Okun’s law describes the positive empirical relationship between unemployment and the output gap. This column explores how this relationship differs depending on age and gender, taking into account different labour market institutions. Using data for 20 OECD countries over three decades, the authors find that the effect of Okun’s relationship decreases with age. Labour market institutions have similar effects on the unemployment rates of all groups, though magnitudes vary by age and gender.
Robert Dixon, Guay Lim, Jan van Ours, 03 May 2016
Daiji Kawaguchi, Ayako Kondo, 13 January 2016
Economists frequently discuss the ‘scarring effects’ the Great Recession has had on young people in Europe. This column tentatively challenges the received wisdom of permanent scarring. Young graduates mitigate some of the negative welfare effects of graduating during bad times by living with their parents for longer.
Brian Bell, Anna Bindler, Stephen Machin, 04 March 2015
Recessions can lead to an increase in youth unemployment, which could later negatively affect labour market outcomes. This column explores the effect of recessions on criminal activity. The findings indicate a substantial effect on initiating and forming youth careers. There is initially strong and eventually long-lasting detrimental effect of entering the labour market during a recession for individuals at the threshold of criminal activity. These effects are economically substantial and potentially more disturbing than short-run effects.
Jan van Ours, 27 February 2015
The Great Recession has been characterised by an unprecedented decline in GDP, and unemployment rates remain above pre-Great Recession levels in many countries. This column argues that economic growth is a ‘one size fits all’ solution for the problem of unemployment, because the unemployment rates of different kinds of workers are strongly correlated within countries. That said, economic growth affects above all the position of young workers, and so benefits mostly those who need it the most.
Juan J. Dolado, 09 February 2015
Youth unemployment has been a problem in Europe for several decades, but some European countries have fared much better than others in recent years. This column summarises the policy lessons to be drawn from a new VoxEU.org eBook that compares the labour market experiences of different European countries and provides an early evaluation of the European Commission’s Youth Guarantee scheme.
Alexander Gelber, Adam Isen, Judd B. Kessler, 25 January 2015
Among different youth employment programmes, summer employment programmes have received relatively little attention. This column looks at the effects of the New York City’s summer youth employment programme – the largest programme of this kind in the US – on a number of outcomes. Whereas the programme did not raise later earning or college enrolment, it decreased the probability of incarceration and mortality. This is a new, often neglected, large benefit from a youth employment programme.
Francis Kramarz, Oskar Nordström Skans, 17 October 2013
Modest recoveries in employment following the crisis mask severe youth unemployment. Because labour market struggles during the early stages of working life can have persistent negative effects, understanding job-finding networks among youth is key to forming pro-employment policies. This column analyses the transition from schooling to working life of Swedish youth. Close familial ties are important in job searches, especially among the less educated. Preliminary evidence suggests that family association can signal worker ability.
Bruno Crépon, Esther Duflo, Marc Gurgand, Roland Rathelot, Philippe Zamora, 24 April 2013
Youth unemployment in Europe seems to be sticking around. This column assesses youth unemployment policy in France using data from a controlled experiment. ‘Job counselling’ – a key French policy that prepares some job seekers for the recruitment process, and connects them with potential employers – seems to improve graduates' chances of employment only marginally. Moreover, the evidence suggests that what’s good for one graduate may be bad for another: the beneficiaries of intensive job counselling are more likely to find employment simply at the expense of other job seekers.
Jacob Funk Kirkegaard, 13 October 2012
Youth unemployment in the Eurozone looks like a social and economic disaster in the making – 30%, 40%, even 50% of young people sitting on their hands instead of building skills and experience. This column argues the headline numbers are misleading. While youth unemployment is a serious problem, a large share of EZ youth are not in the labour force, so the headline figures overstate the labour-market ‘scar tissue’ that will be left over from the crisis.
Hilary Steedman, 06 October 2012
As in every downturn, youth unemployment is a serious concern. This column looks at apprenticeship policy in England. It argues that England is a long way off the apprentice numbers of countries like Germany but with a clear strategy, some nudging, and flexibility, England could realistically aim for the prize that has so far eluded it – higher skills and high youth participation in the workforce.
Glenda Quintini, 15 May 2012
Recent sizeable increases in youth unemployment are compromising the school-to-work transition of recent school graduates. This column uses optimal matching, a method borrowed from molecular biology, to study the transitions from school to work in Europe and the US. It argues the share of youth facing serious difficulties on the labour market is 18 percentage points smaller in the US than in Europe. In Europe, 30% of youth face difficulties settling into the labour market and another 15% are trapped in long-term unemployment or inactivity.
Marco Annunziata, 14 May 2012
In Greece and Spain, around half of all workers under 25 are now unemployed. In Italy, Ireland, and Portugal, the rate of youth unemployment is around one in three. But this column argues that we shouldn’t go blaming austerity; even when these countries were booming, youth unemployment was still painfully high. The problem is far deeper.
Edoardo Campanella, 24 February 2012
Western countries with ageing populations are in the grip a cruel irony. At the same time as having more old people than ever to support, youth unemployment is at its highest levels for a generation. As many of these countries go into elections this year, this column warns against populist politics that panders to the grey vote, and instead calls for leadership that puts the family first.