Youth unemployment in the Nordic countries


The current crisis has had a severe impact for youth on the labour market. A new research project will analyse similarities and differences in patterns and underlying factors of youth unemployment in the Nordic countries.

It is now received wisdom that the youth population has been the most seriously affected by the global financial and economic crisis. There are several obvious reasons why young people have been hit so hard. School‐leavers are often the first to encounter difficulties when the labour market deteriorates, employers shed workers and they become much more selective in hiring new staff. As those making the transition from school to work compete with more experienced workers for (few-er) jobs, they often face virtually impossible barriers when trying to get a foothold in the labour market. And with the labour market having become more selective, the risk of unemployment for recent entrants is notably higher among those lacking relevant skills or experience, who also face particular difficulties in finding a new job.

While early unemployment is known to affect the youth to a substantial degree, it is also recognised that the short‐ and long‐term consequences of early unemployment differ markedly across young individuals. Indeed, emerging evidence indicates that spells of unemployment entail the risk of creating permanent scars, especially for disadvantaged youths who are particularly ill‐prepared for today’s labour market.

A new project at SFI sets out to address relevant issues in this context. The project is a joint project for the Nordic countries: Denmark, Finland, Norway and Sweden. First we want to define major groups of youth in relation to school-to‐work transitions and initial labour market experiences, making due allowance for differences in levels of formal education. Secondly we want to create reasonable proxies for the quantification of these major groups through careful inspection of the country‐specific datasets to be used in combination with an in‐depth review of the international literature, after having developed and implemented indicators.

An OECD synthesis report on jobs for youth identifies two groups of school‐leavers facing particular difficulties in moving into jobs with more stable and promising prospects: the ‘youth‐left‐behind’ and the ‘poorly‐integrated new entrants’. The youth‐left‐behind individuals seem to share the common feature of accumulating multiple disadvantages, one of which is typically the lack of a diploma. The size of this group is usually approximated by the number of young people who are neither in employment, nor in education or training – the so‐called NEET group. Most of these NEETs experience prolonged spells of unemployment or inactivity, and they are usually not actively seeking a job. They are without doubt the most disadvantaged group of young people. The poorly‐integrated new entrants, on the other hand, often experience persistent difficulties in moving into permanent employment, even in periods of economic growth. Despite the fact that they mostly have a diploma, they shift between employment (mainly temporary jobs), unemployment, inactivity and occasionally also education (i.e. they return to continue in education). In other words, for these young people, short-duration ‘first‐jobs’ do not, for some reason, act as a stepping stone into more stable employment.

The project also aims at describing the evolution of the relative importance of these major groups of school‐leavers in the four Nordic countries under scrutiny and, equally important, comparing levels and trends across the four countries.

A third main question is to explore key labour-market-related factors behind the similarities and differences between Denmark, Finland, Norway and Sweden identified in task 2. And to examine in more depth one specific policy measure for tackling the youth unemployment problems, namely apprenticeship training and contracts.

An important difference between the Nordic countries is in the area of vocational training. While Sweden has had very little apprenticeship training, this will change shortly when apprenticeship programmes are introduced in upper secondary schools. Apprenticeship training has also only gained ground recently in Finland, where it is regulated through special agreements governing employment conditions and wages. In the other Nordic countries, in contrast, most vocational training includes elements of apprenticeship training, with apprenticeship contracts being regulated via collective agreements and apprentices receiving wages during their training. In the Nordic context, the Danish vocational training system, which is similar to the traditional apprenticeship system in Germany, has received particular attention. 

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