the effects throughout their whole working lives. Analysing the long-term impacts of previous recessions has shown that early experiences of unemployment can have a wide range of negative effects on individuals. These range from reduced lifetime earnings, continued experience of unemployment, a higher likelihood of precarious employment, poorer health and possibly even reduced life expectancy.9 This can have knock-on effects on the larger society, in
terms of a poorer connection with civil society, postponing the starting of families or not reaching financial autonomy until later in life.
Effects of the recession

The recession has hit young people in Europe particularly hard with regards to their employment prospects. When it comes to restructuring, they often are the most affected group because of the nature of their contracts and the occupations and sectors in which they work. Youth unemployment rates have doubled or in some cases tripled since the onset of the recession (Figure 1). Young people are often the first to lose their jobs during an economic downturn. The large increase of young people in non-standard
Figure 1: Youth unemployment rates in the EU27, 2007 and 2010 (%)
Netherlands Austria Germany Malta Denmark Slovenia Luxembourg Cyprus Czech Republic United Kingdom EU27 Finland Romania Portugal Belgium Bulgaria France Poland Sweden Hungary Italy Ireland Greece Estonia Slovakia Latvia Lithuania Spain 0 5 10 15 2007
Notes: Annual average unemployment rate for those aged 1524 years Source: Eurostat Labour Force Survey
20 2010
25
30
35
40
45
8 9
Figures are for the fourth quarter of 2010. Simms, M., Eurofound (2011), Helping young workers during the crisis: contributions by social partners and public authorities (this Eurofound report informs a substantial amount of this issue of Foundation Findings)
employment (temporary contracts, temporary agency work) over the last 15 years puts them at increased risk. For companies who are experiencing reduced demand for their products or services, the first step is normally not to renew limited contracts or to discontinue the use of workers from employment agencies. Nor does a permanent contract always offer protection. In many countries and companies, the last in first out principle still applies. Companies who have to let staff go are interested in keeping experienced staff and retaining essential skills in their workforce. Compared to earlier recessions, early retirement to reduce staff numbers is often not an option as the financial incentives to retire early no longer exist. The ageing of the population has created more pressures on social security systems and has in turn in many Member States opened up debates about extending working lives and raising the retirement age. However, keeping older workers in employment for longer may put them in competition with young people who are seeking to enter the labour market; this is particularly problematic in times of economic crisis, with little job creation and low levels of public spending resulting from austerity measures. The chances of finding a new job in such an environment are also much more restricted, due to the limited number of vacancies and increased competition among young people. In particular, those with lower levels of qualification find themselves competing with higher-skilled peers who are unable to find employment that matches their skill levels. In some countries, young people also find themselves excluded from the national or sectoral benefits systems either because they have not paid in to the system long enough to be eligible for support or because those systems are organised on the principle of paying contributions on a voluntary basis. The risk of losing financial independence and having to rely on lower social
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welfare payouts can lead to further social exclusion. Research has shown that even short periods of unemployment can have a big impact on future careers. A study carried out by the Swedish Institute for Labour Market Policy Evaluation (IFAU) on the long-term effects of unemployment found that early labour market failure is costly, in terms of both subsequent unemployment probabilities and later annual earnings. The increase in unemployment probability after five years was three percentage points for those who were unemployed directly upon leaving education. The probability of being unemployed five years after leaving education was as high as 16%. The reduction in annual earnings after five years averaged 17%.10 This holds true even after controlling for gender, ethnicity and economic climate at the time of entering the labour market.
Education level
The level of education plays an important role in influencing the probability of finding a job. Generally, the higher the level of education attained, the lower is the unemployment rate. Nevertheless, despite the insurance provided by a high level of initial education, in some Member States graduate employment levels have fallen considerably (Figure 3). Furthermore, as already indicated, there is evidence that graduates are taking jobs for which they are overqualified, which has in turn a spill-over effect on employment among young people with lower levels of educational attainment.
Gender aspects
The recession has affected men and women differently; this becomes apparent also when looking at young workers who have lost their jobs. Eurofound research indicates that young men seem to be the group worst affected by unemployment in such countries as Belgium, Estonia, Greece, Ireland, Italy and the UK. This appears to be a result of structural issues in the labour market as well as educational issues.
Hellmark, A., Eurofound, Sweden: Study examines long-term effects of youth unemployment (online news update), 14 January 2005
Figure 2: Trend in unemployment rate for young people, by education level attained, EU27
30 25 20 15 10 5 0
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 Q 10 20 20 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 10 Q 4
% of labour force 15-24
Low
Medium
High
Source: Eurostat, LFS low = ISCED 1997, levels 0-2 (primary & lower secondary), medium = ISCED 1997 levels 3-4 (upper & post secondary), high = ISCED 1997 levels 5-6 (tertiary), data extracted 15.5.11
Notes: Figures are for people aged between 15 and 24 years; Low, Medium and High refers to education level attained.
Figure 3: Employment rates of young people with a tertiary level of education (%)
Finland Germany Netherlands Latvia United Kingdom Malta Bulgaria Sweden Denmark Cyprus Ireland Austria EU27 Lithuania Hungary Belgium Poland Slovenia France Luxembourg Spain Greece Estonia Portugal Czech Republic Romania Slovakia Italy 0 10 20 30 40 2007Q3
Source: Eurostat Labour Force Survey
50
60 2010Q3
70
80
90
Notes: Figures are for people aged between 15 and 24 years; data for Estonia, Luxembourg and Slovenia flagged as unreliable by Eurostat
In these countries, the sectors that were first affected by the downturn and started shedding jobs, such as manufacturing and construction, are also the sectors that employ mostly men. Furthermore, these countries were experiencing larger structural changes, generally moving away from manufacturing to service jobs (that is, from more male- to female-dominated sectors). And lastly, young men overall have lower skills levels, often related to lower qualifications achieved at school, than their female counterparts. Countries like Germany and Austria have sought to cushion the effects of the recession through a comprehensive system of vocational and technical training. By providing additional training and encouraging apprenticeships through financial incentives for companies, the job losses in manufacturing have been less pronounced. But here again a gender difference appears: it is young men who have profited from this as they tend to be overrepresented in those sectors that most use vocational and technical training.11
ing employment with studies it is often not out of choice and increases the probability of their having low yearly earnings. In some Member States, young workers with short contributory records are often not entitled to unemployment benefit and thus may eventually resort to other sources of income support such as disability benefits. The increase in insecurity associated with job uncertainty and long-term unemployment can affect health through direct and indirect effects (such as changes in health behaviour, alcohol consumption, more risky behaviour etc.). Moreover, young people and those with psychiatric problems or problems of substance dependency are increasingly at risk of homelessness.
NEETs Not in education, employment or training

The acronym NEETs first emerged in the UK in the late 1980s. It was used by researchers and government officials as an alternative way of categorising young peoples experiences, mainly as a result of changes in policy that disqualified those aged 16 and 17 from claiming unemployment-related benefits.13 Since then, interest in the NEET group has grown at the EU level and equivalent definitions were created in almost all Member States, focusing on those aged between 15 and 24 years. Another reason for the rise in interest in the NEET phenomenon is that the traditional indicators for youth labour market participation are frequently criticised for their limited relevance, given the high number of young people who are not in the labour force because they are still in school, or training and university. For these reasons, in recent years a number of studies from academia, national governments and international organisations have started to investigate the phenomenon of those young people who are disengaged from both work and education and are arguably at a high risk of labour market and social exclusion.14
Groups particularly at risk

Young people at risk of labour market and social exclusion are included in the broader category of young people not in employment, education or training (NEETs see below). These are young people aged between 15 and 24 years, who are disengaged from both work and education and are at a greater risk of exclusion, both from the labour market and in social terms. Particularly at risk in this group are those who are economically inactive, the long-term unemployed, as well as those who were vulnerable prior to the onset of the recession such as the less skilled, people with disabilities or mental health problems, and migrants (in particular, women).12 A number of factors increase the vulnerability of young people to the exclusion process. Young people are more likely to be involved in temporary work and part-time work. While sometimes this can be beneficial for example, in combin11 12
Simms, M., Eurofound (2011), Helping young workers during the crisis: contributions by social partners and public authorities European Commission, Joint report on social protection and social inclusion 2010 13 Furlong, A., NEET and discourses of vulnerability: Evidence from the UK, Proceedings of the International Forum of Youth, Kyoto 2006.
The need to focus more on the NEET generation is central to the new set of integrated guidelines for economic and employment policies proposed by the European Commission on 27 April 2010. They state: to support young people and in particular those not in employment, education or training (NEET), Member States in cooperation with the social partners, should enact schemes to help recent graduates find initial employment or further education and training opportunities, including apprenticeships, and intervene rapidly when young people become unemployed.15
may not be available for work. While they have in common that they are not participating in the labour market and education, the sub-groups contained within the NEET category have very different experiences, characteristics and needs and require distinct forms of policy intervention. According to the the latest estimates from Eurostat and the OECD,16 in 2009, NEETs constituted 12.4% of all 1524 year-olds in the EU27. However, this figure varies greatly from country to country from 4.1% in the Netherlands to 19.5% in Bulgaria (Figure 4). In Italy and the UK, the NEET population is approximately 1.1 million of the 1524 year-olds.17 Overall, there are more young women in the NEET category than men. This is especially true for those aged between 20 and 24 years. By contrast, in the 1519 age group, the rates are higher for men than for women. In 2009 in the EU27,
NEET is a heterogeneous category, which includes a range of different groups: young people who are available for work and are actively seeking employment; those who are not available or not seeking work; groups such as the long-term sick or disabled or those with responsibilities for the care of children or relatives who
Figure 4: Proportion of NEETs among 1524 year-olds, EU27 (%)

25
20
15
10
0 DK SK UK HU RO EU27 BG CZ BE PT FR LT EL EE LV IT ES NL CY AT DE PL SE IE FI
Average
Source: Eurostat, data for 2009
Men
Women
14
European Commission, Youth neither in employment nor education and training (NEET) Presentation of data for the 27 Member States, Contribution by Employment Committee (EMCO), 2011 15 European Commission, Proposal for a Council decision on guidelines for the employment policies of the Member States Part II of the Europe 2020 integrated guidelines, SEC (2010) 488 final 16 OECD, Off to a good start? Jobs for youth, Paris, OECD, 2010. 17 Eurofound calculation using figures from the 2009 Eurostat Labour Force Survey
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Figure 5: Educational level of NEETs, 2009

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% AT BE BG CY CZ DE DK EE ES Tertiary FI FR GR HU IE Upper IT LT LU LV NL PL PT RO SE Lower educ SI SK UK Total
Source: Eurostat, 2009 Labour Force Survey (Eurofound calculation)
a little over half of all NEETs were unemployed, the rest being economically inactive. In terms of education, approximately half of all NEETs in the EU have a lower level of attainment, although the proportions vary greatly between Member States. Being in the NEET category reflects both the outcomes of education systems (and the potential of transition from them) as well as labour market conditions for young people; the results of these combinations of factors can vary considerably between Member States. Empirical research shows that the risk of being in the NEET category is greater for those young people who grow up in disadvantaged circumstances underachieving educationally, lacking support, being in poor physical or mental health, or engaging in substance abuse and crime.18, 19 The OECD in its research project Jobs for youth, in which it looked at 16 countries and their approaches to youth unemployment, points to two groups most at risk: Youth left behind and Poorly integrated new
18
entrants. Those in the Youth left behind group are faced with a variety of issues that combine to reinforce disadvantage; these include having left school early (and hence not having completed secondary education), living in deprived areas and coming from migrant or minority backgrounds. This group is at a high risk of dropping out of the labour market completely.
The Poorly integrated new entrants are characterised as having often completed at least secondary education; however, they fluctuate between temporary employment and periods of unemployment, even during periods of strong economic growth. This development has particularly affected France, Portugal and Spain, which have high entry barriers for new entrants to the labour market and where jobs were created primarily in the context of temporary contracts and temporary agency work. Remedying this situation requires more fundamental changes to overall labour market policies in the countries where such employment practices have prevailed.20
Bynner, J. and Parsons, S. Social exclusion and the transition from school to work: The case of young people not in education employment or training, Journal of Vocational Behaviour, 60, 289-309, 2002. 19 Yates, S. and Payne, M., Not so NEET? A critique of the use of NEET in setting targets for interventions with young people, Journal of Youth Studies, 9 (3), 2006. 20 OECD, Off to a good start? Jobs for youth, Paris, OECD, 2010.
Figure 6: Percentage of NEETs among those with tertiary level of education, 2009
25
20
15
10
0 NL DK SE AT DE LU BE UK CZ FR FI PT EU27 SI PL ES CY IE LT HU SK BG RO LV IT EE EL
Notes: Figures are for those aged between 15 and 29 years. Source: Eurostat Labour Force Survey (Eurofound calculation)
However, due to the recession that hit Europe in 2008, a growing share of those young adults with a tertiary level of education are also ending up in the NEET category. This is most evident in Estonia, Greece and Italy, where approximately 20% of those with a tertiary education degree are NEETs. The NEET generation can be seen as a generation of lost talents and, increasingly, as part of an unused labour force. This implies wider economic and social costs for society, such as lost tax revenue, extra cost of health and medical services, cost of criminal activities,21, 22 social exclusion and the risk of an opt-out from civic life.23, 24
and non-standard working hours (weekend, night and shift work). For many people entering the labour market for the first time, such jobs proved to be a mixed blessing. They provided young people with an entry point into the labour market, but it is not clear whether this has helped or hindered their career progression. This ambiguity is also reflected in some of the data concerning the working conditions and attitudes of young people.
Temporary contracts
The number of young workers with temporary contracts or who are employed through temporary agencies has increased along with the overall use of such flexible contracts. In some Member States the Czech Republic, Hungary, Ireland, Latvia and Luxembourg the proportion of young workers on temporary contracts (out of the entire young labour force) rose by more than 6% between the third quarter of 2008 and the third quarter of 2010.
Non-standard employment forms

Between 1996 and 2006, thousands of new jobs were created in the EU. This period of job creation was also characterised by a clear increase in non-standard forms of work fixed-term contracts, temporary agency work, part-time work
21
Walther, A. and Pohl, A. (2005), Thematic study on measures concerning disadvantaged youth, European Commissionsupported study. 22 Godfrey, C. et al (2010), Estimating the cost of being Not in education, employment or training at age 1618, UK Department for Education and Skills. 23 Canoy, M. et al (2008), The importance of social reality for Europes economy: an application to civil participation, Proceedings of the Second OECD World Forum on Statistics, Knowledge and Policy. 24 Mascherini, M. et al (2009), The characterisation of active citizenship in Europe, European Commission JRC scientific and technical report.
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Figure 7: Extent of temporary employment younger and older workers, EU27, 2010 (%)
Romania Bulgaria Latvia UK Malta Slovakia Cyprus Denmark Czech Republic Hungary Greece Ireland Belgium Luxembourg Austria EU27 Finland Italy Netherlands France Portugal Sweden Germany Spain Poland Slovenia 0 10 20 30 2559 years 40 50 60 70 80
1524 years
Note: Figures are as a percentage of the total number of employees for a given age group; no data from Estonia and Lithuania are available. Source: Eurostat Labour Force Survey (2010)
Currently, around 42% of 1524 year-olds in employment are employed on a temporary contract, as against nearly 11% of 2559 year-olds. However, national differences are substantial (see Figure 7).
This reflects both the generally lower level of education of those entering the labour market at an early age, as well as their lack of work experience. As a result of their overrepresentation in particular types of occupation, younger workers end up in jobs that are physically more demanding (Figure 10), and in jobs that require fewer technological skills. Young workers are also much more likely to be in jobs in which they encounter high levels of strain, or encounter low levels of work demand, but accompanied by little in the way of control of their work (Figure 11). This pattern is found consistently across all types of occupation. It cannot be expected that young workers be granted very high levels of control over how and when to carry out their tasks as soon as they enter the labour market: they often still have to develop the knowledge and skills required to work
Risks facing younger workers

Not only is it harder for young people to find a job than for older workers, in most European countries young workers are also less certain about being able to keep it. In the EU27 as a whole, 21% of workers under 25 years are concerned that they might lose their jobs in the next six months, compared with 16% of those aged 25 or over (Figure 8). Not surprisingly, young people tend to be employed in different occupations from older workers (Figure 9). By far the largest group of young workers (31%) is employed in service and sales jobs. Moreover, young workers are much less likely to work in professional and managerial occupations, which require higher skills levels.
Figure 8: Concern regarding job security, by age group (%)

60 %
50 %
40 %
30 %
20 %
10 %
0% SI SE LT IE RO EE CZ PT EL PL FR LV ES BE FI LU MT CY IT SK AT NL HU BG EU27 UK under 25 25 and older DK DE
Notes: Figures are for those who strongly agreed with the statement I might lose my job in the next six months. Source: Eurofound, Fifth European Working Conditions Survey
Figure 9: Type of occupation, by age group (%)

