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Spain’s youth unemployment lessons

Few countries have suffered the scourge of high youth unemployment as much as Spain has. There, the unemployment rate for under 25-year-olds exceeded 50% in 2012, nearly three times the OECD average. However, the crisis has not been the only cause of this; in fact, high rates of youth unemployment are not a recent phenomenon in Spain.

This working paper, “Youth Labour Market Performance in Spain and its Determinants: A Micro-level Perspective”, tries to untangle the issues and suggest a way forward.

For a start, the authors show that while long-term unemployment among youth has risen sharply across the OECD area during the crisis, unemployment and NEET (not in employment, education or training) rates in Spain largely reflect much higher worker turnover, rather than, say, a higher prevalence of long-term unemployment.

Another point is the high incidence of temporary employment in Spain, which is found to be the main determinant of both high worker turnover and the volatility of youth employment. Meanwhile, the long expansion period before the crisis, and the construction boom in particular, played a role in discouraging participation in education as young people were drawn by good wages, even for unskilled jobs. With the crisis, these trends have gone into reverse.

Indeed, education could play a role in helping to address youth unemployment in Spain, where the transition from education to a first stable job has customarily taken longer than in other OECD countries. Since the onset of the crisis, participation in education has risen in Spain, but NEET rates and school drop-out rates among teenagers also remain relatively high. Moreover, vocational education degrees are much less widespread. Given the sharp fall in the employment rates of unskilled youths in the last few years, developing dual work-training programmes could markedly improve the ability of these young people to find work, the authors suggest.

Dolado, J. J. et al. (2013), “Youth Labour Market Performance in Spain and its Determinants: A Micro- Level Perspective”, OECD Economics Department Working Papers, No 1039, OECD Publishing. 

See also www.oecd.org/eco/economicsdepartmentworkingpapers.htm

©OECD Observer No 294, T1 2013