Since the 90s, the European Union Labour Force Survey had been conducted in the 28 Member States of the European Union plus three countries of the European Free Trade Association with the aim of reporting harmonised data on the European workforce. Each year, the survey contains data on population, employment, working time, permanency of a job, professional status, and other indicators used to understand participation in the labour market. The data is commonly broken down by age, gender, education level, economic activity and occupation where applicable. It is the main data source for the domain ’employment and unemployment’ in the database – but not for underemployment. This is the term applied primarily to young professionals and recent higher-education and vocational training graduates who cannot secure gainful employment in their chosen careers. These constitute the bulk of NEETs – for the most part young people under 30 not in education, employment or training – a vulnerable population, statistics for which do not show up in the LFS. The addition of a “NEET” indicator would help policymakers better understand the extent of the multifaceted vulnerability of NEETs in terms of their labour market participation and risks of social exclusion, poor physical and mental health, the development and availability of training (particularly distance learning training that mitigates against geographic limitations) and other issues that policy, initiatives, funding and programming might effectively address.
The lingering effects of the 2008 financial crisis, coupled with imposed austerity measures, have characterised the Southern flank of the EU as being in an emergency situation. The European Commission called unemployed youth a ‘lost generation’ — the possibility of entering into long-term unemployment with no future or prospects for a permanent occupation steadily increasing. Being unemployed and underemployed means a whole lot more than simply losing a steady pay check and one’s professional life. Full participation in adulthood for these youth, for example, is stalled for numerous reasons, from a limited supply of jobs to education systems that fail to provide adequate levels of skills or the right kind of skills demanded by the 21st Century workforce. The medical profession expresses concern over the health of unemployed and under-employed youth being at risk; the stress of losing a job or prolonged unemployment is right up there on the scale of traumatic life events such as the death of a loved one, divorce and incarceration. Long-term unemployed have greater risks for developing depression, insomnia, anxiety, feelings of helplessness, low self-esteem, and even suicide. A study at the University of Helsinki, “Does Unemployment Cause Mortality“, reports on the negative effects on health and increased risk of premature death on those becoming jobless.
While the Baltic states and many Eastern European countries have lowered their youth unemployment rates significantly and are no longer in crisis, there persists the underemployment phenomenon that leads to the infamous “brain drain” – the movement of workers from lower to higher wage regions. Most of these highly-skilled workers and educated professionals who leave their home countries for jobs abroad do not have fixed ideas about the duration of their migration in terms of a sense of permanence. Contributing to the growing crisis, several countries are facing the consequences of a shrinking working-age population, exacerbated by high emigration. Latvia, for example, has not only seen its population decline by 25% in a space of 25 years, its emigration is cited at 40,000 people a year, many of them young graduates. This is substantial for a country with less than 2 million inhabitants.
Emigration from Latvia has been higher than in any OECD country over the past decade. Approximately 12% of Latvian-born people now live abroad and many of them are unlikely to come back.
Economists estimate that about 30,000 people still leave Bulgaria each year, mostly students pursuing higher degrees abroad and graduates in computer science, engineering and medicine. Finding a decent job is one of the main factors preventing those who have left their home country for better jobs abroad from returning. Many countries, including Estonia, Romania and Poland, organize job fairs in countries where large numbers of their emigrants live and work.
The tide may be turning, however, with more people returning to their country of origin after extended periods abroad. Developments such as the IT revolution and globalisation have changed the context of the European labour market. Many see career opportunities in emerging markets at home – opportunities such as telecommuting or following a path toward successful entrepreneurship and enhanced employability are becoming viable options. There are burgeoning entrepreneurship ecosystems flourishing in several areas reeling from the unemployment and underemployment crisis that have been transformed into startup nations and are emerging as important innovation hubs. The Baltic States lead the way in attracting entrepreneurs: Estonia has simple bureaucracy and a taxation system that is one of the most liberal in the world. The Latvian public sector supports small business development through the Investment and Development Agency and is growing its local entrepreneurship ecosystem in leaps and bounds. Lithuania is one of the most innovative and tech-savvy countries in Europe and is among the top five entrepreneurial hubs with a burgeoning startup community in which over $100 million has been invested in recent years. Finland continues its long-time success in supporting nurturing environments for young entrepreneurs, hosting startup conferences and offering co-working hubs and spaces in addition to conducting important research on the Finnish entrepreneurial scenes.
Elsewhere, Romania has at least two governmental programs to support small business. Spain has public-private partnerships throughout the country that help nurture an entrepreneurship culture, targeted especially toward young people. Bulgaria has one of the lowest corporate taxes and is home to two startup accelerators. Slovenija, Slovakia and Hungary have made great strides toward supporting important startup hubs in Europe. One in every 23 people in Ireland (aged 18-64 years) is a new business owner, ranking the island nation as the sixth-highest in Europe for new business owners. This comeback from belonging to the group of countries worst hit by the Eurozone crisis is especially important for women – initiatives are helping to reduce the gender gap in entrepreneurship seen in most countries. Today, one in every 14 women in Ireland is a female entrepreneur. And last but not least, Portugal, joining Ireland, Greece and Spain as suffering most from the financial crisis, has risen to become an important center for innovation, particularly Lisbon’s entrepreneurial scene, that is booming.
WHAT THIS MEANS FOR NEETs…..
The concept of NEETs was first considered in the 1990s, but recently relates to the lingering effects of the 2008 financial crisis that hit hardest in the Southern flank of the European Union – Portugal, Spain, Italy, Greece, Cyprus and Malta. In light of the youth unemployment crisis in Europe, researchers and government officials had sought new ways of monitoring and analysing the prevalence of labour market vulnerability among
young people. A report from Eurofound, “Exploring the Diversity of NEETs“, suggests seven subgroups into which the NEET population can be disaggregated using data routinely collected for the EU Labour Force Survey. Through analysis of the data for each of these subgroups, it offers a contemporary overview of the composition of the NEET population, both at the EU28 level and in each Member State. It is hoped this information will help policymakers more precisely target interventions intended to ease young people’s engagement with the world of work and training. The report builds on the findings of Eurofound’s 2012 report, “NEETs – Young people not in employment, education or training: Characteristics, costs and policy responses in Europe”.
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The European Foundation for the Improvement of Living and Working Conditions,
(Eurofound) is a tripartite European Union Agency, whose role is to provide knowledge
in the area of social and work-related policies.
Contact us at info@EYEIncubator.com