Employment: Commission report shows young people most affected by job losses due to economic impact of COVID-19

Today, the Commission published its Employment and Social Developments in Europe (ESDE) review 2022. Amongst other findings, the report shows young people were among the most negatively affected by job losses during the economic crisis triggered by the COVID-19 pandemic. It also shows that the recovery was slower for them than for other age groups. Possible explanations are linked to their high share of fixed-term contracts and difficulties in finding a first job after leaving school, university, or training. The new report helps identify and underpin the employment and social policies needed to address the challenges young people are facing to become economically independent, in the face of a worsening socio-economic situation due to Russia’s invasion of Ukraine.

Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “Many young people are highly educated, digitally skilled, and take an active interest in ecological issues. This can help them seize the opportunities of the recovery and of the digital and green transitions. 2022 is the European Year of Youth, because the European Union is committed to listen to young people, to support and improve their chances in life. This also means supporting young Ukrainians who have fled the war, helping them get into the EU’s education system and labour market.”

The ESDE review, based on the latest yearly data, finds that:

• The recovery from the COVID-19 pandemic was not evenly spread. The young (under 30 years of age) still face significant challenges to find jobs, or to find jobs that match their skills and experience. While youth unemployment decreased in 2021, particularly towards the end of the year, it remained 1 percentage point (pp) higher than before the crisis (in 2019). Of those in work, nearly 1 in 2 young people (45.9%) had temporary contracts, compared to 1 in 10 for all workers (10.2%).
• On average, young people are more likely to face a challenging social and financial situation. Already prior to the pandemic, the labour income of young people was more volatile than that of older workers. Households headed by young people experienced more poverty, although there are marked differences across EU countries. Young people faced difficulties in meeting their everyday expenses, such as those for bills and rent, with 61% of them worrying about finding or maintaining adequate housing in the next ten years.
• The challenges young people face depend on their level of education and on their socio-economic background. Young people with secondary education are 19pp less likely to end up in a situation where they do not work and are not in education or training than those with a lower education level. For those with tertiary education, this risk is 28pp lower. Young people from a disadvantaged background are even less likely to be in employment, education or training.
• Gender is another factor prompting inequality amongst young people. When they start their careers, young women in the EU earn on average 7.2% less than their male colleagues, a gap which widens with age. At EU level, only a small proportion of this gap – 0.5pp – results from women’s educational achievements, occupational choices, job experiences and the type of work contract they have.

Successful policies at EU level to support young people

The ESDE review provides evidence-based analysis on how to tackle the challenges young people are facing. Notably, employment and social policies should:

• enhance the integration of young people into the labour market,
• enable young people to acquire skills,
• support labour mobility, a building block for a successful and resilient career,
• reduce risks for young people such as unemployment or illness, poverty and debt,
• help young people build up their own wealth and acquire property.

Further EU initiatives to support young people are in the pipeline. In 2023, the Commission plans to review the Council Recommendation on the Quality Framework for Traineeships, notably as regards working conditions. A high-level group is currently looking into ways to improve social protection, including for young people, and is set to present its findings at the beginning of next year.

Background

The annual Employment and Social Developments in Europe (ESDE) review is the European Commission’s analytical flagship report on employment and social affairs. It provides up-to-date economic analysis as well as related policy proposals.

The EU supports young people through a series of policy programmes, including:

• The Youth Guarantee scheme, including the Youth Employment Initiative, has had a transformative effect on EU labour markets. Evidence shows that, since 2014, over 36 million young people who were once registered in Youth Guarantee schemes have then received an offer of employment, continued education, apprenticeships and/or traineeships.
• The European Social Fund Plus (ESF+) is the EU’s main instrument to invest in people, including support to youth employment.
• The new initiative ALMA (Aim, Learn, Master, Achieve) targets disadvantaged young people who are not in employment, education or training.
• The European Instrument for Temporary Support to mitigate Unemployment Risks in an Emergency (SURE), worth EUR 100 billion, was launched in April 2020 to tackle the impact of the pandemic on EU labour markets, including for young people. In 2020, it supported around 31 million people and 2.5 million firms. In 2021, it supported approximately 3 million people and 400.000 firms.
•  The Recovery and Resilience Plans of EU Member States focus on policies for the next generation as one of their six pillars, in line with the reinforced Youth Guarantee.