Youth unemployment in Europe: what makes a labour market ‘youth friendly’?

employment, jobs, young people

Author(s):  Tess Lanning
Published date:  18 Jul 2012
Source:  Touchstone

Commentators in the UK often link the causes of youth unemployment to problems with the British education system, and the fact that young people don’t emerge from school as fully-formed ‘job-ready’ employees. As Phil Cabe of the Forum of Private Business put it in an interview with the Daily Mail last year, ‘Unfortunately, it’s a sad indictment of the UK’s education system that it is not producing the right level of work-ready young people.’

But are variations in levels of youth unemployment across Europe really down to differences in the calibre of young people? Are the work ethic and skills of young people in Germany, Austria and the Netherlands, where youth unemployment stands at less than 10%, significantly stronger than in the UK, where it pushes 22%? Are rates of 50% youth unemployment in Greece and Spain due to a cultural problem among young people in those countries?

The facts suggest something more complex is going on. The variations in the severity of youth unemployment across Europe are partly, of course, a reflection of different levels of economic resilience and overall employment rates across Europe. But a new report by IPPR, the CIPD and the TUC argues that they also reflect systemic differences in how ‘youth friendly’ the job market is in different countries.

Young people find it particularly difficult to compete with older and more experienced workers in in the UK, where they are more than three and a half times more likely to be unemployed than an ‘adult’ (i.e. someone aged over 25). This is a high ratio compared to other European countries, outstripping countries hit hard by the financial crisis such as Greece, Ireland, Spain and Portugal, where young people are about two and a half times more likely to be unemployed than adult workers, as well as the countries with low youth unemployment rates. In Germany, a young person is only one and a half times more likely to be unemployed than an adult worker. The position of young people, and particularly young men, relative to adult workers in the UK has also worsened in recent decades, despite the fact that young people are better qualified than ever before.

Graph: ratio of youth to adult unemployment in the UK
Source: ONS 2012

To understand variations in youth unemployment, the report argues, we need to step back and look at how the overall ‘system’ interacts to help or hinder young people in entering the world of work. In countries with low levels of youth unemployment, there is considerable support for young people to make the transition from school to work and responsible adulthood. In Germany, Austria and the Netherlands, apprenticeships and other vocational qualifications provide structured pathways into skilled work, opening up strong career and earning prospects for young people who do not go to university.

In many other northern European countries, employers offer regular work placements and training to support vocational courses in schools and colleges. Employers and unions even help to design high quality vocational qualifications that include a programme of related academic subjects as well as specific technical training, ensuring that young people have the skills that they will need throughout their working lives.

This is a far cry from the UK, and particularly the English, situation, where employers have become increasingly reluctant to hire and train young people and a vocational qualification often guarantees little more than a low skilled job in the service sector, with few opportunities for progression thereafter. While the UK has some world class apprenticeships, these are offered by a minority of responsible employers. Many employers and training providers have resisted attempts to improve the quality of vocational qualifications. (In response to a government consultation, for example, less than a third agreed that young people should be taught maths, English and ICT as part of an apprenticeship). Some employers have been happy to offer controversial unpaid ‘workfare’ schemes to unemployed young people, but colleges find it very difficult to secure the sort of regular, high quality work experience and training placements that help to prepare young people for work in other northern European countries.

Reversing the trend that has seen employers increasingly opt for older and more experienced workers over young people will not be easy, but the government could start by using procurement contracts to incentivise more employers to offer good quality work experience and training. Unions and employer associations could encourage and support this in the sectors where they are present – following the lead from their counterparts in continental Europe. Reforms to vocational qualifications should aim to equip young people with broad and transferable skills that protect against shifting demand in the economy, not simply prepare them for a specific job. Finally, being unemployed for long periods of time can have a lasting impact on young people’s employment and earnings prospects, and a job guarantee for young people out of work for more than a year would ensure a generation of young people, already failed by systemic problems with the school-to-work transition in this country, are not ‘lost’ to poverty and unemployment.