Introduction to comparing country performance

Young people have been particularly hard hit across the EU by the long-term effects of the Great Recession. This has resulted in:

1. 1. A dramatic rise in youth unemployment;
   2. Lengthier, unstable, and non-linear school-to-work (STW) transitions;
   3. A deterioration in the quality of jobs for youth with greater precariousness;
   4. An increased discouragement and labour market detachment; and
   5. Greater labour market vulnerability of disadvantaged youth such as the low skilled, migrants and the disabled.

While recession-related economic deterioration and subsequent job-poor recovery account for such developments, these are also rooted in persistent structural deficiencies such as poorly performing education and training systems, segmented labour markets and low Public Employment Services (PES) capacity to address the problem.

Although the labour market situation of young people has started to improve in a number of countries since the Great Recession of 2007/8, youth unemployment still remains very high across Europe. In January 2016, the EU28 youth unemployment rate (15-24 years) was 19.7%. There is, however, a large divergence between countries in Europe, with rates ranging from 7.1% in Germany to 45% in Spain.

Youth unemployment rates

High youth unemployment rates reflect young people’s difficulties in securing employment, or the inefficiency of the labour market. However, high youth unemployment rates do not mean that the total number of unemployed young people aged 15-24 is large, since many in this age group are in full-time education and are, therefore, neither working nor looking for a job. This can make meaningful comparisons between countries difficult (O’Reilly et al. Forthcoming a). Some analysts prefer discussing youth unemployment ratios, which measure youth unemployment over the total youth population including students. (O’Reilly et al. 2015).

‘The unemployment rate is the proportion of youth actively looking for a job as a percentage of all those in the same age group who are either employed or unemployed; students are excluded from this measure. The unemployment ratio includes students as part of the total population against which youth unemployment is calculated. Because they are measured against a wider population, unemployment ratios are lower than unemployment rates. Ratios provide an indicator of the proportion of youth looking for a job vis-à-vis the relative share of youth in education. The NEET rate is the percentage of the youth population not in education or training among all young people in the same age group, including those who are working or studying, or both; it can be interpreted as a measure that reflects the fragility of STW transitions in a particular country.’ (O’Reilly et al. forthcoming a)

Youth unemployment ratios

The unemployment ratio, however, does not reveal if young people are not working or studying (economically inactive) because they are in education or because they are discouraged, that is, they have given up on even trying to get a job. This is why the NEET rates of young people aged 15-24 (those who are not in employment, education or training) are often a preferred measure for cross-country comparisons. NEET rates range from 15.6% in Spain to 4.7% in the Netherlands in 2015 (Hadjivassiliou et al. 2016).

Effective institutions

Germany and the Netherlands have established the most effective institutions to achieve a high integration of 15-19 year-olds in education and employment. High performance is consistent over time, showing that institutional effectiveness is robust at different stages of the economic cycle. However, Germany also suffered from high rates of youth unemployment in the early 2000s before the crisis hit the rest of Europe. This was in part due to the consequences of the reunification of Germany and difficult economic circumstances at that time. As a result, the picture in Germany and the Netherlands is slightly less positive for 20-24 year-olds. Nevertheless, both Germany and the Netherlands are amongst the highest performing countries in the EU for making sure their young people are in employment.

Austria and Denmark also achieve good youth labour market and employment outcomes. For 20-24 year-olds, performance is highest in Austria and has, since 2004, improved for 15-19 year-olds. This coincided with the extension of jobsearch instruments, the introduction of youth guarantees (YGs) and the extension of active labour market policies (ALMPs) for young people in Austria (Hadjivassiliou at al. 2015).

Work experience, vocational education and apprenticeships

Independent of educational attainment, work experience can be seen as one important pillar for sustainable school-to-work (STW) transitions in every country. Whereas countries like Germany, the Netherlands or Sweden achieve this by means of well-established schemes where school or study and work are combined, countries like France and the UK try to facilitate STW transitions by lowering labour costs through subsidies or low employment protection.

