Youth unemployment in the EU: a scarred generation? - European Union Committee Contents

Chapter 2: Youth Unemployment in the EU

The headline facts

10.  Current youth unemployment levels in the EU are exceptionally high. According to Eurostat, the EU's statistical service, as at February 2014 the seasonally adjusted rate of youth unemployment across the 28 EU Member States (EU28) stood at 22.9 per cent, more than double the overall unemployment rate of 10.6 per cent.[8] The EU28 youth unemployment rate in 2007 was 12.1 per cent.[9]

Definition of youth unemployment in the EU

11.  In conducting this inquiry, we came across varying definitions of youth unemployment and related concepts such as NEET (Not in Employment, Education or Training). In examining this issue, it is important to be clear about what is meant by the different terms used in this area—youth unemployment is more complex than simply the number of young people without a job. Box 1 outlines the EU definition of unemployment and how it is calculated at EU level.


Definition of youth unemployment

Eurostat provides information on all Member States and the EU as whole, using common definitions to facilitate cross-country comparisons and aggregation. It uses the International Labour Organisation (ILO) definition of youth unemployment, which is also used by most other countries and therefore also allows for comparisons beyond the EU. The ILO definition states that:

    "all persons between the age of 15 and 24 who, during the reference period, were: (a) without work; i.e. had not worked for even one hour in any economic activity (paid employment, self-employment, or unpaid work for a family business or farm); (b) currently available for work; and (c) actively seeking work; i.e. had taken active steps to seek work during a specified recent period (usually the past four weeks)."[10]

Eurostat publishes figures for the absolute numbers falling into this category. It also provides two measurements: the youth unemployment rate and the youth unemployment ratio.

Youth unemployment rate

The youth unemployment rate is the number of unemployed 15-24 year olds divided by the total number of 15-24 year olds active in the labour market (both employed and unemployed young people). This includes those who are in some form of education and are working, or would like to be. It excludes those in education who neither work, nor want to and those not in education who are not actively seeking work. The rate is the main indicator for youth unemployment and is used by Eurostat for international comparisons.[11] The rate for the proportion of young people who have been unemployed for more than 12 months is also published. The rate of youth unemployment is the indicator we use throughout our report.

Youth unemployment ratio

Another indicator of youth unemployment published by Eurostat is the youth unemployment ratio. This is the number of unemployed 15-24 year olds divided by the total population aged 15-24. Therefore, this figure does not vary depending on the size of the youth labour force. The youth unemployment ratio is by definition always smaller than the youth unemployment rate and is typically less than half of it, due to the different denominators.[12] The ratio figure is much less commonly used for comparative purposes or policy-making, since it bears less relation to the potential labour force at any given time and varies considerably depending on the traditions of education and employment progression in different countries.


Across all EU Member States, the figures for the unemployment rate and ratio are drawn from the results of a labour force survey, which all Member States and EU candidate countries must undertake. Despite some differences, these are regarded as sufficiently comparable with one another for aggregation.

Source: Eurostat website: 'Youth Unemployment'

12.  Measuring young people's participation in the labour market is particularly difficult because of the complex way in which education and the labour market interact. One cannot assume a straightforward one-way transition from school to work. It is possible for a young person to be in education and in the labour market at the same time, leading to an overlap.[13] Furthermore, the structural norms associated with education and work differ between Member States. In some countries, young people start working much earlier than in others, for example, in the form of summer or weekend jobs. There are also different national circumstances where it is normal for large proportions of young people to be in both education and employment for extended periods (such as in the German or Austrian 'dual' apprenticeship systems), or where it is usual for large numbers of students to be seeking work to fund their studies, as is increasingly the case in the UK.

13.  The overlap between education and the labour market is shown by Figures 1 and 2 overleaf. They represent a snapshot of the proportions of young people in different positions of education and employment, in 2012, across the EU28 and in the UK.


