3.1 General context
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Labour market situation in the country
As mentioned in the Cyprus National Reform Programme 2023 (pp.9-11), some of the main challenges in Cyprus have been managing implementation timelines, ensuring transparent evaluation processes, addressing budget constraints, coordinating among multiple authorities, adapting to industry changes and conducting effective assessments for Cyprus's initiatives aimed at enhancing SME competitiveness and economic growth. The Cyprus economy has been in the face of economic recovery from the pandemic, starting already as of the 2nd semester of 2021. In numbers, economic activity in 2021 expanded by 5.5%, fully recovering the lost ground of the recession in 2020 (-5.0%). However, given the continuous crisis in Ukraine and the imposition of significant sanctions to Russia by the US, UK and the EU, there is currently considerable geopolitical instability and uncertainty. Some of the sanctions are expected to have a direct or an indirect impact on the Cyprus economy, such as increased cost of energy, lower tourist arrivals, etc. The improvement of the quality of the Active Labour Market Policies, particularly for young people is included in the main reform priorities presented in the National Reform Programme of 2023.
Labour market conditions continued to be pretty similar during the period between 2020-2022. According to Eurostat, the youth unemployment rate in Cyprus (15-29 years) had a slight decrease from 14.2% in 2021 to 14.1% in 2022, reflecting a decrease of male youth unemployment rate to 13.8% from 15.1% and a slight increase of female youth unemployment rate to 14.4% from 13.2% .
Regarding the percentage of young people not in employment, education or training (NEETs) for the age group 15-29, this was 14.7% in 2022 (Eurostat). Lastly, the youth long-term unemployment rate (12 months or longer) for the age group of 15-29 years old is estimated at 3.4% (Eurostat).
The Cyprus Statistical Service provides specialized information, detailing registered unemployed individuals in Cyprus by gender and age for the years 2023 and 2024 that reveals significant insights into youth unemployment trends. Notably, the data shows a slight increase in the number of unemployed individuals under 20, rising from 35 in 2023 to 36 in 2024. This demographic, often facing challenges in entering the job market, illustrates the persistent barriers young people encounter. For the age group 20-24, there is a more pronounced decline in unemployment, dropping from 486 to 424. This reduction may suggest improvements in job availability or better alignment of skills among young job seekers. However, the 25-29 age group reflects a concerning trend, with unemployment decreasing from 1,304 to 1,166. While this decline indicates some progress, the high numbers still signal a pressing issue.
Main concepts
In Cyprus, the right to work is granted to every young person from the age of 14 onwards, as stipulated by the Law on the Protection of Young Persons in the Employment dated 2001 (Ο Περί Προστασίας των Νέων κατά την Απασχόληση Νόμος). Despite this legal provision, some young people encounter challenges in securing employment, particularly those categorized as not in employment, education, or training (NEETs). After the financial crisis in 2013, Cyprus continues its efforts to tackle unemployment and modernise and enhance its Public Employment Services (PES) [Δημόσια Υπηρεσία Απασχόλησης (ΔΥΑ)] through the strengthening of its human and technical capacity and also exploring the potential to improve efficiency in service provision, the performance of PES, as well as reinforcing outreach and activation support for young people who are NEETs.
Concurrently, the government is actively promoting entrepreneurship among young people, demonstrating a concerted commitment to youth empowerment, especially through the Scheme for the Development of New Business Activity implemented for the period of 2021-2027.