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This White Paper assesses Europe’s serious challenge in terms of how best to integrate young people into the labor market. Youth unemployment is a truly serious problem in the EU, standing twice as high as overall unemployment. Even where countries are able to reduce overall youth unemployment, regional disparities remain, and the integration of second-generation migrant youth is as important as “green card” migration. We find that there is no trade-off between employment opportunities for older workers and those of new youth entrants to the labor market. Arguments for and against minimum wages are a distraction. Europe needs to generate very significant numbers of new jobs if we are truly to smooth and accelerate young people’s transition into the world of work. If not, European youth will continue to find it hard to overcome their chief disadvantage: the lack of work experience. GDP growth has a significantly more powerful effect on youth unemployment than for total unemployment. While net job creation is the single most important remedy, education and training system design can also be a strong driver of successful integration. National systems that generate low levels of educational attainment fail to provide sufficient flows of skilled personnel for knowledge-based societies. Countries that rely exclusively on higher levels of general education risk not providing sufficient high-skill jobs for their university graduates. Systems that generate high proportions of apprentices provide advantages only for those able successfully to complete an apprenticeship.
Transferring successful elements between systems can improve labor market performance and deliver more successful transitions for young people. With the end of “job for life” expectations from employers, young people must boost their own employability and acquire transferable skills as their part of the “flexicurity” bargain in Europe. At the individual level, better skills and knowledge are the best guarantee for successful transitions into work and during an (increasingly) long working life. By contrast, unemployment in one’s youth can permanently damage employability.
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