35 % 30 % 25 % 20 % 15 % 10 % 5% 0%
Pl op ant er an at d Sk or fo ille s re d st ag ry r an icu d ltu fis ra he l, ry w Skil or le ke d rs Un w skil or le ke d rs sa Ser le vic sw e or an ke d rs ns ls ls u w pp or or ke t rs cia na es sio ni an M ag er s
ch
er ica
Te
Pr
of
Cl
under 25
Source: Eurofound, Fifth European Working Conditions Survey
25 and older
14
ac
hi
ne
Figure 10: Exposure to physical risks, by age group

106 105 104 103 102 101 100 99 98 97 96
Ergonomic risks
Biological and chemical risks under 25 25 and older
Ambient risks
Note: the figures are indices; the EU27 average = 100 Source: Eurofound, Fifth European Working Conditions Survey
Figure 11: Type of work organisation, by age group (%)
Active (high demands, high control)
High strain (high demands, low control)
Low strain (low demands, high control)
Passive (low demands, low control)
0%
5%
10 %
15 %
20 %
25 %
30 % under 25
35 %
40 %
45 %
25 and older
Source: Eurofound, Fifth European Working Conditions Survey
independently. However, it raises concerns to see that young workers straightaway face high levels of work intensity, without having the autonomy to cope with these demands. As a consequence, these young workers are at a high risk of suffering from stress and the long-term physical and psychological effects that this entails. Many young people enter the labour market without work experience; in addition, some jobs require a level of physical strength and stamina that younger workers are more likely to be able to provide. These factors partially account for the differences in terms of occupation and associated physical demands between younger and older workers. However, the imbalance between
work demands and lack of control faced by many younger workers could be avoided, where it stems from decisions regarding work organisation. However, at the same time, younger workers are more optimistic about their career prospects. Among workers aged under 25 years, 42% strongly agreed with the statement that their job offered good prospects for career advancement, as against 30% of those aged 25 and over. This is the case for all types of occupation and for almost all countries. So, although the quality of their jobs often leaves room for improvement, a lot of young workers feel their job provides a valuable step up into the labour market.
Country codes
AT BE BG CY CZ DE DK EE EL ES FI FR HU IE Austria Belgium Bulgaria Cyprus Czech Republic Germany Denmark Estonia Greece Spain Finland France Hungary Ireland IT LT LU LV MT NL PL PT RO SE SI SK UK Italy Lithuania Luxembourg Latvia Malta Netherlands Poland Portugal Romania Sweden Slovenia Slovakia United Kingdom
All Eurofound publications are available through the Eurofound website: www.eurofound.europa.eu
16
Policy pointers
In its report Off to a good start? Jobs for youth, the OECD states that governments need to ensure that everyone leaving the educational system has the skills needed for the labour market. This requires that every young person be provided with basic qualifications up to a certain age and that more programmes be offered that provide vocational training and apprenticeships for low-skilled young people and those who have already dropped out of the educational system. It goes on to say that, in order to make transitions from school to work smoother, more internships and compulsory work experience should be integrated into school and university curricula. According to the OECD, these reforms of the educational system should be combined with labour market reforms and active labour market policies.
providing financial incentives to make hiring and training young workers more attractive for employers. Some of the national-level initiatives have included financial support to reduce the cost of employing low-skilled young people, lower social security contributions for low-paid employees and more controversially lowering minimum wages for young people. Some national governments have justified such exceptions for young people as a useful tool for increasing employment rates but they are highly contested between social partners.
Apprenticeships
Apprenticeships and other dual vocational education programmes have been identified as efficient transition paths from education to work. According to the OECD report referred to above, they offer several advantages not least, they reduce labour costs for the employer, while placing a commitment on them to offer training leading to a qualification that is transferable to the labour market. Ideally, apprenticeships can lead to direct employment after they have ended, with a clearly defined progression in income and length of contract. Many Member
Active labour market policies

Many national governments have initiated or adapted active labour market policies (ALMP) to react to increasing youth unemployment. These policies tend to focus on promoting apprenticeships and training programmes, offering work experience, adapting the education systems to improve the skills levels of school leavers and
States have made provisions to widen their often longstanding programmes, including the Czech Republic, Denmark, Germany, Greece and Romania. However, there are issues surrounding the effectiveness of these various measures. In countries where specific measures have only been recently introduced, adequate data and evaluation mechanisms are often not in place to assess their success. And in countries with wellestablished programmes the risk of deadweight loss exists, as does the risk that the effectiveness of training measures is reduced if jobs cannot be provided once these programmes have ended. A number of countries have tried to address some the pitfalls of apprenticeships systems. One key issue is that most apprenticeships require a minimum education level, thus excluding those who do not fulfil these requirements. In some countries, a system of pre-vocational training has been established to bridge such gaps. These measures are targeted specifically at those who have failed to complete their education or who come from particularly disadvantaged backgrounds. Secondly, the rising number of apprenticeships does not in itself solve the issue of employment as it has in some cases led to unemployment simply being postponed until after the end of the apprenticeships. This is the case in Germany, for example, where 30% of workers are unemployed after their training and a further 25% move into fixed-term contracts.25 Some measures have been taken to smooth transitions from apprenticeship to employment in particular, making the hiring of young workers financially attractive for employers through tax incentives, subsidised social security contributions or wage subsidies.
The EU promotes the social inclusion and social protection of those left outside of labour markets (particularly those in the NEET category) through three approaches: promoting inclusive labour markets that are open to all and offer career paths and longterm possiblities, thus reducing labour market segmentation; providing access to quality services that are integrated, involve the users and deal with their needs in a personalised way; ensuring adequate income support while activating those who are capable of working and providing opportunities for training and work for them. The concept of activation incorporates a diverse range of measures, different approaches and intent. The cultural and political context of a jurisdiction can strongly influence the approaches adopted. The most frequent types of activation measures seek to bring people into employment. They are measures such as employment incentives or contingent benefits that impact on the activity behaviours of job seekers. But they can also focus on job creation, job sharing or job rotation. An important activation approach is upskilling job seekers and providing opportunities to gain qualifications an essential approach in the case of young people. The individual pathways approach which seeks to provide a personalised approach is a frequently implemented measure, particularly for people with disabilities and others at risk of exclusion. Other types of activation measures include social economy initiatives, supported employment, microloans, financial incentives for employers to recruit workers and awarenessraising measures. Eurofound research in selected Member States shows that active inclusion approaches are at different stages of development across Europe. However, good practice national initiatives have
Active inclusion
Young people with mental health issues or disabilities are faced with an even greater challenge in finding a job, as many employers are reluctant to hire them and there are few opportunities for them that take account of their specific health problems.
25
Simms, M., Eurofound (2011), Helping young workers during the crisis: contributions by social partners and public authorities
18
been identified. These include, for example specific job creation targets.
National examples: the Netherlands

By law and collective agreements, employers in the Netherlands play a key role in promoting occupational health reducing the extent of sick leave and improving job retention and reintegration of employees with disabilities. There are many incentives for employers to employ young people with disabilities. In 2010, several so-called Pilots de Vries were launched to facilitate the transition of young people with disabilities from school to work and to create thousands of jobs. Social partners in the education sector, representing 600 secondary schools, agreed to create enough jobs for young people with disabilities to match the overall rate of people with disabilities in the Netherlands (17%). These initiatives are supported by a new measure, which includes a first claimant assessment at the age of 18 and a final reassessment at the age of 27. For clients with work capacity (who are able to earn more than 35% of the minimum income) attention is focused on some key elements: what they can achieve (rather than on their disability); a work-oriented approach; identifying work skills; developing a participation plan specifying their rights, obligations and prospects for work; setting out an obligation to accept work or an education offer; and creating a stronger financial incentive to take up work.
people and lifelong learning is underpinned by an education guarantee. Early intervention and enhanced service provision are central to the social guarantee. After three months of unemployment, young people (under 25 years of age) are entitled to a specific job-search plan, which specifies the services to be offered. These services include job application training, a job or training place (in training or vocational education), a work placement, on-the-job training, preparatory training for working life, a start-up grant and wage-subsidised work. The employment office, the municipality social services and the Social Insurance Institution provide special services in a one-stop shop system for the longterm unemployed and for those who need the support of multiple professions.
Other examples
Other projects focus on individual, targeted counselling and training for those most removed from the labour market. The STRIVE initiative in Scotland, UK, for example, offers intensive threeweek courses during which 22 different services are applied, aimed at improving soft skills and work preparedness. Another approach is centred on highlighting opportunities for companies that provide direct employment for particularly excluded young people. One Danish IT company employs almost exclusively young people suffering from the autism spectrum disorder; in addition, for those who are not recruited, the company supports a training programme for up to three years, followed by job placements with other IT companies.
National examples: Finland

The active inclusion agenda in Finland includes a combination of employment activation, adequate minimum income and access to supporting services. The ongoing social security reform is aimed at increasing the incentive element of income support in the inclusion process. Many of the active inclusion measures are general measures, not targeted at a particular social group. Nevertheless, the employment of young people is considered to be a crucial challenge for social inclusion. As a result, the country has specific measures that aim to boost employment among young people. Youth employment is supported by the social guarantee for young
Role of social partners

Social partners on the whole agree on the scale of the problem of youth unemployment and on the need to do more to provide employment opportunities for young people. Social partners are also well placed to launch initiatives in terms of vocational training and apprenticeships and improving skill matching, using established bipartite and tripartite mechanisms of social dialogue at national or sectoral level.
However, the recession has hindered progress in this area in many Member States, for a variety of reasons. Many young workers who are vulnerable are employed in sectors with traditionally low levels of unionisation and collective bargaining. Consensus on social dialogue in some Member States has broken down (as in the cases of Ireland, Portugal and Spain), thus hampering effective progress in implementing agreements for young workers. And many of the measures taken in the recession to protect jobs, like short-time working or temporary layoffs, have effectively halted new recruitment in many companies. There is broad agreement between social partners on the need to further develop apprenticeships and reform education systems. There are however also specific agendas and issues pursued separately by employer organisations and trade unions.
In Spain, the Spanish Confederation of Employers Organisations (CEOE) has expressed a desire to see the introduction of a special six- to 12-month contract for young workers, which would not include unemployment protection and would be exempt from some taxes. In Poland, employers have campaigned for changes to the employment law for temporary workers, which would reduce employers responsibilities and, it is argued, facilitate labour market entry for young people. These proposals have created much debate and controversy, as has the wider discussion on whether it is better to create jobs for young people at any price or whether such changes to labour legislation contribute to more precarious working conditions in general. Employers have also focused on improving the level of skills of those still in education and in the workplace and on better job matching. Danish employers propose more opportunities for young people to undertake a series of short internships in different companies and the reform of the school internship to make it a more attractive option for young people. Similarly, employers in Bulgaria, Estonia, France, Poland and Romania are campaigning to reform education to provide more appropriate vocational skills. Improved career services to help with more effective job matching for young people. In Italy, Confindustria is encouraging companies to invest in post-graduate education.
Employer organisations
In some Member States, there has been a growing debate about removing some aspects of labour protection that employers consider as obstacles to hiring young workers, such as minimum wages, statutory limits for probation and dismissal and unemployment protection. In Italy, employers would like to see an extension to the statutory limits on probation periods for open-ended contracts, as well as reduced protection for fixed-term contract workers, agency workers and freelancers. In Portugal, employers have lobbied hard to allow more flexibility when employing young workers and to make redundancies easier. In Sweden, the Confederation of Swedish Enterprise (SN) advocates less rigidity in employment laws and greater wage diversification to help young people. In the UK, employers have lobbied for the removal or reduction of the national minimum wage for young people. They argue that this acts as a barrier to entry, even though it is set at a lower rate than for older workers.
20
Trade unions
One of the main concerns of trade unions is the creation of high-quality jobs and what they see as an increasing divergence of working conditions. They are concerned that changing labour legislation to create exceptions for young people will put young workers more at risk.
Trade unions in France, Luxembourg, the Netherlands and Portugal have campaigned for the equal treatment of young workers in terms of working conditions and wages. Unions in Spain are campaigning for the regulation of fixed-term contracts. Young people are much more likely to have such contracts, which were widely used during the recession to shed workers, thus contributing directly to the extremely high rate of youth unemployment in Spain. In Sweden, unions have countered the assertions of employers that employment laws act as barriers to entry into the labour market for young workers. They argue that attention instead needs to focus on choices of subject specialism in higher education and more effective job-matching services. In order to promote the interests of young workers better, trade unions have sought to engage with them to a greater extent (given that they are often underrepresented in many organisations). There have been efforts to recruit more young union members so that trade unions can better represent and negotiate for their interests for example, in collective bargaining. In order to do this, trade unions are sometimes using more youth-friendly approaches such as social media campaigns and online support mechanisms for interns, working students and trainees. In some Member States, they are joining forces with other organisations to engage in issues particularly affecting young people. In France, for example, unions teamed up with student organisations and youth groups in protests against raising the retirement age, as unions felt this would impact on job opportunities for young people. In Slovenia, the trade union movement has organised joint protests with youth groups against the Mini Jobs Act, which allows for more flexible employment
conditions in mini jobs (jobs with fewer than 14 hours per week) and which is likely to particularly affect working students. Trade unions have also actively engaged in implementing active labour market policies, these policies being seen as reasonably effective. In many countries (Austria, Cyprus, Germany, Hungary, Ireland, the Netherlands, Portugal and the UK), this takes the form of campaigning and negotiating with employers and government for a more extensive use of apprenticeship and training positions.26 In spite of the reduced levels of social dialogue in many Member States, social partners are still engaging in dialogue on the issue of youth unemployment. The crisis has pushed it up the agenda in many countries. In terms of collective bargaining, however, there are only a few instances where the situation of young workers has been directly addressed, as the competing priority of preserving employment through short-time working schemes has left little scope for manoeuvre.
Sustainable work and employment

