Fighting youth unemployment through active labour-market policies

Over the past decade, the unemployment rate of young Europeans has been constantly higher  than that of all other age groups. Economic and financial crises – not least the one triggered by the COVID-19 pandemic – have hit young job seekers the hardest. As specific socio-economic factors concur in causing youth unemployment, specific policy measures targeting young people can be better suited to fight it. This approach is at the basis of initiatives like the Youth Guarantee.

Policies aiming at boosting young people’s employment can be subdivided in two main groups. Some directly offer insertion in the labour market by sponsoring measures like temporary job placements and paid in-work trainings. For example, in France, the “Etablissements pour l'insertion dans l'emploi”, EPIDEs, provide young people with no qualification or at risk of marginalisation with individualised training programmes accompanied by a monthly allowance.

Other policies focus on stimulating employers to hire young job seekers, through economic advantages like the reduction of taxation and social security contributions. This is the approach of Slovenia, where employers hiring a person younger than 26 by means of an indefinite contract are entitled to the partial reimbursement of their social contributions for the first two years.

The two approaches are not exclusive. In fact, in a majority of countries policy-makers apply a mix of the two. For example, in Cyprus, the Ministry of Labour sponsors up to 60% of the wage costs sustained by employers who recruit unemployed youths. At the same time, young unemployed graduates can enter a 6-month job training accompanied by a monthly subsidy. Slovakia runs two parallel programmes: the “Graduate Practice”, a period of training within an enterprise to gain experience and work skills; and the “Support of a first working post” which provides financial contributions to employers who create posts for young job seekers.

Finally, in a minority of countries, employment measures either exist only in the framework of the EU Youth Guarantee (therefore shaped by common guidelines set up at EU level) or do not specifically target young people.