SGI NEWS

Young, Educated and Jobless

A decade after the financial and economic crisis kicked off, youth unemployment remains a thorny problem for many industrialized countries. How can young people make a smoother transition from school to work?

The International Labor Organization (ILO), which marks its centenary this year, shone a spotlight on young people’s job market opportunities with a panel discussion at its recent anniversary conference. At the event, young academics from the Middle East, Africa and Latin America probed the causes of the high global rate of youth unemployment. But the issue of scant labor market opportunities for young people is not confined to the countries of the global South, which is home to a large proportion of the population of young people. Many industrialized countries also have youth unemployment above the global average of 11.8 percent. 

In the wake of the financial and economic crisis, youth unemployment has skyrocketed in almost all industrialized countries, especially in southern Europe. When the crisis’ impact on the labor market peaked in Italy in 2014, 42.7 percent of 14-25-year-old job-seekers were unsuccessful in finding work. In Spain, the figure was as high as 55.5 percent in 2013, while it stood at 58.3 percent in Greece in the same year. 

The good news is that since this spike, the youth jobless rate has started sinking again, in some countries even sliding significantly. The bad news is that the statistic remains far too high. In the latest EU Social Justice Index 2017, published by the Bertelsmann Stiftung, the authors urge EU member states to intensify their efforts to combat youth unemployment by "improving vocational training, further reducing the number of early school-leavers, and better facilitating the transition from the education system into the labor market. There is frequently a great discrepancy between the demands of the labor market and the skills made available by the education system."

High youth unemployment in Finland and Sweden

Failing to secure a job means that young adults face a hurdle right at the start of their independent lives. They remain reliant on their parents, boosting feelings of exclusion and helplessness. It is both an economic and a political challenge as those with a lack of prospects often veer towards extremist and populist movements. Anti-democratic attitudes commonly emerge from a context of personal crises. A sense of being socially excluded and an inability to improve one’s lot often triggers a rejection of the ruling system. 

In Spain, Italy and Greece, less than a decade after the beginning of the crisis, every third young jobseeker is still struggling to find work. In 2017, more than 15 percent of youth unemployment was concentrated in 13 of the 41 OECD and EU countries, whose policies were compared by the Bertelsmann Stiftung’s Sustainable Governance Indicators (SGI). These included Finland (20.1 percent), which is highly praised for its school education, and Sweden (17.9 percent), which is the leader in the SGI’s economic policy ranking. In its 2018 report on Sweden, the SGI’s country experts noted that: "there has been extensive debate about introducing an apprentice model to help younger age cohorts to make the transition from education to the labor market."

Learning from the leaders

Switzerland, Norway and Germany, however, have not witnessed a dramatic increase in youth unemployment in the wake of the financial and economic crisis. One reason for this, according to experts, is the success of the dual training system, which is particularly important in Germany, Austria and Switzerland. In the German system, young people and young adults gain hands-on experience of their future professions in companies, while completing the theoretical part of their training in vocational schools. Ideally, trainees should be taken on by the training company after their apprenticeship. In cases where this is not possible, they can use the experience gained during their apprenticeship to apply to other companies, thus easing their transition to working life. Vocational schools mainly provide training for occupations in the health and education sectors, such as nurses, midwives or educators. However, school-based vocational training in Germany accounts for less than 30 percent of the total. 

Many industrialized countries have no comparable training system, but only offer school-based vocational training or, alternatively, on-the-job training. And even in the vast majority of countries where in-company vocational training and school-based vocational training coexist, the importance of training within a firm is often viewed as below that of its school-based equivalent.

Overall, the countries with a relatively high proportion of apprentices, such as Germany, Austria, Australia, Denmark, the Netherlands and Norway, have significantly fewer problems with youth unemployment than countries with a low supply of apprenticeships, such as Belgium, France, Spain or Italy.

Boosting on-the-job training

Among the measures adopted by the EU in 2012 to combat high youth unemployment, it seeks to transform attitudes to vocational training and support the policy reform of training systems to improve the quality of vocational training and the supply of training places across the EU.

However, the success of training systems does not depend solely on the commitment of companies to practical training. A comparative country study of several German foundations and institutes identified further success factors for training systems as, among others, the flexibility of training content, target group diversity in the offerings, high-quality vocational guidance and the promotion of national and international mobility. 

Promoting international mobility

The ILO’s Global Commission on the Future of Work also recommends that countries with ageing populations cooperate more with countries with younger populations on vocational training, because this would benefit the labor market overall. In addition, governments should improve the labor market opportunities of young people and young adults through employment programs and the promotion of youth entrepreneurship. The organization emphasizes the private sector’s responsibility to provide young people with a quality education and a first job, as well as the need of policy makers to ensure social fairness and avoid the exploitation of the young as cheap labor. And, for young people and young adults, work means more than just economic independence: It provides a sense of meaning, forging identities, networks and opportunities. Withholding all this from young people is a recipe for disaster.