The Fifth European Working Conditions Survey found that around 60% of workers in the EU felt that they would be able to still do their current job at the age of 60 a majority, but not an overwhelming one. As indicated earlier, younger workers are more likely to work in physically demanding jobs and in jobs with high levels of strain, with potential, negative long-term consequences. Such workers are at a higher risk of being unable to work into their later years. Given that these young people will constitute the workforce of the future (with a shrinking birth rate), it is in the interests of European societies generally to ensure both good working conditions and the scope to develop and contribute to their fullest potential.
26
Simms, M., Eurofound (2011), Helping young workers during the crisis: contributions by social partners and public authorities
4 5 TJ-FF-11-008-EN-C
Europe cannot afford that so many young people who have the potential to contribute to our societies and our economies are left behind. We need to realise the potential of all young people in Europe in order to recover from the crisis. Jos Manuel Barroso, the President of the European Commission, January 2011
European Foundation for the Improvement of Living and Working Conditions (Eurofound)
Wyattville Road Loughlinstown Dublin 18 Ireland Tel.: (353-1) 204 31 00 Fax: (353-1) 282 64 56 information@eurofound.europa.eu www.eurofound.europa.eu
ISSN 1830-8805 ISBN 978-92-897-1040-4
EF/11/40/EN
Design : www.imageplus.be
Foundation Findings provide pertinent background information and policy pointers for all actors and interested parties engaged in the current European debate on the future of social policy. The contents are based on Eurofound research and reflect its autonomous and tripartite structure.
GLOBAL EMPLOYMENT TRENDS FOR YOUTH 2012
+0.1 +2.03 +0.04 -25.301 023 -00.22 006.65 0.887983 +1.922523006.62 -0.657987 +1.987523006.82 -006.65 +0.1 0.887987 +1.987523006.60 0.887987 +2.03 +1.0075230.887984 +1.987523006.64 0.887985 +0.04 +1.997523006.65 0.887986 +1.984523006.66 -25.301 0.327987 +1.987523006.59 -0.807987 023 +1.987521006.65 0.-887987 +1.987523006.65 -00.22 0.807987 +1.987523 0.887983 +1.987523006.62 006.65 0.887983 +1.922523006.62 -0.883988 +1.987523006.63 -006.65 0.894989 +0.1 -0.657987 +1.987523006.82 -006.65 +0.1 +1.987523006.65 0.887990 +2.03 +0.887987 +1.987523006.60 0.887987 +2.03 +0.1 +0.04 +1.0075230.887984 +1.987523006.64 0.887985 +0.04 +2.03 -25.301 +1.997523006.65 0.887986 +1.984523006.66 -25.301 +0.04 023 -0.327987 +1.987523006.59 -0.807987 023 -25.301 -00.22 +1.987521006.65 0.-887987 +1.987523006.65 -00.22 023 006.65 0.887983 +1.922523006.62 +1.987523006.62 +1.987523 0.887983 5 006.65 0.887983 0.807987 +1.922523006.62 -00.22 -0.657987 +1.987523006.82 -006.65 -0.883988 +1.987523006.63 -006.65 -0.894989 7 -0.657987 +1.987523006.82 -006.65 006.65 0.887983 +1.922523006.62 +0.887987 +1.987523006.60 0.887987 +1.987523006.65 0.887990 .887 0.887987 +1.987523006.60 0.887987 -0.657987 +1.987523006.82 -006.65 +1.0075230.887984 +1.987523006.64 0.887985 23 220 +1.0075230.887984 +1.987523006.64 0.887985 0.887987 +1.987523006.60 0.887987 +1.997523006.65 0.887986 +1.984523006.66 87 48 +1.997523006.65 0.887986 +1.984523006.66 +1.0075230.887984 -0.327987+1.987523006.64 0.887985 +1.987523006.59 -0.807987 523 0.327987 +1.987523006.59 -0.807987 +1.997523006.65 0.887986 +1.984523006.66 +1.987521006.65 0.-887987 +1.987523006.65 1. 9 +1.987521006.65 0.-887987 +1.987523006.65 0.327987 +1.987523006.59 -0.807987 0.807987 +1.987523 0.887983 +1.987523006.62 5 0.807987 +1.987523 0.887983 +1.987523006.62 +1.987521006.65 0.-887987 +1.987523006.65 -0.883988 +1.987523006.63 -006.65 -0.894989 0 -0.883988 +1.987523006.63 -006.65 0.894989 0.807987 +1.987523 0.887983 +1.987523006.62 +1.987523006.65 0.887990 +1.987523006.65 0.887990 -0.883988 +1.987523006.63 -006.65 0.894989 +1.987523006.65 0.887990
May 2012
Global Employment Trends for Youth 2012
InternatIonal labour offIce Geneva
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Contents
acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Youth unemployment crisis continues in both developed and developing economies . . . . . . . . . . . . . . . . . . . . regional impact and the aftermath of the economic crisis . . Participation or drop-out?. . . . . . . . . . . . . . . . . . . . . . longer-term consequences of the youth jobs crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 7 11 13 13 16 19 21 22 25 29 29 30 31 35 39 43 43 43 44 44 44 45 45 45 46
3. Temporary employment and part-time work: Transition or trap?. . . . . . . . . employment protection legislation and labour market duality . . . . . . . . . . . . . Youth in developing economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Education and the labour market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . education as a shield in developed economies . . . . . . . . . . . . . . . . . . . . . . . not only more but better education and training is needed in developing economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The crisis has brought an increased detachment of youth from the labour market . 5. Youth employment policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 1. World and regional tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1. Global unemployment and unemployment rates, youth (1524), adult (25+) and total (15+), 2007 to 2012 . . . . . . . . . . . . . . . . . . . . . . . 2a. Youth unemployment rates 2000 and 20072016, by region (%) . . . . . . . . . 2b. change in youth unemployment and unemployment rates between 1998 and 2008 and between 2008 and 2011, by region . . . . . . . . . . . . . . . . . . 3a. change in male youth unemployment and unemployment rates between 1998 and 2008 and between 2008 and 2011, by region . . . . . . . . . . . . . . . . . . 3b. change in female youth unemployment and unemployment rates between 1998 and 2008 and between 2008 and 2011, by region . . . . . . . . . 4. Gross enrolment ratio in tertiary education, by region, 200009 (%) . . . . . . 5. Gender gaps in youth labour force participation rates, by region, 1991, 2001 and 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. five-year average of youth labour force growth, thousands . . . . . . . . . . . . . 7. unemployment rates by educational level, selected developed economies, 2000 and 2010 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Youth employment, poverty and neet rates in selected developing economies, by sex (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex 2. Note on global and regional projections . . . . . . . . . . . . . . . . . . . . . Annex 3. Inventory of current country measures to address the youth employment crisis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Boxes 1. The impact of employment protection legislation on the youth labour market. . 2. Measuring labour market transitions: Ilos Work4Youth Project . . . . . . . . Figures 1. Global youth unemployment and unemployment rate, 19912012 . . . . . . . . 2. Youth unemployment rate estimates and projections (200016, %) . . . . . . . 3. Youth unemployment rates and adjusted youth unemployment rates to account for reduced labour force participation, by sex, world and regions, 2011 (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Youth labour force participation rate in france and Spain, 19902010 (%). . . 5. Youth labour force participation rate in Pakistan, 19902007 (%) . . . . . . . . 6. Part-time employment rates for youth and adults in the european union, 200011 (second quarter, %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7a. change in the incidence of temporary employment in total employment in the european union, youth and adults, 200008 (second quarter, %) . . . 7b. change in the incidence of temporary employment in total employment in the european union, youth and adults, 200811 (second quarter, %) . . . . 8a. Share of unpaid family workers in total employment, youth and adults (%) . . 8b. Share of own-account workers in total employment, youth and adults (%) . . . 9. changes in unemployment rates by educational level, selected developed economies, 200010 (percentage points) . . . . . . . . . . . . . . . . . . . . . . . . 10. Youth neet rates in the european union, 200010, by sex (%) . . . . . . . . 11. Youth employment and poverty in selected developing economies, by sex (%) . 12. average poverty rates of neets, employed and unemployed youth in selected developing economies, by sex (%) . . . . . . . . . . . . . . . . . . . . . .
47 48 52 24 27 14 15 17 18 19 22 23 23 26 26 30 32 33 33
Acknowledgements
The Global Employment Trends for Youth 2012 report was prepared by Theo Sparreboom from the employment trends team, headed by ekkehard ernst, with contributions from Sandrine cazes, Sara elder and Steven Kapsos (Ilo) as well as from Isabel ortiz and Matthew cummins (unIcef). The production of the report was supervised by Moazam Mahmood, Director of the economic and labour Market analysis Department, and Jos Manuel SalazarXirinachs, executive Director for employment. azita berar-awad, Director of the employment Policy Department, provided helpful comments. Specific mention should be given to valia bourmpoula for preparing the global and regional estimates on the basis of the Global employment trends econometric models and for helpful research assistance. Derk van Wijk (Ilo consultant) assisted in the production of country tabulations, christian viegelahn prepared a review of the literature, and Pinar Hosafci provided research assistance. The publication would not have been possible without the contributions of other members of the Ilos employment trends team Philippe blet, francisco Guerreiro and alan Wittrup. The analysis provided in the Global employment trends series is only as good as the available input data. We take this opportunity to thank all institutions involved in the collection and dissemination of labour market information, including national statistical agencies and the Ilo Department of Statistics. We encourage additional collection and dissemination of country-level data in order to improve the analysis of employment trends provided in future updates of this report. We would like to express our thanks to colleagues in the Ilo Department of communication and Public Information for their continued collaboration and support in bringing the Global employment trends to the medias attention worldwide.
Executive summary
Youth unemployment crisis continues

The economic crisis abruptly ended the gradual decline in global youth unemployment rates during the period 200207. Since 2007 the global youth unemployment rate has started rising again, and the increase between 2008 and the height of the economic crisis in 2009 effectively wiped out much of the gains made in previous years. Globally, the youth unemployment rate has remained close to its crisis peak in 2009. at 12.6per cent in 2011 and projected at 12.7per cent in 2012, the global youth unemployment rate remains at least a full percentage point above its level in 2007. nearly 75million youth are unemployed around the world, an increase of more than 4million since 2007. Medium-term projections (201216) suggest little improvement in youth labour markets. by 2016, the youth unemployment rate is projected to remain at the same high level. large increases were experienced in particular by the Developed economies & european union, central & South-eastern europe (non-eu) & cIS, latin america & the caribbean and South asia. In the Developed economies & european union, as well as in South asia, little progress has been made in rolling back the impact of the global economic crisis. In north africa, the youth unemployment rate has increased sharply following the arab Spring, rising by almost 5percentage points between 2010 and 2011 and adding to an already very high level of youth unemployment in this region as well as the Middle east. although (large) differences in regional youth unemployment rates remain, all regions face major youth employment challenges. even in east asia, the youth unemployment rate in 2011 was 2.8 times higher than the adult rate. apart from the immediate negative economic and social effects of high youth unemployment, it is important to consider its detrimental effects on future employability and wages.
Economic crisis and youth labour force participation

Discouraged by high youth unemployment rates, many young people have given up the job search altogether, or decided to postpone it and continue their stay in the education system. If the unemployment rate is adjusted for the drop-out induced by the economic crisis, the global youth unemployment rate for 2011 would rise from 12.6 to 13.6per cent. The crisis-induced withdrawal from the labour force amounts to 6.4 million young people worldwide, and is particularly pronounced in the Developed economies & european union. Pressure on young job seekers will mount further when those young people that have been delaying their entry into the labour market will return to activity, and start searching for work. In contrast, the youth participation rate in central & South-eastern europe (non-eu) & cIS is higher than expected on the basis of pre-crisis trends, which is likely to be partly poverty-driven. Participation rates of young men and women are not only driven by economic conditions but also by institutional factors such as broader societal values, culture and norms which are particularly important in regions with large gender gaps such as South asia, the Middle east and north africa. typically, female participation rates show a u-shaped pattern, with high
participation rates at low levels of income per capita that decrease as countries develop before rising again at higher income levels. This makes it difficult to disentangle the effect of the economic crisis on female participation rates from institutional or cultural factors.
Temporary employment and part-time work: Transition or trap?

around the world, many youth are trapped in low-productivity, temporary or other types of work that fall short of their aspirations and that often do not open opportunities to move to more permanent, higher-productivity and better-paid positions. In developed economies, youth are increasingly employed in non-standard jobs and the transition to decent work continues to be postponed. The growth of temporary employment and part-time work in the past decade, in particular since the global economic crisis suggests that this work is increasingly taken up because it is the only option available. for example, in the european union youth part-time employment as well as youth temporary employment has grown faster than adult part-time and temporary employment both before and during the economic crisis. The trend towards an increasing incidence of temporary contracts has fuelled the debate over labour market flexibility in general, and labour market duality in particular. although the evidence on the impact of employment protection legislation (ePl) on aggregate employment/unemployment levels is inconclusive, ePl could affect the position of particularly vulnerable labour market groups such as young people. a partial (dual-track) reform strategy of ePlinvolving labour market reforms only at the margin and for new hires while leaving the employment security entitlements of incumbent workers unchangedcould have been felt disproportionately by youth. In addition, the trend towards shorter tenure among young workers in many european countries could be due to the combination of easing in the legislation governing dismissal costs and procedures of regular contracts (and not of temporary contracts) with the weak individual bargaining power of young people. Youth in developing economies face strong structural barriers in their search for decent work. The share of paid employment in total employment in much of the developing world is low, and a high share of youth is likely to engage in unpaid family work supporting (informal) family businesses or farms. The school-to-work transition may also include unemployment spells or periods of temporary or casual employment if such opportunities arise while the final station is likely to be own-account work. Demographic trends are such that the youth labour force continues to grow in precisely those regions where few opportunities for paid work exist and where working poverty is widespread, in particular in Sub-Saharan africa and South asia.
Education and the labour market

education and training are essential for young people to enter the labour market successfully as they increase their potential productivity and employability. In developed economies, education also serves as a shield against unemployment for many youth, and there is a strong link between educational attainment and employment outcomes. In particular, individuals with primary education or less often have the highest unemployment rates, and fare worse than those with higher levels of education at times of crisis. However, more human capital development and higher levels of education do not automatically translate into improved labour market outcomes and more jobs. In developing economies, available job openings are limited by small formal sectors, and youth do not necessarily possess the right skills to qualify for the existing openings. fast structural change in these economies creates skill and geographical mismatches that pose special challenges for education and training systems and their responsiveness to labour market needs. In this respect, proper labour market information is necessary to facilitate both the role of education in meeting current labour demand and in facilitating change.
Young people that are neither in employment nor in education have become a serious concern for policy-makers, in particular in developed economies. This group, called neet (not in education, employment or training), often constitutes at least 10per cent of the youth population, and disproportionally includes youth with a low level of education in developed economies. Many countries have introduced policies to tackle this phenomenon, targeting specific subgroups of the neet such as school drop-outs or unemployed youth.
Youth employment policies

as youth unemployment rates are projected to remain essentially unchanged in 2012, and most regions face major youth employment challenges, youth employment policies warrant the highest priority. Important areas for interventions include: yy Macroeconomic and growth policies: where fiscally feasible, it is crucial to maintain or enhance measures that can help boost employment generation and jump-start a sustainable jobs recovery. Youth employment is a rising priority in national policy agendas but often it is not sufficiently translated into scaled up programmes, funding is often limited and resources underestimated. yy Active labour market policies and programmes: active labour market measures such as development of public employment services, wage and training subsidies or tax cuts can motivate employers to hire young people as well as to counteract the excess supply of young workers in times of crisis. equally important are programmes that aim to offset the mismatch of technical skills among youth, such as vocational training programmes, re-training of unemployed or discouraged youth, workplace training schemes, the creation or improvement of apprenticeship systems, entrepreneurship training programmes, soft and life skills training programmes for disadvantaged youth. yy better strategies are needed to improve social protection for young people, and to tailor labour market reforms for their specific needs. Decent employment is not only about generating any jobs, but also about improving the quality of jobs. yy Social dialogue and partnerships for youth employment: the establishment of broad-based partnerships to turn commitment to youth employment into reality. Partnerships among governments, employers organizations, trade unions and other organizations can be instrumental in determining the most appropriate action to be taken at national and local levels for the promotion of decent work for young people. yy Supporting strong labour market information and analysis systems which provide the basis to monitor labour markets and design and implement effective policies.
Executive summary
1.Introduction
The global youth unemployment rate has proved sticky, and remained close to its crisis peak. at 12.6per cent in 2011 and projected at 12.7per cent in 2012, the global youth unemployment rate remains at least a full percentage point above its level in 2007. nearly 75million youth are unemployed around the world, an increase of more than 4million since 2007. Youth unemployment and situations in which young people work under poor conditions incur social as well as economic costs. Youth unemployment has been shown to be tightly linked to social exclusion, as the inability to find employment creates a sense of uselessness and idleness among young people. The most obvious gains then, in making the most of the productive potential of youth and ensuring the availability of decent employment opportunities for youth, are the social and personal gains to young people themselves. The second clear gain to recapturing the productive potential of underutilized youth is an economic one. Idle youth are not contributing to the economic welfare of their country. The loss of income among the younger generation translates into a lack of savings as well as a loss of aggregate demand. Many youth who are unable to earn their own income have to be financially supported by the family. Governments fail to receive contributions to social security systems and are forced to increase spending on remedial services. a lack of decent work, if experienced at an early age, also threatens a persons future employment prospects and frequently leads to undesirable labour market outcomes over longer periods. all this is a threat to the growth potential of economies. In order to design appropriate labour market and macroeconomic policies to promote better labour market outcomes for youth, it is necessary to understand the specific situation of young people in labour markets. although this situation is strongly dependent on the overall labour market, youth also face specific barriers as they try to secure decent employment. These include the inexperience trap, which means that employers prefer workers that are experienced, and youth therefore do not manage to obtain an opportunity to gain experience. Youth also may be disadvantaged in the sense of having fewer contacts in the world of work. furthermore, once employed, they may still be among the first to be dismissed on the basis of the last-in first-out principle, as they have the least seniority. but even though young people might lack experience they tend to be highly motivated and capable of offering new ideas or insights. They are the drivers of economic development in a country, and forgoing this potential is an economic waste. Designing appropriate policies to support their transition to stable employment should therefore be a countrys highest priority. This report sets out the youth labour market situation around the world. It draws on the overall analysis of labour markets in the Global Employment Trends 2012 (Ilo, 2012a), and complements the Director-Generals report to the 2012 International labour conference (Ilo, 2012b). further findings include: 1. even though some regions have overcome or made progress in mitigating the impact of the global economic crisis, all regions face major youth employment challenges. 2. Youth unemployment rates continue at dramatic levels in the Developed economies & european union (regionally at 18.0per cent in 2011) where the actual situation is even worse than suggested by the unemployment rate due to massive drop-out from the labour
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force. Youth continuing their stay in the education system will put further pressure on unemployment rates once they enter the labour market. 3. Many youth in developed economies are increasingly trapped in non-standard and/or unstable employment due to both the impact of the economic crisis and labour market reforms. The effects of employment protection legislation reforms have been felt disproportionally by young workers. 4. In contrast to the developed economies, in central & South-eastern europe (non-eu) & cIS the crisis has increased participation of youth in labour markets which is likely to be partly poverty-driven. The youth unemployment rate in this region, at 17.6per cent in 2011, has declined somewhat since the height of the economic crisis. 5. The Middle east and north africa continue to experience exceptionally high levels of youth unemployment (with youth unemployment rates at 26.5 and 27.9per cent in 2011, respectively). together with South asia, these regions are also characterized by large gender gaps in youth labour force participation. 6. Youth in developing economies face strong structural barriers in their search for decent work. Young women are particularly disadvantaged with regard to labour market access as reflected in their low participation rates. 7. In developed economies, education still serves as a shield against unemployment for many youth. Therefore, those youth who are neither in education nor in employment warrant special attention. This so-called neet group includes the unemployed as well as discouraged youth who have effectively disconnected from the labour market. The rise of neet rates during the crisis in many developed economies is therefore a strong concern. 8. although education and training is critical in developing economies as well, more labour market information and analysis is needed to better match the demand and supply of skills in the developing world.
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2.Youth unemployment crisis continues in both developed and developing economies
The economic crisis abruptly ended the gradual decline in global youth unemployment rates during the period 200207. In contrast, since 2007 the global youth unemployment rate has started rising again, accelerating to an unprecedented 0.9percentage points increase between 2008 and the height of the economic crisis in 2009. This increase has taken a heavy toll on young people around the world and effectively wiped out much of the gains made in previous years (see figure1). at 12.6per cent in 2011, the global youth unemployment rate remains a full percentage point above its level in 2007. In 2011, nearly 75 million youth were unemployed around the world, an increase of more than 4million since 2007 (see table1).1 Projections for 2012 show no improvement, with the global youth unemployment rate projected at 12.7per cent. Mediumterm projections (201216) also suggest little improvement in youth labour markets. by 2016, the youth unemployment rate is projected to remain at the same high level (see table2a and figure2). In comparison to other groups on the labour market, youth face a particularly difficult situation, as is captured by the ratio of youth-to-adult unemployment rates. Globally, this ratio was 2.8 in 2011 and is projected at 2.7 in 2012 (see table1). This means that, in comparison with adults, youth continue to be almost three times as likely to be unemployed, and elevated unemployment rates continue to hit them disproportionally.
Regional impact and the aftermath of the economic crisis

