Scholarly article on topic 'Youth Insertion on Labor Market'

Youth Insertion on Labor Market Academic research paper on "Economics and business"

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Procedia Economics and Finance
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{"youth unemployment rate" / "activity rate" / NEET}

Abstract of research paper on Economics and business, author of scientific article — Eliza Mihaela Spatarelu

Abstract Recent studies about Romanian youth labor market outlines the importance of preoccupation for understanding process of transition from learning to working. Despite increasing general emphasis on youth employment, unemployment among youth is very high. For this study will be analyzed several indicators like youth unemployment rate, activity rate and NEET. In appearance, Romania has not serious matter with youth unemployment rate, but a careful study changes the data of the problem. The high rate of the NEET needs more responsibility.

Academic research paper on topic "Youth Insertion on Labor Market"

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ScienceDirect Procedia

Economics and Finance

Procedia Economics and Finance 32 (2015) 1020 - 1026

www.elsevier.com/locate/procedia

Emerging Markets Queries in Finance and Business

Youth Insertion on Labor Market

Eliza Mihaela Spatarelua*

aInstitute of National Economy, NIER, Romanian Academy, 13 th September Street, District 5, 050736, Bucharest, Romania

Abstract

Recent studies about Romanian youth labor market outlines the importance of preoccupation for understanding process of transition from learning to working. Despite increasing general emphasis on youth employment, unemployment among youth is very high. For this study will be analyzed several indicators like youth unemployment rate, activity rate and NEET. In appearance, Romania has not serious matter with youth unemployment rate, but a careful study changes the data of the problem. The high rate of the NEET needs more responsibility.

© 2015 The Authors.Publishedby ElsevierB.V. Thisisanopen access articleunder theCCBY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).

Selection and peer-review under responsibilityof Asociatia Grupul RomandeCercetariin FinanteCorporatiste Keywords: youth unemployment rate; activity rate; NEET

1. Introduction

The young people represent the power that society must use with the best consideration for our future construction, for our safety and for our security. They represent that part of population that is bearing in it the spark of renewal, change and becoming. This spark may be the beginning of a large decline or may also be a step for evolution by setting in motion the huge unknown mechanisms that are transcending all social evolution laws and leading to progress, development and evolution. The transition from learning to working is one of the most important subjects connected with youth issues. The process of finding a job is difficult. This is the most important step for integration in community. The youth needs to learn how to find a job, how to prepare for labor market and how to keep their jobs. Their success in this domain is a prove of quality of their education. A good education is leading to a good job and to a good place in labor market. Recent studies about

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* Corresponding author. Tel.: +40-744-804-979. E-mail address: elizaspatarelu@gmail.com.

2212-5671 © 2015 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).

Selection and peer-review under responsibility of Asociatia Grupul Roman de Cercetari in Finante Corporatiste doi: 10.1016/S2212-5671(15)01563-4

Romanian youth labor market outlines the importance of preoccupation for understanding process of transition from learning to working. Despite increasing general emphasis on youth employment, unemployment among youth is very high. It is necessary to analyze this subject with more attention both in national and in international context. The implications of this problem are very deeply connected with many aspects from economy to education, finance, welfare and safety or security.

2. Literature review

There are more issues related with unemployment among youth. These can include the transition from education to work, informal employment, external mobility, brain drain, segmentation, employment precariousness, income disadvantages (Vasile & Vasile, 2011), characterization of the labor force market youths in the development regions in Romania, education level and genders of the NEET groups under the impact of the economic-financial crisis (Balan, 2014).

Other subject in relation with these is the role of education and how it influences labor market performance (Dimian, 2011). The level of education is positively linked not only to the employment rate, but also to the income level (Diaconu, 2014). The high-level of education contributes to increasing the quality of life. But the education is dependent on the youth's living condition (Aceleanu, 2011). More, social adaptation in childhood, cognitive evolution and economic and financial status has important influence on future adaptation on labor market (Silles, 2010). The lack of correlation between curriculum and labor market is another area of interest, closely related to the topic under discussion. It is overloaded and don't develop creativity, initiative, logical thinking and competence for teamwork (Vasile, Prelipcean & Sandru, 2010). Besides this, the students are attracted for zone which don't offer more places on labor market. In this case, is necessary a new specialization. Because of this, investments in education are still profitable for educational institutions (Varga, 2006).

