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The situation of youth eployment in Spain

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Presentation by Jesús Ferreiro (University of the Basque Country) on the occasion of the 20th LMO meeting on 6 June 2011 in Madrid, Spain

Presentation by Jesús Ferreiro (University of the Basque Country) on the occasion of the 20th LMO meeting on 6 June 2011 in Madrid, Spain

Published in: News & Politics, Travel

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  • 1. The situation of youth employment in Spain
    JESÚS FERREIRO
    Department of Applied Economics V
    University of the Basque Country
    Conference “Youth Employment”
    European and Social Committee – Consejo Económico y Social
    Madrid, June 6, 2011
  • 2. MAIN FEATURES OF YOUTH EMPLOYMENT IN SPAIN
    Between 2007q3 and 2011q1 youth employment has fallen in 1,050,000 people (44.5% of total employment destruction in Spain)
    Youth unemployment rate is above 45%, 26 p.p. higher than those above 25 years old
    2
  • 3. Highyouthunemploymentrates are anstructuralfeature of Spanishlabourmarket, skyrocketing in recessions
    3
  • 4. Unemployment rate is specially high amongst the youngest workers: 65% (54.8% for workers 16-24 years; 19.1% for workers +25)
    4
  • 5. REASONS OF THE BAD PERFORMANCE OF YOUTH EMPLOYMENT IN SPAIN
    Institutionaldesign of Spanishlabourmarket:
    theexcessive use of fixed-termemploymentcontracts leads toanadjustmentviaquantities: temporarycontracts as a buffer toadjustemploymenttolabour-aggregatedemand shocks
    Employmentadjustmentisconcentrated in workerswiththelowestfiringcosts (bothpermanent and fixed-termemploymentcontracts) and/orthelowestproductivity (usuallyyoungworkers in both cases)
    Skillsmismatch
    Socio-cultural elements: bias in payrollsadjustmenttowardsworkerswithoutfamilyburdens
    5
  • 6. Temporary employment
    Temporaryemployment has anextraordinaryimportance in youngemployment
    6
  • 7. 94% of destruction of salaried employment has taken place in temporary employmentTemporary employment in young people fell in 687,000 people (42% of the destruction of total temporary employment)
    7
  • 8. The burden of the employment adjustment has concentrated in two categories of workers:- temporary workers over 25 years old- young workers, regardless their employment contract
    8
  • 9. Skills mismatch
    High schooling failure leads to a low qualification of young workers
    Percentage of people that have taken secondary education: 65% (OECD: 80%, EU-19: 82%)
    Percentage of people that have not completed secondary education and have not taken any kind of professional training: 31.2% (lowest: Basque Country: 16%; highest: Andalucia 37.5%, and Balearic Islands 40.8%)
    But at the sime time a phenomenom of over-qualification (a problem for a demand of low productivity jobs)
    Percentage of people between 25-34 years old that have taken university education: 39% (OECD: 35%, EU-19: 34%)
    9
  • 10. 10
    Unemploymentrates are higherforlow-skilledyoungworkers
  • 11. Solutions to the problem of youth (un)employment
    Recovery of economicactivity
    Reform of thelabourmarket:
    eliminatingtheexcessive use of fixed-termemploymentcontracts (reducingthenumber of modalities of fixed-termemploymentcontracts)
    elimination of thedifferences of firingscostsbetweenpermanent and fixed-termcontracts: (universalization of thepermanentcontractwith 33 days of firingcosts)
    Reduction of skillsmismatch:
    Educationsystemlevel: reduction of schoolingfailure, skillsupgrading, promotion of professional training reducingthe share of peopletakingtertiaryeducation
    Workplacelevel: promotion of on-the-job training
    Mixedlevel: promotion of part-time employment
    11

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