Youth Employment in Europe: Recovery Without Convergence

Youth employment remains one of the most informative indicators of labour market performance in Europe. It reflects not only the strength of economic activity, but also the capacity of education systems, labour market institutions and public policies to support young people in their transition from school to work. Despite the post-pandemic recovery, recent data reveal that youth labour market outcomes remain deeply uneven across Europe, pointing to persistent structural divides rather than temporary cyclical effects.

Graph 1. Unemployment rate among young people (15–29) by country

Source: Author’s own elaboration from EUROSTAT.

The unemployment rate among young people aged 15 to 29 stands at 14.3% on average in the EU-27, according to the latest available data. However, this aggregate figure masks striking cross-country differences. At one end of the distribution, countries such as Iceland (5.6%), Czechia (6.3%) and Germany (9.0%) display remarkably low youth unemployment rates. At the other extreme, Greece (27.6%), Sweden (26.1%), Finland (22.8%) and Spain (20.5%) face persistently high levels of youth joblessness.

The dispersion illustrated in Graph 1 strongly suggests that youth unemployment in Europe is primarily structural in nature. As argued by Bell and Blanchflower (2011), young workers are disproportionately affected by labour market rigidities and economic shocks, particularly in countries characterised by segmented labour markets and weak school-to-work transition mechanisms. Economies combining vocational training systems with strong employer involvement tend to shield young people more effectively from unemployment.

Unemployment rates, however, provide only a partial view of youth labour market integration. Employment rates offer a broader and more informative perspective, capturing both labour demand and the capacity of young people to secure and retain jobs.

Graph 2. Employment rate among young people (15–29) by country

Source: Author’s own elaboration from EUROSTAT.

Employment data for individuals aged 15 to 29 reveal equally pronounced disparities. The EU-27 employment rate stands at 52.9%, meaning that nearly half of young Europeans in this age group are not employed. Once again, cross-country variation is substantial. While Iceland (81.6%), Malta (73.3%), the Netherlands (67.4%) and Denmark (67.1%) record very high youth employment rates, countries such as Türkiye (31.6%), North Macedonia (38.7%) and Greece (40.2%) remain well below the European average.

The contrast between unemployment and employment rates highlights the importance of labour market participation and job quality. Countries with low youth unemployment also tend to exhibit high employment rates, suggesting smoother transitions into work and more stable early career paths. In contrast, countries with low employment rates often combine high unemployment with inactivity, increasing the risk of long-term labour market detachment.

A key factor behind these patterns is labour market duality. As documented by the OECD (2023), young workers are overrepresented in temporary, part-time and low-wage jobs, which often fail to provide stable career progression. In many European countries, temporary employment has ceased to function as a stepping stone and has instead become a persistent state, reinforcing intergenerational inequality and delaying key life decisions such as household formation or investment in human capital.

From a policy perspective, the evidence points to several clear lessons. First, education and training systems matter: countries with strong vocational tracks and apprenticeship schemes consistently achieve better youth employment outcomes. Second, labour market institutions shape incentives: excessive protection for insiders combined with rigid hiring rules discourages firms from offering stable contracts to young workers. Third, well-designed active labour market policies can improve matching efficiency and reduce long-term scarring effects.

In an ageing continent, the underutilisation of young talent entails significant economic and fiscal costs. Youth employment should therefore remain a central policy priority, not only as a social concern but as a key determinant of long-term productivity growth, fiscal sustainability and social cohesion. The current recovery shows that progress is possible, but without structural reforms, Europe risks consolidating a model of recovery without convergence.

References

• Bell, D. N., & Blanchflower, D. G. (2011). Young people and the Great Recession. Oxford Review of Economic Policy, 27(2), 241-267.

• Broecke, S. (2023). Artificial intelligence and the labour market: Introduction. OECD Employment Outlook, 93.