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News : EU Economy Last Updated: Dec 16, 2010 - 3:29 PM


Eurozone employment stable; OECD area youth unemployment rate will be 18% in 2011
By Finfacts Team
Dec 16, 2010 - 4:16 AM

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The number of persons employed in both the Eurozone (EA16) and the EU27 was stable in the third quarter of 2010 compared with the previous quarter, according to national accounts estimates published Wednesday by Eurostat, the statistics office of the European Union. In the second quarter of 2010, employment grew by 0.1% in both zones. These figures are seasonally adjusted. Meanwhile, the Organisation for Economic Co-operation and Development (OECD) said also on Wednesday that youth unemployment rates in the OECD  area are expected to remain at around 18% in 2011 and 17% in 2012.

Falls in employment were recorded in construction (-1.1% in the Eurozone and -1.0% in the EU27) and manufacturing (-0.3% and -0.2% respectively). Agriculture fell by 0.2% in the Eurozone, but grew by 0.4% in the EU27. Financial services & business activities increased by 0.3% in the Eurozone and by 0.2% in the EU27. Other services (which mainly include public administration, health and education) rose by 0.2% and 0.1% respectively. Trade, transport & communication services grew by 0.1% in the Eurozone and remained stable in the EU27.

Compared with the same quarter of the previous year, employment fell by 0.2% in both the Eurozone and the EU27 in the third quarter of 2010. In the second quarter of 2010, employment decreased by 0.6% in both zones.

Eurostat estimates that, in the third quarter of 2010, 221.2m men and women were employed in the EU27, of which 144.5m were in the Eurozone. These figures are seasonally adjusted.

These quarterly data on employment provide a picture of labour input consistent with the output and income measure of national accounts.

OECD

The global economy is recovering but youth unemployment is getting worse, according to a new OECD  report.

Off to a Good Start? Jobs for Youth says that young people are more than twice as likely to be unemployed as the average worker. Yet few governments are taking proactive steps to boost youth employment.

Youth unemployment rates in the OECD  area are expected to remain at around 18% in 2011 and 17% in 2012. This is more than double the total unemployment rate, which stood at 8.6% in October 2010.

“Investing in young people is vital to avoid a scarred generation at risk of long-term exclusion,” said OECD  Secretary-General Angel Gurría. “We can learn from countries that have made it easier for young people to find jobs.It will help us strengthen the economic recovery while taking care of the most precious asset our countries have.”

Since the crisis started, 3.5m more young people have joined the ranks of the unemployed in the OECD area. But unemployment does not capture the full hardship for youth, as many who have left education no longer appear in labour force statistics. At least 16.7m young people are neither in employment, education or training (the so-called NEET group) - 6.7m of these youth are still seeking work, while 10m have given up looking.

The report says that young people who struggle to enter the labour force after leaving school can face persistent scarring. Risks include long-term difficulty finding employment and pay differentials with their peers (up to 8% less in some countries) as deep as 20 years into their careers. Young people leaving school in the coming years are more likely to struggle to find work than previous generations.

The OECD says that governments must prioritise policies that have produced cost-effective results in other countries. Targeting young people most at risk - including youths who leave school without a qualification, come from immigrant backgrounds or live in disadvantaged areas - is key. 

Governments should:

  • Move towards early intervention programmes and effective job-search assistance for different groups of youth, such as in Denmark, the Netherlands and Japan.
     

  • Strengthen apprenticeship and other dual vocational training programmes for low-skilled youth, as traditionally done in Austria, Germany and Switzerland and scaled up in Australia and in France.
     

  • Encourage firms to hire youth, by offering temporary subsidies targeting low-skilled youth and those have completed their apprenticeship, as well as small and medium-sized firms.

The Eurozone (EA16) consists of Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.

The EU27 includes Belgium (BE), Bulgaria (BG), the Czech Republic (CZ), Denmark (DK), Germany (DE), Estonia (EE), Ireland (IE), Greece (EL), Spain (ES), France (FR), Italy (IT), Cyprus (CY), Latvia (LV), Lithuania (LT), Luxembourg (LU), Hungary (HU), Malta (MT), the Netherlands (NL), Austria (AT), Poland (PL), Portugal (PT), Romania (RO), Slovenia (SI), Slovakia (SK), Finland (FI), Sweden (SE) and the United Kingdom (UK).

The Paris-based OECD (Organisation for Economic Cooperation and Development) think thank for governments has 34 mainly developed country members: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Israel, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.

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© Copyright 2010 by Finfacts.com

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