Blog Post

Youth unemployment in the Mediterranean region and its long-term implications

Youth unemployment in the Mediterranean region has consequences for the whole of Europe. Tackling youth unemployment in the region must continue to be a high policy priority.

By: , and Date: April 13, 2016 Topic: European Macroeconomics & Governance

This blog was produced within the framework of the Bruegel- OCP PC joint conference.

It includes all countries with coastlines on the Mediterranean Sea: Albania, Algeria, Bosnia-Herzegovina, Croatia, Cyprus, Egypt, France, Greece, Israel, Italy, Lebanon, Libya, Malta, Morocco, Monaco, Montenegro, Northern Cyprus, Palestine, Slovenia, Spain, Syria, Turkey and Tunisia.

Data for Monaco, Northern Cyprus and Palestine is often not available. Germany and the European Union have been included for comparison purposes.

Europe’s Mediterranean neighbourhood has become a focal point of attention due to the refugee crisis. With over a million people arriving in Europe in the course of 2015, the question of how to address the growing immigration pressures has become a central political issue.

Countries around the Mediterranean are also under scrutiny due to mounting security concerns in Syria, Libya and elsewhere. A range of economic literature links conflicts to demographic conditions and poor economic opportunities for young people. Countries undergoing “demographic transition”, resulting in very youthful populations, are especially vulnerable to conflict, in particular when economic opportunities are scarce (Homer-Dixon 1999; Kelley & Schmidt 2001; Urdal 2004; Kahl 2006).

Youth unemployment is an urgent issue in many countries across the Mediterranean region, where 25.4 million people are unemployed, of whom 7-8 million are aged 15-24. (World Bank 2014; United Nations World Population Prospects 2015).  490 million people live in the region, of which 192 million are part of the 8 EU member states.

The proportion of young people not in education, employment or training has increased since the financial crisis, and in many countries youth unemployment rates are higher than unemployment in the older working age population. The figures available may even underrepresent the true level of unemployment due to non-participation in the labour market.

The growth in youth unemployment is particularly worrying. It can have long-lasting effects on productivity and potential growth, often excluding young people from the labour market for an extended period of time, lowering their productivity and affecting their job prospects for life (Arulampalam 2001; Gregg and Tominey 2005).

The demographic structures of Mediterranean countries vary widely, as can be seen in Figure 1. Median ages in non-EU Mediterranean countries are generally lower than in EU Mediterranean countries. The two most populous non-EU Mediterranean countries, Turkey and Egypt, both have median ages well below any EU country.

Around the Mediterranean, the median age has increased substantially over the past two decades, but with significant differences across countries.

Over the past decade, growth per capita was higher for the non-EU Mediterranean countries. Figure 3 shows the average annual GDP per capita growth of the last ten years, based on purchasing power parities.

The low growth figures in the EU reflect the deep scars left by the euro-area crisis. Growth in non-EU countries was relatively robust in comparison, suggesting some income convergence, although from a low per-capita level.

Unemployment rates in the Mediterranean rose more sharply for EU member states than for non-EU Mediterranean countries over the past 10 years, again reflecting the economic crisis. Unemployment rates at least doubled between 2005 and 2014 for Cyprus, Greece and Spain, with the highest increase in Cyprus where the unemployment rate nearly tripled from 2005 to 2014. Unemployment rates also increased for four non-EU Mediterranean countries (Albania, Bosnia and Herzegovina, Egypt and Syria).

Youth unemployment rates, defined as the share of the labour force aged 15-24 without work but available for and seeking employment, increased much more than overall unemployment rates in most Mediterranean countries from 2005-2014.

Youth unemployment rates in Croatia, Cyprus, Greece, Italy, Slovenia and Spain rose more sharply than the EU average. Youth unemployment rates in the non-EU Mediterranean countries have also increased over the past ten years, including in those with already high youth unemployment rates such as Bosnia and Herzegovina, Egypt, Libya, Montenegro, Syria and Tunisia.

Labour force participation rates have remained similar to levels ten years ago although participation dropped in some EU countries including Croatia, France and Slovenia as well as in the non-EU countries Albania, Morocco, Montenegro and Syria. Israel’s labour force participation rate changed most, with an increase of almost 8 percentage points compared to a decade ago.

In a number of the Mediterranean countries, female unemployment is much higher than male unemployment, but this is likely distorted by the significant differences in participation rates of men and women. In the non-EU Mediterranean countries, female unemployment rates in Algeria, Egypt, Lebanon, Libya and Syria are at least 1.5 times as high as male unemployment rates, and, with the exception of Egypt, the difference has increased in the past ten years.

For most EU Mediterranean countries, male and female unemployment rates were similar in 2014, with lower female unemployment rates compared to male unemployment rates in Croatia, Cyprus, France and Germany. Notably, gaps between female and male unemployment rates – which used to be substantial – lessened in Greece, Italy and Spain between 2005 and 2014.

The Mediterranean faces a crisis of unemployment and youth unemployment that matters not only for the countries individually but also has wider implications, including for the EU as a whole. Initiatives in the region have failed to prevent high levels of youth unemployment (European Commission; European Training Foundation 2015; Koenig 2016).