Labour market status of young people across the EU28

Source: Eurostat website, 'Youth Unemployment'


Labour market status of young people in the UK

Source: Eurostat website, 'Youth Unemployment'

14.  The pink sections towards the top of the graphs show people who are in the labour market and either in work or unemployed, but who are not concurrently in any form of education. This is a relatively small proportion at the lower ages and represents the majority of young people of 24 and older. The grey sections represent those who are in some form of education or training and: who want a job but do not have one; are working as well as studying; and are not in the labour market at all (the largest group). The light pink section at the bottom of the graph shows those not in education, employment or training—the group referred to as NEET (see Box 2).

15.  Figure 2 highlights that in comparison with the EU mean average; there are higher proportions of younger people in the UK who are in the labour market and not studying. The UK also has considerably higher proportions of those who are in education, but are also either working or would like to have a job.


Definition of NEET
The EU categorises as NEET (Not in Education, Employment or Training) young people aged between 15-24 who "are not employed" (i.e. unemployed or economically inactive[14] according to the International Labour Organisation definition) "and have not received any education or training in the four weeks preceding the EU labour force survey".[15]

A young person's labour force status falls into one of three categories: employed, unemployed or economically inactive. In order to be considered as unemployed (according to the ILO definition) a young person must be actively seeking work, but they can be considered NEET whether or not they are actively seeking work.

The European Foundation for the Improvement of Living and Working Conditions (Eurofound), the EU agency that provides information in the area of social and work-related policies, explained this definition further saying that, in practice, "the aim of the NEET concept is to broaden understanding of the vulnerable status of young people and to better monitor their problematic access to the labour market."[16]

NEET figures are provided by Eurostat as a ratio: the number of young people aged 15-24 who are not in education, employment or training, as a proportion of all those in this age group.

Source: Eurostat website, 'Youth Unemployment' and Eurofound website, 'NEET'.

Who is affected?

16.  The rate of unemployment has long been higher for young people as compared to the rest of the working population.[17] Until the peak of the recession in 2008, the youth unemployment rate in the EU was around twice as high as the unemployment rate for the whole population.[18]

17.  Youth unemployment is not a straightforward issue and is inextricably tied up with participation in education and training. A number of witnesses agreed that the youth unemployment crisis was affecting a range of different groups, from school leavers to graduates.[19] We also heard evidence that within these groups some young people were affected more than others. For example, the National Union of Students (NUS) said that the unemployment rates of young black men and disabled young people were particularly high.[20] Professor Melanie Simms, Professor of Work and Employment, University of Leicester, acknowledged that, although the available data make it difficult to understand the impact of the crisis on different groups of young people, the crisis represented a departure from the pre-2008 situation in that it seemed to be affecting young people across a range of skill levels.[21] The Institute for Employment Studies agreed with this view, noting that while unemployment has been high in previous recessions, the post-2008 period had been characterised by its impact on highly skilled young people and graduates, who had not been as affected in previous recessions.[22]

18.  Some witnesses said that the broad range of young people who are currently unemployed had given rise to ambiguous and unhelpful definitions in the area of youth unemployment.[23] As expressed in Box 2 overleaf, the EU uses the NEET category to refer to young people aged between 15-24, who are unemployed or inactive—from disengaged young people through to graduates.[24] This differs from the original narrower definition of NEET, which was coined in the UK and referred to all young unemployed school-leavers under the age of 18 who were not measured in the unemployment statistics.[25] Given this change in meaning, Professor Sue Maguire, Centre for Education and Industry, University of Warwick, questioned whether the phrase NEET, as currently defined and applied, was appropriate. She argued that the casual application of the term NEET risked masking rising and unacceptable levels of inactivity among young people.[26] The UK Government concurred with this view, saying:

    "It is slightly unfortunate that everybody collapses it into the word 'NEETs', because it is actually 'not in education, employment or training' and so, for example, someone who leaves university and might be waiting to take up a job is included in the NEET figures. This is a nightmare, given the different definitions in this area."[27]

19.  Much of the literature in this area refers to NEETs, and so we could not discard the definition for the purposes of this report. Our reference to NEETs in the report is based on a strict interpretation of the definition outlined in Box 2.

