1 1 Strategies for youth employment: the Belgian example Central Economic Council Brussels, 16 December 2009 Kris Degroote, Adviser Contact :

2 2 Low youth employment rate Employment rate of youths (15-24) and adults (25-64) in EU15 countries Source: Eurostat, LFS 2008

3 3 Determinants of employment rate Employment rate = Activity rate x (1-Unemployment rate)  Low youth employment rate can be due to -Low youth activity rate -High youth unemployment rate

4 4 Low youth activity rate Activity rate of youths (15-24) and adults (25-64) in EU15 countries Source: Eurostat, LFS 2008

5 5 High youth unemployment rate Unemployment rate of youths (15-24) and adults (25-64) in EU15 countries Source: Eurostat, LFS 2008

6 6 Reasons for low youth activity rate in Belgium Education compulsory until the age of 18. Easy access to higher education. High rate of school year repetition. Weak development of work-study programs ( formation en alternance ). Few students are working weekends or even during summer vacation. –Statistical measurement problem Netherlands-Belgium

7 7 High qualification protects against unemployment Youth unemployment rate by qualification in Belgium Source: Eurostat, LFS 2008

8 8 No more than 10% early school leavers.  Belgium: 12% in Decrease of at least 20% in the percentage of low-achieving pupils in reading literacy.  Belgium: -11% between 2000 and 2006 At least 85% of young people should have completed upper secondary education.  Belgium: 82.2% in Increase of at least 15% in the number of tertiary graduates in Math, Sciences and Technology, with a simultaneous decrease in the gender imbalance.  Belgium: +7% between 2000 and 2006; Share of women:25% in 2000 ; 27% in Lisbon benchmarks in education for 2010

9 9 Youth career paths are precarious  Slow school-to-work transition Source: Eurostat, LFS 2000 Unemployment rate one year after leaving initial education

10  High sensitivity to business cycles Source: ONSS Evolution of the number of workers by age in Belgium (variation w.r.t previous year) Youth career paths are precarious

11  High sensitivity to business cycles Source: Eurostat, LFS Unemployment rate growth between first quarter 2008 and first quarter 2009 for youths (15-24) and adults (25-64) Youth career paths are precarious

12  Advice 1702 of 7 october from the National Labour Counsil and Central Economic Counsil  Measures aimed at providing work for youths:  First Job Agreements (1999): Obligation (quota) for employers (+50employees) to (engage) employ a certain proportion of young workers; NLC and CEC evaluate the system  Financial incentives for employers to employ young (low qualified) workers  23/12/2005 Pact on solidarity between Generations Extra reductions of social security contributions for the very fewly skilled people, unskilled young people of foreign origin and persons with disabilities Activation of the unemployment benefit ;  Financial incentives for unemployed workers to find a job ( reduction of personal social security contributions ). Policies to improve youth employment in Belgium

13  Education = Communities,  Employment and vocational training = Regions’ responsibility.  Federal Authorities : labour legislation, collective labour agreements and social security benefits.  It is difficult for the Public Employment Service (PES) to function efficiently because unemployment benefit controls are carried out by the ONEM (Office fédéral de l’emploi or Federal Employment Office), while placement and active measures are implemented by the three regional PESs  (VDAB for Flanders, FOREM for the Walloon Region and ORBEM for the Brussels Region).  Need for cooperation Institutional factors influencing transition school-work

14  Measures aimed at improving youth qualification:  Improvement of educational level attained ( adequacy of programs-labour market needs );  Preventing failures  Second opportunity  Technical and professional stream should be revalued (link with higher level) Policies to improve youth employment in Belgium

15  Improvement of work-study programs  (regional harmonisation; bonus for stages and tutoring; fiscal incentives for firms to organise stages);  Other Measures :  Measures to help youths to become self-employed  Promotion of intra-regional mobility  Improving labour market information systems Policies to improve youth employment in Belgium