A multifactorial explanation of youth unemployment and the special case of Austria

One of the biggest challenges currently facing European society is the dramatically high level of youth unemployment. Commonly, political solutions and strategies can be found in those countries that have been able to keep youth unemployment low in spite of the financial and economic crises. Austria is such a case. On the basis of European Union Member State data, the article gives a multifactorial explanation of youth unemployment and asks whether these factors can explain relatively low youth unemployment in Austria. With the country's “youth safety net” presented in detail, it is shown that active labour market policy reduces youth unemployment in Austria. The article also points out the limitations of cross‐country comparisons of youth unemployment rates and proposes the use of a greater number of indicators. Finally, the article argues for economic policies to stimulate demand, which have to be based on a political and social commitment to full employment.     

The challenge of youth unemployment

This article was prepared as a contribution to the ILO's Action Programme on Youth Unemployment. It presents an overview of the youth unemployment problem and youth employment policy principally from a European perspective, although it is hoped that much of the comment and analysis is relevant to afar broader range of countries. In the first section, which considers the nature and causes of youth unemployment, it is shown that its basic cause is aggregate demand rather than high youth wages or the size of the youth cohort, and suggests that a successful strategy for dealing with the problem must take this into account. In the second section, dealing principally with the examples of Germany and the United Kingdom, a number of factors are identified which influence the effectiveness of youth employment policy. In particular, it is found that precise targeting of programmes and the involvement of employers' and workers' organizations, as well as government, in the design and implementation of policy are both important determinants of an effective policy. A third section attempts to set the analysis in a more general context.     

Labour market integration of unemployed youth from a life course perspective: the case of Norway

The aim of this article is to analyse the labour market integration of previously unemployed youth in a life course perspective. 'Work, Lifestyle and Health' is a longitudinal panel survey following a sample of nearly 2,000 individuals who are representative of the Norwegian cohorts born between 1965 and 1968. The survey was first conducted in 1985 with follow-ups in 1987, 1989, 1993 and again in 2003. Unemployment among young people does not necessarily lead to marginalisation and social exclusion. Long-term effects will be dependent upon how the youths cope with unemployment, the duration of the unemployment period, their mental health status and educational qualifications. Many young unemployed people are not entitled to unemployment benefits because they lack work experience. Consequently, they are dependent on support from their family and/or social assistance. However, there is still much to learn about the long-term consequences of youth unemployment, e.g. whether or not the youths have received social assistance and what are the long-term consequences for their future labour market career and labour market integration.     

The increasing importance of place: neighbourhood differences in metropolitan Sweden, 1990–2006

The shift from a fairly equitably distributed economy to a more unequal one is likely to have consequences. This article investigates neighbourhood differences in three cities in Sweden between 1990 and 2006 using panel registry data for the total population. The results show increasing neighbourhood differences in the outcomes of student grades and youth unemployment. Neighbourhood differences were computed for both those belonging to the majority of the population and visible minorities, and it was determined that the differences are not the result of an increase in the number of immigrants in poorer neighbourhoods. The majority population displays the largest differences in both grades and unemployment. The increase in disparities among neighbourhoods regarding outcomes for youth is a warning sign: it could lead to low motivation, loss of aspirations and social unrest.     

Financial hardship during unemployment in Norway: the impact of public and private income support

It is common to assume that long-term unemployment no longer causes financial hardship because of generous welfare benefits. It is further assumed that unemployment benefits have eroded the traditional role of the family in protecting its members against hazards. This panel study of long-term unemployed people in 1991-1992 demonstrates the inadequacy of unemployment benefits and the importance of family support in reducing the risk of financial hardship. Vulnerable household types, such as single people and families with limited economic resources, at the outset seem unable to bear the personal risk of unemployment that is built into the benefit scheme. Persons disadvantaged at the outset risk a downward spiral because of long-term unemployment. Especially during times of high unemployment, the compensation level is not optimal from a welfare point of view. Greater coverage and more generous unemployment benefits may help unemployed people to cope better financially and thus avoid applying for discretionary and highly stigmatized social assistance allowance.     