Youth unemployment rates by region show large variations, ranging from 8.6 per cent in South asia to 25.7per cent in the Middle east in 2008. even though youth unemployment rates increased in most regions since then, there are important regional differences. The Developed economies & european union have been hit hardest by the crisis and its aftermath, and the change in both the unemployment rate and the number of unemployed youth from 2008 to 2011 were largest in this region. over this period, the number of unemployed youth increased by a massive 26.5 per cent while the unemployment rate rose by 4.7 percentage points above the level in 2008. Most of this increase occurred between 2008 and 2009, which resulted in historically high rates in several developed economies.2 Since 2009, not much progress has been made with the reduction of youth unemployment, and the regional youth unemployment rate reached 18.1per cent in 2010, its highest level since at least the early 1990s. Projections suggest a youth unemployment rate of 18.0per cent in the Developed economies & european union in 2012 (see tables 2a and 2b), in part reflecting the weak recovery in many countries. as shown in figure2, the youth unemployment rate in the medium term is projected to decrease but pre-crisis levels are not likely to be reached even by 2016. The economic crisis has also resulted in a dramatic increase in the youth unemployment rate in central & South-eastern europe (non-eu) & cIS, jumping from 17.0 per cent in
1 all tables are being referenced in annex 1. 2 See, for example, bell and blanchflower (2011) on youth unemployment in Sweden and the united States.
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Figure 1. Global youth unemployment and unemployment rate, 19912012

80 78 76
Youth unemployment (millions) Youth unemployment (millions) Youth unemployment rate (%) 12.4 J 11.7 J 11.0 J 69.9 12.0 12.0 11.9 J J J 11.4 J 11.3 J 76.4 76.4 77.1 73.0 72.9 74.0 13.1 J 12.9 12.8 12.8 J 12.7 12.7 J J J J 12.8 J 12.3 J 11.7 11.6 J J 77.9 12.7 12.7 J 12.6 J J
13.5 13.0 12.5 12.0 11.5

75.4 74.8 74.5 74.6 Youth unemployment rate (%)
74 72 70 68 66 64 62 60 58
12.6 J
74.9
11.0 10.5 10.0 9.5
69.2
67.5
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012p
p = projection Source: ILO, Trends Econometric Models, April 2012.
2008 to 20.5 per cent in 2009. However, contrary to the Developed economies & european union, the rate decreased between 2009 and 2011, and fell to 17.6per cent. This is still 0.6percentage points above its level in 2008 but reflects a decrease of 2.9percentage points since the height of the crisis (see figure 2). The decrease in the youth unemployment rate in central & South-eastern europe (non-eu) & cIS has also contributed towards a slight reduction in the number of unemployed youth in the region since 2008. latin america & the caribbean have also experienced a sharp increase in youth unemployment rates during the crisis, from 13.7 in 2008 to 15.6 in 2009. However, much of the impact of the economic crisis has been overcome, and the rate decreased to 14.3per cent in 2011. nevertheless, the youth unemployment rate remains above its pre-crisis level and is not projected to decline in the medium term (see figure2), partly owing to weaker growth. In South asia, the youth unemployment rate has increased by 0.5 percentage points between 2008 and 2009, and by a further 1.1 percentage point during 200910. Since 2008, South asia added 1.2million youth to the ranks of the unemployed, by far the largest number outside the Developed economies & european union. Similar to the developed economies, South asia has also made little progress in rolling back the negative impact of the slowdown in growth during 200809 on youth unemployment (see figure2). north africa and the Middle east stand out in terms of their overall unemployment problem, and these are the only two regions where the unemployment rate exceeded 10per cent in 2011 for the population aged 15 and above. Moreover, the ratios of youth-to-adult unemployment rates are exceptionally high, at 4.0 in the Middle east and at 3.9 in north africa, and youth unemployment rates have been at very high levels for decades in these regions. north africa was relatively resilient to the global economic crisis but following the arab Spring economic growth decreased and the youth unemployment rate increased sharply by 4.9 percentage points in 2011 (see figure 2). The Middle east is one of the two regions in which the youth unemployment rate decreased from 2008 to 2009 but since 2009 the rate has increased. In 2011, the youth unemployment rate stood at 26.5per cent in the Middle east and at 27.9per cent in north africa. South-east asia and the Pacific has been affected less by the crisis in terms of the youth unemployment rate, and managed a slight reduction in the rate between 2008 and 2009. In 2011, at 13.5per cent the youth unemployment rate was 0.7percentage points below the level in 2008 (see figure2). following the sharp rise in the youth unemployment rate in the early stages of the global economic crisis, the youth unemployment rate remained close to 9per cent in east asia in recent years. The youth unemployment rate in Sub-Saharan africa, at 11.5per cent in 2011, has been fairly stable since 2005.
14
65.8
66.4
69.0
69.1
70.2
70.3
70.8
Figure 2. Youth unemployment rate estimates and projections, 200016 (%)

32 27 22 17 12 7
World
32 27 22 17 12 7
Developed Economies & European Union
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
32 27 22 17 12 7
Central & South-Eastern Europe (non-EU) & CIS
32 27 22 17 12 7
East Asia
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
32 27 22 17 12 7
South-East Asia & the Pacic
32 27 22 17 12 7
South Asia
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
32 27 22 17 12 7
Latin America & the Caribbean
32 27 22 17 12 7
Middle East
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
32 27 22 17 12 7
North Africa
32 27 22 17 12 7
Sub-Saharan Africa
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 p p p p p p
p = projection Note: The charts depict the evolution of global and regional unemployment rates between 2000 and 2010 as well as unemployment rate projections for 2011 to 2016. Projections are presented in the form of a fan chart, indicating the probability of various outcomes for the unemployment rates. Each shade of the fans corresponds to one-third of the condence interval around the central projection (see Annex 2 for methodological information). Source: ILO, Trends Econometric Models, April 2012.
15
although the economic crisis has been detrimental for both young men and women, at the global level as well as in most regions the impact of the economic crisis on female youth unemployment rates was greater than on male rates. The difference in impact was very pronounced in north africa where the female youth unemployment rate rose by 9.1percentage points in comparison to 3.1percentage points for male youth. only in the Developed economies and the european union was the impact more detrimental for young men (tables 3a and 3b). In sum, youth unemployment rates have increased in most regions since 2008, at times to dramatic levels. even though there are large differences in regional youth unemployment rates, and some regions have made better progress in mitigating or rolling back the impact of the global economic crisis than others, all regions face major youth employment challenges. even in east asia, perhaps the most economically dynamic region, the youth unemployment rate in 2011 was 2.8 times higher than the adult rate. In the medium term, upward pressures on youth unemployment rates are projected in several regions, including the Middle east, east asia and South-east asia and the Pacific.
Participation or drop-out?
High youth unemployment rates discourage young people from looking for work, and those who are not prepared to give up face long periods of job search. unsurprisingly, some of the countries with very high youth unemployment rates also have a high incidence of youth longterm unemployment (the number of unemployed for one year or longer as a proportion of all unemployed). Data from eurostat show that, in 2011, the youth unemployment rates in croatia, Slovakia and Spain were 35.8, 33.6 and 46.4per cent, respectively; the highest rates among european countries with available data at the time of writing this report. around onethird of the unemployed youth in Spain were looking for a job for more than a year while in croatia and Slovakia the long-term unemployed accounted for more than half of the unemployed youth in the third quarter of 2011. Such extremely adverse labour market conditions lead many youth to give up the job search altogether or to decide to postpone it and continue their stay in the education system.3 an indication of the gap in labour force participation induced by the crisis can be obtained through a comparison of pre-crisis trends in youth labour force participation and the Ilos estimates and projections of the economically active population. In figure3, such a comparison is made for each region in 2011, and separately for young men and women. Globally, this labour force gap amounted to 1.2per cent for young men and 0.5per cent for young women. In other words, if the unemployment rate is adjusted for drop-out induced by the economic crisis, the global youth male unemployment rate would rise from 12.4 to 13.6per cent, and the global youth female unemployment rate would rise from 13.0 to 13.5per cent. The crisisinduced withdrawal from the labour force amounts to 6.4million young people worldwide, which means that the adjusted global youth unemployment rate would be 13.6per cent (compared with an actual rate of 12.6per cent). labour force gaps show striking differences between regions. In the Developed economies & european union, the crisis resulted in around 2million youth withdrawing from the labour market. In the oecD, higher unemployment rates have been linked with lower participation rates, providing evidence of a discouraged worker effect (bell and blanchflower, 2011). Pressure on young job seekers will mount further when those young people that have
3 Young people may also seek work elsewhere, including abroad, but issues relating to relocation or migration of youth are beyond the scope of the current report.
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Figure 3. Youth unemployment rates and adjusted youth unemployment rates to account for reduced labour force participation, by sex, world and regions, 2011 (%)
45 40 35 30 25 20 15 10 5 0
Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Unemployment rate Unemployment rate adjusted for labour force gap
World
Developed Economies and European Union
Central and South-Eastern Europe (non-EU) and CIS
East Asia
South-East Asia and the Pacic
South Asia
Latin America and the Caribbean
Middle East
North Africa
Sub-Saharan Africa
Note: The adjustment of the youth unemployment rate has been made on the basis of a comparison of pre-crisis trends in youth labour force participation and the ILOs estimates of the economically active population. Source: ILO calculations based on ILO, Trends Econometric Models, October 2011, and ILO (2011d), Economically Active Population Estimates and Projections, 6th edition.
been delaying their entry into the labour market will return to activity, and start looking for work.4 In contrast, the youth participation rate in central & South-eastern europe (non-eu) & cIS was higher than expected on the basis of pre-crisis trends. Important factors explaining these opposing trends are the relative underdevelopment of social protection mechanisms in central & South-eastern europe (non-eu) & cIS in comparison to developed economies, as well as the more detrimental impact of the economic crisis on wages in at least some countries in central & South-eastern europe (non-eu) & cIS (Ilo, 2010b). The loss of family income due to stagnant or declining wages or due to the lack of unemployment benefits upon job loss by family members is likely to have pushed youth into the labour market. In other words, these youth would have preferred to remain inactive, for example to continue their studies, if the economic environment would have been more favourable and their families could have continued their support. The upward effect on youth participation rates is consistent with the sharp slowdown in the growth of tertiary enrolment ratios in central and eastern europe and the decrease of these ratios in central asia at the height of the economic crisis in 2009 (see table4). In ukraine, for example, the tertiary enrolment ratio increased on average by 3.7 percentage points annually from 2000 to 2008 but this increase slowed down to 1.5percentage points in 2009 and, in 2010, tertiary enrolment decreased by 1.1points. In the absence of sufficient decent jobs, many youth in central & South-eastern europe (non-eu) & cIS may also have been forced to rely on jobs with low barriers to entry, such as own-account work or contributing family work (see section 3 below). labour market distress and discouragement on the one hand, and the need to work and sustain (family) income on the other, underlie much of the regional variations shown in figure3, but these factors should also be analysed in the context of regional structural economic and labour market conditions. Many low-income economies in Sub-Saharan africa weathered the crisis well, mainly due to their more limited trade and financial linkages with
4 In the netherlands, for example, analysts expect a rise in youth unemployment in the course of 2012 due to the entry of youth who have been delaying their labour market entry; see De Volkskrant, 16 March 2012 (http://www.volkskrant. nl/vk/nl/5273/Werk/article/detail/3225974/2012/03/16/Positie-jongere-op-arbeidsmarkt-holt-achteruit.dhtml).
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Figure 4. Youth labour force participation rate in France and Spain, 1990-2010 (%)
50
France
65 60
Spain
Men
45
Men
55 50
40
Women
35
Women
45 40
30
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
35
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source: ILO (2011a), Key Indicators of the Labour Market, 7th edition (Geneva), table 1b (national estimates).
the global economy and their reliance on agriculture as a source of employment and income. In these countries, labour force participation rates tend to be high and little affected by global economic conditions. apart from short-term and structural economic conditions, participation rates of young men and women are driven by institutional factors such as broader societal values, culture and norms. Institutional factors are particularly important in regions with large gender gaps such as South asia, the Middle east and north africa (see table5). at the country level, this can be illustrated if we compare participation rates for young men and women in two developed economies, france and Spain, on the one hand, and in Pakistan (South asia) on the other. as shown in figure4, the gender gap in youth participation rates for young people in france and Spain is limited, in line with the relatively small gap in participation rates in the Developed economies & european union. furthermore, the development of participation rates for young men and women in these two countries is fairly similar over time. economic opportunities certainly play an important role in this development, as indicated by the drop in participation for both men and women in the most recent years. In Pakistan, in contrast, youth male and female participation rates show little similarity in their development over time, and are at very different levels, with some progress towards closing the still large participation gap (see figure 5). Indeed, participation rates of young Pakistani men are among the highest in the world but less than one out of five young Pakistani women participates in labour markets, which primarily seems to reflect cultural barriers to female labour force participation. Since the early 1990s there has been some convergence between (youth) male and female participation rates in Pakistan but this process is not linear. typically, female participation rates show a u-shaped pattern, with high participation rates at low levels of income per capita that decrease as countries develop before rising again at higher income levels.5 This pattern has been confirmed by a number of (cross-) country studies (Durand, 1975; Goldin, 1995; Mammen and Paxson, 2000), including for Pakistan (fatima and Sultana, 2009). consequently, it is difficult to disentangle the effect of the economic crisis on female participation rates from institutional or cultural factors in South asia, and the differences between young men and women in figure3 may have little to do with short-term global or regional economic conditions. empirical studies of countries in South asia have often found that female participation is lower if household income increases (e.g. bangladesh begum and lawson, 2009; IndiaDasgupta and Goldar, 2005; Pakistanfaridi et al., 2011). Such studies give weight to the assertion that women primarily enter the labour market in the
5 note that participation of young males is not necessarily following a linear trend either, as illustrated in figures 4 and5. However, female participation has attracted much more attention, given the very low levels seen in some developing countries and the related issues of both equity and the potential for economic development.
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Figure 5. Youth labour force participation rate in Pakistan, 1990-2007 (%)

74
Men
20 18 16
Women
72
70 14 68 12 66 10 8
64
1990
1992
1994
1997
1999
2002
2005
2007
1990
1992
1994
1997
1999
2002
2005
2007
Source: ILO (2011a), Key Indicators of the Labour Market, 7th edition (Geneva), table 1b (national estimates).
case of economic necessity. They also help explain why considerable economic growth in past decades has resulted in little progress in reducing gender gaps in youth participation rates in South asia (see table5). as economic growth by itself is not sufficient to render support for convergence between male and female participation rates, strong gender policies are needed in regions with large gender gaps to overcome the persisting structural barriers to female labour force participation. In this respect, it is noteworthy that the unemployment gap adjusted for labour force drop-outs would actually be larger in the South asia, latin america & the caribbean and Middle east regions.
Longer-term consequences of the youth jobs crisis

