Youth in many developed countries to suffer long run unemployment
According to a report by OECD, the government of nations under OECD should realize that their youth may have to face long run unemployment. The job prospects in these countries remain grim and worst in case of youth employment. High degree of dropouts from schools in countries like Spain may cause increase in number of the unskilled population who would fail to add to the productivity of their nation.
Youth unemployment rates in the OECD area are expected to remain at around 18% in 2011 and 17% in 2012. This is more than double the total unemployment rate, which stood at 8.6% in October 2010.
Since the crisis started, 3.5 million more young people have joined the ranks of the unemployed in the OECD area. But unemployment does not capture the full hardship for youth, as many who have left education no longer appear in labor force statistics. At least 16.7 million young people are neither in employment, education or training (the so-called NEET group) – 6.7 million of these youth are still seeking work, while 10 million have given up looking.
Here is an extract of what report says:
Young people who struggle to enter the labor force after leaving school can face persistent scarring. Risks include long-term difficulty finding employment and pay differentials with their peers (up to 8% less in some countries) as deep as 20 years into their careers. Young people leaving school in the coming years are more likely to struggle to find work than previous generations.
The OECD says that governments must prioritize policies that have produced cost-effective results in other countries. Targeting young people most at risk – including youths who leave school without a qualification, come from immigrant backgrounds or live in disadvantaged areas – is key.
- Move towards early intervention programs and effective job-search assistance for different groups of youth, such as in Denmark, the Netherlands and Japan.
- Strengthen apprenticeship and other dual vocational training programs for low-skilled youth, as traditionally done in Austria, Germany and Switzerland and scaled up in Australia and in France.
- Encourage firms to hire youth, by offering temporary subsidies targeting low-skilled youth and those have completed their apprenticeship, as well as small and medium-sized firms.