Why does Italy have high youth unemployment

Youth unemployment : Why so many southern Europeans are without a job

It's been a little over a year since Angela Merkel invited 17 EU heads of state and government to the Chancellery for a summit on youth unemployment. The problem could not be solved "overnight", she said in July 2013. At the time, around 5.6 million young people under the age of 25 in the EU were without a job, now there are half a million fewer. However, the issue of youth unemployment continues to preoccupy politics and business. This is because measures to combat them are only getting off to a slow start in many countries. For example the “Youth Guarantee” developed by the EU countries, the aim of which is to offer all young people under 25 years of age a job, apprenticeship, internship or training course within four months of becoming unemployed.

On Tuesday, the Robert Bosch Foundation presented a study by the Center for European Economic Research (ZEW) on some of the countries whose youth are hardest hit by the crisis. In the report, ZEW analyzes the situation in Italy, Spain and Portugal and names measures to reduce youth unemployment in these countries. According to the authors, the most important causes of youth unemployment: deficits in the education and training system, country-specific regulations, for example in terms of protection against dismissal, and ineffective labor market policy instruments.

Lack of practical skills

One reason for the massive increase in young unemployed people in Spain was the high proportion of young people in temporary employment. Many companies had already hired young people with temporary contracts before the crisis. In addition, many low-skilled young people were employed in Spain in the construction sector, which saw massive job losses after the housing bubble burst. According to the study, the Spanish education system, which is strongly university-oriented, is also problematic. Vocational training takes place mainly in school, only a quarter of the training time is spent in the company. The result is a relatively high proportion of overqualified young people, while employers also complain about a lack of practical skills.

Against this background, the Mannheim-based ZEW advises further development of the training system and a binding framework in order to increase the quality and content of the training. In contrast to Spain, Italy recorded only low economic growth and high unemployment rates in the years before the financial and debt crisis. According to the researchers, the reason for this is also the conflict-prone relationships between trade unions and employers, which made it difficult to reach agreements. In addition, the quality of the education system is rather low. Since university graduates in Italy do not have much better employment opportunities than secondary school leavers, there is little incentive for higher qualifications.

ZEW relies on the market

This is why investments in the education system are particularly important, according to the country analysis. The study also criticizes the fact that the labor market in Italy is still very divided. As in Spain and Portugal, there is strong protection against dismissal, while the regulations on time limits are rather loose. This combination makes it difficult for young people to find a permanent job.

In Portugal, the tough austerity measures that have been taken to reduce national debt since the beginning of the economic crisis are weighing on development. Increasing economic output therefore plays a key role in combating youth unemployment. In addition, it is important to develop the vocational training system together with the companies in order to better qualify Portuguese young people. In addition, the study advises changing the country's wage structure, such as reducing “bargaining collectively agreed wages” and adjusting minimum wages to age. This gives employers an incentive to hire young people.

With the study, the Robert Bosch Foundation wants to contribute to the discussion about youth unemployment, said managing director Ingrid Hamm on Tuesday at the presentation in Berlin. When it comes to recommendations, such as the demand for more in-house training, the ZEW is in some cases heavily oriented towards the perspective of the company. ZEW President Clemens Fuest commented critically on the youth guarantee planned by the EU countries. “Experience has shown that job creation measures and state training positions are not strong bridges in the labor market.” ZEW, on the other hand, relies on the market.

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