Meanwhile, demographic pressures and immigration flows suggest that unemployment rates could increase further in the years to come. Tackling youth unemployment in the region should continue to be a high policy priority, but the focus must be on programmes that have demonstrated results. In addition, the EU’s neighbourhood policy needs to be given greater priority and should include some countries, such as Libya and Syria, which are currently at the margins of the partnership.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

View comments
Read article More on this topic More by this author

Blog Post

Revision of the Posted Workers Directive misses the point

The Commission’s proposed revision of the Posted Workers Directive has been approved by the European Parliament’s Employment Committee, which welcomes the arrival of “equal pay for equal work”. But the revision will have little impact, and was largely unnecessary. Instead we should focus on the fight against bogus self-employment, social security fraud and undeclared work.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: October 18, 2017
Read article More on this topic More by this author

Blog Post

Long-term growth potential, or dead in the long run?

By linking growth with both employment and the imperative for India to hold its own with China for strategic autonomy, Prime Minister Modi has brought sustainable, high quality, inclusive economic growth to the centre of political discussion, which is where it rightfully belongs.

By: Suman Bery Topic: Global Economics & Governance Date: October 5, 2017
Read about event More on this topic

Past Event

Past Event

Crowd Employment

This event aims to discuss the various nuances and diversity that characterize crowd employment.

Speakers: Cristiano Codagnone, Valerio Michele De Stefano, Irene Mandl, Georgios Petropoulos and Amit Singh Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 5, 2017
Read article More on this topic

Blog Post

Employment in Europe and the US: the EU’s remarkable strength

The common narrative that the US labour market outperforms the EU is not as trustworthy as overall unemployment figures imply. There is a complex interaction between job creation, labour force participation and unemployment. Jobseekers leaving the labour market altogether was an important factor behind the reduction in US unemployment, while Europe’s job growth has been accompanied by increased labour force participation.

By: Zsolt Darvas and David Pichler Topic: Global Economics & Governance Date: September 28, 2017
Read article Download PDF More by this author

Blueprint

Remaking Europe: the new manufacturing as an engine for growth

Europe needs to know how it can realise the potential for industrial rejuvenation. How well are European firms responding to the new opportunities for growth, and in which global value chains are they developing these new activities? The policy discussion on the future of manufacturing requires an understanding of the changing role of manufacturing in Europe’s growth agenda.

By: Reinhilde Veugelers Topic: Innovation & Competition Policy Date: September 7, 2017
Read article More on this topic More by this author

Blog Post

EU posted workers: separating fact and fiction

After President Macron’s recent tour of Central and Eastern European countries, EU posted workers are getting a lot of attention. However, a major reform of the system is already underway and we should not confuse posted workers with long-term labour migrants. Posted workers are a small part of the labour force, and their labour market impact is likely to be minor.

By: Uuriintuya Batsaikhan Topic: European Macroeconomics & Governance Date: August 31, 2017
Read article Download PDF More by this author

Parliamentary Testimony

European Parliament

Could revising the posted workers directive improve social conditions?

This presentation was delivered in Brussels on 31 January 2017 at a hearing of think-tanks, to advise the European Parliament on the revision of the Posting of Workers Directive.

By: Zsolt Darvas Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: August 29, 2017
Read about event More on this topic

Past Event

Past Event

Perspectives on Universal Basic Income

At this event, we discussed the possible benefits but also the possible disadvantages of Universal Basic Income.

Speakers: Grégory Claeys, Olli Kangas, Professor Philippe Van Parijs and Prof. Dr. Hilmar Schneider Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: July 12, 2017
Read article Download PDF More by this author

Parliamentary Testimony

European Parliament

Combating inequalities as a lever to boost job creation and growth

This presentation was delivered in Brussels at the Employment and Social Affairs Committee (EMPL) of the European Parliament on 29 May 2017.

By: Zsolt Darvas Topic: European Parliament, Testimonies Date: June 20, 2017
Read article More on this topic More by this author

Blog Post

Is Greece’s labour market bouncing back?

After rapid increases in unemployment and large wage reductions, Greece’s labour market is showing signs of recovery. Certain sectors of the economy are showing strong employment growth, which could hint at a broader economic recovery.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: June 14, 2017
Read article More by this author

Blog Post

The Mariel Boatlift Controversy

What's at stake: how does immigration affect the wages of local workers? One way to answer this question is by exploiting a natural experiment. The Mariel boatlift of 1980 constituted an ideal experiment - bringing a sudden and large increase of low-skilled workers in just one city - but results are still hotly debated.

By: Silvia Merler Topic: Global Economics & Governance Date: June 5, 2017
Read about event

Past Event

Past Event

Inclusive growth: global and European lessons for Spain

Can manufacturing still be a driver for inclusive growth around the world? What European and national policies can foster inclusive growth in Europe? What is the situation in Spain and what can Spain learn from the global and European experiences?

Speakers: Cristina Cabrera, Zsolt Darvas, Maria Demertzis, Alejandra Kindelán, Robert Lawrence and Federico Steinberg Topic: European Macroeconomics & Governance, Global Economics & Governance Location: Calle Los Madrazo 36-38 Madrid Date: May 31, 2017
Load more posts