Persistent and high youth unemployment has also important adverse longer-term consequences for currently young people. These include a higher risk of future unemployment, a prolonged period of unstable jobs and a potentially depressed income growth (arumlamplam et al., 2001). Such consequences may result from a deterioration of skills but also from prospective employers negative perceptions of youth who have been out of work for prolonged periods. Moreover, these effects are believed to be more severe for youth entering the workforce with an education level below the tertiary level who are already in a relatively disadvantaged position compared with their better educated peers (see section 4 below). apart from its detrimental effects on future wages and employability, youth unemployment may hurt happiness, job satisfaction and health for many years thereafter (Morsy, 2012). Increased vulnerability to future shocks: the jobs crisis has forced many households to sell their assets and borrow money which has increased the vulnerability of youth, in particular, to ongoing or future shocks. In order to meet consumption needs during periods of unemployment or reduced or erratic wages, many households have drawn down savings and sold possessions, or turned to friends, relatives, membership-based clubs, community groups and banks, where possible, for financial help. This behavior has been observed in a wide range of countries since 2008, including bangladesh, cambodia, the central african republic, Ghana, Kazakhstan, Kenya, Mongolia, the Philippines, Serbia and Thailand (Heltberg et al., 2012), armenia, bulgaria, latvia, Montenegro and romania (World bank, 2011), nigeria (Samuels et al., 2011) and tonga (Patel and Thapa, 2010), among others. Wage scars: unemployment produces permanent scars rather than temporary blemishes, especially on youth populations. fairlie and Kletzer (1999) estimated that being unemployed while young results in lower future earnings by a magnitude of 8.4 and 13.0per cent for males
19
and females, respectively. More recently, a study by Kahn (2010) estimated that a 1 percentage point increase in unemployment in the united States results in a 6 to 7 per cent decrease in the wages of college graduates. In addition, although the cost in terms of foregone wages decreases over time, it still remains significant 15 years later. In the united Kingdom, burgess et al. (2003) found that youth unemployment raises the probability of unemployment later on; Gregg and tominey (2005) estimated an earnings loss of up to 21per cent at age 41 for workers who experience unemployment in early adulthood; and bell and blanchflower (2010) showed that unemployment in a persons early twenties negatively affects employment and earnings prospects, as well as health and job satisfaction, up to two decades later. Social instability: the jobs crisis further threatens the well-being of households and young workers through rising levels of social discontent and instability. In this respect, the Ilos social unrest index indicates a significant aggravation of social unrest in 45 of the 118 countries surveyed (Ilo, 2011f). The regions under greatest threat include the Middle east and north africa, parts of asia and the group of developed countries. one of the most obvious manifestations of these findings is the increasing number of street demonstrations and protests observed worldwide since 2010, which have been closely linked to the arab Spring and european sovereign debt crises.
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3.Temporary employment and part-time work: Transition or trap?
The type and quality of work are important determinants of the long-term labour market prospects of young people. In this regard, it is worrying to note that around the world, many youth are trapped in low-productivity, temporary or other types of work that fall short of their aspirations and that often do not open opportunities to move to more permanent, higherproductivity and better-paid positions. Young people often go through a transition period, during which work, study, travel and other activities complement each other. although such a transition period by itself is no reason for concern, there are signs that youth in developed economies are increasingly trapped in non-standard jobs and the transition to decent work continues to be postponed. The growth of temporary employment and part-time work in the past decade, in particular since the global economic crisis, suggests that this work is increasingly taken up because it is the only option available. Part-time work has been growing for many years, more recently due to the growth of male part-timers (Ilo, 2011b).6 Many youth choose part-time work because of the constraints in the number of hours available for work. an increase in the part-time employment among young people can therefore be a positive sign that young workers combine work with study or other activities as a means of gaining experience and broadening their networks. However, the sheer magnitude of the increase in part-time employment among youth in european countries since the onset of the crisis suggests that part-time work is not only increasing because youth choose to work part-time (Ilo, 2011c). In the european union, youth part-time employment has grown faster than adult parttime employment both before and during the economic crisis (see figure 6). between the second quarter of 2008 and 2011, the youth part-time employment rate increased by 3.6percentage points in the european union as a whole while it increased by 11.8percentage points in Spain and 20.7percentage points in Ireland.7 In many countries, including cyprus, Denmark, Greece, Hungary, Portugal and Slovenia, the increase during the same period exceeded 5percentage points. During both 200008 and 200811, part-time employment grew faster for young women than for young men (see figure6). The Ilos KIlM database also shows a rapid increase of the youth part-time employment rate between 2008 and 2010 in australia, canada, Japan and new Zealand (Ilo, 2011a). Youth are also more likely than adults to work as temporary employees. In the second quarter of 2000, 35.2 per cent of youth employees worked on temporary contracts in the european union, compared to 8.9per cent of adult employees (aged 2564 years). In other words, youth were already almost four times as likely as adults to be a temporary employee at that time. as shown in figure7a, between 2000 and 2008 the share of temporary employment in total employment increased for both youth and adults in the majority of european union Member States. However, the increase for youth, at 4.3 percentage points, was more than double the increase for adults (2.1percentage points). In five countries, the increase for youth exceeded tenpercentage points (Italy, luxembourg, Poland, Portugal and Slovenia). Since the
6 There is no internationally agreed definition as to the number of hours below which one is considered to work parttime. typically, the dividing line is between 30 and 40 hours per work. The oecD is using 30 hours as its cut-off line (see Ilo, 2011a, ch. 6). 7 Quarterly comparisons are made in view of data availability.
21
Figure 6. Part-time employment rates for youth and adults in the European Union, 200011 (second quarter, %)
35 40
30
Youth
35 30
Female youth
25 25 20
Male youth
Adult
20 15 10
15
10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: ILO calculations based on Eurostat.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Figure 7. Change in the incidence of temporary employment in total employment in the European Union, youth and adults
50 40 30 20 10 0 10 20 Greece Czech Republic Spain Luxembourg Slovakia Belgium Lithuania Slovakia Latvia Malta Denmark Portugal Austria Cyprus Romania Italy Slovenia Euro area (17 countries) Germany Ireland Hungary Finland United Kingdom European Union (27 countries) Sweden Netherlands Poland Ireland
(a) 200008, second quarter (%)

Youth Adult
15 12 9 6 3 0 3 6
(b) 200811, second quarter (%)

Youth Adult
United Kingdom
Euro area (17 countries)
Source: ILO calculations based on Eurostat.
22
European Union (27 countries)
Czech Republic
Luxembourg
Greece
Portugal
Hungary
Romania
Italy
Latvia
Lithuania
Denmark
Germany
Netherlands
Slovenia
Belgium
Spain
Cyprus
Finland
Sweden
Austria
Poland
Malta
onset of the global economic crisis there has been a further acceleration in the use of temporary contracts for young workers. between 2008 and 2011, the share of temporary employees increased by 2.7percentage points, or around 0.9percentage points per year compared with 0.5points per year during 200008. In contrast, the average share of temporary employment for adult workers in the eu remained unchanged during the same period (see figure7b).8 Many temporary employees have good reasons to work on temporary contracts, for example, because they are still studying. This is, in fact, the most important reason for youth to take up temporary jobs in the european union (41.3per cent of temporary employees in 2010 were students). nevertheless, the increasing importance of temporary work as an option of last resort is confirmed by the fact that more than one out of three youth state that they could not find a permanent job, and this proportion has been rising since the crisis started (from 36.3 in 2008 to 37.1per cent in 2010).
Employment protection legislation and labour market duality

The trend towards an increasing incidence of temporary contracts has fuelled the debate over labour market flexibility. In particular, the discussion on labour market duality has been increasingly attracting attention. labour market duality is by no means a new phenomenon but in the context of a job crisis the relationship between employment protection legislation (ePl, e.g. hiring and firing rules) and labour market outcomes has become a top priority for policy-makers. Much empirical work has been produced on the impact of ePl on labour market outcomes. for more than two decades, this has been a highly controversial topic and many studies have tried to identify a causal link between ePl and (un-)employment across oecD countries (see box1). So far, there is a general consensus that the evidence on the impact of ePl on aggregate employment/unemployment levels is not conclusive but ePl could have some positive/mitigating effects particularly for vulnerable labour market groups such as young people. at the same time, many economists have argued that the growing segmentation in european labour markets over the last two decades was due to a partial (dual-track) reform strategy, involving labour reforms only at the margin (for new hires) while employment security entitlements of incumbent workers remained unchanged (boeri, 2011; eichhorst and Marx, 2011). accordingly, it is the deregulation of the use of fixed-term contracts and agency work (rather than the reduction of protection for workers on permanent contracts) that led to increased duality between the insiders and outsiders, especially in countries where strict ePl for regular workers was combined with little protection of fixed-term contracts. Due to the asymmetric treatment of different groups of workers, the effects of these ePl reforms have been felt disproportionately by new entrants, in particular by youth (Dolado et al., 2002; Kahn, 2007; cazes and tonin, 2010). fewer studies have assessed the causal link between ePl and labour market duality, in particular (temporary) youth employment. boeri (2011) highlights the fact that labour market duality would not only be characterized by a high share of temporary contracts but also by the lower probability of transitioning from temporary to permanent contracts due to the asymmetry between the two types of contracts. cazes and tonin (2010) found a trend towards shorter tenure among young workers in many european countries, and their findings suggest that this job instability was due to the combination of the easing in legislation governing dismissal costs and procedures of regular contracts (and not of temporary contracts) with weak individual bargaining power of young people.
8 It can be noted that the fact that the share of temporary employment for adult workers did not change during 200811 in the european union may also be the result of a disproportionate reduction in the number of temporary contracts, as opposed to the creation of new permanent contracts.
23
Box 1. The impact of employment protection legislation on the youth labour market
Protecting employment and stabilizing jobs can be achieved using different instruments. Traditionally, countries have resorted to introducing clauses governing individual labour contracts to prevent employers from firing workers at will. In addition, in some countries, the legal system allows for an extensive use of anti-discrimination acts to prevent or limit firing workers with certain characteristics (related to their sex, age or ethnic group). Increasingly, countries have sought alternative ways of securing employment, either by differentiating social security payments across firms to account for the level of job turnover i.e. effectively penalizing those companies that have a very high turnover of workers, such as the experience rating system in the United States or by considering employment protection as part of the overall social security system with entitlement rights transferable from one job to another, as in the recently reformed system in Austria. When implemented at the level of individual contracts, employment protection legislation (EPL) makes provisions for severance payments, advance notice periods and other procedural aspects related to the dismissal of employees. These regulations provide an insurance scheme to workers, avoiding unexpected income fluctuations and allowing sufficient time for the search of a new job (Pissarides, 2001). They are supportive of employment relations that are more long-term in nature, offering incentives for general and job-specific training investments that may result in higher productivity (Fella, 2005) and more innovative activity, especially when combined with particular wage bargaining systems (Bassanini and Ernst, 2002). Job security can also be crucial when it comes to the wellbeing and health of workers (Kompier et al., 2009). However, dismissals are more costly for employers in the presence of stringent regulations. It is these higher costs that may have an impact on youth unemployment. In theory, EPL may have opposing effects on youth unemployment. On the one hand, employers may hire fewer workers in anticipation of higher dismissal costs. Job creation would then be reduced, which would make it more difficult to find jobs in particular for young jobseekers that form a considerable part of the unemployed. On the other hand, higher dismissal costs also lower the dismissal rate and therefore reduce the inflow into unemployment. This may encourage training activities that are expected to strengthen the employability of youth (Forrier and Sels, 2003). The magnitude of the effects also hinges on the degree to which wages can adjust in order to reflect higher dismissal costs (Lazear, 1990). Empirical evidence on the impact of EPL on youth unemployment is inconclusive. While many tend to be supportive of the view that there is an adverse impact on youth unemployment (Addison and Texeira 2003; Heckman and Pags, 2000; Botero et al., 2004; Bernal-Verdugo et al., 2012), this impact has been questioned by others (Freeman, 2005; Howell et al., 2007), and there are some studies that reject an adverse impact of EPL on youth unemployment (Noelke, 2011). Some of the critical points that are brought forward include concerns over the indicators that are used to measure EPL (Bertola et al., 2000; Berg and Cazes, 2008) and the fact that statistical inference is mostly based on cross-country comparisons, which raises issues related to policy endogeneity. If country-specific institutional features such as the degree of unionization are related to both youth unemployment and EPL, then there is a high risk that results are spurious when the estimation methodology fails to take this into account. Finally, EPL is often analysed in an isolated way, ignoring interactions with other labour market policies.
In europe, the introduction of a single contract has been debated in both academic and political circles as a response to labour market duality. The idea would be to narrow the differential between temporary and permanent workers through a more gradual and continuous increase of rights with tenure (bentolila et al., 2010). While it is clear that an exit strategy from duality is needed, it is not obvious that the best approach would be through the introduction of a single contract. Many southern european countries where such a policy option is being considered have additional problems that hamper labour markets from functioning effectively, such as high school drop-out rates or inadequate active labour market policies. also, implications of an easing on wage developments need to be considered: existing empirical studies suggest that lowering ePl would increase entry-level wages, making it more difficult for young people to access employment (leonardi and Pica, 2007, 2010). Therefore, a well-balanced approach towards ePl, which is coherent with other labour market policies and institutions, and which is based on social dialogue should be a key ingredient for youth employment policies (Ilo and oecD, 2011).
24
Youth in developing economies

In the developing world, youth have traditionally faced strong structural and other barriers in their search for decent work. This is reflected in high rates of vulnerable employment and working poverty. Globally, vulnerable employment, defined as the sum of own-account work and unpaid family work, accounts for 56.2per cent of the employed in developing regions in 2011. Such a high share of workers in vulnerable employment indicates widespread informal work arrangements, whereby workers typically lack adequate social protection and opportunities to influence their conditions of work. vulnerable employment is also often characterized by low pay and difficult working conditions, in which workers fundamental rights may be undermined.9 The share of workers in vulnerable employment by region in the developing world in 2011 ranges from one in five in central & South-eastern europe (non-eu) & cIS (20.6per cent) to more than three out of four workers in South asia and Sub-Saharan africa (77.7 and 76.6per cent, respectively, see tablea12 of Ilo, 2012a). conversely, the share of paid employment in much of the developing world is often low. Wage and salaried workers account for 48.3 per cent of all employment at the global level but this proportion is as low as 20.9per cent in South asia and 22.9per cent in Sub-Saharan africa. In addition, even if paid work can be found, the risk of low-wage employment is substantially higher for young workers both in developed and developing economies (Grimshaw, 2011; Ilo, 2010b). In part, this is due to the fact that entry-level jobs are more likely to be low-paid, reflecting limited experience of young workers. The question then focuses on how much time it takes for young workers to move to better paid jobs (see box2). So far, the limited availability of paid work or decent work clearly poses strong barriers in developing economies, particularly in low-income economies. In developing economies, a relatively high share of youth is likely to engage in unpaid family work, starting their working life supporting (informal) family businesses or farms. among a sample of 24 developing economies for which breakdowns by age and status in employment are available, the share of contributing family work in youth employment exceeded the corresponding share for adult workers in all countries (see figure8a). The school-to-work transition may also include unemployment spells, or periods of temporary or casual employment if such opportunities arise while the final station is likely to be own-account work. With the exception of one, in all countries the share of own-account work in total employment was lower for youth than the corresponding share for adults (see figure8b). In Sub-Saharan africa, schoolto-work transitions typically have a long duration and youth often have to deal with a drawn out period of job search and/or inactivity (Guarcello et al., 2005). Difficulties that youth face in starting their own enterprises are confirmed by a study based on household data collected by the Inter-american Development bank (IDb) for 14 latin american countries. This study showed that only 12.8 per cent of workers between the ages of 16 and 24 were entrepreneurs (llisterri et al., 2006). The IDb also noted that many businesses were fragile and driven mostly by necessity, and young entrepreneurs in latin america face major obstacles. They have less capital in the form of skills, knowledge, experience, savings, and access to credit. In addition, they have limited business networks and less access to information about job vacancies. banks and financial institutions regard them as high risk. at the same time, entrepreneurship programmes that integrate skills training, mentoring and access to capital have demonstrated success in boosting business creation. evaluations of the Calificacin de Jvenes Creadores de Microempresas programme in Peru and Proyectos Productivos in argentina, for example, suggest numerous ingredients for success.
9 as noted in Ilo (2010a), the vulnerable employment indicator has some limitations: (1) wage and salary employment is not synonymous with decent work, as workers may carry a high economic risk despite the fact that they are in wage employment; (2) the unemployed are not included in the indicator, though they are vulnerable; (3) a worker may be classified in one of the two vulnerable status groups but still not carry a high economic risk, especially in the developed economies. for a discussion see Sparreboom and De Gier (2008).
25
Figure 8.
100 90 80 70 60 50 40 30 20 10 0 Mozambique, 2003 Jordan, 2002 Cambodia, 2004 Indonesia, 2002 Mexico, 2004 Mali, 2006 Morocco, 1998 Niger, 2005 Gabon, 2005 Madagascar, 2005 Pakistan, 2005 Peru, 2006 Thailand, 2002 Benin, 2003 Nicaragua, 2005 Burkina Faso, 2003 Guatemala, 2006 Colombia, 2003 Philippines, 2003 Senegal, 2001 Uganda, 2005 Uganda, 2005 Bhutan, 2003 Congo, 2005 Togo, 2006 Togo, 2006
(a) Share of unpaid family workers in total employment, youth and adults (%)
Youth Adult
100 90 80 70 60 50 40 30 20 10 0
(b) Share of own-account workers in total employment, youth and adults (%)
Youth Adult
Indonesia, 2002
Mexico, 2004
Morocco, 1998
Mozambique, 2003
Cambodia, 2004
Jordan, 2002
Madagascar, 2005
Congo, 2005
Mali, 2006
Philippines, 2003
Guatemala, 2006
Bhutan, 2003
Nicaragua, 2005
Colombia, 2003
Source: ILO calculations based on national household surveys.
These include demand-driven training content; private sector participation in programme design and implementation; appropriate targeting and screening mechanisms to leverage youths competitive advantages and reduce programme drop-out rates; and access to financial capital and the development of financial and youth-tailored banking instruments that encourage savings and provide a pathway for credit (Salazar-Xirinachs, 2012). Demographic trends are easing pressure on youth in most regions, giving rise to a demographic dividend. However, the youth labour force continues to grow in precisely those regions where few opportunities for paid work exist and where working poverty is widespread. In Sub-Saharan africa, an average of 2.1 million young people will be entering the labour market every year between 2011 and 2015 while in South asia the youth labour force is projected to grow by an average of 465,000 each year over the same period, reversing a decline in recent years (see table6). In both regions, the share of working poor at the internationally adopted level of uS$1.25 a day (at purchasing power parity) is much higher than in other regions. The new estimates of the working poor released by the Ilo in 2011 showed that globally 14.8per cent of workers were living below the poverty line in this year. However, whereas in most regions the proportion of poor workers was below 10per cent, 35.9per cent of workers in South asia and
26
Burkina Faso, 2003
Pakistan, 2005
Thailand, 2002
Gabon, 2005
Niger, 2005
Senegal, 2001
Benin, 2003
Peru, 2006
Box 2. Measuring labour market transitions: ILOs Work4Youth Project

