Youth unemployment is the unemployment of young people, defined by the United Nations as 15–24 years old. An unemployed person is someone who does not have a job but is actively seeking work. In order to qualify as unemployed for official and statistical measurement, the individual must be without employment, willing and able to work, of the officially designated 'working age' and actively searching for a position. Youth unemployment rates are historically double or more the adult rates in nearly every country in the world. Reasons for and rates of youth unemployment vary across national contexts. Official rates in the early 2010s decade ranged from under ten percent in Germany, Vietnam, Sierra Leone and Cuba to around fifty percent in countries including Armenia, Macedonia, South Africa, and Spain. Since unemployment is defined as those out of work but actively seeking work, the youth that are out of work but not seeking work are not a part of the unemployment statistics. Youth in training, unpaid internships, or educational programs but not seeking paid work are not counted as unemployed, even though their presence in such programs may indicate a shortage of jobs for young people. Thus, the rate of youth unemployment is undercounted.
The age range designated by The United Nations addresses the period when mandatory schooling ends until the age of 24. Two theoretical perspectives that have dominated the debate on defining youth are that of life stage and/or youth transitions and the youth culture perspective. The first perspective defines youth as a stage in life between adolescence and adulthood. The latter perspective defines youth as a socially constructed group with their own sub-culture.
The youth unemployment rate is typically higher in developing countries, but has become a problem in countries around the world, including those in the global north. During the 1960s, the United States and Canada were the only industrialized countries to have youth unemployment rates over 10 percent, but by the 1980s many more countries had double digit youth unemployment rates. The recession in 2008 affected employment rates for youth in Europe and North America significantly. In 17 middle-income countries surveyed, all saw a moderate or significant decrease in wage employment during the recession. In Latin American countries, youth shifted to the informal sector to avoid unemployment during the 2008 economic recession.
Changes in the economy have had a larger effect on youth unemployment rate than the overall unemployment rate. The economic recession had a big affect on the current rate of youth unemployment in the global north. In 2007, before the recession began, the youth unemployment rate was 13 percent as compared to 5 percent among older workers. This number has now increased to around 20 percent for youth, more than 2 times the national average of 7 percent as of March 2012. When there is a general hiring freeze, the youth unemployment rate grows as youth move from school into the workforce. The effects of limited economic growth was visible in the mid-1970s in the United States. While the economy weakened, the number of young people in the labor force grew and the youth unemployment rate grew as well. Problems of youth unemployment affect more than youth, youth unemployment also has a major impact on society as a whole and the economy. The issue of youth unemployment cannot be separated from larger questions about labor and the task of promoting economic growth.
There are many causes behind the youth unemployment rate. Causes stem from issues related to the structure of job and labor markets to education. There has also been a rise in the phenomenon of internships and other temporary work for youth which has a significant impact on youth unemployment rates. Unemployment while young can lead to long-term reductions in wages.
Inflexible labour markets
Older employees have more job experience and job security, meaning that the newest employees, typically the youngest, are more likely to be let go than an older employee who has been there for a long time. One country that serves as an example to this model of older works having a firmer position in a company, is Spain. In Spain temporary workers do not have as many rights as their older counterparts who have permanent contracts. Youth also have less experience searching for work, making it a more difficult process where they are likely to find less success than older employees. Along with having less experience than older employees, youth also have smaller social networks. There is also an increase in expected education levels. Along with this increase there is also a decrease in job availability. (furlong and global) Mobility is another factor in the youth unemployment rate. In community-oriented countries, youth are often less mobile than older workers. When the attachment to home is strong and when youth rely on parents for financial support, they are less able to move locations to find a job than older workers who can move their entire family. The youth being supported financially by their parents are also able to wait longer before accepting a job, meaning that they remain unemployed for a longer period of time.
