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Youth Unemployment in Greece: Measuring the Challenge. David Bell Division of Economics Stirling Management School University of Stirling. David Blanchflower Department of Economics Dartmouth College. A Deep-Rooted Problem. - PowerPoint PPT Presentation
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Youth Unemployment in Greece:Measuring the Challenge
DAVID BELLDIVISION OF ECONOMICSSTIRLING MANAGEMENT SCHOOLUNIVERSITY OF STIRLING
DAVID BLANCHFLOWERDEPARTMENT OF ECONOMICSDARTMOUTH COLLEGE
A Deep-Rooted Problem
• [Youth unemployment is] "perhaps the most pressing problem facing Europe at the present time.... It is highly regrettable that parts of the economic elite assume so little responsibility for the deplorable situation” Angela Merkel, July 2013
EU Policy Response
• The Youth Guarantee
• Member states of the European Union should "ensure that all young people under the age of 25 receive good quality offer of employment, continued education, apprenticeship or a traineeship with enough period of four months of becoming unemployed were leaving formal education." (Council of the European Union, 2013)
• The Council created the Youth Employment Initiative through which €6 billion will be made available to NUTS 2 regions with an youth unemployment rate above 25% in 2012. These monies have to be distributed between 2014 and 2016.
• The Youth Guarantee is intended to provide young people with a job, training or education over a defined period. The entitlement is generally given by public institutions such as the public employment service, sometimes acting in concert with private or third sector organizations.
Effectiveness of Interventions to Mitigate Negative Effects of Youth Unemployment
• Evidence of Success Limited
– Differences between countries in the types of programs, which succeed or fail
– Scaling up – management problem
– Time horizon – how long should evaluation last? (may have to rely on cohort studies or administrative data)
– Programs evolve – complicating evaluations
– Evaluations tend to focus on narrow range of measures
– Understanding how allocation to programs may affect outcomes
Scarring Effects of Youth Unemployment
• Experience of unemployment when young
– A temporary disturbance that is part of the search and matching process for those inexperienced in the labour market
– A negative experience that changes the beliefs and preferences of the young about the nature of the labour market and has long-lasting negative effects on their labour market experience
• Most of the evidence supports the latter explanation
Greece and the Youth Guarantee
• Greece is intending to implement a national youth action plan using €517 million, with the aim of benefiting up to 350,000 young people.
• Measures under the plan include a temporary hiring program for unemployed persons below the age of 35 in community-based work programs.
• In July 2013 it introduced a youth internship and employment voucher program under the youth action plan aimed at supporting occasional training and internships for a six-month period for 45,000 people up to the age of 29.
• €1.2 billion is being allocated to help small and medium-sized companies meet liquidity requirements and so assist with the expansion of youth employment.
Analysis
• Using the European Labour Force Survey and Eurostat
• Comparators
– Spain and Portugal - southern European countries that, like Greece, have hit particularly hard by the recession
– The Republic of Ireland has also been hit hard, but has a quite different labor market
– Even though its economic performance has been much stronger, Sweden has experienced persistently high levels of youth unemployment
– Germany, the UK and France to give a perspective on unemployment trends in the European Union as a whole.
