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Symposium 2012

Solution for Tackling Youth Unemployment

The Challenge

Among the world's unemployed, young people have been particularly hard hit. Youth unemployment rates are significantly higher than adult unemployment rates in both developed and developing countries. ...

Among the world's unemployed, young people have been particularly hard hit. Youth unemployment rates are significantly higher than adult unemployment rates in both developed and developing countries. Global protest movements of young people are a manifestation of their lack of job prospects.

Replace the system of temporary and permanent employment contracts with a single type of open-ended contracts with gradually increasing employment protection.

In many countries, labor market regulations create a highly segmented system with low severance pay for the termination of temporary contracts and a steep increase in the severance costs for permanent contracts. Many employers therefore avoid hiring people on permanents contracts due to the high costs they would incur in recessionary times. They prefer to rotate workers in a sequence of fixed-term contracts rather than to upgrade them to permanent contracts.

The higher turnover rate becomes detrimental for productivity and temporary jobs become dead-end jobs rather than “stepping stones.” Replacing most temporary contracts with an open-ended contract, in which the level of employment protection increases gradually over time, would eliminate the incentive for this wasteful rotation.

To foster the labor mobility of young workers, the system could incorporate the creation of a worker-specific fund. Under this so-called Austrian model, the firms anticipate a small fraction of any redundancy payments by making annual payments into the fund.

    Related Solutions

    Solution
    Symposium 2012

    Governments should guarantee the young either a job or access to training.

    Governments should guarantee the young either a job or access to training.

    Governments should guarantee the young either a job or access to training.

    Polity
    Solution
    Symposium 2012

    Use extensive surveys of firms to determine skills needs and then steer the young into appropriate education and training programs.

    Use extensive surveys of firms to determine skills needs and then steer the young into appropriate education and training programs.

    Use extensive surveys of firms to determine skills needs and then steer the young into appropriate education and training programs.

    Polity, Business
    Solution
    Symposium 2012

    Promote vocational training and foster uptake.

    Promote vocational training and foster uptake.

    Promote vocational training and foster uptake.

    Polity, Business
    Solution
    Symposium 2012

    Adopt a dual approach to training: address unemployment among educated young people with compulsory on-the-job training and placement schemes and among uneducated young people with vocational training.

    Adopt a dual approach to training: address unemployment among educated young people with compulsory on-the-job training and placement schemes and among uneducated young people with vocational training.

    Adopt a dual approach to training: address unemployment among educated young people with compulsory on-the-job training and placement schemes and among uneducated young people with vocational training.

    Polity
    Solution
    Symposium 2012

    Create Internet platforms that support remote work and "trade in tasks."

    Create Internet platforms that support remote work and "trade in tasks."

    Create Internet platforms that support remote work and "trade in tasks."

    Polity, Academia, Business, Civil Society