20.  In 2012, NEETs made up 13.1 per cent of young people aged between 15-24 across the EU.[28] The European Youth Forum emphasised the high costs of NEETs to the economy and the importance of solving this aspect of the crisis.[29] The study referred to the 2012 Eurofound study, which showed that in 2011 NEETs cost EU Member States €153 billion in terms of lost tax contributions.[30] It also showed that, with the exception of Austria, Germany and Luxembourg, all Member States had seen an increase in the number of NEETs since the peak of the economic crisis in 2008.[31]


21.  Eurostat also publishes data that show the long-term youth unemployment rate (the unemployment rate for young people[32]who have been out of work for 12 months or more). Between 2004 and 2008, the rate of long-term unemployed young people in the EU was steadily decreasing, and had almost halved. However, 2008 marked an upturn in the long-term unemployment rate for young people, which went from 3.5 per cent to 7.4 per cent in 2012.[33] This is particularly worrying since the young people covered by these data must be economically active to be classed as unemployed (see Box 1), and so these statistics show that it is taking young people who are actively looking for employment longer to find it. Indeed, in the UK context, one of the young people on Barclays' apprenticeship scheme said that before starting the scheme she was unemployed for nine months despite applying for six or seven jobs every day.[34] We heard of similar situations from the young people we spoke to in Liverpool and Birmingham.

22.  We understand the need for a consistent definition of youth unemployment to allow for cross-country comparisons, aggregation of figures at the European level, and to provide clarity for all those involved in policy-making in the area of youth unemployment. The International Labour Organisation's definition provides this, notwithstanding its complexity. However, it is limited in its usefulness, particularly when trying to understand the issues for those who are simultaneously in the labour market and in the education system. The European Commission and Member State governments should take care to recognise the diversity of the different situations which underlie the headline figures, and ensure that policy is founded on an accurate and nuanced assessment of the issues.

23.  Although we understand the significant issues which confront many of the young people characterised as NEET, we find the term ambiguous and at times unhelpful, because of the broad scope of young people it encompasses.

24.  The youth unemployment crisis has affected graduates and young people who are highly skilled, less skilled and those who struggle most to access the labour market. We recognise that some young people within these groups are disproportionately impacted by the youth unemployment crisis, including those from some ethnic minority groups, people with disabilities, young parents and those coming from the care system. The issues that affect the access of different types of young people to the labour market are varied and policy responses must take account of this and ensure that young people in need of help are not excluded from the labour market, education or training systems.

A North-South divide?


Distribution of youth unemployment in the EU28 (2012)

Source: European Commission

25.  Figure 3 shows the regions with over 25 per cent youth unemployment in red and the regions with under 25 per cent youth unemployment in pink. It provides a visual demonstration of the large disparities between the youth unemployment rates in different regions and Member States. For example, in Spain and Cyprus, the rates of youth unemployment in December 2013 were 54.3 per cent and 40.8 per cent respectively. In Greece, the youth unemployment rate for November 2013 was 59 per cent.[35] This contrasts with the situation in Germany, Austria and the Netherlands, where unemployment has been consistently low and hovering around or below the 10 per cent mark since December 2005.[36] Academics and others pointed to these data as evidence of a distinction between the nature of the problem in Mediterranean Member States and the rest of the EU. For example, Dr Paul Copeland, Lecturer in Public Policy, Queen Mary University, said that:

    "long-term it is the Mediterranean countries that have had a problem here and we include France within the discussion. These Mediterranean countries have had much higher levels of youth unemployment than in the UK and this is because they have often operated dual labour markets, so younger generations find themselves on contracts that are less generous than older generations".[37]

26.  The problems experienced by different Member States are linked to the issue of migration, which is discussed in Chapter 6.

Is the youth unemployment crisis long-term or short-term?

27.  There is uncertainty about the nature of the current high levels of youth unemployment in Europe and whether it results from a long-term structural problem (related to the underlying structure of the youth labour market), or is a short-term phenomenon caused by the economic crisis. This is an important consideration because it dictates the appropriate policy solutions. For a short-term problem, a large injection of funds may be enough to stimulate the youth labour market, whereas the resolution for a long-term problem may require a greater focus on structural change. Furthermore, this question also addresses the extent to which solutions should be the same for all Member States within the EU28.

