Youth Unemployment in Spain: Causes and Solutions

5898 WordsNov 29, 201224 Pages
Working Papers Number 11/31 Youth unemployment in Spain: causes and solutions Economic Analysis Madrid, 27 September 2011 11/31 Working Papers Madrid, 27 September 2011 Youth unemployment in Spain: causes and solutions* Juan Ramón García. September 2011 Abstract Youth unemployment in Spain is a persistent phenomenon that has worsened during the current crisis. And at the levels now being registered (46.1% in 2Q11), the measures to fight it can be delayed no longer. The evidence presented in this document indicates that there are serious shortcomings in Spain's education system and labour market, which explain the country's relatively high level of youth unemployment. The former include early school leaving and the imbalance between…show more content…
In Section 2 of this Economic Observatory, we make a detailed analysis of the importance of each of these factors compared with other EU countries. In order to quantify the impact of social and labor characteristics on the conditional probability of an individual being unemployed in Spain, we have used a discrete-choice model based on microdata from Spain’s Active Population Survey (the EPA). Section 3 summarises the main results of this model, with a special focus on the importance of an individual's age and their level of education. The regression analysis confirms that the conditional probability of being unemployed decreases with an individual's age and educational attainment, particularly during a recessive cycle such as the current one. Age plays a particularly significant role during the early years of a person's working life, and this can be seen in the importance that employers give to work experience when taking their hiring decisions. The positive effect of education has also grown during the course of the current crisis, to the extent where higher secondary education or university graduates decrease a 20% the risk of being unemployed. And finally, Section 4 includes some recommendations regarding economic policy, based on the main conclusions of the analysis carried out in the previous sections. Page 3 Working Papers Madrid, 27 September
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