Overall, although with some notable exceptions (such as Germany and the Netherlands), vocational education and training (VET) is frequently perceived as being associated with jobs of lower status and quality than those resulting from a general/academic education; fewer students voluntarily choose the VET track. Crucially, there has been a convergence in policy across the EU, in that VET is now being promoted as a high-quality route to achieving improved labour market outcomes for young people (Hadjivassiliou et al. 2016).

Social partner cooperation

The provision of apprenticeships reflects the extent, type and nature of social partners’ involvement in providing pathways into work for young people; in other words, how well employers, training providers and unions work together.

This involvement varies considerably between member states of the European Union and VET programmes. The role of social partners is clearly prescribed in highly regulated VET/apprenticeship systems with a corporatist form of governance such as Germany and Sweden. This results in very strong and active social partner involvement. In contrast, in market-led systems such as the UK, social partner involvement is rather weak and uneven. Likewise, social partner involvement in school-based VET systems tends to be less extensive than in work-based VET systems.

Given the importance of educational attainment in determining a young person’s employment chances, there has been a major policy push (at both the EU and national levels) to both prevent early school leaving (ESL) and reduce educational underachievement. Indeed, reducing the ESL rate below 10% by 2020 is one of the headline targets of the Europe 2020 strategy. Despite this policy focus, in many member states − albeit with clear and considerable country variations − a large number of young people do unfortunately drop out of school and need help in re-engaging with the world of education. For example, of the countries studied as part of our research, Poland, Sweden, the Netherlands, France and Germany have already achieved the Europe 2020 target of ESL rates below 10%, as opposed to Spain, which has one of the highest ESL rates in the EU; and the UK, which has a relatively high but declining ESL rate.

Policy implications

Improving the situation of many millions of young Europeans who are failing to find gainful employment and, more generally, are suffering from deprivation and social exclusion, has been identified as a clear priority for both national (EU member states) and EU-wide initiatives (Eichhorst et al. 2015; Hadjivassiliou et al. 2016). EU and national policies have, in recent years, intensified support for young people, with a much greater focus on enhanced VET and youth-related active labour market policies (ALMPs).

Well-integrated VET systems with strong employer involvement

Well-integrated VET systems with strong employer involvement and clear labour market connections and supportive ALMPs have emerged as important institutional characteristics that have historically enabled comparatively better performance in countries like Germany, the Netherlands and Sweden.

There is currently a major policy drive across the EU regarding Youth Guarantees − YG/ALMP interventions for young people at risk of disengagement − which have been found to be effective policy instruments in the Scandinavian countries and Austria.

Integrating or centralising support for young people

Integrating or centralising support for young people by ensuring effective cooperation between relevant administrative bodies and other stakeholders can be another important pillar in fostering smooth STW transitions because it prevents young people from getting lost between different policy domains and avoids service fragmentation.

Closely linked to this is the need for partnership/multi-agency working to offer an integrated service to youth at risk, notably at the local level. Such partnerships are more effective if they include a wide range of relevant actors, notably PES, education, social services and health services, employers, NGOs and youth organisations. However, such partnerships will not necessarily be set up spontaneously, and a national drive, combined with appropriate resourcing, may be required. That said, this should also allow for flexibility at the local level.

Early vocational guidance

Early vocational guidance in combination with early jobsearch assistance and further support is another promising approach in improving STW transitions, especially for more disadvantaged young people (Eichhorst et al. 2015). Given the specific characteristics of youth at risk/NEETs who have multiple and varied needs, the design and delivery of programmes and policies should be informed by the involvement of all relevant stakeholders, ranging from social and health services to education and training providers, including schools, PES, employers, local authorities and third-sector organisations, including NGOs and youth organisations, etc.