28.  Although most witnesses accepted that the recession starting in 2008 had a role to play in escalating the current youth unemployment crisis, a number of them believed that the surge in the youth unemployment rate did not result solely from the recession. Dr Copeland recalled that in 1994 the European Commission produced a White Paper, which outlined that youth unemployment across the EU stood at 20 per cent, a high level compared to the five per cent rate in Japan and the 13 per cent rate in North America, its main competitors at the time.[38] It is notable that the 1994 rate of youth unemployment closely compares to the current rate of unemployment in the EU, thereby suggesting a long-term cause.

29.  Reflecting on the situation in his own country, His Excellency, Konstantinos Bikas, the Greek Ambassador to the UK, noted that, as far back as 1983, youth unemployment in Greece was recorded at 23 per cent and that, in 1987, the youth unemployment rate in Spain was also high, at 45 per cent. On that basis, he suggested that youth unemployment must have a structural character. However, he qualified this by saying that in both Greece and Spain, the structural problems behind youth unemployment had been accentuated by the financial crisis and in Cyprus the financial crisis was the main reason for the steep rise in youth unemployment—from around nine per cent in 2008, to approximately 41 per cent in 2013.[39]

30.  Eurofound agreed that although the financial crisis was an aggravating factor in the area of EU youth unemployment, the underlying cause was structural and related to the individual youth labour market in each Member State. It noted that:

    "In some Member States the crisis has exploded youth unemployment, but the labour market was already difficult before for young people. If we analyse, for example, the population of NEETs, they have very different characteristics among Member States, even in countries with similar rates. For example … in Spain the population of NEETs has increased because of the crisis, so the majority of NEETs are unemployed males with work experience. On the other hand, in Italy the majority of NEETs are inactive females without work experience because there was a problem of youth accessing the labour market even before the crisis."[40]

31.  It seems that youth unemployment is both a long- and short-term problem. The balance between the two varies amongst Member States. Indeed, the evidence we received indicated that a sharp distinction between the 'southern' and 'northern' European states was over-simplistic and that the youth unemployment crisis seemed to have manifested itself differently in each Member State, irrespective of its geography. Turning again to Figure 3, although there is a concentration of youth unemployment in the 'southern states', there are a number of 'northern states' with regions experiencing unemployment rates of over 25 per cent. In Cyprus, the financial crisis played a large role in triggering the youth unemployment crisis, which contrasted with the situation in other 'southern' states, where the structure of the labour market was a key contributing factor. Similarly, much of the evidence indicated that although the UK was in the 'northern' group of EU states, its experience of youth unemployment was affected by the historic structure of its labour market. Professor Maguire considered that the decline of the UK manufacturing sector in the 1980s and 1990s had resulted in dramatic structural change to the UK youth labour market, destabilising the traditional labour market that existed for young people and school leavers.[41] Similarly, The Prince's Trust said that technological change had resulted in a reduction of lower-skilled entry-level jobs in the UK.[42]

32.  The current high levels of youth unemployment in the EU are not solely a consequence of the 2008 global financial crisis and the ensuing recession. Rather, the cause of the unemployment crisis differs between Member States. For some Member States, it is due more to underlying structural issues in the youth labour market that have been accentuated by the financial crisis. The EU and individual Member States will need to employ both long-term and short-term solutions to address the youth unemployment crisis.

Youth unemployment in a UK context

33.  Youth unemployment in the UK is not as high as it is in some Member States, but has been at historically high levels since 2008. In September 2011, it was recorded as 22.1 per cent, the highest ever recorded level. It subsequently dropped to 21.3 per cent in May 2013,[43] and to 20.7 per cent in the fourth quarter of 2013.[44] The percentage of NEETs in the UK was 14.4 per cent from October to December 2013, down 0.4 per cent from a year earlier.[45] As such, youth unemployment in the UK appears to be falling, but it is still higher than the levels recorded in May 2008, before the economic crisis. NEET numbers are still of particular concern, placing the UK in 17th place amongst the 28 EU Member States.[46] As Figure 4 (below) shows, since 2004, the percentage of NEETs in the UK has been rising at a considerably higher rate than in the rest of the EU28. Professor Maguire said that in the UK there was a particular problem with NEET young people, especially those between the ages of 16 and 18 who did not always declare themselves as actively seeking work. She said that these young people can fall outside the system, because they "have no natural entitlement to income support until the age of 18".[47] She also said that the reduction of services had resulted in reduced access to support for 16-18 year olds.[48]