Increased education expectations
Youth are expected to have more education to compete for jobs than was true for previous generations, a phenomenon referred to as credential inflation or academic inflation. Youth are expected to stay in formal schooling for longer periods of time. Employers use credentials as a way to evaluate whether youth applicants are good potential employees, requiring youth to seek education and delay entry into the workforce. Education credentials are also used as a screening method, forcing more youth to remain in education to meet the requirements of employers. The increasing amount of time that youth spend getting an education causes an equivalent rise in the average age when full-time employment begins. The increased education expectations also has another angle in its impact on youth unemployment. The education many young people are receiving today is preparing them for jobs that perhaps no longer exist.
Young people are more likely to have temporary forms of work such as internships, seasonal jobs, contract work, and graduate research assistantships. Because their jobs are temporary contracts, youth are often the first to be laid off when a company downsizes. If they are laid off, youth are typically not eligible for redundancy payments because they only worked with the company for a short period of time. Once this work ends, many find themselves unemployed and disadvantaged in the job search. However, some youth are entering work on a part-time basis during tertiary education. This rate is low in countries like Italy, Spain and France but in the United States almost one-third of students combine education and work.
Young people with take temporary internships and research assistant positions into as a way to build their experience. Facing unemployment, they will also turn to unpaid work. The legitimacy of internships has begun to be questioned. The intent of an internship is to provide valuable work experience, typically to youth in or recently out of college. However, many interns have complained that they are simply performing basic grunt-work, rather than learning important knowledge and skills. Whether or not these internship positions are now violating the federal rules that are in place to govern programs such as internships remains to be seen. The internship however, seems to be the only viable alternative to job placement for the young individual. With little to no job growth occurring, the unemployment rate among those fresh out of college and at the later end of the 15-24 aged youth spectrum is approximately 13.2% as of April 2012.
In Ghana the same type of temporary internship work is being done. Apprenticeships are common among Ghana youth as a way to learn the skills necessary for future career development. And much in the same way that Western internships seem to be working outside of federal guidelines, Ghana apprenticeships are happening informally and outside of state regulation.
The individual experiences of youth unemployment vary from country to country. Definitions of youth can also vary from country to country so examination of particular countries gives a greater insight into the causes and consequences of youth unemployment.
African countries define youth as someone from as young as 15 to someone well into their mid thirties, which varies from the standardized definition of the United Nations. Africa has the youngest population of any continent which means that the problem of youth unemployment there is particularly relevant. Approximately 200 million people in Africa are between the ages of 15 and 24. This number is expected to double in size in the next 30 years. Between 2001 and 2010, countries in Africa reported some of the world's fasted growing economies. In Africa, the message the youth are receiving from schools and adults is to become job creators rather than job-seekers, which encourages them to become entrepreneurs.
Canada's economy has braved the global recession better than many others. But last year, 14.3 percent of Canadian youth were unemployed, up from 11.2 percent in 2007 and double the current national jobless rate of 7.2 percent, according to Statistics Canada. That amounts to the biggest gap between youth and adult unemployment rates since 1977. The average post-secondary graduate carries $28,000 in student debt. The unemployment rate for Canadian young people is about double that of the rest of the population.  Only youth who collect Unemployment Insurance (UI) or welfare are recorded in Canada’s unemployment statistics.  In Canada's largest province, Ontario, joblessness rates are the highest. The rate of unemployment for Ontarians between the ages of 15-24 is hovering between 16 and 17 per cent, double that of the normal provincial rate and higher than the national youth unemployment rate of 13.5-14.5 per cent. The percentage of youth in Ontario who actually have a job hasn’t climbed above 52 per cent this year.Toronto’s youth unemployment rate is at 18 per cent, but only 43 per cent of the area’s youth are employed, the lowest rate in the province.
Due to the great recession in Europe, in 2009, only 15 per cent of males and 10 per cent of females between ages 16–19 in were employed full-time. The youth employment rate in the European Union reached an all time low of 32.9 percent in the first half of 2011. Of the countries in the European Union Germany sticks outs with its low rate of 7.9%. Some critics argue that the decrease of the youth unemployment began even before the economic downturn, countries such as Greece and Spain.
The United Kingdom has experienced increased youth unemployment in the past few years, with rates reaching over 20 percent in 2009. The term NEET originated here, meaning youth that are not in education, employment or training.
