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.
BOX 1
Definition of youth unemployment
| Definition
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.
Methodology
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.
FIGURE 1
Labour market status of young people across
the EU28
Source: Eurostat website, 'Youth Unemployment'
FIGURE 2
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.
BOX 2
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]
LONG-TERM UNEMPLOYMENT
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?
FIGURE 3
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]
FIGURE 4
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]
FIGURE 5
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:
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/3-01042014-AP/EN/3-01042014-AP-EN.PDF Back
9
Eurostat, 'Youth unemployment rate', available at: http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
Back
10
International Labour Organisation , 'Youth Unemployment Rate',
available at: http://www.ilo.org/public/english/employment/yen/whatwedo/projects/indicators/2.htm
Back
11
Eurostat , 'Youth Unemployment', available at:
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ 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: http://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/EN/edat_esms.htm
Back
16
Eurofound, 'NEET', available at:http://www.eurofound.europa.eu/areas/industrialrelations/dictionary/definitions/neet.htm;
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: http://www.eurofound.europa.eu/areas/industrialrelations/dictionary/definitions/neet.htm 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:
http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
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 http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/.
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: http://stats.oecd.org/Index.aspx?DatasetCode=STLABOUR# Back
51
Eurostat 'Youth unemployment', available at: http://ec.europa.eu/europe2020/pdf/themes/21_youth_unemployment.pdf
Back
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