The Challenge of Youth Unemployment

77 Pages Posted: 15 Jul 2005

See all articles by Niall O'Higgins

Niall O'Higgins

University of Salerno - Department of Economics; ILO; IZA Institute of Labor Economics


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 comment 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 that the 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 programs 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.

Keywords: Youth unemployment, youth employment policy

JEL Classification: J24, J64

Suggested Citation

O'Higgins, Shane Niall, The Challenge of Youth Unemployment. Available at SSRN:

Shane Niall O'Higgins (Contact Author)

University of Salerno - Department of Economics ( email )

Via John Paul II, 132
Fisciano (SA), 84084

ILO ( email )

CH-1211 Geneva 22


IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

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