Youth Unemployment in the OECD: The Role of Institutions

26 Pages Posted: 4 Nov 2014

See all articles by Andreas Sachs

Andreas Sachs

ZEW – Leibniz Centre for European Economic Research

Werner Smolny

Ruhr University of Bochum - Faculty of Economics

Date Written: October 15, 2014

Abstract

This paper analyzes the role of labor market institutions for youth unemployment, as contrasted to total unemployment. The empirical results are basically consistent with an insider view of labor market institutions. Labor market institutions tend to protect (older) employees but might harm (young) entrants. Remarkable is especially the significant and very high effect of employment protection for regular jobs on youth unemployment. In addition, the combined effects of powerful unions and a coordinated wage bargaining system are beneficial for older people and detrimental to youth. Finally, the paper establishes significant labor supply effects and effects of the education system on youth and total unemployment.

Keywords: Youth unemployment, labor market institutions, age-specific unemployment

JEL Classification: E02, E24, J21, J68

Suggested Citation

Sachs, Andreas and Smolny, Werner, Youth Unemployment in the OECD: The Role of Institutions (October 15, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-080, Available at SSRN: https://ssrn.com/abstract=2518367 or http://dx.doi.org/10.2139/ssrn.2518367

Andreas Sachs (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Werner Smolny

Ruhr University of Bochum - Faculty of Economics ( email )

Ruhr University of Bochum
Faculty of Economics
D-44780 Bochum, DE 44780
Germany
0234 32 28341 (Phone)
0234 32 14273 (Fax)

HOME PAGE: http://www.ruhr-uni-bochum.de/agvwp1/Team/aktuellLebenslauf.htm

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