Youth guarantees can boost Eurozone recovery

The cost of programmes designed to help young people get a job, education or training stands at less than 0.5 per cent of government spending in the Eurozone, according to an ILO report issued on Wednesday 11 July. The rewards, however, are a lot higher.

News | 12 July 2012
GENEVA (ILO News) – Programmes that guarantee young people will get a job, education or training can play a key role in slashing unemployment at a time when the youth jobs crisis threatens to delay recovery in the Eurozone, the ILO said.

Implementing such a “youth guarantee” programme across the Eurozone would cost no more than 21 billion euros, the ILO’s International Institute for Labour Studies said in the study published on Wednesday 11 July 2012 entitled Eurozone Job crisis: Trends and policy responses.

The cost, which would represent less than 0.5 per cent of government spending in the single-currency area, is “a modest figure vis-à-vis expected benefits.”

In April 2012, the youth unemployment rate in the Eurozone was over 22 per cent. It was more than 50 per cent in Greece and Spain and exceeded 30 per cent in Italy, Portugal and Slovakia.

Nordic countries have led the way and registered significant success with youth guarantee programmes


In Finland, the Public Employment Service estimated success rates at more than 80 per cent in 2011, and in Sweden, 46 per cent of participants in the programme had successful outcomes.

The measures are aimed at youth in defined target groups – unemployed, not in education or with a short employment experience.

Austria, Denmark, Germany, the Netherlands, Norway, Poland and Sweden and Portugal all have youth guarantees programmes.

Tailor-made programmes

In some countries the programmes are tailored to the specific characteristics and needs of the young jobseekers. In Denmark, for example, age and education determine what measures apply – ranging from guidance, to introductory courses and schemes to build bridges to the world of work.

Lessons can be learned from the relatively long experience of Nordic countries, including the need for early action targeted at specific groups, and the importance of having a wide range of possible measures to allow a mix-and-match fit.

Mixed strategies enable employment services to select the most effective instruments for each young person taking part in the programme, for example by combining training with job search assistance.

“Youth guarantee programmes in Norway and Sweden are thought to be successful mainly because these countries count with integrated activities which use job seeking as a starting point, but draw upon other measures if job seeking alone does not work.”

The report warns that failure to act on the youth jobs crisis would have severe negative consequences on growth prospects as a result of reduced labour supply and increased future skill mismatches. “This would only delay further any recovery.” 

Examples of youth guarantee programmes
In Sweden, after 90 days of unemployment, youth are referred to the programme for four months. They initially get educational and vocational guidance, and job search coaching, and then work experience, education, training, business start up grants or employability rehabilitation.
A person in the 18-24 age range can participate for up to 15 months. The cost in 2010 was less than €6,000 per participant.

In Finland, within the first three months of unemployment, a registered youth has to be offered a job, academic education, vocational training, or another measure to improve job prospects.
The youth guarantee scheme targets people below age 25 who are finishing school and do not have a job or a place in an education programme. From 2013 it will be expanded to graduates under age 30.

Contact

For more information, please contact Jean-Luc Martinage, ILO press officer at martinage@ilo.org or tel: +41(0)22/799-8046.