IDEAS home Printed from https://ideas.repec.org/a/spr/izalpo/v5y2016i1p1-3010.1186-s40173-016-0057-x.html
   My bibliography  Save this article

Youth unemployment and active labor market policies in Europe

Author

Listed:
  • Marco Caliendo

    ()

  • Ricarda Schmidl

    ()

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. JEL codes: J13, J68, J64 Copyright Caliendo and Schmidl. 2016

Suggested Citation

  • Marco Caliendo & Ricarda Schmidl, 2016. "Youth unemployment and active labor market policies in Europe," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-30, December.
  • Handle: RePEc:spr:izalpo:v:5:y:2016:i:1:p:1-30:10.1186/s40173-016-0057-x
    DOI: 10.1186/s40173-016-0057-x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1186/s40173-016-0057-x
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bruno Crépon & Esther Duflo & Marc Gurgand & Roland Rathelot & Philippe Zamora, 2013. "Do Labor Market Policies have Displacement Effects? Evidence from a Clustered Randomized Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 128(2), pages 531-580.
    2. Per Engström & Patrik Hesselius & Bertil Holmlund, 2012. "Vacancy Referrals, Job Search, and the Duration of Unemployment: A Randomized Experiment," LABOUR, CEIS, vol. 26(4), pages 419-435, December.
    3. Lechner, Michael & Wunsch, Conny, 2013. "Sensitivity of matching-based program evaluations to the availability of control variables," Labour Economics, Elsevier, vol. 21(C), pages 111-121.
    4. Bart Cockx & Matteo Picchio, 2013. "Scarring effects of remaining unemployed for long-term unemployed school-leavers," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(4), pages 951-980, October.
    5. David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages 452-477, November.
    6. Marco Caliendo & Reinhard Hujer & Stephan Thomsen, 2008. "Identifying effect heterogeneity to improve the efficiency of job creation schemes in Germany," Applied Economics, Taylor & Francis Journals, vol. 40(9), pages 1101-1122.
    7. Doiron, Denise & Gørgens, Tue, 2008. "State dependence in youth labor market experiences, and the evaluation of policy interventions," Journal of Econometrics, Elsevier, vol. 145(1-2), pages 81-97, July.
    8. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2009. "Does the public employment service affect search effort and outcomes?," European Economic Review, Elsevier, vol. 53(7), pages 846-869, October.
    9. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
    10. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, Elsevier.
    11. Gregg, Paul & Tominey, Emma, 2005. "The wage scar from male youth unemployment," Labour Economics, Elsevier, vol. 12(4), pages 487-509, August.
    12. Giuseppe Bertola & Francine Blau & Lawrence Kahn, 2007. "Labor market institutions and demographic employment patterns," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 833-867, October.
    13. Patrick Arni & Rafael Lalive & Jan C. Van Ours, 2013. "How Effective Are Unemployment Benefit Sanctions? Looking Beyond Unemployment Exit," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(7), pages 1153-1178, November.
    14. Bart, COCKX & Stéphane, ROBIN & Christian, GOEBEL, 2006. "Income support policies for part-time workers : a stepping-stone to regular jobs ? An application to young long-terme unemployed women in Belgium," Discussion Papers (ECON - Département des Sciences Economiques) 2006050, Université catholique de Louvain, Département des Sciences Economiques.
    15. Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
    16. Brodaty, Thomas & Crépon, Bruno & Fougère, Denis, 2000. "Using Matching Estimators to Evaluate Alternative Youth Employment Programs: Evidence from France, 1986-1988," CEPR Discussion Papers 2604, C.E.P.R. Discussion Papers.
    17. Petrongolo, Barbara, 2009. "The long-term effects of job search requirements: Evidence from the UK JSA reform," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1234-1253, December.
    18. Lu, Ching-Chih & Chollete, Loran, 2010. "Bankruptcy and the size effect," UiS Working Papers in Economics and Finance 2010/6, University of Stavanger.
    19. Kluve, Jochen, 2010. "The effectiveness of European active labor market programs," Labour Economics, Elsevier, vol. 17(6), pages 904-918, December.
    20. van Ours, J.C., 2002. "Comment on 'Can training and employment subsidies combat European unemployment?'," Other publications TiSEM 4c7e1e9a-b698-42a2-badb-f, Tilburg University, School of Economics and Management.
