OECD, Directorate for Employment, Labour and Social Affairs Organisation for Economic Co-operation and Development S EMINAR ON "THE EFFECTS OF THE ECONOMIC CRISIS ON YOUTH : T HE CHALLENGE OF K NOWLEDGE “ Thursday 10 June 2010 European Parliament, Brussels The effects of the global economic crisis on youth Stefano Scarpetta Directorate for Employment, Labour and Social Affairs OECD

In general, youth face a much higher risk of unemployment than adults On average in the OECD, the ratio of to unemployment rates was 2.7 before the onset of the crisis Unemployed as a % of the labour force, Source: National labour force surveys.

Youth have been hit especially hard during the crisis… 3 Percentage change in employment by workforce groups, 2008Q4 to 2009Q4

… with massive increases in youth unemployment in some countries 4 Source: National labour force surveys. Unemployed as a % of the labour force

5 Despite the ongoing recovery, youth unemployment is expected to remain high in 2010 and 2011 a) Projections of youth unemployment rates for the 2010 and 2011 are based on the latest OECD projections of the total unemployment rate and on the ratio of youth to total unemployment rate of Source: National labour force surveys and OECD (2010), Economic Outlook, No. 87.

Two groups of youth have difficulties in getting a firm foothold in the labour market The group of “poorly integrated new entrants” The group of “youth left behind” The size of these two groups is likely to increase during the downturn, heightening the risk of long-term scarring 6

Even before the crisis, many youth were neither in education nor in employment (NEET)

8 The expected number of years spent in employment in the five years after leaving education was 3.6 years for young European but only slightly above 2 for those with low skills Years in employment, 2008 Source: European Union labour force survey. The transition takes time almost everywhere, particularly for low-skilled youth

Entry jobs for youth are often precarious Incidence of temporary work one year after leaving education

Access to employment is closely associated with education achievements and skills needed on the labour market The employment probability of school-leavers aged was the highest for tertiary graduates, everywhere in 2006, except in Italy 10 Employed as a % of youth aged having left education, 2006 Source: OECD Education database. * Share of youth in employment with less than an upper secondary education qualification or ”drop-outs” in parenthesis.

11 School-to-work pathways vary a lot across countries Source: Adapted from Quintini and Manfredi (2009) High Performers spend most of their time – 70% or more – in employment and take less than six months to find their first job after leaving school; Poorly-Integrated New Entrants move in and out of employment, unemployment, inactivity and sometimes education, signalling difficulties in settling on a promising career path; Left-behind youth spend most of the five years in unemployment or inactivity; youth Returning to Education leave education for a spell on the labour market of varying length but ultimately return to complete high school – if they have dropped out before completion – or to attend tertiary education.

Recommendations during the crisis Key short-term challenges: Overall, the main challenge is to prevent the current generation of school leavers becoming a “scarred generation” Secure access to the safety net for the young jobseeker but condition that to active job search; Ensure access to re-employment services, including training Making active labour market programmes for the least employable young people more effective and strengthening social protection for the most disadvantaged Promote apprenticeships as a way to facilitate the school to work transition, also for the low-skilled youth. 12

13 Recommendations during the crisis (continued) Prepare young people to be ready and equipped for work when the recovery will gather pace Further improve education and vocational training Give a second training chance to school drop-outs and long- term unemployed

JOBS for YOUTH