24/3/2010 - Young people in OECD countries have been hit hard by the economic crisis. In Greece, the already high youth unemployment rate could rise further in the coming months, according to a new OECD report.
The government should focus its efforts on reforms that will deliver results quickly without increased spending, such as improving job-search training and limiting employment subsidies to the long term jobless.
Jobs for Youth: Greece says that youth unemployment could reach 28% by the end of 2010, up from 25.3% in September 2009. Even before the crisis, youth unemployment in Greece was among the highest of OECD countries, at 20.6% in 2008 compared with an OECD average of 13.2%.
Young Greeks are twice as likely to suffer long term unemployment as their peers in most OECD countries and less likely to be in work. The youth employment rate was 20 percentage points below the OECD average in 2008 (Table A).
“Young people are particularly vulnerable in this jobs crisis,” said OECD Secretary-General Angel Gurría. “Every effort must be made to keep young Greeks in touch with the job market to avoid the long term scarring of a generation.”
Reforms announced in October 2009 to overhaul work-experience programmes and cut social security contributions for small businesses that hire young people are steps in the right direction, the report says. But re-employment assistance is too centred on costly work subsidies, and relatively high labour costs and tough dismissal regulations for white-collar workers discourage employers from hiring inexperienced youth, thereby making it difficult for young people to get a foothold in the job market.
To address these issues, the OECD recommends that Greece:
- Require young people to participate in job-search training in the early stages of unemployment and reserve more costly programmes for those who fail to find work after a period of monitored job search;
- Limit employment subsidies to jobs with training and target them on long-term unemployed youth, unemployed early school leavers and young people who have spent more than six months neither in employment nor in education;
- Move towards a single contract of work with moderate protection against dismissal and lengthen the trial period in permanent contracts;
- Help firms that hire workers at or around the minimum wage in jobs that offer training by reducing their social security contribution rates;
- Create a single vocational route in upper secondary education combining classroom based and work based learning;
- Expand apprenticeship training to include more professions and encourage employers, particularly small businesses, to take on more apprentices.
Jobs for Youth: Greece is the last in a series of OECD reports on youth employment policies that now covers sixteen countries.
For comment on the report, journalists are invited to contact Stefano Scarpetta, Head of the OECD’s Employment Analysis and Policy Division (+33 1 4524 1988 or email@example.com) or Glenda Quintini, economist in the same division (+33 1 4524 9194 or firstname.lastname@example.org).
For more details about the project, visit www.oecd.org/employment/youth
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