Unemployment has risen sharply during the recession, and young people have been particularly hard hit. Even in good times, the youth unemployment rate (15-to-24-year-olds) can be two to three times that of adults, but it has increased much more rapidly during the crisis; even in Germany, young people are now one and half times more likely to be unemployed than prime age workers, while in Sweden their risk is four times greater.
There are currently nearly 15 million unemployed young people in the OECD area, about four million more than at the end of 2007.
In countries like France and Italy, about one youth in four on the labour market is unemployed, while in Spain the level rises to more than 40%.
There are several reasons for this, as outlined in this recent OECD observer article on employment. Young people are more likely to be on temporary contracts and so are often the first to go if companies cut staff. Less skilled young people tend to work in sectors such as construction that have been badly hit by the crisis. People who are unemployed for long periods in their teens and 20s face a lifelong risk of joblessness and reduced earnings. This “scarring” from being out of the workforce means less work experience and can lead to a loss of skills. There is now a very real concern that the recession will produce a “lost generation” of young people with slimmer, long-term, job prospects. Policies for avoiding this are examined in a new working paper, Rising Youth Unemployment During the Crisis, released today, including measures to ensure all young people enter the labour force with a worthwhile qualification and that the gap between temporary and permanent contracts is narrowed.