Youth unemployment in old Europe: the polar cases of France and Germany

Abstract

France and Germany are two polar cases in the European debate about rising youth unemployment. Similar to what can be observed in Southern European countries, a "lost generation" may arise in France. In stark contrast, youth unemployment has been on continuous decline in Germany for many years, hardly affected by the Great Recession. This paper analyzes the diametrically opposed developments in the two countries to derive policy lessons. As the fundamental differences in youth unemployment primarily result from structural differences in labor policy and in the (vocational) education system, short-term oriented policies do not address the core of the problems. Ultimately, the youth unemployment disease in France and in other European countries has to be cured with structural reforms.JEL codes: J24; J38; J68

Promoting Youth Employment in Europe: Evidence-Based Policy Lessons

“…Labor costs can be a substantial barrier in the transition from school to work -in particular for low-qualified young job seekers as highlighted by Cahuc et al (2013). A number of studies document the detrimental employment effects for young people when a minimum wage is set too high (e.g., Abowd et al, 2000;Kramarz and Philippon, 2001;Neumark and Wascher, 2008).…”

The labor market in Germany, 2000–2016

“…Figure 2 shows that, although following a similar pattern, youth unemployment rates have been constantly lower than adult unemployment rates during the entire period from 2000 to 2016. This is quite exceptional in the European context [5].…”

Happiness as a guide to labor market policy

“…At the same time, France experienced such a strong rise in youth unemployment that experts now believe that a generation may be "lost"; while in Germany, youth unemployment continued to decline and was hardly affected by the crisis. These differences coincide with different structures of labor market policy and in the transition from school to work, which for many youngsters in Germany is eased by the dual vocational education system [10].…”