Rising Youth Unemployment During the Crisis: How to Prevent Negative Long-Term Consequences on a Generation?
Written by Stefano Scarpetta, Anne Sonnet and Thomas Manfredi
The report’s message is that governments need to do much more to help young people. Some have benefitted from broader efforts to help the unemployed. But more policies are needed that target young people, especially those with poor education and skills. These “at-risk” youngsters now account for between three and four out of ten of all young people in the OECD and are at risk of long-term joblessness and reduced earnings.
In the short term, a priority must be to provide income support to unemployed young people. In two-thirds of OECD countries school-leavers are not eligible for unemployment benefits unless they have worked a certain period of time (from four months in France to one year more generally).
Another promising avenue is apprenticeship contracts for low-skilled young people. These could pay a “double dividend”: securing the transition towards employment and lowering labour costs compensated by a training commitment from the employer. Governments could provide subsidies to promote apprenticeships and help apprentices made redundant to complete their training.
The paper also looks at the number of young people on temporary contracts and finds they are over-represented among workers. And while for many these contracts are stepping stones into permanent jobs, for others they tend to be dead ends. Reducing the gap between regulations for temporary and permanent contracts would help, together with lowering the cost of employing low-skilled youth in their first job.
