Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Youth unemployment rose sharply in 2020 amid the COVID-19 pandemic, but fell quickly again in the years after. Nevertheless, global youth unemployment was increasing even before the pandemic. Furthermore, employment rates among youth declined steadily since the millennium. What explains the increasing youth unemployment levels? And why are youth particularly vulnerable on the labor market?
Reasons for youth unemployment vary from country to country, but some common patterns can be observed worldwide. First, in countries with slowing economies and high unemployment rates, youth are usually mostly affected, as can be observed in Southern Europe. Second, youth are often the first laid off when companies need to downscale, which could be seen during the outbreak of COVID-19. Youth often have limited experience and thus are more expendable than older, more experienced employees, and are often working on temporary, short-term contracts, making it easier for companies to move them on once contracts expire. Third, even though youth are becoming more highly educated, they are struggling to find employment in some countries such as India. Either there are not sufficient jobs, or their qualifications do not match the skills required by the employers, leading to a mismatch between the supply of workers and demands of employers. Definitions of youth unemployment vary from country to country, with some countries only counting people actively registered as unemployed, whereas other include everyone without employment. Youth usually refers to people between 15 and 24 years, but sometimes includes people up to 29 years.
Looking at the coming years, youth unemployment and labor participation is estimated to remain at today's levels, with unemployment rates seemingly unaffected by the rising inflation rates seen around the world in recent years. For instance, the share of youth not in education, employment, or training (NEET) worldwide is forecast to remain around 22 percent in 2024 and 2025. In a more long-term perspective, youth unemployment will depend on a multiple of factors, including on businesses ability to continue to grow and create more jobs, and on whether youth are able to obtain the type of education employers demand.
Reasons for youth unemployment vary from country to country, but some common patterns can be observed worldwide. First, in countries with slowing economies and high unemployment rates, youth are usually mostly affected, as can be observed in Southern Europe. Second, youth are often the first laid off when companies need to downscale, which could be seen during the outbreak of COVID-19. Youth often have limited experience and thus are more expendable than older, more experienced employees, and are often working on temporary, short-term contracts, making it easier for companies to move them on once contracts expire. Third, even though youth are becoming more highly educated, they are struggling to find employment in some countries such as India. Either there are not sufficient jobs, or their qualifications do not match the skills required by the employers, leading to a mismatch between the supply of workers and demands of employers. Definitions of youth unemployment vary from country to country, with some countries only counting people actively registered as unemployed, whereas other include everyone without employment. Youth usually refers to people between 15 and 24 years, but sometimes includes people up to 29 years.
COVID-19 hit youth particularly hard
As the coronavirus (COVID-19) started spreading across the world in early 2020, many countries imposed restrictions to stop the spread of the virus. Borders were closed, and restaurants, cafes, and other non-essential businesses where people met in public were forced to shut down. This led to rapidly increasing unemployment rates as businesses had to downscale and lay off employees. While the pandemic and the following measures hit people across all age groups hard, youth were particularly affected. Many youth were working in industries mostly impacted by the restrictions such as retail, food, restaurants, accommodations, and tourism. Moreover, youth who graduated from either university or secondary school in 2020 and 2021 struggled to find work as businesses worldwide went bankrupt or stopped hiring. The pandemic not only hit youth harder than other age groups, but also affected young women more than young men in the beginning of the outbreak, as women had to take on more care responsibilities at home with children out-of-school.More education leads to falling employment rates
Simultaneously with increasing global youth unemployment, youth employment-to-population ratios declined from 2000 to 2020, only stabilizing in the years post-COVID-19. This development was mainly driven by declining ratios in in Eastern Asia, a region that has seen a substantial economic development over the past decades. This can be explained by the increasing number of people entering secondary education in countries once they start developing, meaning that people enter the labor force at a later stage.Looking at the coming years, youth unemployment and labor participation is estimated to remain at today's levels, with unemployment rates seemingly unaffected by the rising inflation rates seen around the world in recent years. For instance, the share of youth not in education, employment, or training (NEET) worldwide is forecast to remain around 22 percent in 2024 and 2025. In a more long-term perspective, youth unemployment will depend on a multiple of factors, including on businesses ability to continue to grow and create more jobs, and on whether youth are able to obtain the type of education employers demand.
