Youth Labor Market Integration: The Role of Shocks and Institutions

Abstract

Sooner or later, all young people have to go through a phase of transition from the educational system to paid work. However, the ease and speed of making a successful transition to a decent job depend crucially on the institutional setting in the respective country or region on the one hand and on the economic circumstances on the other hand. Under adverse institutional and economic conditions phases of transitions can last long and imply persistent scars on later employment experiences, and in fact, problematic institutions can aggravate the negative impact of recessions. Our contribution discusses the role of crisis periods as well as policy measures that influence youth labor markets both in European and developing countries. We highlight the role of labor market institutions in general, including vocational training systems, and the specific role crisis response measures can play in mitigating crisis effects that affect young people more than prime-aged workers due to their more vulnerable situation.