The challenge of youth unemployment

This article was prepared as a contribution to the ILO's Action Programme on Youth Unemployment. It presents an overview of the youth unemployment problem and youth employment policy principally from a European perspective, although it is hoped that much of the comment and analysis is relevant to afar broader range of countries. In the first section, which considers the nature and causes of youth unemployment, it is shown that its basic cause is aggregate demand rather than high youth wages or the size of the youth cohort, and suggests that a successful strategy for dealing with the problem must take this into account. In the second section, dealing principally with the examples of Germany and the United Kingdom, a number of factors are identified which influence the effectiveness of youth employment policy. In particular, it is found that precise targeting of programmes and the involvement of employers' and workers' organizations, as well as government, in the design and implementation of policy are both important determinants of an effective policy. A third section attempts to set the analysis in a more general context.