Youth Unemployment in Old Europe: The Polar Cases of France and Germany

Posted: 20 Jul 2013

See all articles by Pierre Cahuc

Pierre Cahuc

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); University of Angers - French National Center for Scientific Research (CNRS); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Stéphane Carcillo

Organisation for Economic Co-operation and Development (OECD); Sciences Po; IZA

Ulf Rinne

IZA Institute of Labor Economics

Klaus F. Zimmermann

Global Labor Organization (GLO); UNU-MERIT; Maastricht University, Department of Economics; Free University Berlin; University of Bonn; Centre for Economic Policy Research (CEPR); Journal of Population Economics

Abstract

France and Germany are two polar cases in the European debate about rising youth unemployment. Similar to what can be observed in Southern European countries, a "lost generation" may arise in France. In stark contrast, youth unemployment has been on continuous decline in Germany for many years, hardly affected by the Great Recession. This paper analyzes the diametrically opposed developments in the two countries to derive policy lessons. As the fundamental differences in youth unemployment are primarily resulting from structural differences in labor policy and in the (vocational) education system, any short-term oriented policies can only have temporary effects. Ultimately, the youth unemployment disease in France and in other European countries has to be cured with structural reforms.

Keywords: labor policy, labor market institutions, Great Recession, youth unemployment, minimum wages, demographic trends, vocational education and training, employment protection

JEL Classification: J24, J38, J68

Suggested Citation

Cahuc, Pierre and Carcillo, Stephane and Rinne, Ulf and Zimmermann, Klaus F., Youth Unemployment in Old Europe: The Polar Cases of France and Germany. IZA Discussion Paper No. 7490, Available at SSRN: https://ssrn.com/abstract=2296297

Pierre Cahuc (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

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France

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University of Angers - French National Center for Scientific Research (CNRS)

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Centre for Economic Policy Research (CEPR)

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IZA Institute of Labor Economics

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Stephane Carcillo

Organisation for Economic Co-operation and Development (OECD) ( email )

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France

Sciences Po ( email )

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IZA ( email )

Ulf Rinne

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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Klaus F. Zimmermann

Global Labor Organization (GLO) ( email )

Bonn
Germany

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UNU-MERIT ( email )

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Netherlands

Maastricht University, Department of Economics ( email )

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University of Bonn

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Germany

Centre for Economic Policy Research (CEPR)

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Journal of Population Economics

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