Youth, unemployment and political marginalisation

The article investigates the impact of being unemployed on political marginalisation among young people. Are unemployed youth politically marginalised compared with employed youth? Is the impact of unemployment on political marginalisation related to the development of the welfare state? Based on Marshall’s concept of social citizenry, and Esping‐Andersen’s theory of decommodification politics, the impact of unemployment on political marginalisation was expected to be least in the most‐developed welfare states. In these countries, welfare policies were expected to counteract marginalisation among the unemployed. The analyses were based on the Eurobarometer survey Young Europeans from 1990. Three aspects of political marginalisation were investigated: political confidence, political interest and political extremism. Unemployed youth express less confidence in politics, they talk less about politics and they more frequently support revolutionary political ideas, compared with employed youth. The greatest difference in political confidence between unemployed and employed is found in Great Britain, while Italy represents a deviant case where the unemployed have more confidence than the employed. The development of the welfare state does not appear to be a crucial factor for political confidence among the unemployed.     

Europeanisation and the Youth Guarantee: The case of France

In 2013, the European Council approved the Youth Guarantee (YG) to counteract youth unemployment. Because of its specific features, the YG is useful for understanding whether the EU has triggered policy change in national youth unemployment policies. Contrary to most of the literature on similar topics, we focused in this study on the effect of this specific European measure rather than on broader EU strategies or policies. The study contributes to the literature by qualifying the degree of fit/misfit and suggesting a counterfactual analysis, using the case of France. We first situate the article within the broader Europeanisation debate and present our research design. The second section introduces the policy structure of the YG and investigates youth unemployment policy in France, prior to and after the European initiative. The third section discusses whether the French youth unemployment policy would have been developed in the same way without the YG. A final section concludes.     

Laziness or liberation? Labor market policies and workers' attitudes toward employment flexibility

This study examined the relationship between labor market policies and employees' willingness to make concessions in order to avoid unemployment. In contrast to previous work that analyzed the behavior of employers and the unemployed, we examined how labor market policies influence employees' flexibility. Multilevel modeling techniques were applied to a data set that was created by combining individual‐level data from the International Social Survey Program (ISSP) with country‐level information from the Organization for Cooperation and Economic Development. The main findings of our analyses were that dismissal protection and unemployment benefits do make a difference to employees' willingness to make concessions, and that the relationships between the willingness to make concessions and labor market policies are nonlinear. Substantively, these nonlinear relationships suggest that employees' willingness to be flexible is negatively associated with both “too much” and “too little” social protection.     

Unemployment and Labour Market Policies: Some Lessons from West Germany

The author points out that West Germany has had low inflation, high industrial efficiency, and good vocational training, but has not escaped rising levels of unemployment. After an analysis of employment trends in Germany since 1945 there is a review of varying government policies in public expenditure and in dealing with unemployment. The author relates demographic trends to employment patterns, and refers to such phenomena as the "dormant labour force", concluding that unemployment will remain high. He reviews the effects of social security benefits and of job creation schemes. He concludes that none of the well-known remedies for unemployment have proved effective in themselves but that short-term job creation schemes are very much a "second-best". He concludes that industrial efficiency — though essential — is not enough in itself and that conquering inflation or providing youth training are shown by the German example to be only a partial help and not a solution to improving employment prospects.     

Bringing firms on board. Inclusiveness of the dual apprenticeship systems in Germany,Switzerland and Denmark

In dual vocational education and training (VET) systems, the state and employers collaborate in order to meet a country’s needs in terms of education for youth and professional skills for the labour market. These systems are considered as effective tools to lower youth unemployment. However, since firms in dual VET systems select the apprentices, not every candidate gets access to in‐firm training. Consequently, governments develop measures that try to make their dual VET systems more inclusive. We present a categorisation of the different measures used to enhance inclusiveness in three dual collective skill formation countries (Switzerland, Germany and Denmark). We show that inclusiveness measures exist in each of the three countries but are limited in the extent to which firms are expected to play an active role in them. We conclude that the types of measures adopted are related to political economy traditions and the country’s level of macro‐corporatism.     