The International Labour Office (ILO) and The MasterCard Foundation have forged a unique partnership to help young people find the path to decent work in a labour market that is markedly different from that of their parents. The five year, $14.6 million Work4Youth (W4Y) partnership will increase the global awareness of the specific challenges facing young people in the world of work. The partnership supports the collection and dissemination of information on youth labour markets and aims to support youth employment policy making and programme development both nationally and worldwide. It should serve as a good example of how policy-makers, the social partners and the private-sector can engage in the promotion of decent work for young women and men around the world. Through the W4Y project, the ILO works with government institutions to implement school-towork transition surveys in 28 countries across five regions. These surveys will increase the knowledge on difficulties facing young people during their transition to decent work, especially in developing countries. The data and information generated by these surveys will be included in a series of analytical national, regional and global reports on youth employment, including the next version of the ILOs Global Employment Trends for Youth planned for early 2013. The reports are designed to assist policy-makers and practitioners in shaping evidence-based programme and policies that promote decent work for youth. For more information on the project, see website: http://www.ilo.org/employment/areas/ youth-employment/WCMS_170261/lang--en/ index.htm.
38.1per cent of workers in Sub-Saharan africa were counted as the working poor. Data from household surveys also show that youth account for a disproportionate share of poor workers, comprising 23.5per cent of the working poor for countries with available data, compared with 18.6per cent of non-poor workers. Many poor workers are trapped in a vicious circle of low levels of education and low-productivity employment (Ilo, 2012a).
27
4.Education and the labour market
education and training are essential for young people to enter the labour market successfully. They increase the potential productivity and employability of young people, opening up new opportunities in different sectors and occupations. on the back of continuous technological progress and globalization, recent years have seen a continuous shifting of employment opportunities towards higher-skilled occupations. at the same time, and partly in response to these challenges, educational attainment of the labour force has been increasing in most countries. nevertheless, there are still many countries with large shares of the labour force having only primary education or less. These can be predominantly found in Sub-Saharan africa, the Middle east and, to a lesser extent, latin america and asia (see Ilo, 2011a, sections on indicators 5 and 14).
Education as a shield for youth in developed economies

In developed economies, there is a strong link between educational attainment and employment outcomes, and people with higher levels of education enjoy a competitive advantage in the labour market, including higher wage levels. for example, in a sample of 27 developed economies, those with primary-level education or less had the highest unemployment rates in 25 countries in 2010 (see table7). The labour market advantage of completing higher education was particularly striking in Slovakia. The unemployment rate of people with a primary education or less in this country stood at 44.2per cent in 2010, versus 14.1per cent for those with secondary education and 5.8per cent for those with a tertiary education. figure 9 shows changes in unemployment rates by level of educational attainment between 2000 and 2010. as 2010 was the height of the economic crisis in many countries, unemployment rates in 2010 tended to be higher than those in 2000. Individuals with primary education or less fared worst in terms of rising unemployment rates, with increases observed in 23 out of 27 countries. The degree of increase in the unemployment rates between 2000 and 2010 was largest among persons with primary education in 21 countries. among those with secondary education and tertiary education, unemployment rates rose in 15 and 18 countries, respectively. The differential impact of the economic crisis for people with different levels of education is underlined by oecD (2012), which also notes that skills of more educated people better match labour market demand, even during times of crisis. nevertheless, the graduate unemployed were not spared in the face of the economic crisis. In the sample of developed economies shown in figure9, the unemployment rate of persons with tertiary education rose in 18 countries and declined in eight countries. In two countries, cyprus and Slovenia, the educated unemployed were the hardest hit, showing the largest increase in the unemployment rate over the period. Given the stronger labour market position of better-educated people in developed economies, the response of young people to continue their stay in the educational system is understandable and may pay off in the future. However, more education in itself does not result in more jobs, and the scale of the withdrawal of youth from the labour market may result in
29
Figure 9. Changes in unemployment rates by educational level, selected developed economies, 2000-10 (percentage points)
16
Primary or less
12 8 4 0 4 8
Secondary Tertiary
Greece
France
Portugal
Czech Republic
Romania
Slovakia
Belgium
Estonia
Ireland
Poland
Slovenia
Latvia
Spain
Sweden
Switzerland
Finland
Austria
Cyprus
Lithuania
Source: ILO (2011a).
future imbalances in the labour market. The literature suggests that, despite the positive link between educational attainment and labour market outcomes, even preceding the global economic crisis, skill mismatches such as overeducation were affecting significant proportions of the employed in many developed economies (Groot and Maassen van den brink, 2000; Korpi and tlin, 2009; verhaest and van der velden, 2010). Workers are considered to be overeducated if the level of education they possess exceeds the skill level required for that job.10 The incidence of overeducation in the future may be aggravated as more and more younger people substantially extend their education and training periods in these economies.
Not only more but better education and training is needed in developing economies
More and better education and training is critical to advance decent work in developing economies. nevertheless, more human capital development and higher levels of education do not automatically translate into improved labour market outcomes and more jobs. In many Sub-Saharan african countries higher educational attainment does not lead to lower unemployment rates (Guarcello et al., 2005). Similarly, in many latin american countries, unemployment rates are highest for those with secondary education (e.g. in argentina, bolivia, brazil, chile and Mexico) while those with primary and sometimes tertiary education show lower rates (see table14c of Ilo, 2011a). furthermore, in Pakistan higher educational attainment has been shown to increase the likelihood of unemployment for both adults and youth. These facts notwithstanding, educational attainment has also been positively associated with the likelihood of securing paid employment in the case of adults in this country. These findings suggest that even though more education may not automatically result in more jobs, it allows young people to secure entry into non-vulnerable employment (Sparreboom and Shahnaz, 2007). In other words, the situation that youth in many developing countries are facing is such that education does not guarantee a decent job but such a job is very difficult to secure without education.
10 The incidence of overeducation can be measured in several ways, for example on the basis of the difference between years of schooling of workers in comparison with the average years of schooling for workers within an occupation, but it can also be measured based on self-reports by individual workers on the rate of skill utilization. according to 25 studies reviewed by Groot and Maassen van den brink (2000), the incidence of overeducation varies from 10 to 42per cent.
30
United Kingdom
Bulgaria
Netherlands
Denmark
Hungary
Italy
Germany
Norway
Several factors explain why more education does not automatically lead to more jobs for young people in developing economies. These include small formal sectors, skills mismatches, the need to work (in particular for the poor) and aspirations of youth (in particular of the welleducated). In addition, the particular characteristics of developing economies pose special challenges for education and training systems and their responsiveness to labour market needs. In developing economies where structural change is deep, education and training needs to keep up with this change in order to supply the skills necessary for economic development and creation of decent work (Ilo, 2008). at the same time, aggregate demand management has to create the conditions for structural transformation to successfully lead to strong private investment and job creation in more advanced sectors. to find the right balance between demand and supply of skills can be a challenging task (aDb, 2007). If historical trends are taken as benchmarks, several asian countries would be considered to raise educational attainment levels too fast. at the same time, education can serve as a driver of development, by empowering people to develop or adopt new technologies and diversify production structures. recent Ilo research found that countries that have managed to successfully catch up with developed economies, such as the republic of Korea, typically experienced a transformation of the education system that preceded the transformation of the production structure (nbler, 2012). In this respect, proper labour market information is necessary to facilitate both the role of education in meeting current labour demand and in facilitating change. With regard to the first role, it is important that expectations of the contribution of education to structural change are based on an empirical understanding of what workers are likely to do with their education. In other words, analysis of trends in employment, including the sectoral distribution and wage developments, should inform education and training policies. Information requirements are likely to increase as the economy expands, transforms and integrates with global markets, and skills development systems become more complex. If skills development policies are used as a driver of development, it becomes more important that information is produced on future skills requirements (early identification of skills), and skills policies are synchronized with other policies through appropriate institutional structures and arrangements.
The crisis has brought an increased detachment of youth from the labour market
Young people that are neither in employment nor in education have become a growing concern for policy-makers, in particular in developed economies. This group, called neet (not in education, employment or training), has been rapidly increasing, especially since the onset of the crisis. The concern with neets partly results from the fact that this group reflects a growing detachment of young people from the labour market. labour statistics such as unemployment or participation rates do not capture what youth are doing outside the labour market. If youth are economically inactive (outside the labour force) because they are in education or training, they invest in their skills and in this way improve their future employability. However, youth who are not employed and also not in education or training risk labour-market and social exclusion. The share of youth not in employment or education/training as a percentage of the youth population (the neet rate) is non-negligible in developed economies. In Japan, new Zealand and the united States, for example, the neet rates were 9.7, 13.1 and 15.6per cent in 2010 respectively whereas the average for the oecD was 12.8 per cent in this year.11 as shown in figure10, the neet rate in the european union at the beginning of the 2000s was just
11 See http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/neet-paper.aspx.
31
Figure 10. Youth NEET rates in the European Union, 2000-10, by sex (%)
16
Women
14
Total Men
12
10
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: Eurostat.
above 13per cent but came down to 10.9per cent before the global economic crisis in 2007 and 2008. However, due to the global economic crisis, the downward trend in the neet rate in the european union was broken, resulting in an increase by 1.9percentage points in the average rate between 2008 and 2010. The rate in the latter year exceeded 15per cent in bulgaria, Ireland, Italy, latvia, romania and Spain. The crisis-induced increase in the european union was much greater for young men, at 2.6percentage points compared to 1.1percentage points for young women. The convergence between male and female neet rates in the most recent years in part reflects the stronger impact of the crisis on male youth unemployment in developed economies including the european union (see tables 3a and 3b). as both the unemployed and the economically inactive are included in the neet group, the crisis-induced increase of the neet rate in europe is consistent with the effects of the crisis on the unemployment rate as well as the withdrawal of youth from the labour force in many developed economies discussed in earlier sections. However, the fact that many youth continue their stay in the education system may appear contradictory with the increase in the neet rate. This may be explained by the different profile of neets in comparison with the overall youth population. contrary to those extending their stay in the education system, many of whom are already among the better-educated, young people with a low education level are more likely to belong to the neet group, as are those with a low household income and those with an immigrant background (efIlWc, 2011). accordingly, part of the rise in the neet rate in recent years may have been due to higher-educated workers crowding out lower-educated ones. nevertheless, the economic crisis also increased the risk for better-educated youth to end up in the neet group (efIlWc, 2012). In developing economies, the neet group is equally important but often reflects a different reality. as employment in many developing economies is at least partially povertydriven, and resources for education are more limited, youth employment-to-population ratios (ePrs) tend to be higher in poorer countries. This is illustrated in figure 11, which shows poverty rates (at the uS$1.25 a day level) and ePrs for a sample of developing economies (see alsotable8). This relationship is much stronger for young women, in part because of the u-shaped pattern of female labour force participation that was discussed in an earlier section. In other words, at lower poverty levels, young women may withdraw from the labour market, but this is less likely to be the case for young men. The profile of young people who are neither in education nor in employment in developing economies is different from that of the employed. as shown in figure 12, the poverty rate among the neets is lower than the poverty rate of the employed. Moreover, for both young men and young women, poverty rates are lowest for the unemployed, which are part of the neet group. This suggests that employment in these developing countries is primarily driven by lack of adequate alternative sources of income. even though the differences
32
Figure 11. Youth employment and poverty in selected developing economies, by sex (%)
90 B J 70 B 60
Poverty rate
Men B
J B
J Women
J BJ B B B J J J 40 B B 50 B J B B J B J
B B B J J J BB B B J B J B
45 30 J 15 0 0 J B JJ 10 B 20
J J B J J J J B 30
60
70
80
90
100
Employment-to-population ratio Note: The estimated coefcient of the regression line for young women is signicant at the 99 per cent condence level. Source: ILO (employment) and World Bank (poverty) calculations based on national household surveys (see table 8 for a list of countries and years).
Figure 12. Average poverty rates of NEETs, employed and unemployed youth in selected developing economies, by sex (%)
40
30
20
10
All
NEETs
Employed WOMEN
Unemployed
All
NEETs MEN
Employed
Unemployed
Note: NEETs are youth neither in education nor in employment, including the unemployed. Source: ILO (NEET) and World Bank (poverty) calculations based on national household surveys (see table 8 for a list of countries and years).
in poverty rates are significant, the figurealso shows that all groups have considerable poverty rates even at the low level of the internationally agreed uS$1.25.12 The average neet rate in the 24 developing economies in figures 11 and 12 is 12.4per cent for young men. In other words, even if many young men in developing economies have little alternative but to work, the overall rate is not lower than in the european union, and a considerable share of young men are not preparing for the labour market. for young women, the average neet rate is much higher (28.1per cent). a number of countries have started to take measures to address this phenomenon. for example, the response of the united States Government to the economic crisis included the expansion of tax credits to employers hiring disconnected youth, meaning those youth who were neither in employment nor in education (bell and blanchflower, 2011). In latin america a wide variety of initiatives and projects have been put in place to address the neet challenge (Salazar-Xirinachs, 2012). In many european countries, measures have been taken ranging from tackling early school leaving to facilitating the transition to employment, often targeting
12 The uS$1.25 a day was designed to be representative of the poverty lines in the poorest countries, and therefore is necessarily relatively low. Many countries use higher poverty lines for national policy-making purposes.
33
specific subgroups of the neet group (efIlWc, 2012). In the netherlands, for example, the Drive to reduce drop-out rates encourages the development of local programmes to prevent drop-out, including long-term performance agreements between schools, municipalities and the national government, in partnership with business and youth care workers, and a funding policy linked to the reduction of the number of early school leavers.13 a number of countries also have youth guarantees in place which aim to ensure that young people have a job offer or an educational or related opportunity within a certain timeframe, or offer specialist job search assistance. according to a recent policy review, neet-relevant policies based on partnership approaches with stakeholders outside the public sector are likely to be particularly effective (efIlWc, 2012).
13 See http://www.aanvalopschooluitval.nl/english.php.
34
5.Youth employment policies 14
as youth unemployment rates are projected to remain essentially unchanged in 2012, and most regions face major youth employment challenges, youth employment policies warrant the highest priority. to address these challenges, countries have already enacted a wide range of policies targeted specifically at young, first-time jobseekers.15 to tackle the youth unemployment crisis successfully, these measures need to be stepped up and extended also to those countries that have not yet enacted policies in this respect. Important areas for interventions include: (i) macroeconomic and sector policies, (ii) active labour market policies and programmes, (iii) labour standards and social protection for young people, (iv) social dialogue and partnerships for youth employment, and (v) support for labour market information and analysis systems, as summarized below.16 Macroeconomic and growth policies: ultimately, job growth will not come from labour market interventions alone. Macroeconomic and fiscal policies should include or enhance measures that support employment generation, bring about a sustained job recovery and finance the necessary investments in youth employment promotion. Youth employment is a rising priority in national policy agendas but often it is insufficiently translated into action, and funding is often limited and resources underestimated. Globally, progress in rebalancing world demand based on effective measures by the G20, and stability in the euro area are essential for paving the way to stronger output and employment growth. In this respect, austerity measures currently implemented in a wide range of developed economies bode ill for a quick recovery of youth labour markets (Ilo, 2012a). Growth policies can also influence youth employment by encouraging economic diversification and productive transformation through sectoral strategies, removing constraints on private sector investment and growth, in particular for small enterprises. Active labour market policies and programmes: a series of different active labour market programmes and policies can be tailored for specific needs of the youth. These include: (i) direct employment generation (promoting small enterprise development, cooperatives, wage subsidies, public works, guaranteed job schemes, etc.); (ii) labour exchanges or employment services facilitating young peoples transition into the labour market (e.g. job brokerage and counseling offices, linking employers with educational institutions); and (iii) skills development programmes. It is particularly important to: yy address barriers to job growth: the lack of labour demand prompted by insufficient or job-poor growth has a significant impact on unemployment and leads to discouragement,
14 for a detailed discussion of policy areas, see the Ilo report The Youth employment crisis: time for action (http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---relconf/documents/meetingdocument/ wcms_175421.pdf). The forthcoming 2012 International labour conference will discuss the youth employment crisis and update the policy conclusions to address the challenge. The latest policy conclusions date from the 2005 International labour conference and are included in the resolution concerning youth employment (http://www.ilo.org/public/english/standards/relm/ ilc/ilc93/pdf/resolutions.pdf). 15 for an overview of policy measures enacted by member countries to address the employment challenge caused by the crisis see the Ilo/World bank Inventory of Policy responses to the financial and economic crisis online tool available at: http://www.ilo.org/dyn/crisis-inventory/f?p=17020:2:257694020209059. 16 for an evaluation of lessons learned in youth employment programmes, see chapter 4 of Ilo (2010c). annex 3 in the current report provides an inventory of crisis response interventions directly affecting youth employment, by country.
35
particularly among youth. active labour market measures, such as the development of public employment services, wage and training subsidies or tax cuts can incentivize employers to hire young people and counteract the excess supply of young workers in times of crisis. yy address skill mismatches: programmes that aim to offset the mismatch of technical skills among youth, such as vocational training programmes, re-training of unemployed or discouraged youth, workplace training schemes, the creation or improvement of apprenticeship systems, entrepreneurship training programmes, soft and life skills training programmes for disadvantaged youth, and special programmes that link employers with educational institutions which can facilitate young peoples transition into the labour market. yy adjusting the focus of technical and vocational education to make it relevant to the requirements of companies and the labour market is another essential orientation. yy Promote entrepreneurship: enabling motivated youth access to start-up capital and facilitating a broad range of services, including high quality mentoring, can be effective ways of reducing precarious and informal employment among young people and may also propel job creation. Labour standards and social protection for young people: decent employment is not only about generating any jobs, but also about improving the quality of jobs. Poor young workers work long hours, often in unsafe conditions and still are unable to move their families out of poverty. Hence employment policies must not merely focus on creating jobs but also on ensuring adequate wages and working conditions. Wage policies, for instance, are important from both an economic and a human rights perspective. a decent remuneration can enable workers to provide for themselves (and their families) and help fulfill the basic human right to a decent standard of living which includes food, clothing, housing and medical care. raising the incomes of workersincluding young workersalso increases domestic demand which, in turn, encourages economic growth and recovery. a particular concern in this respect is the inadequate social protection for young people, in part because they are engaged in non-standard forms of employment. as a result, better strategies are needed to improve and expand social protection programmes for young people, and tailor labour market reforms for their specific needs. It is also important that such social protection measures are not viewed as a cost to society but rather as an investment (cichon et al., 2006). Investing in young persons has significant positive impacts on human development and productivity. Social dialogue and partnerships for youth employment: equally important is the establishment of broad-based partnerships to turn commitment to youth employment into reality. Partnerships among governments, employers organizations, trade unions and other organizations can be instrumental in determining the most appropriate action to be taken at national and local levels for the promotion of decent work for young people. to bring high youth unemployment rates down, it is essential that employers, unions and governments not only dialogue together about how to achieve a socio-economic recovery, but mobilize to develop specific projects and interventions, including in partnership with young people. Social pacts can be an effective strategy to articulate labour market policies that can create positive synergies between economic and social development. They are especially wellsuited to arrive at optimal solutions in macroeconomic policy, in strengthening productivity, job and income security, and in supporting employment-generating enterprises. Social dialogue can be fostererd further when governments strive also to repair and regulate their financial systems. to this end, it is critical that policymakers reduce the fear and uncertainty that is hindering private investments so that the private sector can re-start to be the main engine of global job creation, including for youth (Ilo, 2012a). Supporting strong labour market information and analysis systems: support in the areas of data collection, tabulation, analysis and dissemination of labour market information,
36
and strengthening institutional relationships between producers and users of information and analysis provides a solid basis to monitor labour markets, and design and implement effective policies. More information is needed particularly on the pathways of youth to decent work. In sum, to prevent the emergence of a lost generation, it is important that youth employment is prioritized on national policy agendas, and countries establish or develop integrated strategies aimed to ensure long-term, sustained and concerted action for the promotion of decent work for young people. assigning priority to youth employment requires a coherent policy framework, with measurable targets and achievable outcomes that addresses youth employment in national development strategies and employment policies.
5. Youth employment policies
37
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Annex 1. World and regional tables
unless the source is stated, the source of all tables is Ilo, trends econometric Models, april 2012. 2011 are preliminary estimates. 2012p2016p are projections; for details on methodology, see annex 2 and Ilo (2012a).
Table 1.Global unemployment and unemployment rates, youth (1524), adult (25+) and total (15+), 2007 to 2012
2007 2008 2009 2010 2011 2012p
Youth unemployment (millions) Adult unemployment (millions) Total unemployment (millions) Youth unemployment rate (%) Adult unemployment rate (%) Total unemployment rate (%) Ratio youth-to-adult unemployment rate
p = projection
70.3 99.7 169.9 11.6 4.0 5.4 2.9
70.8 104.6 175.3 11.7 4.1 5.5 2.9
75.4 121.2 196.6 12.6 4.7 6.2 2.7
74.8 121.1 195.9 12.7 4.6 6.1 2.8
74.5 121.5 196.0 12.6 4.5 6.0 2.8
74.6 127.9 202.4 12.7 4.7 6.1 2.7
Table 2a.Youth unemployment rates 2000 and 20072016, by region (%)

