Written by Tomás Ruiz de la Ossa
The plight of youth unemployment has not only been considered a European Union (EU) problem but a global one (Scarpetta et al. 2010). The EU has included youth unemployment in its agenda since the early 2000s, and therefore, an analysis of the policies adopted and their evolution would be appropriate. This paper hence focuses on one of the most recent and most important interventions of the EU to address youth unemployment, namely, the Youth Guarantee (YG). Firstly, this policy brief clarifies YG’s definition, origin, and evolution since its adoption and implementation. Secondly, it briefs out a description of the primary outcomes of the policy based on the literature. Additionally, the paper aims to identify the challenges that existed prior to the approval of the Reinforced Youth Guarantee reform. This reformed programme is explained and discussed in the following section. Finally, building on the findings of the previous sections, the policy brief provides meaningful conclusions and policy recommendations.
What is the Youth Guarantee?
In order to tackle the challenge of youth unemployment, the EU devised the YG. Young people have been facing several structural challenges manifested in several problems – among others, high unemployment and low school-to-work transition rates and a high NEET (Not in Education, Employment or Training) rate – concerning their inclusion in the labour market. Quintini et al. (2007) show that these challenges are nothing new and were already known at the beginning of the 2000s. However, it was during and especially after the Great Recession (from 2011 onwards) that European economies were severely affected. This situation exacerbated the challenges faced by young people, hence making further EU response necessary (Caliendo et al. 2018). In fact, in 2012, 13.2% of the EU-28 population aged 15 to 24, i.e. 7.5 million young people, were NEETs (Ferrera et al. 2021).
Within this framework, in 2013, the Council, following a Commission proposal in 2012, approved a Recommendation for a European Youth Guarantee with the aim of addressing the existing problems. The EU’s main objective was to address the challenges faced by the young population, which was achieved by implementing structural reforms of vocational education and training (VET) systems and activation policies across the Member States (Caliendo et al. 2018). After the Commission proposal and its subsequent adoption by the Council, all Member States committed to the establishment of a YG, meaning that they had to “ensure that all young people receive a good-quality offer of a job, apprenticeship, traineeship or continued education within a period of four months of becoming unemployed or leaving formal education” (European Commission, 2013, p. 3). The European Commission considered people under the age of 25 as young people and thus, the NEETs were the main beneficiaries of the programme.
The proposal consisted of a group of recommendations to the Member States. Although, as pointed out by Ferrera et al (2021), formally the proposal was not legally binding, as they show, it – albeit indirectly – provides new possibilities to young people in case of unemployment or inactivity. The proposal had the objective to promote the drafting and publication of the so-called Youth Guarantee Implementation Plans, in which Member States establish a strategy based on the existing policies and intended future efforts to achieve their objectives. These plans were accompanied by the creation of a new EU fund in the MFF 2014-2020 to finance them, which was called Youth Employment Initiative (YEI). The YEI was agreed upon in the first half of 2013 and allocated EUR 6.4bn to support YG during the first three years (2014-2016) of its implementation (Escudero and López Moruelo, 2015). The YEI was intended for the regions where the youth unemployment rate was higher than 25% in 2012 “to boost the fiscal capacity of the most affected regions where the youth unemployment rate was much higher than the EU average in 2012” (Andor, 2016). Additionally, the European Commission established six axes around which the measures adopted in the field of YG should revolve, which were considered to be the guidelines of the scheme and precise recommendations on how to act.
After the approval of the recommendation by the Council, it was first implemented in 2014, and, as was to be expected, the range of measures diverged across countries. This happened because the YG aims not to have a uniform scheme in Europe on how to approach youth unemployment, but to reach certain objectives, namely the ones mentioned above, and therefore leaves the Member States with a certain amount of leeway in how to achieve these objectives (Tosun et al. 2019). In addition, it is important to bear in mind that national or even regional situations differ significantly within and across Member States, to the extent that an analysis of this programme should also be tailored to labour market realities. That said, an analysis of the main outcomes of the YG may be useful to see whether and to what extent these influenced the subsequent legislative modifications that took place, as will be done during the next section.
Youth Guarantee 2014-2020: outcomes
To carry out an exhaustive analysis of the YG’s outcomes would require a case-by-case study of the situation at the national or even regional level in each of the Member States. This section aims instead to give a general overview of what the YG brought with it, what the main developments were after its approval and implementation and, thus, to see what has worked and what has not.
When looking at the literature, one thing that stands out is that the main indicator used to evaluate the YG is the youth unemployment rate. However, as Andor (2016) points out, the youth unemployment rate is insufficient to evaluate the programme properly, and other indicators, such as the NEET rate, are equally important. In addition to this, there are other elements that he defines as ‘misconceptions’ that are important to be aware of when analysing this programme.
The figures below, taking into account Andor’s ideas, present the numbers for these two indicators from 2013, the start of the YG, to 2020, the final year before the introduction of legislative changes. It is necessary to clarify that, firstly, these figures are taken at the EU level and secondly, that it is not the objective to isolate the numbers and link them solely to the YG because other factors are also contributing to these indicators. Therefore caution should be exercised with the conclusions drawn from the analysis.
