International Lessons: youth unemployment in the global context

Lizzie Crowley

The UK has a growing structural youth unemployment problem…

Number of young people aged 16-24 years who have been unemployed for 12 months or more 2000-2012

…but many other countries have managed to maintain low levels of youth unemployment

Youth unemployment ratio - % of 15-24 years old who are unemployed

The UK

Are there lessons the UK can learn from other countries?

Germany – falling youth unemployment since the mid 2000s

Youth unemployment ratio - % of the 15-24 years old population who are unemployed

The Dual Apprenticeship System

Appears to have sheltered young people from the downturn:

• Large scale and high quality training - A common pathway – 60 per cent of young people choose vocational pathway - 4x as many apprentices than UK

• High integration between education and labour market -and the taught element is much greater than in the UK accounting for 2 days per week compared to 1 a month

• High levels of employer engagement at all levels - All large employers offer apprenticeships – compared to just a third in the UK, and employers heavily involved in design and delivery.

Denmark - recession led to a rapid rise in youth unemployment in but long-term youth unemployment has remained very low…

The UKDenmark

Long-term youth unemployment in OECD 2001-2011 % of unemployed

Denmark – Active Labour Market Policy (ALMP)

Highest expenditure on ALMP amongst OECD nations

Progressively reduced time before activation – passive period is being phased out this year

Immediate activation of all 18-19 year olds

Better co-ordination between authorities – including data exchange agreement

Re-integration with education for those under 25 who have not completed formal education

The Netherlands has a highly flexible youth labour market which supports high levels of youth employment…

The impact of non-standard work

• Most forms of temporary employment act as a stepping stone to permanent employment rather than a trap

• A large amount of part-time jobs are permanent, have similar protection levels to full-time jobs, and often reflect choice

Benefits include:

• Less scarring than unemployment

• Allows development of work experience and human capital

• Strengthens social networks and contacts with employers

But…

• Some evidence that the system impacts negatively on the lowest skilled

Australia low and stable youth unemployment levels

Youth unemployment ratio - % of the 15-24 years old population who are unemployed

Australia – Work for Your Dole

Evolution of welfare to work policy in Australia – UK has closely followed Australian model

One of the first countries to introduce mandatory work activity – Work for Your Dole in 1997 originally for youth

Effectiveness of mandatory work experience activity highly questionable:

Deterrence effect – job seekers exit benefit system, pushing young people out of support system

Lock in effect – job search activity reduced so participation reduces chances of entry to employment

Lessons for the UK?

Difficulty in importing policies from elsewhere but there are key things UK could learn:

From Denmark – early intervention, more local control and co-ordination, and prioritisation of reintegration into education for those with no or low qualifications.

From Germany - increasing employer engagement, reviewing levels of academic context,

Netherlands – expansion of part-time opps for young people. ensuring appropriate work experience whilst at school.

From Australia – avoid a ‘work first’ policy research shows that these policies are largely ineffective and can impact negatively on a persons chances of finding a job as they reduce the time for job search