2000 2007 2008 2009 2010 2011 2012p 2013p 2014p 2015p 2016p
WORLD Developed Economies & European Union Central & South-Eastern Europe (non-EU) & CIS East Asia South-East Asia & the Pacific South Asia Latin America & the Caribbean Middle East North Africa Sub-Saharan Africa
12.7 13.5 20.0 9.3 13.2 10.1 15.8 24.0 28.7 12.9
11.6 12.5 17.5 8.0 14.9 9.0 14.1 24.8 23.8 11.5
11.7 13.3 17.0 9.1 14.2 8.6 13.7 25.7 23.0 11.5
12.6 17.3 20.5 9.3 13.9 9.1 15.6 25.2 23.6 11.5
12.7 18.1 19.4 8.9 13.6 10.2 14.5 25.4 23.1 11.4
12.6 18.0 17.6 9.0 13.5 9.8 14.3 26.5 27.9 11.5
12.7 18.0 17.5 9.3 13.7 9.8 14.3 26.9 27.8 11.5
12.7 17.7 17.6 9.4 14.0 9.7 14.4 27.5 27.6 11.5
12.7 17.2 17.5 9.6 14.2 9.7 14.5 28.0 27.3 11.4
12.7 16.5 17.5 9.7 14.2 9.8 14.5 28.6 26.9 11.4
12.7 16.0 17.5 9.8 14.3 9.8 14.6 29.0 26.7 11.4
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Table 2b.Change in youth unemployment and unemployment rates between 1998 and 2008 and between 2008 and 2011, by region
Change in youth unemployment (%), 19982008 Change in youth unemployment rate (percentage point), 19982008 Change in youth unemployment (%), 200811 Change in youth unemployment rate (percentage point), 200811
0.7 12.1 22.4 5.4 24.0 7.5 8.9 30.9 4.2 17.8
0.6 1.0 5.5 0.5 2.0 0.1 1.8 1.8 3.4 1.3
5.3 26.5 3.8 4.6 6.4 10.2 4.0 1.7 18.8 6.1
0.9 4.7 0.6 0.1 0.7 1.3 0.6 0.9 4.9 0.1
Table 3a.Change in male youth unemployment and unemployment rates between 1998 and 2008 and between 2008 and 2011, by region
WORLD Developed Economies & European Union Central & South-Eastern Europe (non-EU) & CIS East Asia South-East Asia & the Pacific South Asia Middle East North Africa Sub-Saharan Africa
1.9 6.8 19.6 1.6 24.2 7.4 26.2 10.0 18.5
0.6 0.1 5.3 0.8 1.7 0.1 1.6 1.1 4.3 1.0
4.9 26.3 4.5 3.3 7.2 8.8 4.6 1.2 13.0 6.0
0.8 5.0 0.4 0.1 0.9 1.0 0.6 0.7 3.1 0.1
Latin America & the Caribbean 13.0
Table 3b.Change in female youth unemployment and unemployment rates between 1998 and 2008 and between 2008 and 2011, by region
0.9 18.2 26.1 10.8 23.7 7.7 4.7 42.0 5.7 17.1
0.6 2.0 5.7 0.5 2.3 0.4 2.4 4.0 1.1 1.7
5.8 26.8 2.8 6.6 5.3 13.6 3.6 2.7 27.3 6.2
1.0 4.4 0.9 0.1 0.6 1.9 0.6 1.1 9.1 0.0
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Table 4.Gross enrolment ratio in tertiary education, by region, 200009 (%)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
WORLD North America & Western Europe Central & Eastern Europe Central Asia East Asia & the Pacific South & West Asia Latin America & the Caribbean Arab States Sub-Saharan Africa
18.9 59.5 42.6 20.7 15.5 8.5 22.7 19.1 4.1
20.0 60.8 46.4 22.4 17.2 8.9 24.4 19.1 4.4
21.5 66.2 50.0 23.8 19.2 9.2 26.1 19.0 4.7
22.5 68.1 51.9 24.8 20.9 9.6 27.5 19.3 5.1
23.4 68.6 55.0 25.5 22.4 10.0 29.2 20.1 5.3
24.0 69.2 57.8 25.4 23.3 10.1 30.9 20.8 5.5
24.9 69.4 60.2 25.7 24.4 10.9 33.2 21.0 5.6
25.9 69.5 62.5 25.5 25.4 12.5 35.4 21.5 5.9
26.5 70.2 64.6 25.8 26.3 12.8 36.9 22.0 6.1
27.1 72.1 65.0 24.7 27.8
37.2 22.4 6.3
Source: UNESCO Institute for Statistics, online database,table14.
Table 5.Gender gaps in youth labour force participation rates, by region, 1991, 2001 and 2011
Male (%) 1991 2001 2011 Female (%) 1991 2001 2011 Gap (percentage point) 1991 2001 2011
67.0 58.8 56.7 75.3 65.6 70.3 71.3 57.2 51.7 58.3
60.4 54.4 48.9 60.9 64.0 66.2 66.4 50.9 48.7 56.6
56.3 49.7 49.8 59.0 59.3 57.6 62.6 46.7 47.0 55.9
51.0 52.4 44.2 78.0 52.5 32.5 39.6 12.6 21.6 49.7
44.3 49.1 35.3 68.1 49.4 28.7 42.5 13.7 19.3 51.3
40.7 45.6 34.6 61.6 45.1 23.4 42.7 13.1 19.6 51.4
16.1 6.4 12.4 -2.7 13.2 37.8 31.7 44.6 30.1 8.6
16.0 5.3 13.6 -7.3 14.6 37.5 23.9 37.2 29.4 5.3
15.6 4.1 15.2 -2.5 14.2 34.1 19.9 33.6 27.4 4.5
Table 6.Five-year average of youth labour force growth, thousands

19952000 200005 200510 201015
1 592 325 177 6 447 566 1 834 440 426 219 1 872
7 132 637 147 1 657 345 2 837 298 429 312 2 039
3 541 840 141 511 470 2 924 110 161 217 1 832
2 901 325 788 3 937 280 465 91 147 63 2 083
Annexes
45
Table 7.Unemployment rates by educational level, selected developed economies, 2000 and 2010 (%)
Country Unemployment rate, 2000 Primary or less Secondary Tertiary Unemployment rate, 2010 Primary or less Secondary Tertiary Change, 200010 (percentage points) Primary or less Secondary Tertiary
Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Netherlands Norway Poland Portugal Romania Slovakia Slovenia Spain Sweden Switzerland United Kingdom
8.1 10.3 25.1 6.3 22.6 6.2 25.2 18.7 15.3 12.6 9.2 11.5 7.9 12.1 21.3 23.6 4.4 6.6 21.8 3.9 4.2 40.4 10.8 15.2 8.1 4.7 8.8
4.2 6.8 15.8 5.4 7.8 4.4 14.7 11.1 9.1 7.9 15.1 6.4 3.0 10.6 14.8 20.2 2.0 2.9 17.0 4.8 9.4 18.4 6.9 13.8 5.7 2.4 5.0
2.2 2.7 6.7 2.9 3.0 2.6 4.8 5.2 5.5 4.3 8.1 1.4 1.7 6.1 7.2 9.3 1.7 2.5 5.5 2.8 3.6 5.3 2.2 10.9 3.0 1.4 2.5
8.5 15.3 22.8 7.2 25.0 10.7 31.0 16.1 15.4 14.9 12.5 24.9 21.1 10.3 31.5 39.2 7.2 7.3 17.6 11.8 6.1 44.2 11.7 27.3 17.6 7.4 13.7
3.9 8.1 9.7 6.3 6.9 6.9 19.3 8.9 8.7 6.9 14.4 10.5 15.7 7.9 20.1 21.7 3.9 2.9 10.5 11.3 8.3 14.1 7.5 19.2 7.6 4.6 8.2
2.4 4.5 4.5 5.6 2.8 4.9 9.3 4.4 5.5 3.1 9.8 4.7 7.5 5.7 10.3 7.7 2.8 1.8 5.0 7.2 5.4 5.8 4.3 11.3 4.5 3.0 4.1
0.4 5.0 2.3 0.9 2.4 4.5 5.8 2.6 0.1 2.3 3.3 13.4 13.2 1.8 10.2 15.6 2.8 0.7 4.2 7.9 1.9 3.8 0.9 12.1 9.5 2.7 4.9
0.3 1.3 6.1 0.9 0.9 2.5 4.6 2.2 0.4 1.0 0.7 4.1 12.7 2.7 5.3 1.5 1.9 0.0 6.5 6.5 1.1 4.3 0.6 5.4 1.9 2.2 3.2
0.2 1.8 2.2 2.7 0.2 2.3 4.5 0.8 0.0 1.2 1.7 3.3 5.8 0.4 3.1 1.6 1.1 0.7 0.5 4.4 1.8 0.5 2.1 0.4 1.5 1.6 1.6
Source: ILO (2011a), Key Indicators of the Labour Market, 7th edition (Geneva), table14c.
46
Table 8.Youth employment, poverty and NEET rates in selected developing economies, by sex (%)
Country Year Women Employment-topopulation ratio Poverty rate NEET rate Men Employment-topopulation ratio Poverty rate NEET rate
Benin Bhutan Bolivia Burkina Faso Cambodia Colombia Congo Gabon Guatemala Indonesia Jordan Kenya Liberia Mali Mexico Mozambique Nepal Nicaragua Niger Pakistan Thailand Togo Uganda Viet Nam
2003 2003 2002 2003 2004 2003 2005 2005 2000 2002 2002 2005 2007 2006 2004 2003 2003 2005 2005 2005 2002 2006 2005 2006
58.2 58.4 41.8 73.5 76.1 35.4 27.7 12.3 41.1 32.0 6.2 33.4 55.8 55.6 31.4 68.0 90.1 29.5 22.8 15.0 42.5 63.6 65.0 52.3
38.0 27.2 17.9 47.1 37.8 13.2 53.4 4.2 11.2 26.9 0.9 17.6 81.3 45.0 1.3 68.8 51.4 12.5 58.5 19.9 0.6 32.3 42.8 19.5
20.1 15.7 20.7 16.1 13.4 43.2 32.0 30.9 44.4 40.8 44.1 26.2 22.9 29.6 37.4 11.5 5.5 38.7 67.9 66.4 12.6 13.3 10.7 11.0
43.5 51.2 60.2 79.1 78.6 55.6 26.5 18.1 79.8 50.6 32.2 37.1 55.4 66.2 59.3 52.3 76.5 70.3 61.4 62.3 51.8 59.0 65.4 55.5
43.6 30.1 19.6 53.2 37.8 16.3 52.2 4.3 10.9 27.5 0.9 18.0 82.5 48.8 1.5 65.1 47.1 16.5 61.1 17.5 0.6 38.5 43.6 18.2
14.9 6.2 5.0 6.1 6.7 26.2 25.2 20.9 6.0 19.9 21.4 15.9 14.6 11.3 10.4 9.4 7.4 10.3 21.3 10.9 8.5 6.3 4.6 8.3
Source: ILO (employment) and World Bank (poverty) calculations based on national household surveys.
Annexes
47
Annex 2.Note on global and regional projections
unemployment rate projections are obtained using the historical relationship between unemployment rates and gross domestic profit (GDP) growth during the worst crisis/downturn period for each country between 1991 and 2005, and during the corresponding recovery period.17 This was done through the inclusion of interaction terms of crisis-year and recoveryrecovery dummy variables with GDP growth in fixed-effects panel regressions.18 Specifically, the logistically transformed unemployment rate was regressed on a set of covariates including the lagged unemployment rate, the GDP growth rate, the lagged GDP growth rate and a set of covariates consisting of the interaction of the crisis-year dummy, and of the interaction of the recovery-year dummy with each of the other variables. Separate panel regressions were run across three different groupings of countries, based on: (1) Geographic proximity and economic/institutional similarities. (2) Income levels.19 (3) level of export dependence (measured as exports as a percentage of GDP).20 The rationale behind these groupings is the following. countries within the same geographic area or with similar economic/institutional characteristics are likely to be similarly affected by the crisis, and have similar mechanisms to attenuate the crisis impact on their labour markets. furthermore, because countries within geographic areas often have strong trade and financial linkages, the crisis is likely to spill over from one economy to its neighbour (e.g. canadas economy and labour market developments are intricately linked to developments in the united States). countries of similar income levels are also likely to have more similar labour market institutions (e.g. social protection measures) and similar capacities to implement fiscal stimulus and other policies to counter the crisis impact. finally, as the decline in exports was the primary crisis transmission channel from developed to developing economies, countries were grouped according to their level of exposure to this channel, as measured by their exports as a percentage of GDP. The impact of the crisis on labour markets through the export channel also depends on the type of exports (the affected sectors of the economy), the share of domestic value added in exports, and the relative importance of domestic consumption (for instance, countries such as India or Indonesia with a large domestic market were
17 The crisis period is comprised of the span between the year in which a country experienced the largest drop in GDP growth, and the turning point year when growth reached its lowest level following the crisis, before starting to climb back to its pre-crisis level. The recovery period is comprised of the years between the turning point year and the year when growth has returned to its pre-crisis level. 18 In order to project unemployment during the current recovery period, the crisis-year and recovery-year dummies were adjusted based on the following definition: a country was considered currently in crisis if the drop in GDP growth after 2007 was larger than 75per cent of the absolute value of the standard deviation of GDP growth over the 19912008 period and/or larger than 3percentage points. 19 The income groups correspond to the World bank income group classification of four income categories, based on their 2008 gross national income (GnI) per capita (calculated using the atlas method): low-income countries, uS$975 or less; lower middle-income countries, uS$976 uS$3,855; upper middle-income countries, uS$3,856 uS$11,905; and high-income countries, uS$11,906 or more. 20 The export dependence-based groups are the following: highest exports (exports 70per cent of GDP); high exports (exports <70per cent but 50per cent of GDP); medium exports (exports <50per cent but 20per cent of GDP); and low exports (exports <20per cent of GDP).
48
less vulnerable than countries such as Singapore and Thailand). These characteristics are controlled for by using fixed-effects in the regressions. In addition to the panel regressions, country-level regressions were run for countries with sufficient data. The ordinary least squares country-level regressions included the same variables as the panel regressions. The final projection was generated as a simple average of the estimates obtained from the three group panel regressions and, for countries with sufficient data, the country-level regressions as well.
Refinement of the global and regional projections

