Unemployed youth has been called “a lost generation”: not only because of productivity loss but also because of the long-term direct and indirect impact unemployment has on young people and their families. Unemployment has been said to affect earnings for about 20 years. Because they aren't able to build up skills or experience during their first years in the workforce, unemployed youth see a decrease in lifetime earnings when compared to those who had steady work or those who were unemployed as an adult. A lower salary can persist for 20 years following the unemployed period before the individual begins earning competitively to their peers. Widespread youth unemployment also leads to a socially excluded generation at great risk for poverty. For example, Spain saw an 18% increase in income inequality.
The lost generation effect impacts also their families. Youth in many countries now live with their parents into theirlate twenties. This contributes to what is called the”full-nest syndrome”. In 2008, 46% of 18- to 34-year-old in the European Union lived with at least one parent; in most countries the stay-at-homes were more likely to be unemployed than those who had moved out. In families, it is common that when one person becomes unemployed, other members of the family begin looking for or securing employment. This is called the added worker effect. This can sometimes take the form of employment in the informal sector when necessary. Alongside the shift in youth living situations, the impact of returning to live with parents as well as difficulty finding a fulfilling job lead to mental health risks. Being unemployed for a long period of time in youth have been correlated to decreased happiness, job satisfaction and other mental health issues. Unemployed youth also report more isolation from their community. Youth who are neither working nor studying do not have the opportunity to learn and improve their skills. They are progressively marginalized from the labour market and in turn can develop an anti-social behaviour.
Political unrest and increased public spending: The rise of political unrest and anti-social behaviour in the world has been recently attributed to youth unemployment
A lack of innovation: The economic crisis has led to a global decrease in competitiveness. “There is a risk of loss of talent and skills since a great amount of university graduates are unable to find a job and to put their knowledge and capabilities into producing innovation and contributing to economic growth”
Training not supplemented with loans and not targeted appropriately: This strategy has not yielded the desired results because the training is often not accompanied by soft loans, which graduating trainees could use as start-up capital in order to facilitate their quick integration into the labor market. Targeting has also presented a challenge. Often, all categories of unemployed youth are lumped together as if they are homogeneous (in terms of education, skill, capabilities, etc.)
Weak management, complex structures and inadequate funding hinder success: When you run a multiplicity of programs at the same time under a weak management structure and practice, with inadequate funding, and with several layers of authorities that sometimes bicker among themselves, there is the risk of not being focused and effective.
Entrepreneurship: an answer to youth unemployment? When taking into consideration the need to foster competitiveness through innovation and creativity, recent studies have advocated for entrepreneurship as a viable a solution to youth unemployment. With the right structure and facilitated administrative processes, young people could create enterprises as means to find and create new jobs. According to the OECD, Small and Medium Enterprises are today’s main employers with 33% of jobs created over the last ten years. It shows that big companies no longer represent the main sources of employment and that there is a necessity to prepare young people for an entrepreneurship culture
Assistance to youth in the transition to the world of work: A number of studies have shown that young people are not sufficiently advised on work related opportunities, necessary skills and career pathways. Before they leave education, it appears critical that they have access to this information to be better prepared for what to expect and what is expected of them. Good quality career guidance along with labour market prospects should help young people make better career choices
Teach 21st century skills: The education system plays a central role in the debate about the youth labor market crisis. What has become evident is that there need to be major changes in what we teach and in the way we teach. One prominent approach taken by various educators is to shift teaching from knowledge-centered teaching to skills-centered teaching.
(s:Wikipaedia & Tunji Akande, Professor of Agricultural Economics)