Helping young people enter the labor market and stay there is an essential part of policies promoting economic growth and better living conditions. Such activation and sustainable integration of young people are also instrumental in reaching the Europe 2020 employment target.
The transition of young people from school to work is burdened by specific challenges. The result is relatively low employment rates, high unemployment and high rates of young people who are neither in employment, education or training (NEETs). Youth unemployment is more sensitive to the business cycle than adult unemployment. Being new entrants with limited work experience, young people are less likely to find a job, are often employed through temporary and part-time contracts or are pursuing a traineeship, and they are more easily dismissed if the economic cycle is weak.
Moreover, in many Member States, a high number of young workers have involuntary temporary contracts, and often in such cases have difficulty transitioning on to permanent jobs. However, the nature of temporary work and the opportunities for finding a permanent and stable job it offers to young people varies widely across countries. A high prevalence of temporary contracts for youth may be the result of participation in education and training, or a probationary period.
The levels of youth employment, unemployment and inactivity are largely influenced by the macroeconomic situation. But they may also have important root causes in the structural characteristics of school – to work transitions. These structural factors include:
- unsatisfactory outcomes of education and training systems;
- segmentation of labor markets affecting young people in particular, and
- the low capacity of public employment services to provide tailored services to young people and the limited efforts of these services to engage with young people in the most vulnerable situations.
Unemployment and inactivity among young people have a high cost and require targeted policies. Unemployment, especially long-term unemployment, at the start of a career can have negative long-term consequences such as lower future earnings and worse employment prospects (the so-called ‘scarring effect’).
The youth unemployment rate is the percentage of unemployed in the age group 15 to 24 years old compared to the total labor force in that age group (which includes both employed and unemployed young people but not the economically inactive, i.e. young people who are not working and not available or looking for work). The youth unemployment rate in the EU has decreased from a peak of almost 24% in 2013 to 18.7% in 2016, but it is still 2.8 pps higher than it was in 2008 (and more than double the overall unemployment rate which stood at 8.6% in 2016). Eleven Member States faced a youth unemployment rate of above 20%: in 4, the rate was even over 30% (Greece, Spain, Italy, and Croatia). For 10 Member States (Germany, the Czech Republic, the Netherlands, Malta, Austria, Denmark, Hungary, the UK, Estonia and Lithuania) the rates were lower than 15%, an improvement from 2015 when it was just 8 Member States. The dispersion of youth unemployment among euro area countries remains higher than for the EU 28, ranging from a low 7.1% in Germany to a very high 47.3% in Greece.
In 2016, on average 40.8% of young employees (15-24 age group) in the EU were on temporary contracts (compared to 11.2% of workers aged 20-64) and 32.4% had part-time jobs (compared to 18.9% of workers aged 20-64)
There are wide differences within the NEET population and not all situations are problematic. For some young people being NEET is just a temporary status (time between jobs or before finding a job after finishing their studies).
For others, being NEET can be a symptom of disadvantage and indicate disengagement from actively participating in society. The NEET status is also dynamic: while the overall numbers may remain broadly the same, many of the individuals within the group are changing at a rapid rate because they find a job or engage in further education. But there is also a ‘core’ group who does not change over time and who may face multiple barriers to entering the labour market. For this group, spending time as a NEET may have a wide range of negative consequences, such as insecure and poor employment prospects, which are more common, or mental and physical health problems, which are more extreme.
In countries with high labor market segmentation, young people are at particular risk of being trapped in precarious employment, with little on the-job training, relatively low wages, and weak long-term employment and career prospects. Younger workers are also comparatively more often overqualified in their jobs than other age groups
In many Member States young people more often than not have involuntary temporary contracts, and often find it difficult to make the transition to permanent jobs. However, the nature of temporary work and its impact on whether or not young people find sustainable employment varies considerably across countries.
You can read and learn more about youth employment in European countries on the following link: