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Understanding massive youth unemployment during the EU sovereign debt crisis: a configurational study

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Comparative European Politics Aims and scope

Abstract

After the economic downturn of 2008, youth unemployment rose rapidly in the EU. Simultaneously, many countries were also facing increasing public deficits. In this context, the EU developed a set of policies to tackle youth unemployment and public debt. While policies to fight unemployment were underpinned by the concept of social investment, austerity was seen as the best way to reduce public debt. These different approaches to the crisis led to a growing tension between the two policy areas. This problem was particularly visible in the countries most affected by the sovereign debt crisis where youth unemployment remained very high for a long period of time. Not only were countries with high public debt and low growth unable to invest sufficiently in active labour market policies (ALMPs), but also, at the same time, austerity policies depressed the economic activity. This study uses the fsQCA methodology. Our results point to the existence of one necessary condition for high youth unemployment—low expenditure on ALMPs. The analysis of sufficient conditions points to the existence of one configuration: the countries most affected by the sovereign debt crisis and characterized by having a demand-led growth model, combined a low GDP growth with a low expenditure on ALMPs. Together, this led to high levels of youth unemployment.

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Notes

  1. Ireland was much less vulnerable to this process. In 2007, the export’s share of GDP was 79% (Hall 2018: 11).

  2. We use the average because we are mainly interested in the differences in levels of youth unemployment between countries. Because our focus is on the differences between countries and considering our cross-sectional research question, we apply fsQCA as a cross-sectional method.

  3. We decided to focus on the combination of a rise and a high level of youth unemployment to control for the fact that some countries depart from very low levels of youth unemployment. For instance, it is not same to increase the youth unemployment rate from 6.31 to 11.43%, as in Denmark, or to increase from 10.31 to 19.08%, as in Ireland. Indeed, in 2014 youth unemployment was almost two times higher in Ireland compared with Denmark. Furthermore, as is widely recognized, Southern European countries and Ireland were the countries more severely affected by the problem of youth unemployment during the crisis. Focusing only on the rate of change is in our perspective misleading.

  4. The paper uses the condition ‘ALMP in general’ instead of ‘youth oriented active labour market policies’ for two reasons. First, because no data on youth-related programmes is available (Eichhorst and Rinne 2018: 196). Second, because several ALMP are not exclusive for young people, all age groups are entitled to be enrolled in general programmes. Thus, it does not make sense to exclude those policies.

  5. Besides presenting the truth table rows, the table also reveals twelve configurations with no empirical observations (logical remainders). To overcome the problem of limited diversity (i.e. the presence of logical remainders), we draw on the strategy suggested by Ragin (2008): the ‘Standard Analysis procedure’. It consists of producing the complex solution (without assumptions about logical remainders), the most parsimonious solution (all simplifying assumptions), and the intermediate solution (only easy counterfactuals) are incorporated. Therefore, the results presented in this section refer to the intermediate solution.

  6. In this analysis, we use the R Package ‘QCA’, version 1.1-2 (Dusa and Thiem 2012).

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Acknowledgements

The authors acknowledge the comments from participants at the CES International Conference in Glasgow, Scotland, in July 2017; the comments from participants at the ECPR General Conference in Oslo, Norway, in September 2017; and language editing by Rachel Evans. Felix Hörisch acknowledges financial support from the EU-funded collaborative research project CUPESSE (Cultural Pathways to Economic Self-Sufficiency and Entrepreneurship; Grant Agreement No. 614357).

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  1. Instituto Universitário de Lisboa (ISCTE-IUL), DINÂMIA’CET-IUL, Avenida das Forças Armadas, Edifício ISCTE, Office D2.29, 1649-026, Lisbon, Portugal

    Paulo Marques

  2. Institute of Political Science, Ruprecht-Karls-Universität Heidelberg, Bergheimer Str. 58, Room 03.043, 69115, Heidelberg, Germany

    Felix Hörisch

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Marques, P., Hörisch, F. Understanding massive youth unemployment during the EU sovereign debt crisis: a configurational study. Comp Eur Polit 18, 233–255 (2020). https://doi.org/10.1057/s41295-019-00184-3

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