NEETs in the UK

Source: Eurostat website

34.  The UK Government acknowledged that youth unemployment was a serious problem in the UK, as well as in the rest of the EU, but emphasised that "apart from a short period in 2011, the UK youth unemployment rate has been consistently below the EU27 average".[49] Despite this, it is notable that the UK youth unemployment rate is above the Organisation for Economic Co-operation and Development (OECD) average.[50] Furthermore, Eurostat figures show that, within the EU, the UK's unemployment rate is above that of Member States with which it might traditionally compare itself economically, such as Germany, Austria and the Netherlands (see Figure 5). In these countries, the post-2008 rate of youth unemployment has consistently been under or around the 10 per cent mark.[51]


Youth unemployment rates across the EU28

Source: Eurostat website

35.  We are particularly concerned about 16-18 year old NEET young people in the UK, who risk becoming invisible to the authorities through their lack of access to the benefits system and absence of other means of engagement. We encourage the UK Government to use EU funds in a way which helps identify problems and solutions within this group. We believe this would represent clear added value to existing national provision.

8   Eurostat news release, 1 April 2014, available at: 

9   Eurostat, 'Youth unemployment rate', available at:  Back

10   International Labour Organisation , 'Youth Unemployment Rate', available at:  Back

11   Eurostat , 'Youth Unemployment', available at: Back

12   Ibid. Back

13   Ibid. Back

14   The inactive population can include anyone provided that they are not working at all and not available or looking for work either. Back

15   Eurostat , 'Educational attainment, outcomes and returns of education', available at:  Back

16   Eurofound, 'NEET', available at:; European Commission, (2011), 'Youth neither in employment nor education and training (NEET). Presentation of data for the 27 Member States'. Back

17   Q 116; Q 23  Back

18   UK Government  Back

19   Professor Melanie Simms; Q 20; Q 120 Back

20   Q 127 Back

21   Professor Melanie Simms Back

22   Q 120; see also Q 166 (Rebecca Taylor) Back

23   Professor Sue Maguire; Professor Martyn Sloman; Q 3  Back

24   Eurofound, 'NEET', available at: Back

25   Professor Sue Maguire; The term NEET was coined after changes to out-of-work benefits provision in the UK in the 1990s. Back

26   Professor Sue Maguire  Back

27   Q 3 Back

28   UK Government  Back

29   Q 216  Back

30   Eurofound (2012), NEETs-Young people not in employment, education or training: Characteristics, costs and policy responses in Europe, Publications Office of the European Union, Luxembourg. Back

31   Ibid. Back

32   Young people between the ages of 15-24. Eurostat also publishes data on the long-term unemployment of those aged between 15-29.  Back

33   Eurostat, 'Youth long-term unemployment rate (12 months or longer) by sex and age', available at:  Back

34   Hannah Dean Back

35   Eurostat; at the time this report was finalised in April 2014, December 2013 figures were not yet available for Greece from Eurostat.  Back

36   Ibid. Back

37   Q 20; see also Q 119 (Professor Robin Simmons) and Q 179 (Max Uebe) Back

38   Dr Paul Copeland  Back

39   Greek Ambassador to the UK  Back

40   Q 120 Back

41   Q 20; see also Q 18 (Professor Sloman) who commented on the role of globalisation in removing entry-level jobs. Back

42   Q 20 Back

43   Eurostat, available at  Back

44   UK Government (not yet available on Eurostat). Back

45   Office of National Statistics, Young People not in Education, Employment or Training, February 2014. The data shows estimates for young people aged 16-24 who are NEET in the UK. Back

46   UK Government  Back

47   Q 16 Back

48   Q 24 Back

49   UK Government; the figure was calculated based on the average unemployment rate of the existing 27 Member States before Croatia acceded to the EU on 1 July 2013. Back

50   The OECD Member countries are: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom and the United States; OECD 'Stat Extracts', available at: Back

51   Eurostat 'Youth unemployment', available at:  Back

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