Looking after the future
Off to a Good Start? Jobs for Youth says that young people are more than twice as likely to be unemployed as the average worker. This is a waste of resources that today’s economies can ill afford.
Young people have suffered a disproportionate share of job losses during the global economic crisis. In the third quarter of 2010, the OECD-average youth unemployment rate represented 18.5% of the labour force aged 15/16-24, with nearly 3.5 million more youth having joined the ranks of the unemployed compared with the corresponding quarter of 2007.
But unemployment does not capture the full hardship for youth, as many of those who have left education do not even appear in labour market statistics. Youth unemployment rates in the OECD area are expected to stay high in 2011 before dropping slightly to about 17% in 2012. This is more than double the total unemployment rate, which stood at 8.6% in October 2010.
Complicating matters is the fact that young people after leaving school can face lower pay–up to 8% in some countries–than their peers 20 years into their careers. And young people leaving school in the coming years are more likely to struggle to find work than previous generations.
Countries cannot afford to waste their most valuable resources by allowing them to remain idle. The loss is compounded in countries with aging populations. But what can governments do to help young job-seekers find work?
Governments should emulate policies that have produced costeffective results in other countries. For example, it is essential to target young people most at risk, including youths who leave school without a qualification, those from immigrant backgrounds or who live in disadvantaged areas.
Early intervention programmes and effective job-search assistance for different groups of youth have demonstrated positive results in countries such as in Denmark, the Netherlands and Japan.
Job-search assistance programmes are found to be the most costeffective for young people who are assessed as ready to work, and many OECD countries hired new staff in the crisis to better assist young job-seekers.
Apprenticeship, vocational education and training programmes appear to be efficient school-to-work pathways, particularly for secondary students. Governments should strengthen these programmes, as is done in Austria, Germany and Switzerland– and increasingly in Australia and in France. Governments could also use temporary subsidies to encourage firms to hire youth who have completed their apprenticeship, targeting in particular those lowest-skilled candidates and smaller firms.
These active measures should be complemented by temporary extensions of the safety net, which are vital to ward off poverty. For example, in its Recovery Act of 2009, the US provided federal funding to states to expand coverage of unemployment benefit eligibility for the jobless with short work histories, which covered younger workers.
The risks posed by a “scarred” generation have motivated many governments to take vigorous action, notably by scaling up funds for youth labour market programmes. In the context of today’s fragile recovery and mounting fiscal pressures, there is a strong need to keep up momentum. But governments cannot do everything alone, and well co-ordinated support and incentives must come from employers, trade unions, NGOs, and other players.
Improving labour market prospects for all youth should be at the top of the political agenda in all OECD countries in 2011. Our economies cannot afford to underestimate the size of the problem, and addressing it is essential for our future.
Recommended links and references
See www.oecd.org/employment/youth
©OECD Yearbook 2011
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