Exceptions are South East Asia and the Pacific as well as South Asia, where youth-to-
There is substantial heterogeneity within regions. For example, while this ratio is
ILO (2013).
5
This heterogeneity of youth-to-adult unemployment ratios within and
across regions demonstrates the crucial role that institutional settings and public
policies play in influencing youth labour market dynamics. Hence, reducing
youth unemployment in the long run often requires a range of structural reforms
in areas such as labour market regulations and institutions as well as in the
education system.
8
This paper focuses on public policies, mainly activation strategies, which
are implemented within a given institutional and economic setting.
9
Such
policies can also enhance youth labour market integration, at least in the short
run (World Bank, 2010). For example, if young people face a lack of labour
demand, wage or training subsidies may be appropriate interventions. Or, if
there are constraints in the job search and matching process, improving
employment services appears to be a useful strategy.
These considerations may explain the popularity of active labour market
policies (ALMP) that are specifically designed for young people. The
importance of such measures is thus significant. For example, the young ALMP
participants in EU-15 countries amounted to approximately 14 per cent of the
youth labour force in 2007 (Caliendo et al., 2011). Average expenditure in the
EU-15 is quite significant.
10
In addition, ALMPs that are specifically designed for youth are frequently
subject to reforms, i.e. discretionary modification of programmes. Figure 3
displays the number of reforms in the EU-28 over time and relates these reforms
to the trends in youth unemployment rate. First, there were in total 77 reforms
between 2000 and 2010. Second, these reforms concentrated in two time
periods: one period was between the early- to mid-2000s and another one during
and after the Great Recession. When considering the development of youth
unemployment in this context, it appears that policy makers reacted in both
periods to a trend of rising youth unemployment by implementing reforms.
8
See, for example, World Bank (2007) for a proposal of such structural reforms.
9
See Section 2 below for a detailed discussion and overview on youth activation
policies.
10
Between 1999 and 2002, the average annual expenditure was about €1.3 billion in EU-
15 countries for ALMPs specifically targeted at unemployed youth (OECD, 2004).