Youth Unemployment in Europe

1. Youth Unemployment in Europe Recent Trends and Initiatives to Tackle the High Youth Unemployment Jacques Dahan, Consultant 26/27April 2012 - Conference on “Youth: Employment and Inclusion in Times of Crisis” Danish Presidency of the Council – EU 2012

2. In 2011, Europeanyouthunemploymentreacheditshighestlevel • In EU-27, in December 2011 • 5.5 Million youngpersons, under 25, wereunemployed • Youth unemployment rate at 22.1% - + 1.1 pts compared Dec. 2010 • Unemployment affects much more young persons than adults • 2.23 times as high among young persons as in entire population • EU Unemployment rose faster among young people • 241 000 more young people unemployed, compared with Dec. 2010 • + 4.4% while EU total unemployment rose by 3.8%

3. Youthunemployment heavily hit Southern EU Countries in crisis YouthUnemployment Rate Situation Dec. 2011 Evolution Dec 2011/Dec 2010

4. Since 2007, negative developments in young people LM participation • Decrease in youth employment rate (YER) • In 2010, YER 34%, ‘twice’ lower than for the “25 to 64” (64%) • A rapid decline: - 3.3 points compared to 2007 (-1.2 pts for 25/64) • ES, EL, IT combine a low YER and an important decrease since 2007 • Deterioration in quality of jobs • Youth activity rate down • Youth NEET is rising, and much higher than EU average in IT, ES, EL • Increase in youth emigration related to Labour Market exclusion since 2008 in EL, ES, PT, IT, IE

5. Differences increasing across EU countries since 2011 • 2007 to 2010 : all countries except Germany experienced a decline in employment rates and higher unemployment rates of 15 to 24 years. • Since 2011, divergent trends in young people situation : • Improvement with increase in employment and decline in unemployment rate – Sweden, Austria, Finland, Germany, • Strong deterioration notably in Greece (unemployment up 10 points over one year), and Spain, but also in Italy, Bulgaria, Romania, Portugal, Poland. • Deterioration also in France and in the UK but to a lesser extent.

6. Tackling the high youth unemployment • In recent years, all EU Member States have been actively engaged in designing and implementing policy initiatives that improve employability and participation in the labor market : • Activation strategies • The dominant approach in L.M. integration over the last decade • Introducing mutual obligations in passive measures and developing activation benefits • - Active Labour Market Policy facilitating the transition to work • Special guidance services, tailored for young people • Work-based integration : • School-based integration • Employer and Training subsidies. • - Measures aimed at improving efficiency of the labour market action to deliver qualitative services • PES modernisation and change • Cooperation between relevant stakeholders and networking

7. EU Southern MS situation Problems facing young people / Labor Market are not new: - Low employment, high unemployment rate, inactivity - Issues of the relations between education and employment - Long and difficult transition between school and worklife - Lack of flexibility of the LM The crisis revealed and amplified these structural difficulties If all EU MS have recently introduced a wide variety of policy to deal with the challenges brought by the economic crisis, Southern EU countries do not have or have few the instruments that will enable the labor market to be more flexible and to better meet the needs of employers and more secure for youth unemployed

8. Greece • Horizon of young people is “blocked” • Sharp rise in youth unemployment, job insecurity, youth poverty • Inadequacy of the transition between school and work • Less social protection and security for the most disadvantaged • A rising and accelerated emigration with the crisis - From the "700 euro generation" to "500 euro generation" • Policies provide little response to youth unemployment issues • More labor market flexibility • Authorization to extend the duration of labor, to turn full time to part-time, to unilaterally terminate a fixed term contract, … • - Active measures to facilitate LM integration : few, timid and not attractive- Business creation • - Training scheme contracts and relieve social contributions for companies attractive for companies, less for young people- Measures that do not target the NEET

9. Greece • Challenges - Prevent young emigration • Secure the transition school/work • Strengthen work-based experience • Develop social dialogue in parallel with a more flexible labor Market • Modernize PES and develop partnerships to better meet young people needs • Target youth NEET, who are being excluded • Young Greeks and the crisis : the danger of losing a generation • "6 out of 10 young Greeks plan to leave for going to work in another European country," mainly in Germany and the UK. "Unless policies are adopted to address this problem, Greece could see many of the brightest minds among its young people leave the country".

10. Spain • Main issues • 1. Relation training, work and housing, a crucial issue • Leaving home, a first step towards the emancipation • Since the entry into crisis in 2008, more and more young people returning to the parental home, notably the young unemployed • 2. Labor market unable to integrate young people • Youth LTU has increased sixfold in the period 2007-2011 • High proportion of temporary contracts among young persons • A labor market not equipped to provide answers to problems and to meet the needs of young people including the poorest • Youth policies and responses to the crisis- A recent measure establishing the "base income of emancipation" (RBE), one of the few measures that directly address the needs of young people leaving home- A Program “”Temporary Assistance to unemployment and inserting” called Preparawas introduced in February 2010.

11. Spain Challenges • 1. More flexibility in the Labor Market and more security - Simplify and make more readable the labor regulation • - More consistency between temporary contracts and permanent contracts • 2. Smoothing transition from school to working life • - Closer cooperation between education system and companies • - Skills of young people who leave the education system to meet the needs of the labor market- Develop work-based and training-based integration with a focus to the NEET • - Strengthen measures aiming at young people financial autonomy and accessing housing • 3. Implementing a comprehensive activation strategy - Closer cooperation between the autonomous communities and INEM (PES).- Increased effectiveness of employment services to unemployed youth, and early management and support ; management by Objective- Youth Outreach to PES support - Improve consistency of action between the INEM and private providers.

12. Italy • Main issues: “ the 1000 euros generation", "lost generation"- Unemployment and LTU rate very high in 2011- The job insecurity has intensified: Less access to employment, reduced chances of moving to a more stable employment- Young people remain very late in family home, waiting for a stable job- NEET: the proportion has increased sharply, close to the Spanish situation- Quality of youth employment deteriorated • Youth policies in response to the crisis • - Promoting apprenticeship: benefits to companies, less to the transition between school and work- Encouraging entrepreneurship: Relevant fund to support employment and entrepreneurship combined with a micro-credit fund for businesses creation- Inclusion measures to the most disadvantaged (Since 2005, IRAP (Programma of azione per il re di-impiegolavoratorisvantaggiati). Plan to return/access to employment based on individual skills and needs of local area, and bonuses for companies that hire.

13. Italy Challenges • Reform the labor market with employment policies and welfare oriented towards young people • Families plays a compensatory role for young people that does not promote social visibility of youth issues. The result is a large gap between the labor market reforms and social welfare policies entirely oriented to the family. • Secure transition to working life • Combine work flexibility and stable jobs a transition period before reaching a stable job: Impact of labor flexibility has made more fluid access to employment while increasing significantly the precariousness of employment • More job insecurity for NEET • Correct the mismatch between education and labor market demand • Italy 2020 : Combining active and passive measures “Action plan for youth employment through the integration of apprenticeship and work”

14. EU Southern MS The high rate of structural youth unemployment may, in the longer term, have tragic consequences, notably Southern European Countries and several NMS A recent European Council stressed the urgency: "Each MS has agreed to develop a national plan for employment. This will include measures to shift the tax burden on labor and reduce labor market segmentation to improve the prospects youth employment and low skilled workers. "The committee "will form working groups with the eight countries (Spain, Greece, Ireland, Italy, Latvia, Lithuania, Portugal and Slovakia) that have a high rate of youth unemployment above average." .