Figure 1. EU youth unemployment rate (15-24 years old) (left panel) and EU rate of 15–24-year-old NEETs (right panel)
Source: Own elaboration based on Eurostat (UNE_RT_A) (left panel) and (LFSI_NEET_A) (right panel)
Both the data for youth unemployment (15-24 years old) (left panel) and the total number of 15–24-year-old NEETs (right panel) importantly show positive elements. However, both indicators suffered from the Covid-19 crisis and its aftermath, as was expected and as reflected in the data for 2020 in the figures above, where an increase in the numbers is observed. The overall picture, however, is positive and one can argue that the implementation of the YG has led to positive developments. However, as Andor (2016) points out, economic recovery also provides a possible justification for the positive figures. It is thus essential to follow the actual implementation of the schemes as well as assessing statistics. In this vein, Pesquera Alonso et al. (2021) have recently analysed the YG programme to define it as a success or a failure, with some of their findings worth mentioning.
Firstly, in line with Andor’s (2016) statements, Pesquera Alonso et al. (2021) conclude that the YG is a completely new strategy and Member States therefore still need time to adapt their national, regional, and local policies to it. Secondly, the authors observe a problem in relation to the lack of confidence by member states’ citizens in the policy used and its potential effects on member state economies, as well as the lack of policy evaluations. Thirdly, Pesquera Alonso et al. (2021) also found some bias in the collection of data at the national level due to the high number of unreported cases which may lead to drawing wrong conclusions and, therefore, policymakers being guided wrongly in their decisions. Finally, the authors conclude that time will determine whether the YG is a success or a failure, even though some elements have already affirmed the possibility of improvement. Contrary to this, other authors, such as Ferrera et al. (2021), have highlighted the importance of the YG because of the services and opportunities it offers to NEET youth. It provides enough options for their integration in the labour market as well as functioning as an (indirect) awareness-raising campaign, locating NEET people in the employment policies spotlight.
Latest legislative developments
Recently, the European Commission renewed its commitment to youth employment in the Multiannual Financial Framework (MFF) 2021-27, which is already in place. In July 2020, the Commission presented a new Communication (‘Supporting Youth Employment: A Bridge to Work for the Next Generation’ (European Commission, 2020)), accompanied by a proposal for a Council Recommendation, aimed at reinforcing the YG. In October 2020, the Council approved the Recommendation supporting the Reinforced Youth Guarantee. The Reinforced Youth Guarantee differs from the original YG in several ways.
Firstly, the age range covered by the YG was extended to 25–29-year-olds. Although at first sight, this may be considered a minor change, it is relevant since, as the Commission points out (p.3, 2020), young people aged 25-29 face, in many cases, realities of unemployment and difficulties in accessing the labour market and situations comparable to those faced by younger people. Secondly, the European Commission sets out a clear pathway, consisting mainly of guidelines on how to carry out the mapping exercise, the outreach activities, the preparation of the services to be properly provided, as well as the offer-related provisions, and some elements it considers “crosscutting”, which refer to the use of partnership so that the number of offers on the market is expanded, data collection and monitoring exercises are carried out correctly, and funding is used in the right way to achieve the objectives of the programme.
A greater level of detail can be found in the Council Recommendation. The novelties introduced contribute to addressing most of the challenges identified in the previous section above. This is because policy evaluation, data collection, and monitoring exercises are explicitly encouraged in the proposal. In addition, as Ferrera et al (2021) highlight, the proposal gives significant attention to vulnerable groups, which is another positive aspect of the Reinforced Youth Guarantee.
After the presentation of a proposal that can certainly be considered convincing, the next and probably the most difficult step is its implementation. Following the same line of reasoning, it is too early to make an assessment. However, one can hope that the impetus provided by the approval of the Reinforced Youth Guarantee will be matched by policies at the national level. So far, very few countries have submitted amendments or modifications to their 2014 YG implementation plans, and it is therefore difficult to know what their priorities will be for the coming years. Additionally, without aiming to assess whether the data collection, monitoring, and evaluation systems suggested by the Commission are in place, there are no available websites for reference beyond the national level. This scarcity challenges the work of researchers, which is an essential element in the decision-making process, as discussed throughout this article. However, it is encouraging to see that youth employment policies are more present than ever and are expected to remain so in the future.
Conclusions and policy recommendations
This article has discussed the main features of the YG since its inception in 2013. It has identified its main elements, as well as some relevant comments by experts. Moreover, it has provided a brief overview of the main outcomes of the YG until 2020 – the year in which the proposal for a Reinforced Youth Guarantee was presented. These outcomes have given rise to some criticism as well as positive aspects that have been highlighted. From a general EU perspective, the YG was a very positive recommendation, although some aspects such as those related to data collection, monitoring and evaluation, needed to be adjusted. Furthermore, the article has focused on the changes in the 2020 proposal for the reinforcement of the YG and the analysis of these changes, as well as some preliminary comments on it. The proposal is sufficiently complete to suggest a paradigm change in the national spheres concerning youth employment policies. However, a key aspect of this will be its correct implementation by the Member States. In light of the above, two main recommendations are to be made:
- Firstly, the creation of a unified and easily accessible data collection and reporting system in all Member States and the obligation to carry out policy evaluations not only at the national but also at the regional level, taking into account the local nature of employment policies.
- Secondly, keeping youth employment policies consistently on national agendas, and consulting on the implementation of one of the most relevant policies, the Youth Guarantee, with due consultation of stakeholders in each of the acts adopted.