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help youth weather the economic storm, both by providing additional opportunities for education and training, and by helping young workers gain valuable work experience through employment subsidies and increased places in apprenticeship-type training. But at this point, it is not yet possible to assess how successful these measures have been in limiting the scarring effects that can accompany them for life. So how should governments respond? Ensuring a credible medium-term strategy of fiscal consolidation is essential for unwinding large increases in public debt, rebuilding confidence and ultimately renewing the basis for sustained growth. Yet, while necessary, this will not be sufficient to bring down long-term unemployment. We need to support
Unemployment encountered early in young people’s working lives can jeopardise their career prospects over the long term a new wave of job creation. With public resources limited, the OECD rightly suggests that the focus should be on cost-effective measures. This will include well-designed hiring subsidies and training programmes tied closely to local labour market needs and focused on the most vulnerable groups. Improving the labour market situation of youth requires a two-pronged approach. First, action needs to be directed at tackling the rise in youth joblessness that took place during the crisis. Policies involving job-search assistance, hiring subsidies and remedial assistance should focus on the most disadvantaged youth, including those most at risk of exclusion. In a number of countries, there is also a need to expand opportunities for “study and work” programmes,
such as apprenticeships and other dual vocational education and training programmes. Second, policies must be put in place to give all youth a better start in the labour market. This means ensuring youth do not leave school before acquiring adequate foundation skills, both cognitive and non-cognitive. As underlined in the OECD’s in-depth country reviews on youth employment, such skills will be a critical issue looking further ahead, particularly the need to achieve a better match between the skills youth acquire at school and those required by the labour market. This requires improving early childhood education and development and making sure that dropping out of school is not an option. Education and trainings systems also need to be made more responsive to the skill needs of employers. In many cases, governments need to reassess and remove potential barriers to youth employment. These may include excessive labour costs for hiring unskilled youth, as well as restrictive hiring and firing rules that relegate young job seekers to dead-end temporary jobs. Youths, as well as employers, need a degree of labour market flexibility to ensure that younger job seekers receive a fighting chance in terms of hiring and moving onto career tracks. The immediate future of the world economy is still uncertain at best, and realistic short-term solutions to the challenges of unemployment remain elusive. But doing nothing is not an option as the economic and social costs of rising long-term unemployment and the exclusion of many young job seekers from the labour market would be simply far too high. Recommended link and reference www.oecd.org/employment OECD (2011), Divided We Stand: Why Inequality Keeps Rising, OECD Publishing.
OECD Yearbook 2012 © OECD 2012
2012 OECD Yearbook