Youth unemployment – the EU and B&H share the problem, but can they also share solutions?

The economic recession in recent years has had a devastating impact on young people in Bosnia and Herzegovina, with youth unemployment increasing two to three times more than the overall unemployment rate. A new GEA study explores possible solutions to this problem.

Labor statistics clearly point to three key problems as regards youth unemployment:

Skyrocketing youth unemployment (currently over 60% – the highest rate in Europe);

Increased youth inactivity (more than 50% are economically inactive, meaning they are unemployed and not seeking a job);

Rising long-term unemployment among youth (more than 50% of those seeking jobs for over one year have not found one).

Comparative data show that European Union member countries are also facing the problem of significantly high youth unemployment, which has jumped from 15% to 23.5% in only four years. Almost 7.5 million young people living within the European Union are currently economically inactive or unemployed, with the majority living in southern countries including Greece, Spain, Italy, and Portugal, but also in Slovakia, Ireland, Lithuania and Sweden, where the youth unemployment rate also exceeds the EU average. The problems of youth inactivity, premature abandonment of education, and long-term unemployment among youth are, of course, interlinked.

A major Eurofound study of 21 EU member states found that each year, countries are losing from annual 0.8% to 1.2% of GDP or over 100 billion euros in costs related to youth unemployment and their absence from education and training programs. Although Bosnia and Herzegovina was not included in this analysis, rough estimates based on comparisons with EU member states suffering similar labor market problems (such as Spain), suggest that B&H loses around 1% of its GDP – or 250.000.000 BAM – each year due to youth unemployment and inactivity!

Recognizing the importance of young people to bring forth new ideas and further advance every society, EU leaders convened at the June 2013 meeting of the Council of Europe and adopted a comprehensive plan for combating this problem. Several existing initiatives were expanded and new programs launched to help integrate youth in the labor market and encourage their employment. One such initiative is the “Youth Guarantee” program, which aims to offer a job, further education, or training in a new practical skill or handicraft to young people living within the EU who do not find employment within four months of completing their formal education.

This GEA study seeks to answer the following question: Can policies adopted at the EU level to promote youth employment also help tackle this problem in Bosnia and Herzegovina? And if so, how? The study, which was carried out from August to December 2013, compared the position of young people within the contexts of the B&H versus the EU labor markets and, based on common characteristics, identified general principles and concrete, applicable, solutions for Bosnia and Herzegovina.

The complete analysis in English, including recommendations for future labor market interventions, can be found  here.