The youth unemployment rate was around 10 percent in 2005, but they haven't reliably reported statistics to the United Nations over the years. However, there has been an increase in young adults remaining in school and getting additional degrees simply because there aren't opportunities for employment. These youth are typically of a lower class, but it can represent a wide variety of individuals across races and classes. They call the phenomenon timepass because the youth are simply passing time in college while waiting for a paid employment opportunity. In India, the employment system is reliant on connections or government opportunities.
There are 15 million unemployed young men in Arab communities. The youth unemployment rate in Jordan has traditionally been much higher than other countries. In the past ten years, the rate has stayed around 23 percent. There has been a recent increase in the popular belief that unemployment is the fault of the individual and not a societal problem. However, youth unemployment has also been attributed to increased pressure on service sectors that typically employ more youth in Jordan. Youth unemployment has led to later and later ages of marriage in Jordan, which some view as one of the most important consequences of the phenomenon. Another consequence experienced in Jordan is increased mental health problems.
Youth unemployment in Russia was over 18 percent in 2010. However, there was a wide variance in levels of unemployment in Russia just a few years earlier, that continued through the 2008 economic crisis. In 2005, the area around Moscow had an unemployment rate of just 1 percent while the Dagestan region had a rate over 22 percent. This may be partially attributed to the differences in levels of development in the region. It has been found that the higher the level of development in a region, the lower the level of both overall and youth-specific unemployment. In Russia, the main cause of youth unemployment has been attributed to lower levels of human capital.
The general unemployment rate in the United States has increased in the last 5 years, but the youth unemployment rate has jumped almost 10 percentage points. In 2007, before the most recent recession began, youth unemployment was already at 13 percent. By 2008, this rate had jumped to 18 percent and in 2010 it had climbed to just under 21 percent. The length of time the youth are unemployed has expanded as well, with many youth in the United States remaining unemployed after more than a year of searching for a job. This has caused the creation of a scarred generation, as discussed below.
Youth unemployment has many long-term consequences for the individual and for their country. Some individual consequences involve finding employment in unrelated or unfulfilling tracks. For some countries, high youth unemployment causes youth to leave the country in search of employment. High youth unemployment has led to social unrest and political revolutions. The Arab Spring movement and the protests in Greece are recent examples of this.
A scarred generation or a lost generation describes how a generation is harmed when many of its members cannot find work. After long-term unemployment, youth are in danger of losing skills, connections to their industry, and desire to work long into the future. After a period of unemployment during a recession, the individual will find it difficult to find work once the economy improves because they have a large gap in their work history. Instead, employers will be more likely to hire those in the next generation who are just out of school.
A major consequence of youth unemployment is decreased earnings over their entire lifetime for those who are unemployed in youth. Because youth aren't able to build up skills or experience during their first years in the workforce, unemployed youth see a decrease in lifetime earnings when compared to those who had steady work or those who were unemployed as an adult. The penalty has been estimated to be a 20 percent decrease in salary. The lower salary can persist for 20 years after the unemployed period before the individual begins earning competitively to their peers. While not earning money during unemployment, the youth could be contributing to a pattern of poverty for their generation. Widespread youth unemployment leads to a generation that is excluded socially and at a great risk for poverty. It also widens the gap between the rich and poor even further. For example, Spain saw an 18 percent increase in income inequality.
Youth are increasingly moving back in with their parents when unemployed. This has been seen as both an effect and a cause of high youth unemployment. Youth in many countries now live with their parents into their late twenties. Although this has been common in collectivist countries, it is growing increasingly common in more individualist countries. In families, it is common that when one person becomes unemployed, other members of the family begin looking for or securing employment. This is called the added worker effect. It is more common in collectivist societies because family members support one another. This can sometimes take the form of employment in the informal sector when necessary. Alongside the shift in youth living situations, the impact of returning to live with parents as well as difficulty finding a fulfilling job lead to mental health risks. Being unemployed for stretches in youth has been correlated to decreased happiness, job satisfaction and other mental health issues. Some youth end up committing suicide because they feel that they are a failure and are of no importance to their communities. Unemployed youth also report more isolation from their community.
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