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Danish Presidency of the Council of the European Union

Youth labour market developments during the jobs crisis: trends and policy challenges Stefano Scarpetta Deputy Director for Employment, Labour and Social Affairs OECD . Danish Presidency of the Council of the European Union “ Youth: Employment and Inclusion in Times of Crisis ”

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Danish Presidency of the Council of the European Union

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  1. Youth labour market developments during the jobs crisis: trends and policy challenges Stefano Scarpetta Deputy Director for Employment, Labour and Social Affairs OECD Danish Presidency of the Council of the European Union “Youth: Employment and Inclusion in Times of Crisis” 26-27 April, 2012, Horsens, Denmark

  2. Structureof the presentation • Youthunemploymentduring the crisis: some key stylisedfacts • Structuralchallengespre-existing the crisis • Short-termpolicy tools andlong-termconcerns • Conclusions

  3. In general, youth face a much higher risk of unemployment than adults… Youth and adult unemployment rate, 2011 Q4 Percentages of labour force 4 times as high 2 times as high Equal

  4. …and young people have been hard hit by the global crisis… Youth (age group 15/16-24) unemployment rates in 2007 Q4, at its peak and in 2011 Q4 Seasonally adjusted1data, percentage of the youth labour force • Not seasonally adjusted data for Chile, Iceland, Israel, Mexico and Switzerland. Countries shown in ascending order of the youth unemployment rates at its peak.

  5. …and a many are facing long spells of joblessness Incidence of long-term unemployment1 among youth, selected G-20 countries, 20102 Percentage of total youth and adult unemployment (aged 15-24 and 25-54, respectively) • Unemployed persons for one year or more. • 2008 for Korea and the Russian Federation. Source: OECD Labour Force Statistics Database.

  6. Labour market difficultiesforyouth go beyondunemployment Youthneither in employmentnor in education or training (NEET) Percentage of youth aged 15-24 NEET 2008 breakdown Source : OCDE (2010), Off to a good start! Jobs forYouth

  7. The “quality” of jobs also matters…The share of working youth in temporary jobs is high in many EU countries Percentage of employedyouthaged 15-24, by reason for temporarystatus, 2010 Source: Estimationsbased on the EuropeanUnionlabourforcesurvey

  8. …as the matching of qualifications with the demandManyyouthuthare over-qualified for their job, more sothanadults Percentage of employed in age group, 2010 Source: European Survey of Working Conditions, 2010

  9. Key short-term challenges in the jobs crisis • Prevent the current generation of school leavers from becoming a “scarred generation” • Job-search assistance programmes are found to be the most-cost effective for young people who are job ready • Temporary extensions of the safety nets are vital to prevent poverty among unemployed youth. But it is essential to apply “mutual obligations” • Apprenticeships and other dual vocational education and training (VET) programmes can facilitate the school-to-work transition • More in-depth options are needed for most disadvantaged youth • second-chance education opportunities are expensive but could be effective in helping youth cumulating several disadvantages

  10. Going forward, a number of structural problems should be tackled • Ensure that everyone leaving the education system has the skills needed on the labour market • Basic “qualifications guarantee” up to a given age • Promote second-chance learning opportunities for school drop-outs • Make the transition from school to work less abrupt • More opportunities to work while studying • Strengthen internships and apprenticeships for smoother and efficient pathways from school to work • Address over-qualification • Better guidance to inform youth of work opportunities by field of study • Strengthen links between universities and the labour market

  11. Going forward, anumber of structural problems should be tackled • Addressing labour demand barriers for youth • Reduce the cost of employing low-skilled youth, through youth sub-minimum wages and/or lower social security contributions at low wages • Tackle discrimination at hiring (e.g. mentorship for graduates with an immigrant background) • Continue efforts to reduce labour-market duality • With particular focus on reducing the gap in employment protection between temporary and permanent contracts

  12. Summing up • Most OECD countries have acted swiftly during the crisis by scaling up resources for youth programmes. • Strong need to keep the momentumand provide adequate resources for cost-effective youth measures. Actions are needed to prevent most school-leavers from being trapped in long spells of unemployment. • In a long-term perspective, the target group for intensive assistance should be the hard-core group of youth cumulating disadvantages and at high risk of long-term unemployment and inactivity. • It is therefore crucial that governments tackle the structural barriers this hard-core group faces in education and in the labour market. • Better school guidance andimproved links between the education sector and employers are also needed to tackle over-qualification.

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