Unemployment and economic security for young adults in Finland,Norway and Sweden: From unemployment protection to poverty relief

In this study, we investigated if there has been a displacement in the type and coverage of welfare services available for young unemployed adults in Finland, Norway and Sweden over the last two decades. This question is important because a number of studies have argued that the generous unemployment benefits and extensive labour market intervention found in the Nordic welfare states shield young people from the most severe consequences of economic inactivity. In this article, we instead show that during this period, less generous means‐tested unemployment and social assistance benefits have become the most important form of income protection for young people. In evidence, earnings‐related unemployment benefits now cover only 10 per cent of unemployed Swedes and Finns and 45 per cent of unemployed Norwegians aged 24 years or younger. This development marks a significant change in our understanding of unemployment protection for young people in Nordic countries.     

The policies of unemployment protection in Europe

The abundant literature on welfare state policies, regimes or ‘worlds’ has been only limitedly interested in unemployment protection, and even less in youth unemployment protection. What is clearly lacking in the literature is an updated analysis of the most recent policies developed in European countries targeting youth. This mini‐symposium aims to fill in this gap by presenting findings from an EU‐funded research project entitled ‘Youth, Unemployment and Exclusion in Europe: A Multidimensional Approach to Understanding the Conditions and Prospects for Social and Political Integration of Young Unemployed’ (YOUNEX). The main aim of the research endeavour was to develop theory and contribute to empirical knowledge concerning the social and political exclusion of unemployed youth in Europe.     

New challenges for the welfare state: The emergence of youth unemployment regimes in Europe?

In this article we discuss the emergence of ‘youth unemployment regimes’ in Europe, that is, a set of coherent measures and policies aimed at providing state responses to the problem of unemployment and, more specifically, youth unemployment. We classify these measures and policies along two main dimensions: unemployment regulations and labour market regulations. Using original data, we show how seven European countries locate on these two dimensions as well as within the conceptual space resulting from the combination of the two dimensions. Our findings show cross‐national variations that do not fit the traditional typologies of comparative welfare studies. At the same time, however, the findings allow for reflecting upon possible patterns of convergence across European countries. In particular, we show some important similarities in terms of flexible labour market regulations. In this regard, the recent years have witnessed a trend towards a flexibilisation of the labour market, regardless of the prevailing welfare regime.     

Different routes,common directions? Activation policies for young people in Denmark and the UK

This article analyses and compares the development of activation policies for young people in Denmark and the UK from the mid-1990s. Despite their diverse welfare traditions and important differences in the organisation and delivery of benefits and services for the unemployed, both countries have recently introduced large-scale compulsory activation programmes for young people. These programmes share a number of common features, especially a combination of strong compulsion and an apparently contradictory emphasis on client-centred training and support for participants. The suggested transition from the 'Keynesian welfare state' to the 'Schumpeterian workfare regime' is used as a framework to discuss the two countries' recent moves towards activation. It is argued that while this framework is useful in explaining the general shift towards active labour-market policies in Europe, it alone cannot account for the particular convergence of the Danish and British policies in the specific area of youth activation. Rather, a number of specific political factors explaining the development of policies in the mid-1990s are suggested. The article concludes that concerns about mass youth unemployment, the influence of the 'dependency culture' debate in various forms, cross-national policy diffusion and, crucially, the progressive re-engineering of compulsory activation by strong centre-left governments have all contributed to the emergence of policies that mix compulsion and a commitment to the centrality of work with a 'client-centred approach' that seeks to balance more effective job seeking with human resource development. However, attempts to combine the apparently contradictory concepts of 'client-centredness' and compulsion are likely to prove politically fragile, and both countries risk lurching towards an increasingly workfarist approach.     

Why are Swedes sick but Finns unemployed?

While the Finnish and Swedish social security systems are structurally quite similar, the two countries show marked differences both in the recipiency rates of sickness and work disability benefits and in the level of open un­employment. In Sweden, the usage of sickness-related benefits since the beginning of the 1990s has varied in inverse relation to the level of registered unemployment, whereas in Fin­land, recipiency rates of sickness and work disability benefits have remained fairly constant, registered unemployment having typically been more than twice the Swedish level. Using the available statistical data, the article explores the differences in the prevalences of sickness, work disability and unemployment benefits between Sweden and Finland. Factors that may explain the divergence between the two countries are sought and interpreted from the long-term differences in welfare-state strategies and the structural features of the social security systems under investigation.     