    21. Daly, M. & Delaney, L., 2013. "The scarring effect of unemployment throughout adulthood on psychological distress at age 50: Estimates controlling for early adulthood distress and childhood psychological factors," Social Science & Medicine, Elsevier, vol. 80(C), pages 19-23.
    22. Graversen, Brian Krogh & van Ours, Jan C., 2008. "How to help unemployed find jobs quickly: Experimental evidence from a mandatory activation program," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2020-2035, October.
    23. Inés Hardoy, 2005. "Impact of Multiple Labour Market Programmes on Multiple Outcomes: The Case of Norwegian Youth Programmes," LABOUR, CEIS, vol. 19(3), pages 425-467, September.
    24. Dorsett, Richard, 2006. "The new deal for young people: effect on the labour market status of young men," Labour Economics, Elsevier, vol. 13(3), pages 405-422, June.
    25. Paul Ryan, 2001. "The School-to-Work Transition: A Cross-National Perspective: Corrigendum," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 767-767, September.
    26. Bart Cockx & Christian Goebel & Stéphane Robin, 2013. "Can income support for part-time workers serve as a stepping-stone to regular jobs? An application to young long-term unemployed women," Empirical Economics, Springer, vol. 44(1), pages 189-229, February.
    27. Denis Fougère & Francis Kramarz & Julien Pouget, 2009. "Youth Unemployment and Crime in France," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 909-938, September.
    28. Micklewright, John & Nagy, Gyula, 2010. "The effect of monitoring unemployment insurance recipients on unemployment duration: Evidence from a field experiment," Labour Economics, Elsevier, vol. 17(1), pages 180-187, January.
    29. Centeno, Luis & Centeno, Mário & Novo, Álvaro A., 2009. "Evaluating job-search programs for old and young individuals: Heterogeneous impact on unemployment duration," Labour Economics, Elsevier, vol. 16(1), pages 12-25, January.
    30. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 439-479.
    31. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, June.
    32. Carling, Kenneth & Larsson, Laura, 2005. "Does early intervention help the unemployed youth?," Labour Economics, Elsevier, vol. 12(3), pages 301-319, June.
    33. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
    34. Hohmeyer, Katrin & Wolff, Joachim, 2007. "A fistful of Euros: Does One-Euro-Job participation lead means-tested benefit recipients into regular jobs and out of unemployment benefit II receipt?," IAB Discussion Paper 200732, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    35. Rainer Winkelmann, 1996. "Employment Prospects and Skill Acquisition of Apprenticeship-Trained Workers in Germany," ILR Review, Cornell University, ILR School, vol. 49(4), pages 658-672, July.
    36. Jensen, Peter & Rosholm, Michael & Svarer, Michael, 2003. "The response of youth unemployment to benefits, incentives, and sanctions," European Journal of Political Economy, Elsevier, vol. 19(2), pages 301-316, June.
    37. Misbah Tanveer Choudhry & Enrico Marelli & Marcello Signorelli, 2012. "Youth unemployment rate and impact of financial crises," International Journal of Manpower, Emerald Group Publishing, vol. 33(1), pages 76-95, March.
    38. Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages 585-606, November.
    39. ., 2010. "Cultural Effects on the Korean Economy," Chapters,in: The Korean Economy in Transition, chapter 2 Edward Elgar Publishing.
    40. Goldsmith, Arthur H. & Veum, Jonathan R. & Darity, William Jr., 1997. "Unemployment, joblessness, psychological well-being and self-esteem: Theory and evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 26(2), pages 133-158.
    41. Berg, Gerard J. van den & Uhlendorff, Arne & Wolff, Joachim, 2015. "Under heavy pressure : intense monitoring and accumulation of sanctions for young welfare recipients in Germany," IAB Discussion Paper 201534, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    42. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
    43. Saniter, Nils & Siedler, Thomas, 2014. "The Effects of Occupational Knowledge: Job Information Centers, Educational Choices, and Labor Market Outcomes," IZA Discussion Papers 8100, Institute for the Study of Labor (IZA).
    44. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Youth labour markets in Spain: Education, training, and crowding-out," European Economic Review, Elsevier, vol. 44(4-6), pages 943-956, May.