Mobility on international labor market is a major right for European citizens. In spite of this, our country needs to capitalize with more attention the national potential. Permanent loss of human capital in special young people tend to affect national economy, GDP level, demand for goods and service, the demographic structure of population and emphasizes structural deficits of labor force, depending on age and profession (Vasile & Vasile, 2011). Employment depending on gender is another research topic. National and European statistics show that NEET rate is higher for female than male. The high level of NEET (not in employment, education or training) may have severe consequences both at individual and community level, for long and short term. These consequences may be financial or social like isolation, poverty and physic or psychic degradation (Balan, 2014). Concern for education and integration of young people in the society is one of the most important elements that must be taken into consideration at this moment. As a result, we'll have higher level of youth employment in our country and they will be able to provide better service for community.

3. Methodology

For this research will be analyzed several indicators such us the youth unemployment rate, the activity rate and NEET. All date will be taken from Eurostat. The youth unemployment rate is calculated for people aged 15 to 24. This indicator takes into account only the active population that includes both employed person and unemployed person. Someone is considered unemployed if they meet tree important conditions. First, they are not employed. Secondly, they are ready to start on the next weeks. Finally, they have been looking for a job in recent weeks.

The activity rate is the second indicator used in this paper. It is calculated for people aged 15 to 64. They must be economically active. This category includes both the employed and the unemployed people.

Employed people are considered those that work during de reference week. This work may be at least one hour, may be in family profit. The person that is in period of sick or annual leave is considered employed. This indicator is calculated for people aged 15-24 too.

The last indicator is NEET, which is mean young people not in employment, education and training. This refers to people aged 15 to 24. They must meet tree conditions. First, they should not be employed. Secondly, they should not be in education four weeks before. Finally, they should not in training four weeks before. This indicator includes both active and inactive population.

4. Data analysis

One of the most important indicators that need to be analyzed in discussion about youth insertion on labor market is youth unemployment rate. The rate of youth unemployment for Romania is 23,7 of active population (Table. 1).

Table. 1 Youth unemployment rate - % of active population

Countries

2013 Youth Unemployment rate

Belgium Bulgaria

28.4 18,9 13,0 7,9

26.8 58,3

24.8 50,0 40,0

38.9 23,2 21,9 16,8

13.0 11,0 9,2

38.1 23,7

21.6 33,7

Czech Republic Denmark

Germany

Estonia

Ireland

Greece

Spain France

Croatia

Italy Cyprus Latvia Lithuania

Luxembourg

Hungary

Netherlands Austria

Poland

Portugal Romania

Slovenia

Slovakia

Finland 19,9

Sweden 23,6

United Kingdom 20,5

Iceland 10,7

Norway 9,1

Turkey 17,1

Source of data: EUROSTAT

Comparative with other European country, Romania is just a little above European average (23, 3%). It is possible to think that is a good score, but if it is analyzed the trend of the last years, it can be seen that the trend is ascending, as can be followed in Table. 2. It can be noted that the rate decreased only a few percent in 2003, 2005 and 2012. The lowest level of unemployment was recorded in 2008, at 17, 5%. Referring to other European countries in first figure, we observe that it can be made three groups: (1) countries with high percentage of unemployment like Greece, Spain, Italy; (2) countries with middle percentage of unemployment like Hungary, Bulgaria, Poland and France and (3) country with low percentage of unemployment like Germany, Austria and Netherlands. Romania is part of the middle group. With regard to evolution trend of unemployment rate, the situation of the other European countries may differ compared to Romania. Therefore, Germany has a descendant trend with 15, 5% in 2005 and 8% in 2013. Italy has an ascendant trend with 15, 5% in 2005 and 55% in 2013. Bulgaria which has a similar situation Romania, maintains the same trend, with 12% in 2008 and 28% in 2013.

Table. 2 Youth unemployment rate - % of active population in Romania

Year Romanian Youth Unemployment rate

2004 20,5

2005 19,1

2006 20,2

2007 19,3

2008 17,6

2009 20,0

2010 22,1

2011 23,9

2012 22,6

2013 23,7

Source of data: EUROSTAT

The situation needs to be analyzing in-depth. Maybe our country has a good score in appearance, but this percentage is referred to active population. And, Romania hasn't a good activity rate. Analyzing data from Table. 3, we observe that it can be made five groups. The first group contains countries that have very low-level of active population such us: Hungary, Italy and Poland. The second group contains countries that have low-level: Bulgaria, Ireland and Greece. The third group contains countries with medium level: Slovenia,

France and Portugal. The fourth group has countries with high-level of active population: Finland, Spain and United Kingdom. The last group has countries with very high-level of active population: Sweden, Germany and Netherlands. Romania is part of the first group.