Why targeting matters: The apprenticeship program for youth in the Czech Republic

In this paper, we analyze the targeting and outcomes of the apprenticeship program implemented under the Youth Guarantee/YG scheme in the Czech Republic. We examine the outcomes and targeting using counterfactual impact evaluation (quasi-experimental design) of the apprenticeship program on the basis of administrative data from the Czech Employment Office. The implementation strategy is analyzed using various policy documents. The findings indicate that the program is apparently targeted at those groups of young people who are less disadvantaged as regards education level and previous unemployment experience. At the same time, paradoxically, the effects in terms of outflows from the unemployment register are weak for the short-term and medium-term unemployed, as well as for low-skilled and high-skilled youth, and stronger effects are evident in the case of long-term unemployed and medium-skilled youth. The failures in targeting and in adjusting the program to the needs of more vulnerable groups of youth are due to an inconsistent implementation strategy of Czech Public Employment Services.     

How unemployment duration affects social assistance receipt: evidence from Finland

This article reports on a study of the impact of unemployment duration on the probability of becoming a social assistance recipient and on the time spent on social assistance. The data are taken from a local Finnish labour market consisting of the cohort of unemployed people at a given date (n = 2,274). The data are linked to information about the number of months recipients received social assistance during the subsequent year. Count data regression models of the hurdle type are estimated. The results of the analysis suggest that the impact of unemployment duration on the probability of becoming a social assistance recipient is explained to a large extent by changes in the distribution of types of unemployment benefits between people with different lengths of time spent in unemployment. Unemployment assistance recipients are more likely to become social assistance recipients and to spend longer periods on social assistance than are recipients of unemployment insurance because the unemployment benefits for the latter are higher. Among social assistance recipients, time spent on the transfer increases with unemployment duration only for those who are in frequent need of assistance.     

Youth‐oriented active labour market policies and economic crisis: Explaining policy effort in Greece and Portugal

The starting point of this study is the implementation of seemingly similar youth‐oriented labour market policies in Greece and Portugal. Both countries have suffered high youth unemployment rates and have been pressured to restructure their labour market as part of the rescue programmes adopted during the European sovereign debt crisis. Despite convergence in terms of policy trajectories, there is a significant divergence in employment outcomes. In Portugal, youth‐oriented policies were better‐targeted and structured. Their implementation has been more effective and has involved the social partners from the outset of the crisis. In Greece, policy design failures, administrative weaknesses and unfavourable macroeconomic conditions have limited the dynamics of youth‐oriented policies thus increasing youth insecurity. Τhe analysis suggests that convergence in policy content can be compatible with divergence in terms of outcomes.     

Explaining differences in unemployment benefit takeup between labour migrants and Dutch native workers

The large increase in Eastern European migrants entering the Dutch labour market has led to concerns about their potential claim on Dutch unemployment benefits. We use a decomposition analysis to investigate differences in uptake of unemployment benefits between migrants and native Dutch employees by analysing register data for all employees in the Netherlands in 2015. The results show that Eastern European migrants, similar to other migrants, receive unemployment benefit more often than native Dutch employees. This difference can be largely ascribed to job characteristics. The inclusion of unemployment risk in the analysis reveals that non-working migrants are much less likely to receive unemployment benefits than Dutch natives.     

The ratification of ILO Conventions and the provision of unemployment benefits: An empirical analysis

This article tests the relationship between the ratification of International Labour Organization (ILO) Conventions and the provision of unemployment benefits. Statistical tests focus on two related issues: why countries ratify ILO Conventions on unemployment benefits, and whether ratification influences government spending on unemployment benefits. The main findings are that democracy, region, income, and globalization are the main factors influencing why countries ratify ILO Conventions on unemployment benefits. In turn, the ratification of ILO Conventions is systematically associated with higher spending if countries have ratified more than two Conventions.