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Youth Employment in Europe: Institutions and Social Capital Explain Better than Mainstream Economics

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  • Bruno Contini

Abstract

Why did employment growth - high in the last decade– take place at the expense of young workers in the countries of Central and Southern Europe ? This is the question addressed in this paper. Youth unemployment has approached or exceeded 20% despite a variety of factors, common to most EU countries. According to neo-classical economics all would be expected to exert a positive impact on its evolution: population ageing and the demographic decline, low labor cost of young workers, flexibility of working arrangements, higher educational attainment, low unionization of young workers, early retirement practices of workers 50+. But neither seems to provide a convincing explanation. Historically based institutions and political tradition, cultural values, social capital – factors that go beyond the standard explanation of economic theory – provide a more satisfying interpretation.

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Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 102.

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Date of creation: 2010
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Handle: RePEc:cca:wplabo:102

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  1. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-45, January.
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Cited by:
  1. Rodica PERCIUN & Mariana BALAN, 2013. "Youth Labour Market: Characteristics And Specific Issues," Internal Auditing and Risk Management, Athenaeum University of Bucharest, Athenaeum University of Bucharest, vol. 2(30), pages 21-30, June.

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