Greek Unemployment Rates by Age Group
largest increase among 15-19 year olds
2005 2006 2007 2008 2009 2010 2011 20120%
10%
20%
30%
40%
50%
60%
70%Ages 15-19
Ages 20-24
Ages 25-29Greece had a substantialyouth unemployment problemprior to the Great Recession
Greek Employment to Population Ratio by Age Group
largest decline among 25-29 year olds
2005 2006 2007 2008 2009 2010 2011 20120%
10%
20%
30%
40%
50%
60%
70%
80%
Ages 15-19
Ages 20-24
Ages 25-29
Empl
oym
ent t
o Po
pula
tion
Ratio
Rates can give a misleading impression of magnitudes
Age 15-19 20-24 25-29 15-19 20-24 25-29 15-19 20-24 25-29 15-19 20-24 25-29 15-19 20-24 25-29 15-19 20-24 25-29
Year2005 281 333 408 281 334 389 26 159 335 13 109 235 8 34 37 11 54 64
2009 270 294 404 278 280 362 22 134 321 11 90 230 6 31 44 8 43 532012 275 265 366 271 266 325 11 76 211 4 50 159 14 67 116 15 77 106
Activity Rate (%) EPOP Rate (%) Unemployment Rate (%)
2005 12 58 91 9 49 77 9 48 82 5 33 60 24 18 10 46 33 21
2009 11 56 90 7 48 78 8 46 79 4 32 64 22 19 12 43 33 192012 9 54 89 7 48 82 4 29 58 1 19 49 56 47 35 79 61 40
Males Females Males Females Males Females
Population Employment Unemployment
Table 3: Unemployment, NEET and Educational Status in selected European Countries among those aged 16-29, 2012 (000s)
Greece Portugal Spain
StudentNon-
student Total StudentNon-
student Total StudentNon-
student Total
Employed 32 479 511 89 652 742 346 2,120 2,466
Unemployed 36 359 396 57 224 281 372 1,394 1,766
Inactive 729 131 860 681 94 776 2,674 519 3,193
Total 676 970 1,646 701 970 1,671 3,016 4,033 7,049
Unemployment Rate 53.5% 42.8% 43.6% 38.8% 25.5% 27.4% 51.8% 39.7% 41.7%
NEET Rate 27.8% 17.7% 25.8%
Germany France Sweden
StudentNon-
student Total StudentNon-
student Total StudentNon-
student Total
Employed 2,797 5,423 8,221 793 4,224 5,017 229 731 960
Unemployed 127 517 644 92 1,004 1,096 92 110 202
Inactive 4,646 863 5,509 4,208 885 5,093 582 93 675
Total 7,416 6,803 14,218 5,093 6,113 11,206 819 934 1,753
Unemployment Rate 4.3% 8.7% 7.3% 10.4% 19.2% 17.9% 28.7% 13.0% 17.4%
NEET Rate 9.6% 16.9% 11.0%
Older NEETs pose a huge challenge for Greece
Sweden Germany United Kingdom
Portugal France European Union
Ireland Spain Greece0
5
10
15
20
25
30
35
40
Age 15-19Age 20-24Age 25-29
Perc
ent N
EET
Source: Eurostat
Percent NEET (Not in Employment, Education or Training) by Country and Age Group 2013
Youth (16-24) to adult ratio is relatively low in Greece.
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
15-24/25-64 ratio (LHS) Youth unemployment rate (RHS)
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
1.7
1.8
1.9
2.0
2.1
2.2
2.3
0.0
10.0
20.0
30.0
40.0
50.0
60.0 15-24/25-64 ratio (LHS)
Youth unemployment rate (RHS)
1.5
1.7
1.9
2.1
2.3
2.5
2.7
2.9
3.1
3.3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
15-24/25-64 ratio (LHS)
Youth unemployment rate (RHS)
Greece
SpainSweden
Youth cohort has been declining very rapidly in Greece
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
60
70
80
90
100
110
120
Greece
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
50
60
70
80
90
100
110
120
Spain
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
60
70
80
90
100
110
120
UK
Gender differences?
2005 2006 2007 2008 2009 2010 2011 20120%
50%
100%
150%
200%
250%Greece UKSweden PortugalIreland FranceSpain Germany
Ratio
of F
emal
e to
Mal
e Yo
uth
Un-
empl
oym
ent R
ates
How does staying at home influence labour market outcomes?