In Q1 2012, at the time of production of the Global Employment Trends for Youth 2012 report, 57 out of a total sample of 178 countries had released monthly or quarterly unemployment estimates for the whole year 2011 and ten for a portion of 2011. In three countries, estimates were available through november; in four countries, estimates were available through September or Q3; and in three countries estimates were available through Q2. These monthly/ quarterly data are utilized in order to generate an estimate of the 2011 annual unemployment rate. The 2011 projection for the rest of the sample (countries without any data for 2011), as well as projections for 2012 onwards, are produced by the extension of the trends econometric Models using the relationship between economic growth and unemployment during countries previous recovery periods, as described above. In generating the 2011 point estimate for the ten countries for which 2011 data are available, the first step is to take an unweighted average of the (seasonally adjusted) unemployment rate over the available months or quarters of 2011, which is defined as the point estimate. around this point estimate a confidence interval is generated, based on the standard deviation of the monthly or quarterly unemployment rate since the beginning of 2008, multiplied by the ratio of the remaining months or quarters to 12 (for monthly estimates) or four (for quarterly estimates).21 Thus, all else being equal, the more months of data that are available for a country, the more certain is the estimate of the annual unemployment rate, with uncertainty declining in proportion to the months of available data. In order to integrate the short-term and medium-term trends in the movement of unemployment rates, the above point estimate is adjusted according to whether the two trends are in agreement.22 Specifically: yy If both trends are positive (negative), then the above point estimate is recalculated as a weighted average of 60 (40)per cent of the upper bound and 40 (60)per cent of the lower bound. yy If the two trends are in opposite directions, the unemployment rate of the latest month or quarter available is assigned to the remaining months or quarters of the 2011, and the above point estimate is recalculated as an unweighted average over the 12 months or four quarters of 2011. The underlying assumption is that in cases where there is a clear upward (downward) trend over two consecutive periods, the tendency will be for somewhat higher (lower) unemployment rates than in the latest month of available data. In cases in which there is no discernible
21 In cases where the ratio of the point estimate and the standard deviation is less than or equal to 5, the standard deviation is instead constructed since the beginning of 2009. The rationale is that the exceptionally high volatility of unemployment rates during the early period of the global financial crisis is unlikely to persist over the short to medium term. rather, the most recent level of volatility can be expected to persist. 22 The short-term and the longer-term trend are defined, respectively, as the percentage point differences between the unemployment rate of the latest month M (or quarter Q) available and the unemployment rate of the month M-3 (or quarter Q-1), and of the month M-6 (or quarter Q-2), respectively.
Annexes
49
trend over the past two periods, unemployment is expected to remain at the most recent rate, and therefore more weight is given to the latest information available. The final 2011 unemployment rate estimate for these ten countries is equal to the adjusted pointestimate. out of a total sample of 178 countries, 35 had released monthly or quarterly youth unemployment rate estimates for the whole of 2011 and 14 for a portion of 2011 (five up to Q2 and nine up to Q3). The same procedure is followed for the unemployment rate of the youth sub-components for the countries with at least two quarters available in 2011. The projections for the unemployment rate of the rest of the sub-components for 2011 onwards are produced with the extension of the trends econometric Models, using separately for each sub-component the same model specifications as for the total unemployment rate. The nominal unemployment for the various sub-components estimated with the extension of the trends econometric Models is aggregated to produce a nominal total unemployment, which may differ from what the above procedure estimates for total nominal unemployment. The difference between the total nominal unemployment produced as the sum of the sub-components and the total nominal unemployment estimated separately is distributed among the sub-components in proportion to each sub-components share of total unemployment.23 These adjusted point estimates are the final point estimates for the sub-components.
Confidence interval for the global and regional projections

for the projections for 2012 onwards, the confidence intervals around the projections are generated with progressively smaller (more restrictive) significance levels the longer the projection period is, in order to reflect an increasing level of uncertainty with respect to labour market conditions over time. In addition, countries are divided into three groups based on the ratio of the standard deviation of their unemployment rate during the period from 1998 to 2008 to their 2011 unemployment rate estimate. In order to smooth the differences in the confidence intervals between countries with high or low ratios, a lower significance level (and therefore a wider confidence interval) is ascribed to countries with lower ratios to reflect the higher uncertainty associated with labour market conditions in these countries. Many of these countries have few reported unemployment observations and consequently estimates for these countries tend to be based on econometric models, which result in less variation over time in estimated unemployment rates. Specifically, countries with ratios less than 0.06 are given a significance level of 15per cent in 2012, decreasing progressively to 5per cent by 2016 (12per cent in 2013); countries with ratios between 0.06 and 0.20 inclusively are assigned a significance level of 45per cent in 2012, decreasing progressively to 35per cent in 2016 (42per cent in 2013); and countries with the highest ratios (historical standard deviation greater than 20per cent of the 2011 unemployment rate), are given a 75per cent significance level in 2012, decreasing progressively to 65per cent in 2016 (72per cent in 2013). In order to construct the confidence interval for each sub-component, the ratio of the sub-component unemployment rate to total unemployment rate is applied to the upper- and lower-bound estimates of the total unemployment rate. lastly, in order to encourage the reader to concentrate on the wide degree of uncertainty surrounding the central projection instead of the precise central point, the unemployment rate projections are presented along with the confidence intervals. The confidence intervals are by default constructed symmetrically around the central projection and for the figures
23 The underlying assumption is that the relationship between the total unemployment rate and GDP growth is better understood than the relationship between unemployment rates of subgroups of workers and GDP growth.
50
presented in the main text the confidence interval is divided into three bands. That is, within the confidence intervals, it can be judged that there is a higher or lower chance that the unemployment rate will be within each band. The choice of three bands in the figures is arbitrary. The central band, coloured with darkest shade, includes the central projection within one-third of the confidence interval, the middle band represents the next one-third of the confidence interval and the outside band with the lightest shade represents the whole confidence interval. for more information on the methodology of producing world and regional estimates, see www.ilo.org/trends.
Annexes
51
52
Addressing skill mismatches Promoting young entrepreneurs Expanding social protection Building consensus
Annex 3.Inventory of current country measures to address the youth employment crisis

Launch of Programa Jovenes con Mas y Mejor Trabajo targeting those youth that have not completed compulsory education and were either unemployed or receiving social assistance Launch of Campaign for the Future of Young People and creation of job placements, employment subsidies and other projects for unemployed youth Improvement of trade training centers in schools and approval of the Marshall Plan to provide employment for young people via internships and training Increase in the number of apprenticeship and vocational training opportunities for young people Start-up credits to unemployed young Introduction of Youth Work Experience programme and offer of a grant up to six months to employers to hire young people who have not found employment after graduating from secondary or higher education
Addressing barriers to job Growth
Argentina
Austria
Australia
Belgium
Belize
Bulgaria
Addressing skill mismatches
Promoting young entrepreneurs
Expanding social protection
Building consensus
Chile
Passing of Tripartite Pact covering six measures in the field of employment, training and social protection
China Implementation of a national vocational training programme targeting young migrant workers who returned home Training and start-up capital for young entrepreneurs (Projoven) Revision of professional vocational training courses where approximately half of all courses were provisioned take place within the companies Introduction of a policy under which 1819 year olds were interviewed, participated in a job-search training course, and placed in an educational programme or workplace within three weeks of applying for unemployment benefits Training programme for rural youth and grants of public land Adoption of a development plan for vocational education and training system Launch of the Emergency Plan for Youth Employment which consisted of a combination of measures addressing apprenticeships, training programmes and subsidized contracts Creation of job search clubs for unemployed young people and provision of training and apprenticeship placements Government-sponsored loans for young entrepreneurs
Costa Rica
Croatia
Denmark
Introduction of a hiring subsidy to private sector employers for recruiting young people under the age of 30 who had been on welfare for at least a year
Dominican Republic
Estonia
France
Germany
Annexes
Hungary
Introduction of START and provision of subsidies to companies that employed young labour market entrants
Expansion of safety nets for young people and reduction in eligibility requirements for social protection benefits
53
54
Addressing skill mismatches Promoting young entrepreneurs Expanding social protection Building consensus
India Launch of Skills Development Initiative to train onemillion young people over a five year period Development of a Job Card System to allow unemployed youth gain practical job training in participating companies whereby the card documents participants training record along with companies evaluation of participants abilities Provision of start-up credit by the Youth Development Fund Expansion of safety nets for young people and reduction in eligibility requirements for social protection benefits
Japan
Agreement to maintain employment for more than 13million workers through work-sharing arrangements that were subsidized by the government, which contributed to employment creation and stability for young people

Provision of a monthly stipend to unemployed youth aged 1824 and offer of on- the-job training for up to 12 months Start-up credits for young entrepreneurs
Kenya
Introduction of Kazi Kwa Vijana programme and creation of 300,000 jobs for youth over a six month period
Republic of Korea
Re-launch of Youth Internship Program and provision of some 100,0000 young people with work experience, regular job contracts and other career development opportunities
Latvia
Lithuania
Exemption of employers social contribution upon offering young people their first job
Pakistan
Introduction of Benayir Bhutto Shaheed Youth Development Program and offer of a monthly stipend and access to training for 100,000 young people
Philippines
Implementation of a summer work programme for young people subsidized by the government
Poland
Introduction of an internship programme for unemployed youth and financial support equivalent of 120per cent of the unemployment benefit for up to a year
Addressing skill mismatches
Promoting young entrepreneurs
Expanding social protection
Building consensus
Portugal Provision of low-interest credit and technical advice for first-time jobseekers Tax exemptions, hiring subsidies and government-backed credit guarantees for start-ups created by young entrepreneurs
Romania
Serbia
Introduction of First Chance programme which gives young job seekers without significant prior work experience the opportunity to enter subsidized employment by private employers for a period of up to 12 months at a pre-set wage Expansion of safety nets for young people and reduction in eligibility requirements for social protection benefits Expansion of safety nets for young people and reduction in eligibility requirements for social protection benefits
Singapore
Spain
Sweden
Adoption of a Job Guarantee Scheme targeted to unemployed youth and subsequent provision of an immediate job or opportunity to return to education
Turkey
Reduction of employers social contributions for five years upon the recruitment of unemployed youth Launch of the Future Jobs Fund and creation of 100,000 jobs for long-term unemployed youth
United Kingdom
United States
Expansion of tax credits for employers hiring unemployed or disconnected youth
Expansion of safety nets for young people and reduction of eligibility requirements for social protection benefits
Annexes
Source: European Commission (2011); ILO (2009d); ILO (2010d); ILO (2011e); Ha et al. (2010); Gnter (2009); United Nations (2009); Scarpetta et al. (2010).
55

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Foundation Findings: Youth and work

European Foundation for the Improvement of Living and Working Conditions

ISBN 978-92-897-1040-4 ISSN 1830-8805 doi:10.2806/27724

Images: Erik Luntang/ETF/istock/Getty Images

EU policies on youth unemployment

3 / Foundation Findings: Youth and work

Young people and social exclusion

Exploring the issues

Challenges for young people

5 / Foundation Findings: Youth and work

Effects of the recession

7 / Foundation Findings: Youth and work

% of labour force 15-24

NEETs Not in education, employment or training

Groups particularly at risk

9 / Foundation Findings: Youth and work

Figure 4: Proportion of NEETs among 1524 year-olds, EU27 (%)

Figure 5: Educational level of NEETs, 2009

Source: Eurostat, 2009 Labour Force Survey (Eurofound calculation)

11 / Foundation Findings: Youth and work

Non-standard employment forms

Risks facing younger workers

Figure 8: Concern regarding job security, by age group (%)

0% SI SE LT IE RO EE CZ PT EL PL FR LV ES BE FI LU MT CY IT SK AT NL HU BG EU27 UK under 25 25 and older DK DE

Figure 9: Type of occupation, by age group (%)

Figure 10: Exposure to physical risks, by age group

Biological and chemical risks under 25 25 and older

Figure 11: Type of work organisation, by age group (%)

Active (high demands, high control)

High strain (high demands, low control)

Low strain (low demands, high control)

Passive (low demands, low control)

15 / Foundation Findings: Youth and work

Active labour market policies

National examples: the Netherlands

National examples: Finland

Role of social partners

Sustainable work and employment

21 / Foundation Findings: Youth and work

ISSN 1830-8805 ISBN 978-92-897-1040-4

GLOBAL EMPLOYMENT TRENDS FOR YOUTH 2012

Global Employment Trends for Youth 2012

InternatIonal labour offIce Geneva

ILO Cataloguing in Publication Data

Photocomposed in Switzerland Printed by the International labour office, Geneva, Switzerland

Global Employment Trends for Youth 2012

Youth unemployment crisis continues

Economic crisis and youth labour force participation

Temporary employment and part-time work: Transition or trap?

Education and the labour market

Global Employment Trends for Youth 2012

Youth employment policies

Global Employment Trends for Youth 2012

2.Youth unemployment crisis continues in both developed and developing economies

Regional impact and the aftermath of the economic crisis

Figure 1. Global youth unemployment and unemployment rate, 19912012

13.5 13.0 12.5 12.0 11.5

11.0 10.5 10.0 9.5

Global Employment Trends for Youth 2012

Figure 2. Youth unemployment rate estimates and projections, 200016 (%)

Developed Economies & European Union

Central & South-Eastern Europe (non-EU) & CIS

South-East Asia & the Pacic

Latin America & the Caribbean