Youth Unemployment and Active Labor Market Policies in Europe

41 Pages Posted: 16 Nov 2015

See all articles by Marco Caliendo

Marco Caliendo

University of Potsdam; Institute for the Study of Labor (IZA)

Ricarda Schmidl

IZA Institute of Labor Economics

Abstract

Since the economic crisis in 2008, European youth unemployment rates have been persistently high at around 20% on average. The majority of European countries spends significant resources each year on active labor market programs (ALMP) with the aim of improving the integration prospects of struggling youths. Among the most common programs used are training courses, job search assistance and monitoring, subsidized employment, and public work programs. For policy makers, it is of upmost importance to know which of these programs work and which are able to achieve the intended goals – may it be the integration into the first labor market or further education. Based on a detailed assessment of the particularities of the youth labor market situation, we discuss the pros and cons of different ALMP types. We then provide a comprehensive survey of the recent evidence on the effectiveness of these ALMP for youth in Europe, highlighting factors that seem to promote or impede their effectiveness in practice. Overall, the findings with respect to employment outcomes are only partly promising. While job search assistance (with and without monitoring) results in overwhelmingly positive effects, we find more mixed effects for training and wage subsidies, whereas the effects for public work programs are clearly negative. The evidence on the impact of ALMP on furthering education participation as well as employment quality is scarce, requiring additional research and allowing only limited conclusions so far.

Keywords: youth unemployment, active labor market policies, evaluation, training, job search

JEL Classification: J13, J68, J64

Suggested Citation

Caliendo, Marco and Schmidl, Ricarda, Youth Unemployment and Active Labor Market Policies in Europe. IZA Discussion Paper No. 9488, Available at SSRN: https://ssrn.com/abstract=2690736

Marco Caliendo (Contact Author)

University of Potsdam ( email )

August-Bebel Strasse 89
Potsdam, 14482
Germany
+49(0)331/9773225 (Phone)
+49(0)331/9773210 (Fax)

HOME PAGE: http://www.uni-potsdam.de/en/empwifo/news.html

Institute for the Study of Labor (IZA) ( email )

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

Ricarda Schmidl

IZA Institute of Labor Economics ( email )

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

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