Combating Youth Unemployment : The European Perspective and Policy Response

Middlesex University London 13 November 2015

Eamonn Davern European Commission Employment Strategy Unit

How Serious is the Youth Unemployment Problem?

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• 5 million under 25 year olds unemployed

• 21.4% Youth Unemployment

• 44 ppt gap between lowest and highest countries

(EUROSTAT Dec 2014)

Macro-Economic Youth Unemployment Factors

• • More sensitive to economic cycle• • Young less experienced - more prone to lay offs• • Concentrated in vulnerable sectors • • More likely on short term contracts• • 50% changes in Youth Unemployment cyclical• • Structural changes can be positive , investment

in ALMP,education,training/education

NEETS in Europe

• 7.5 million NEETS (aged 15-24) EU 28

• NEETS aged 15-29 13% (2008) to 15.4% (2014)

(EUROSTAT Dec 2014)

Significant Differences across EU NEETs rate aged 15-29 years

• Greece 26.7% Luxembourg 6.5%• Italy 26.2% Denmark 7.3% • Bulgaria 24% Netherlands 7.6%• Spain 20.7% Germany 8.7%

• United Kingdom 13.4% (10th In EU 28)

(EUROSTAT Dec 2014)

European Policy Context (1)

• NEET most problematic youth unemployment issue

• • Europe (2020) Initiative Youth on the Move • • 2012-2013 Youth Opportunities Initiative• • To provide pathways back into education/training and

establish labour market contact

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European Policy Context (2)

• European Commission Employment Package • Towards a Job Rich Recovery (2012)

• Stressed importance of decreasing NEET rates by enabling transitions to work.

• New indicator introduced to monitor NEET situation (from 2014 part of joint employment report scorecard)

European NEETS Heteregenous Population

• Largest sub-group Conventionally Unemployed

• Other NEETs

• • Sick and disabled• • Young Carers• • Non-vulnerable NEETS

Young people at greatest risk of becomong NEET

• • Low levels of education• • Migrant background• • Disability and health problems• • Family issues

Social and Economic cost of inactivity

• 2011 economic loss (benefits paid – lost output) from youth labour market disengagement Euro 153 billion (1.2% European GDP)

• Loss exceeds 2% in Bg Cy Hu Ire It Ltv Pl

• Much greater social disengaement• (Eurofund Report 2011)•

Adverse Consequences for Individual NEETs

• • Disaffection• • Insecure future employment• • Higher rates of youth offending• • Mental and physical health problems

The Youth Guarantee

• Commission Proposal December 2012

• Adopted by Council of Ministers 22 April 2013

• Endorsed by European Council June 2013

• G20 Melbourne September 2014 called for more action on youth unemployment

Youth Guarantee Policy Intention

• Structural reform to improve school to work transitions and measure to immediately support jobs for young people

• Based on successful experience in Finland and Austria

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Youth Guarantee Commitment

• Within 4 months of leaving school or losing job young people under 25 receive either:

• • good quality job suiting their education, skills, and experience,

• • aquire education, skills and experience required to find a job in the future through apprenticeship, traineeship, or continued education

Youth Guarantee Implementation

• All Member States have presented Youth Guarantee Implementation Plans

• Plans and implementation assessed as part of European Semester (EU re-enforced economic surveillance framework)

• Employment Ministers endorsed Youth Guarantee Indicator/Monitoring framework December 2014 .

Required Supply Side reforms in Member States

• Structural reforms needed include improved :• • ALMP • • Training• • Job – Search• • Education – including combatting early leaving • • Outreach • • Quality and quantity of aprenticeships and VET • • CSRs in 2014 for 8 EU Member States • • PES Reform , co-operation decision May 2014 •

Identification and Activation of NEETs

• Tools and Strategies involving all who have access to unregistered young people

• Key actors include : Social Services, Education Providers , Youth Associations

Youth Guarantee boost for demand for young labour

• Temporary well targeted wage and recruitment subsidies

• Apprenticeship and traineeship grants

• Business development support :• • European Structural and Investment Funds and •

European Investment Bank• • COSME Programme

Social Investment in Youth Employment

• • Youth Guarantee high priority in Partnership Agreements setting Strategic Framework for Structural and Investment Funds 2014-2020

• • Euro 86 billion ESF (Youth Employment measures including Guarantee)

• • Supplementary support from Youth Employment Initiative Euro 6.4 billion (targets NEETS – regions exceeding 25% Youth Unemployment (20 MS) eligible

Further Initiatives complementing Youth Guarantee

• Quality Framework for Traineeships (adopted by Council of Ministers March 2014)

• European Alliance for Apprenticeships launched July 2013

Key Policy Messages

• • Diverse menu of instruments needed• • Labour market readiness of beneficiaries must be

considered• • Young people need long –term sustainable pathway• • Involving range of stakeholders in design is essential• • Client centred not provider focussed measures

needed• • Success depends upon innovation

Thank you for your attention

• Questions ?