Challenges Facing European Labour Markets: Is a Skill Upgrade the Appropriate Instrument?

The global financial and economic crisis of 2008-09 hit young people around the world very hard. Youth unemployment increased significantly in most OECD countries, even in those where the increases in overall unemployment were contained; during the sluggish recovery which began in 2010, many young people have been struggling to find a job and are now at high risk of prolonged periods of joblessness and exclusion. Investing in youth to give them a fair chance in the world of work is more than ever a key policy priority in all countries. High youth unemployment and inactivity are not new, even if they have been exacerbated by the recent crisis, and many OECD countries have devised strategies to improve the matching of the skills youth acquire at school and those needed in the labour market in order to render the school to work transition easier. Many of them have reinforced these strategies during the crisis to address the growing concerns about the risk of the so-called “lost generation”. But have these strategies and renewed efforts been sufficient to give youth a fair chance in the world of work? The paper revisits this issue drawing from recent in-depth OECD reviews of youth employment policies. It is organised as follows: first, the key facts on how young people have been faring in the labour market prior to and during the crisis are presented; the subsequent section analyses the main policies to improve educational outcomes and upgrade youth skills; and the last section focuses on broader policies dealing with education, labour market and social protection.