    45. Wolff, Joachim & Jozwiak, Eva, 2007. "Does short-term training activate means-tested unemployment benefit recipients in Germany?," IAB Discussion Paper 200729, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    46. Brian Bell & Richard Blundell & John Reenen, 1999. "Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 339-360, August.
    47. John T. Addison & Paulino Teixeira, 2003. "The Economics of Employment Protection," Journal of Labor Research, Transaction Publishers, vol. 24(1), pages 85-129, January.
    48. Werner Eichhorst & Núria Rodríguez-Planas & Ricarda Schmidl & Klaus F. Zimmermann, 2015. "A Road Map to Vocational Education and Training in Industrialized Countries," ILR Review, Cornell University, ILR School, vol. 68(2), pages 314-337, March.
    49. Monica Costa Dias & Hidehiko Ichimura & Gerard J. van den Berg, 2013. "Treatment Evaluation With Selective Participation and Ineligibles," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 108(502), pages 441-455, June.
    50. Sandra Cavaco & Denis Fougère & Julien Pouget, 2004. "Conventions de conversion et retour à l'emploi," Economie & Prévision, La Documentation Française, vol. 0(3), pages 93-111.
    51. Sarah Bernhard & Thomas Kruppe, 2012. "Effectiveness of Further Vocational Training in Germany – Empirical Findings for Persons Receiving Means-tested Unemployment Benefits," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(4), pages 501-526.
    52. Hartig, Martina & Jozwiak, Eva & Wolff, Joachim, 2008. "Trainingsmaßnahmen: Für welche unter 25-jährigen Arbeitslosengeld-II-Empfänger erhöhen sie die Beschäftigungschancen?," IAB-Forschungsbericht 200806, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    53. Jochen Kluve & Christoph M. Schmidt, 2002. "Can training and employment subsidies combat European unemployment?," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 409-448, October.
    54. Núria Rodríguez-Planas, 2012. "Longer-Term Impacts of Mentoring, Educational Services, and Learning Incentives: Evidence from a Randomized Trial in the United States," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 121-139, October.
    55. Maibom, Jonas & Rosholm, Michael & Svarer, Michael, 2014. "Can Active Labour Market Policies Combat Youth Unemployment?," IZA Discussion Papers 7912, Institute for the Study of Labor (IZA).
    56. Paul Ryan, 2001. "The School-to-Work Transition: A Cross-National Perspective," Journal of Economic Literature, American Economic Association, vol. 39(1), pages 34-92, March.
    57. Bernhard, Sarah & Wolff, Joachim, 2008. "Contracting out placement services in Germany : is assignment to private providers effective for needy job-seekers?," IAB Discussion Paper 200805, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    58. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages 626-653, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ghoshray, Atanu & Ordóñez, Javier & Sala, Hector, 2016. "Euro, crisis and unemployment: Youth patterns, youth policies?," Economic Modelling, Elsevier, vol. 58(C), pages 442-453.
    2. Werner Eichhorst & Ulf Rinne, 2017. "The European Youth Guarantee: A Preliminary Assessment and Broader Conceptual Implications," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 18(2), pages 34-38, July.
    3. repec:spr:italej:v:3:y:2017:i:1:d:10.1007_s40797-016-0045-8 is not listed on IDEAS
    4. Floro Ernesto Caroleo & Elvira Ciociano & Sergio Destefanis, 2017. "The role of the education systems and the labour market institutions in enhancing youth employment: a cross-country analysis," Discussion Papers 1_2017, CRISEI, University of Naples "Parthenope", Italy.
    5. Marco Mariani & Alessandra Mattei & Lorenzo Storchi & Daniele Vignoli, 2017. "The ambiguous effects of public assistance to youth and female start-ups between job creation and entrepreneurship enhancement," Econometrics Working Papers Archive 2017_04, Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti".
    6. Iva Tomic, 2016. "What drives youth unemployment in Europe?," Working Papers 1601, The Institute of Economics, Zagreb.
    7. repec:taf:irapec:v:31:y:2017:i:2:p:173-190 is not listed on IDEAS

    More about this item

    Keywords

    Youth unemployment; Active labor market policies; Evaluation; Training; Job search;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:izalpo:v:5:y:2016:i:1:p:1-30:10.1186/s40173-016-0057-x. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.