Economic Crisis and the Long Shadow of European Youth Unemployment
One of the most visible and distressing consequences of the 2008-09 financial crisis was the marked increase in unemployment across Europe, reaching heights that had not been seen for decades. Young people were particularly hard hit and one EU-funded project has been closely examining the direct consequences of the spike in youth unemployment, a societal challenge that is still being grappled with today.
It has been nearly 10 years since the beginning of the worst economic crisis since the Great Depression. The crisis still casts a long shadow over Europe, and as researchers from the EXCEPT (Social Exclusion of Youth in Europe: Cumulative Disadvantage, Coping Strategies, Effective Policies and Transfer) project discovered, that shadow lies particularly prominently over the continent’s young people. The researchers also examined in great detail the direct consequences of youth unemployment.
Unemployment: Immediate consequences
Based on an analysis of quantitative data from both the EU-28 and Ukraine, the project team found that the immediate consequences of unemployment amongst young people were a general lowering of wellbeing, health and housing autonomy. Whilst the consequences of fixed-term employment were less severe, they were still notable by fostering a worse economic situation compared to youth in permanent employment. Whilst other factors could help cushion the blow of youth unemployment, such as young people returning to their parents’ home, EXCEPT found that in the long run, experiencing unemployment and/or involuntary job loss at a young age negatively affects an individual’s wellbeing and health for up to 35 years.
Negative effects are considerably worse for men than for women, especially if job loss occurs at the beginning of their careers. “The health consequences of unemployment, particularly for men, extend beyond unemployed youth and also affect their partners,” comments project coordinator Professor Marge Unt. “Men’s unemployment deteriorates their female partners’ health, particularly in conservative countries where there is still the societal expectation of the man being the primary breadwinner.”
Youth experiences in nine countries
EXCEPT has undertaken 386 interviews with youths from nine European countries representing different social welfare regimes, providing an in-depth understanding of how disadvantaged youths perceive their social situation, finding wide divergences across countries. “In Bulgaria, Estonia, Poland and Ukraine, young people complained less about the lack of jobs but more about ‘toxic’ work and ‘harsh’ working conditions,” outlines Prof. Unt. “Whilst in Italy and Greece, there was a much stronger feeling of despair over young people’s career prospects in their home country.” Among unemployed youth, the highest increase in pessimism about being able to make ends meet after the crisis is in Cyprus, Greece and Spain.
However, the findings were not all negative – in Sweden and the UK, where youth unemployment levels are falling, young people reported being more optimistic and hoped for career opportunities that best reflected their qualifications and overall ambitions. Whilst in most EU countries young people have been more at risk of material deprivation after the crisis, this was not the case in ‘new’ Member States such as Slovakia, Lithuania, Latvia, Poland and Bulgaria, where youth exposure to material deprivation has declined continuously. Overall, unemployment had far less of an impact in countries which saw more youth in higher education, had a less stratified tertiary education system and had a higher generosity of passive labour market policies.
A better pensions deal for youth
EXCEPT’s findings offer many insights for better policymaking with regards to the youth experience, particularly in an area that may not naturally be associated with young people: pensions. “One of the most innovative parts of our project was to analyse the consequences of labour market vulnerability for old age,” says Prof. Unt. “Youth today know that they need to save more for retirement but many are simply unable to.”
The project argues that as public pensions are still the main source of retired income, universal coverage of public pensions should be reinforced, with periods of unemployment being at least partially considered as contribution years in the calculation of future pension benefits. “Notably the UK’s recent policy initiative to make occupational pensions mandatory at the beginning of a new contract could also be considered in other countries,” says Prof. Unt.
Moving beyond EXCEPT
The project has been heavily involved in wider policymaking discussions with national and EU stakeholders. These have included several major publications, as well as attending conferences and meetings that have allowed the project team to make strong connections with high-level officials from relevant national ministries and EU institutions.
Prof. Unt and her team will continue to promote the project’s results and she will be contributing to the work of other relevant EU-funded projects. But having the final word, Prof. Unt argues: “It’s urgent to realise that in order to prevent future youth poverty, changes are needed now at national and at EU level. The threat of limited old age incomes concerns not only vulnerable youth, but also our mobile youth.”
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