Can welfare and labour market regimes explain cross‐country differences in the unemployment of young people?

Date01 December 2017
AuthorDennis TAMESBERGER
DOIhttp://doi.org/10.1111/ilr.12040
Published date01 December 2017
International Labour Review, Vol. 156 (2017), No. 3–4
Copyright © The author 2017
Journal compilation © International Labour Organization 2017
Can welfare and labour market regimes
explain cross-country differences
in the unemployment of young people?
Dennis TAMESBERGER*
Abstract. No single institution can reduce (long-term) youth unemployment.
Welfare and labour market institutions function as “bundles”, through multiple
inter-institutional synergies. Based on a focused literature review for theory and
on cluster analysis for empirics, the author identies ve such regimes across the
EU-27 and estimates their effects on the youth unemployment ratio and on long-
term youth unemployment. The most helpful institutional arrangement for young
people in the labour market would be a combination of strong dual apprentice-
ship embedded in a corporatist labour market regime with high levels of social
security, active labour market policy, and spending on education and childcare.
The nancial and economic crisis that began in 2007 produced painful
outcomes across labour markets and society in general. Mass un-
employment – previously thought to have been a thing of the past – is now-
adays widespread in many European countries. A number of studies point to
youth unemployment in particular as having become a major problem (Bell
and Blanchower, 2011; Boeri, 2011; Cahuc et al., 2013; Choudhry, Marelli
and Signorelli, 2012; O’Higgins, 2012; Scarpetta, Sonnet and Manfredi, 2010).
In a more recent article, O’Higgins (2015) refers to the fact that the increase
in long-term unemployment has been much higher among the young than it
has been among adults.
However, youth unemployment ratios and long-term youth unemploy-
ment exhibit remarkable cross-country variation (gure 1).
1
Such variation is
* Department for Economic, Welfare and Social Policy, Chamber of Labour, Linz, Austria,
email: Tamesberger.d@akooe.at. The author is indebted to Johann Bacher. He also wishes to thank
Christina Koblbauer, Heinz Leitgöb, Franz Mohr and two anonymous referees for their helpful
comments on earlier versions of the paper. The opinions expressed in this article are the author’s
alone and do not necessarily reect those of the Chamber of Labour.
Responsibility for opinions expressed in signed articles rests solely with their authors, and
publication does not constitute an endorsement by the ILO.
1 Dietrich (2013), Howell (2005) and Tamesberger (2015) refer to problems in cross-country
comparability when only the youth unemployment rate is used. This is why the youth unemploy-
ment ratio is used in this article.
International Labour Review444
20
30
40
Figure 1. Youth unemployment ratio, long-term youth unemployment and GDP change (2007–13) in the EU-27
50
60
Source: Author’s calculations based on Eurostat (2015).
Notes: The youth unemployment ratio is the number of unemployed aged 15–24 as a percentage of the total population of the same age. Long-term youth unemployment
(12 months or more) is a percentage of the total number of unemployed aged 15–24. GDP change is the change in real gross domestic product per capita expressed as a percen
-
tage over the period 2007–13.
Youth long-term unemployment 2013
–10
0
10
–30
–20
70
Youth unemployment ratio 2013 GDP change 2007–2013
FI SE DK AT NL LT LU DE MT FR UK LV BE PL CZ CY HU EE PT ES SI RO IE BG EL IT SK

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