ABSTRACT
A rule of thumb is that youth unemployment rates tend to be approximately twice the adult rate. The most recent 2006 figures, for example, from the 2007 OECD Employment Outlook, reveal a EU15 unemployment rate in 2006 of 16.1 percent among those 15-24 years of age, compared to a rate of 7.0 percent among those 25-54 and 6.4 percent for 55-64 year-olds. The figures for the OECD as a whole were 12.5 percent; 5.4 percent and 4.4 percent respectively. Unemployment rates for 18-24 year olds in 2006 were especially high in Belgium (18.9 percent); Finland (18.8 percent); France (23.9 percent); Greece (24.5 percent); Italy (21.6 percent); Poland (29.8 percent); Slovak Republic (26.6 percent) and Sweden (21.3 percent). In the UK, for example, the proportion of total unemployment accounted for by those aged 18-24 has increased steadily over the past decade: in 1997 it was 23.9 percent of the unemployed compared with 30.8 percent in the latest available data at the time of writing for June-August 2007 (Office for National Statistics 2007). Therefore in countries with the most severe youth unemployment rates, such as France, a quarter of young people can be looking for work. It is widely accepted that this is not merely a short-run waste of human resources and a source of unhappiness among Europe’s young people. It may have long-term scarring effects on the working adults of the next generation. For many years, Europe has had a large group of young people outside education and the workplace. The persistence of the problem seems to demonstrate that standard economic policies have been insufficient. Western governments are searching for new alternatives. One is the idea that policy should attempt to create more entrepreneurship among the young. It is not obvious that even a large new supply of young entrepreneurs would solve the
jobs crisis. Nevertheless, there are a number of ‘potential’ benefits often discussed by commentators.
