Across the OECD area, youth unemployment rose by 4.3 percentage points over the year to June 2009, to 17.6%, which is about twice the overall average rise for all age groups. Youth unemployment is highest in Spain, with over a third of young workers now out of work there, compared with a national average of 15.8% for workers aged 25 and over. Several other countries with different kinds of labour markets, from Italy through Sweden to the US, also have youth unemployment approaching (or exceeding) 20%. Even in countries where well-established apprenticeship systems have traditionally promoted a smooth transition from school to work, such as Germany, Austria and Switzerland, youth unemployment has climbed sharply too.
One reason is that the nature of apprenticeships has evolved during the crisis, and firms are reluctant nowadays to offer them to youth who don't have educational qualifi cations, or who come from immigrant backgrounds. To make matters worse, many of the youth laid off from temporary or part-time jobs do not qualify for unemployment benefits. With the severity of this downturn and the danger of a jobless recovery, these young people run a serious risk of falling into poverty.
In short, an entire generation of recent school-leavers could soon find themselves out of work for months or possibly years, and may never recoup the losses in income, career prospects, and job and life satisfaction that early and prolonged unemployment can entail.
Some governments have responded quickly with comprehensive youth-targeted packages. In April, the UK government announced that from January 2010, all people under the age of 25 who have been unemployed for over a year will have a job offer, training or a paid work-experience place. The US government announced that it would expand unemployment benefits to many more jobless people, including youth, and expand its existing programme of tax credits to employers hiring 16 to 24-yearolds. All municipalities in the Netherlands are now obliged to offer work, training or a combination of the two to all 18 to 27-year-olds who apply for social assistance benefits. And France has recently announced a comprehensive €500 million plan to assist young people in either continuing their studies or entering the labour market.
Many other countries are making efforts to provide easier access to active labour market programmes, including job-search assistance and training, for both new entrants and youth who have encountered difficulties in entering the labour market. Many are also providing extra funding for apprenticeships for unskilled youth, while some are discussing ways to reform the education system so as provide youth with sufficient opportunities to earn a recognized and valued professional qualification.
It's becoming clear that in many countries, the traditional "first school, then work" model no longer applies: work is becoming part of a student's core curriculum. But the main lesson in an increasingly knowledge-based global economy is that it pays for students to stay longer in school, since unemployment among young people, even during good economic times, is solidly linked with low levels of education. Governments would be smart to revise some of their basic education, training, employment and social policies so that when a recovery does take hold, young people will be ready and able to work.
©OECD Observer No 274, October 2009