Table. 3 Activity rate, 2014

Countries Activity rate (15-64 years) Activity rate (15-24 years)

Belgium 67,5 31,0

Bulgaria 68.4 29.6

Czech Republic 72.9 31.5

Denmark 78.1 61.7

Germany 77.5 50.9

Estonia 75.1 39.8

Ireland 69.8 39.7

Greece 67.5 28.4

Spain 74.3 37.8

France 71.2 37.5

Croatia 63.7 29.9

Italy 63.5 27.2

Cyprus 73.6 38.4

Latvia 74.0 39.4

Lithuania 72.4 31.5

Luxembourg 69.9 25.9

Hungary 65.1 27.2

Malta 65.0 52.8

Netherlands 79.7 70.0

Austria 76.1 59.3

Poland 67.0 33.3

Portugal 73.0 35.0

Romania 64.6 30.8

Slovenia 70.5 33.8

Slovakia 69.9 30.8

Finland 75.2 51.8

Sweden 81.1 54.5

United Kingdom 76.6 58.7

With regard to data from second column, it can be seen a large variation between countries. The active population rate for 15-24 years down by half. This fact is normal for a population that learning is the principal activity. But, there are countries that have high-level for youth activity rate: United Kingdom (78.7), Austria (59.3), Netherlands (70.0), Denmark (61,7). Romania is among countries with very low-level of youth activity rate (30.8) with Slovakia, Slovenia, Poland, Italy, Croatia, Bulgaria, and Belgium.

Because youth unemployment rate is referred on active population and Romanian youth activity rate is very low, it is necessary to find a new indicator that can integrate the inactive youth. The reality may not be well captured in these data. Youth inactive population rate have a segment of population that are not occupied

with learning. This part needs to be added with youth unemployment rate from youth active population rate. Since the last information change the dates of the problems, there is a need for a different type of indicator that can include both unemployment rate and active population. NEET can do this because it refers to entire population not only to active population like the unemployment rate.

NEET is mean young people not in employment, education and training. This refers to people aged 15 to 24. They must meet tree conditions. First, they should not be employed. Secondly, they should not be in education four weeks before. Finally, they should not in training four weeks before. Table. 3 contains data for NEET.

Table. 4. Young people not in employment, education or training (% of total population) 2013

Countries (NEE

Belgium 12.7

Bulgaria 21.6

Czech Republic 9.1

Denmark 6.0

Germany 6.3

Estonia 11.3

Ireland 16.1

Greece 20.4

Spain 18.6

France 11.2

Croatia 19.6

Italy 22.2

Cyprus 18.7

Latvia 13.0

Lithuania 11.1

Luxembourg 5.0

Hungary 15.4

Malta 10.0

Netherlands 5.1

Austria 7.1

Poland 12.2

Portugal 14.1

Romania 17.2

Slovenia 9.2

Slovakia 13.7

Finland 9.3

Sweden 7.5

United Kingdom 13.3

(NEET 15-24 years) 2013

Source of data: EUROSTAT

According to this information, Romania is located in group of countries with high NEET along with Italy, Bulgaria, Greece and Spain. The countries with middle level of NEET are Portugal, Poland, Belgium and United Kingdom. The countries with low-level of NEET are Denmark, Germany, Netherlands and Luxembourg.

Comparing indicators, youth unemployment rate, youth activity rate and NEET for Romania, it can be seen that rate of unemployment youth from both activity and inactivity population is 7.3. If the NEET is 17.2 percent of total population (15-24 years) it follows that around 10 percent of inactive population is not in training or in education. The level of the NEET is very important because it points to a large category of population with same characteristics and with same disadvantages. This population is largely destined for social exclusion.

5. Conclusion

In appearance, Romania has a medium rate of youth unemployment, which leads us to believe that shouldn't be worried. In this light, countries like Spain, Italy or Greece, who have very high rate of youth unemployment rate need to be more worried than us. But the truth is that our concern should be the same, for all of us which have high rate of NEET. This is more than a problem for affected person. This problem is related to society and the economy too. To fight to this is a great step in order to introduce young people into the labor market. The concern for this problem is important not just for young people, but also for everyone's future (Eurofound, 2012). The economic costs are important, but also important is civic participation of youth. The benefits of concept like NEET need to be outlined. The society should be more careful to youth problems. The community needs to know their vulnerabilities.

A limit of this study is the concentration on data provided only on official information from Eurostat. The future research needs to bring and to analyze data from other various sources, which includes qualitative data and direct investigation of the population. In order to increase the youth chance to integrate on labor market, qualified institutions need to elaborate new strategies and make more steps for their fulfillment. Their programs for youth professional counseling should give more responsibility for integration in active life in society. Alongside with increase number of jobs, it is necessary to encourage the youth population to engage in volunteering projects. This will help them gain experience, courage and important skills for active life. This will develop their citizenship and will shape the next basic citizens of Europe.

References

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Responsibility in Education and Science, 4(3), 105-115. Eurofound, 2012. NEETs - Young people not in employment, education or training: Characteristics, costs and policy responses in Europe,

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