The Challenge of Youth Unemployment

This paper presents an overview of the youth unemployment problem and youth employment policy principally from the European perspective although it is hoped that much of the coment and analysis is relevant for a much broader range of countries. Its intention is to raise issues rather than provide a blueprint for policy. In the first part, which considers the nature and caiuses of youth unemployment, it is shown thatbthe basic cause of youth unemployment is insufficient aggregate demand rather than high youth wages or the size of the youth cohort, and suggests that a successful strategy for dealing with this problem must take this into account. In the second section, dealing principally with the examples of the UK and Germany, a number of factors are identified which influence the effectiveness of youth employment policy. IN particular, it is found that precise targetting of programmes and the involvement of employers' and workers' organisations as well as government in the design and implementation of policy are both important determinants of an effective policy.