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Youth employment crisis

EU-wide youth guarantees: ILO at the ready

The ILO will cooperate with the European Commission in tackling the employment crisis facing young people, including through youth guarantee schemes.

News | 04 April 2013
GENEVA (ILO News) – As young people continue to be disproportionately affected by the employment crisis, the International Labour Organization (ILO) has said it is ready to join forces with the European Commission to support EU member states in implementing youth guarantees.

It follows on from the approval in February, by European Social Affairs and Employment ministers (EPSCO), of a recommendation calling for these schemes to be launched across Europe.

Youth guarantees can be effective in reducing unemployment and discouragement among young people."
“Youth guarantees can be effective in reducing unemployment and discouragement among young people,” says Azita Berar Awad, head of the ILO’s Employment Policy Department.

Under the initiative, member states will put in place measures to ensure that young people up to the age of 25 are offered good quality employment, continuing education, an apprenticeship or a traineeship, within four months of becoming unemployed.

Each country now has to work out how to implement these measures based on their specific national contexts. The speed at which labour market programmes and services will be set up may, for instance, depend on the level and the composition of youth unemployment in individual member states or on the kind of budgetary difficulties they face.

An estimated 7.5 million young Europeans are currently neither in employment nor in education or training (NEETs). Youth guarantees can play a significant role in helping them reconnect with the labour market, explains Berar Awad:

“The ILO’s review of existing youth guarantees shows the potential of these schemes to bridge the gap, until economic growth strengthens and the labour market recovers.”

The Nordic European countries, (Denmark, Finland, Norway and Sweden), were the first to implement youth guarantees in the 1980s and 1990s. Austria, Germany, the Netherlands and Poland have also launched similar programmes.

“There is a lot to learn from these experiences. If well-designed and targeted, the youth guarantees can reach disadvantaged youth and keep them connected to the labour market,” adds Berar Awad.

A study conducted in 2011 in Sweden, showed that unemployed youth aged 24, who benefited from the guarantee, were able to find a job faster than others.

Finland also saw a decrease in youth unemployment either through direct employment assistance or further training leading to a job.

In Austria, 63 per cent of young people who participated in a similar guarantee scheme in 2010, found a job within a year of participating in this labour market programme.

According to ILO estimates, youth guarantees can be implemented at an annual cost of approximately 0.5-1.5 per cent of GDP, based on country conditions and the size of the eligible population.

“Considering that the short and long term economic and social impact of youth unemployment and inactivity are very high, the benefits from youth guarantees can outweigh the costs,” Berar Awad says.

Yet, as more countries are about to experiment with youth guarantees, there is certainly a need for more monitoring and impact evaluations of such schemes.

The ILO and EC will actively pursue ways to cooperate on a review of youth guarantee schemes and a range of other policy measures for youth employment. Lessons learned will be disseminated on a wide scale, as a further step in the follow-up to the ILO’s Call for Action on the youth employment crisis, which was made in June 2012.

The ILO's call for action 
In June 2012, the ILO adopted a resolution at its annual Conference, calling for immediate, targeted and renewed action to tackle the youth unemployment crisis. The resolution provides a portfolio of tried and tested measures in five areas: macro-economic policies, employability, labour market policies, youth entrepreneurship and rights. It underscores the need for balance, coherence and complementarity across the policy measures (Read the press release).

The ILO call for action on youth employment calls on governments and the social partners:
  • To foster pro-employment growth and decent job creation through macroeconomic policies, employability, labour market policies, youth entrepreneurship and rights to tackle the social consequences of the crisis, while ensuring financial and fiscal sustainability.
  • To promote macroeconomic policies and fiscal incentives that support employment and stronger aggregate demand, improve access to finance and increase productive investment – taking account of different economic situations in countries.
  • To adopt fiscally sustainable and targeted measures, such as countercyclical policies and demand-side interventions, public employment programmes, employment guarantee schemes, labour-intensive infrastructure programmes, wage and training subsidies and other specific youth employment interventions. Such programmes should ensure equal treatment for young workers.