Targeted policy interventions

Given the high diversity of the NEET population, each NEET-related sub-group requires targeted policy interventions tailored to their specific (and quite varied) needs. However, in general, in view of the major adverse impact of low educational attainment on a young person’s likelihood of becoming NEET, it is generally accepted that preventative measures in relation to early school leaving and/or remedial measures aimed at re-integrating youth at risk are needed. Such measures should be so designed as to motivate, at an early stage, youth at risk of disengagement by focusing more on practical, vocational or work-related provision, either school-based or in alternative settings. That said, the provision of the required level of basic and soft skills, together with the development of confidence and self-esteem, should be an integral part of such interventions.

Reducing early school leaving

In general, prevention and early intervention are critical. For example, for those at risk of early school leaving or who have dropped out of school because of alienation from the more traditional (academic) teaching methods and formats, the provision of more vocation-oriented training options and/or alternative learning environments has also proved an effective way of either preventing their early school leaving or re-integrating them in education. Moreover, since the greater risk of dropping out occurs at key transition stages, notably between lower and upper secondary education, early intervention at these key transition stages is also critical.

Outreach

However, given the fact that a significant proportion of youth at risk is not registered, for example with PES, there is an urgent need for proper outreach and tracking-down approaches in order to identify such young people and include them in mainstream provision. To this end, the involvement of NGOs and youth organisations with specialist knowledge and skills in how best to engage with hard-to-reach young people is critical, although there are also good-practice examples where such outreach activities are conducted effectively by state actors. Second-chance education/‘bridging’ programmes have also proved effective in preparing vulnerable young people for entry to mainstream education.

Vulnerable young people

Similarly, systems for diagnosing vulnerable young people’s specific needs and circumstances and putting in place a comprehensive range of person-centred services and interventions are essential for effectively addressing their complex and multiple needs. Indeed, the focus of interventions should be person-centred and have enough flexibility and variety so as to cater for different pathways toward STW transition, taking into account the different profiles and needs of youth at risk.

For the hardest to reach and most disaffected youth, this may mean that, as a first step towards their active engagement, much more emphasis should be put on their motivation and the development of their self-confidence and self-esteem. To this end, personalised counselling, mentoring and on-going support is critical, with the mentor not only helping the young person navigate the various and, many times, complicated administrative systems, but also guiding and offering him/her support throughout the intervention. Indeed, mentoring and on-going support has proved to be very effective for youth at risk.

Effective case management

Linked to this is the need for effective case management that again has been shown to be essential for such youth. Individual action planning together with personalised help and support throughout the young person’s journey, and follow-up well after the end of the intervention, contribute to more sustainable outcomes. Here ensuring that there is sufficient PES capacity and resources is critical, especially in relation to properly servicing youth at risk, who require much more intensive and personalised attention.

Labour demand

Despite EU funding, reforms are, in most cases, being introduced against a backdrop of tight public finances, austerity and spending cuts, which undermines their effective implementation. Moreover, a general lack in labour demand will soon show the limitations of ALMPs or VET systems if these are used on their own as a means for addressing youth unemployment. This is because incentive mechanisms for employers and potential employees, like those included in ALMPs, are quite unsuitable under difficult macroeconomic conditions. Against a fragile economic recovery in many member states, the scope for providing training places (such as apprenticeships and jobs) to young people may be limited. Furthermore, Hadjivassiliou et al. (2015) show that simply reducing labour costs by increased flexibility does not improve the STW transition per se.

In our research into the STW transition systems in eight countries, we identified favourable policy changes that could improve STW transitions, such as the greater policy focus on VET and the wider implementation of the YG with a distinct focus on NEETs. However, strong labour demand shocks can only partly be tackled by employment and education policy at least in the short run.

The Youth Guarantee

Although the YG framework serves as a strong basis for effective interventions, it is not clear that it provides the extended timeline and flexibility required for reaching out to those youth at risk who are farthest from the labour market and need a longer-term integration process. Here, the effort of identifying and engaging them as well as addressing their multiple and complex needs and stabilising their social and employment situation is a labour-intensive and time-consuming process. This should be reflected in the way the YG is resourced, implemented and monitored across the EU.