Table 4: Proportion of those aged 15-29 with parents not in the same household Ages 15-19 Ages 20-24 Ages 25-29 Greece UK Greece UK UK Total Males Females Total Total Males Females Total Total Males Females Total
2005 7.5 6.3 8.8 7.9 31.0 26.8 35.1 49.9 41.7 31.2 52.6 81.0 2006 6.8 5.6 7.9 7.3 30.1 25.3 35.1 48.6 39.9 29.4 51.3 81.3 2007 6.8 5.6 8.0 7.3 31.6 28.5 34.8 49.7 38.3 29.4 48.1 80.5 2008 6.8 6.0 7.5 8.5 33.6 30.4 37.0 48.6 38.0 30.4 46.2 79.7 2009 7.1 6.0 8.2 8.5 36.1 32.3 40.0 47.4 40.5 33.0 48.9 78.5 2010 6.3 5.2 7.5 8.9 33.0 28.2 37.8 47.2 41.4 32.3 51.1 78.4 2011 6.7 6.0 7.5 8.3 30.5 25.6 35.3 50.1 39.3 31.9 47.4 81.1 2012 6.2 5.4 7.1 8.4 30.0 27.7 32.3 45.7 36.2 30.0 43.3 79.5
Source: European Labor Force Survey
Change 2005-08 to 2009-2012
Employment Unemployment InactivityShare of Cohort
No formal qualifications -4.0% 11.5% -7.5% 0.7%
Primary -11.6% 7.4% 4.2% 6.9%
Lower Secondary -6.5% 2.0% 4.5% 25.7%
Upper Secondary -11.9% 10.1% 1.8% 2.9%Upper Secondary with quals -6.7% 5.1% 1.6% 39.5%Non-tertiary post-sec -12.5% 11.3% 1.2% 7.5%
First stage tertiary -8.3% 10.7% -2.4% 16.6%Second stage tertiary 7.7% 0.1% -7.7% 0.1%
The Role of Education
Long-term unemployment
2005 2006 2007 2008 2009 2010 2011 20120%
10%
20%
30%
40%
50%
60% Germany Spain France
Greece Ireland Portugal
Sweden UK
Perc
ent o
f Une
mpl
oyed
with
dur
atio
n >
12 m
onth
s
Greece had a substantial long-term unemployment problemprior to the Great Recession
Long-term Unemployment in Greece
• The average age of the long-term unemployed is lower in Greece than in our comparator countries with the exception of the UK and Ireland
• Among our comparator countries Greece has the highest proportion of females among the long-term unemployed
• Other Sources of Variation in Long-term Unemployment– Education– Nationality
Age 20-24
Age 25-29
Age 30-34
Age 35-39
Age 40-44
Age 45-49
Age 50-54
Age 55-59
Age 60-64
-0.10
-0.05
0.00
0.05
0.10
0.15
0.20
Long-term unemploy-mentUnemployment
Prob
abili
ty c
ompa
red
with
16-
19
year
old
Conditional probability of(lt) unemployment by age
Amongst our group of countries, Greece experienced the largest fall in well-being with the recession
2000-07 2008-2012 Changes 2000-2007 to 2008-2012 Age Group Age Group Age Group 15-24 25-29 30+ All 15-24 25-29 30+ All 15-24 25-29 30+ AllGreece 2.89 2.8 2.59 2.66 2.68 2.51 2.27 2.34 -0.21 -0.29 -0.32 -0.32Germany 2.9 2.89 2.9 2.9 3.1 3 3.01 3.02 0.2 0.11 0.11 0.12
France 3.02 3 2.9 2.93 3.14 2.97 2.92 2.95 0.12 -0.03 0.02 0.02Spain 3.15 3.09 3.01 3.04 3.07 2.88 2.85 2.88 -0.08 -0.21 -0.16 -0.16UK 3.19 3.16 3.2 3.19 3.33 3.22 3.26 3.26 0.14 0.06 0.06 0.07Ireland 3.25 3.21 3.25 3.24 3.23 3.15 3.24 3.23 -0.02 -0.06 -0.01 -0.01Sweden 3.36 3.37 3.36 3.36 3.52 3.42 3.45 3.46 0.16 0.05 0.09 0.1
But it was not concentrated among the young
Source: Eurobarometer
Conclusion
• In general, the evidence that ALMPs work is not strong. Careful evaluation in the correct context is essential.
• The age group 25-29 in Greece is probably of greatest concern• Student (part-time) employment and unemployment is less common in Greece than
in other European countries• The European Labor Force Survey indicates that numbers in Greece in the 15-29
age group have fallen sharply• Gender differentials in the Greek labor market are more marked than in many other
EU states.• Greek youths are much more likely to live at home than are young people in Northern
Europe.• Greece has the highest proportions of the young unemployed that have been without
work for more than a year• The decline in Greek well-being since the beginning of the recession has been the
most rapid in Europe.
0 - Pre-primary education; 1- Primary education or first stage of basic education; 2- Lower secondary education or second stage of basic education; 3 - Upper secondary education; 4 - Post-secondary non-tertiary education; 5a - First stage of tertiary education (theoretical); 5b - First stage of tertiary education (technical, practical); shorter6 - Second stage of tertiary
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