Declining Youth Unemployment in Europe: The Effect of the Business Cycle or the European Youth Guarantee?

Monday, 4 September 2017
Researchers' work published externally
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A fresh look at youth unemployment in Europe finds that it is not the huge societal problem previously thought, but rather that general unemployment merits closer attention.

In 2012, youth unemployment took centre stage as a European policy issue. It was on the agenda of successive European Councils and became the target of many policy initiatives aimed at fighting youth unemployment, with the adoption of the Youth Guarantee as the central piece of European legislation. The latter committed member states to offer their young people, within four months of becoming unemployed or finished education, either employment, apprenticeship/traineeship or further education. In addition the initiative made available around €3 billion of funding from the Commission to support young people living in regions with youth unemployment higher than 25%.

At the time these initiatives were being rolled out, Mikkel Barslund and Daniel Gros were critical of the singular focus on youth unemployment in the public debate, arguing that public spending is always about trade-offs and there is never a shortage of good causes to which funds can be allocated. In this new paper, they argue that in most countries youth unemployment is not a large stand-alone societal problem but rather that general unemployment is the problem. In this article, the two CEPS economists take a fresh look at youth unemployment and how it measures up against overall unemployment. They find that the literature is far from clear on the crucial question of whether being unemployed when young carries a larger scar than for older workers and conclude, in fact, that there is little reason to prioritise jobs for youth over jobs for adults.

Mikkel Barslund is Research Fellow at CEPS and Daniel Gros is Director of CEPS. This article originally appeared in the CES Forum, Vol. 18, No. 2, Summer 2017, and is republished on the CEPS website with the permission of the publisher.