The hidden face of youth unemployment

Extremely adverse labour market conditions are forcing many youth to give up the job search altogether or to continue their stay in the education system. Globally, some 6.4 million youth have dropped out of the labour force.

News | 17 May 2012
Geneva, (ILO News) – More than 6 million youth worldwide have either given up searching for a job or have decided to prolong their studies due to the extremely adverse conditions in the labour market, says to the latest edition of the “Global Employment Trends for Youth 2012” report ( published by the International Labour Organization (ILO).

According to the report, the total number of drop-outs aged 15 to 24 reaches 6.4 million worldwide. Taking this number into account, the adjusted global youth unemployment rate would be 13.6 per cent instead of the current 12.6 per cent. Globally, this labour force gap amounts to 1.2 per cent for young men and 0.5 per cent for women.

Striking differences between regions

In the Developed Economies & European Union, the crisis resulted in around 2 million youth withdrawing from the labour market. In OECD countries, higher unemployment rates meant lower participation rates, which points to a discouraged worker effect.

In contrast, the youth participation rate in Central & South-Eastern Europe (non-EU) & CIS is higher than expected on the basis of pre-crisis trends, which is likely to be partly poverty-driven.

The impact of drop-outs on youth unemployment

Adjusting the youth unemployment rate to account for reduced labour force participation can be obtained by comparing pre-crisis trends in youth labour force participation and the ILO’s estimates of the economically active population. In the figure below, such a comparison is made for each region in 2011, and separately for young men and women.

For instance, if the unemployment rate is adjusted for drop-out induced by the economic crisis, the global youth male unemployment rate would rise from 12.4 to 13.6 per cent, and the global youth female unemployment rate would rise from 13.0 to 13.5 per cent.

Source: ILO calculations based on ILO, Trends Econometric Models, October 2011, and ILO (2011d), Economically Active Population Estimates and Projections, 6th edition.