Noreside Resource Centre, Kilkenny, Ireland

Youth Unemployment in Ireland

By Bill Kirwin

Introduction

This short paper briefly describes the phenomenon of youth unemployment in Ireland together with a brief evaluation of the various policy initiatives that have been put in place to address the problem generally.  It draws on figures and statistics taken from the Irish Central Statistics Office (CSO)(1) as well as papers from the National Youth Council of Ireland (NYCI) (2) and the OECD(3). For the purposes of discussion, unemployed youth is defined as workers and jobseekers in the 18-25 age cohort.

Unemployment in Ireland

Perhaps the most pernicious challenge facing Irish economic policy makers since the foundation of the State in 1921 has been persistent levels of chronic unemployment.  Where, at any particular time, any reasonable level of full employment had been reached, inevitably, forces brought about by external shocks (exchange rate upheavals, overseas protectionist policies, periods of international recession etc) rocked these unemployment rates upward.  Fortunately, for most of the twentieth century, the greater UK labour market operated as a “pressure valve” for the Irish Labour Market, where, in periods of recession with consequent high levels of structural unemployment, excess labour “supply” in the Irish labour market, tended to be taken up by the wider UK labour market. In actual fact the historical nature of the relationship between Ireland and the UK allowed the creation of this “single market” for labour with virtually uninterrupted frontiers between the two jurisdictions, has allowed Ireland to escape the expensive and potentially socially disruptive effects of mass scale unemployment.  Periods of recession in the 1970’s  and 1980’s in particular created very significant levels of unemployment in Ireland, and indeed, some of the persistent problems with long term unemployed workers dating from this time in particular communities also date from this time.

Youth Unemployment in Ireland

But the recession that arose very sharply with the Irish economy in 2008 following the global financial crisis arising from the collapse of certain US Banks and all of the major Irish Banks has had very severe and catastrophic impacts on employment and on youth employment in particular.  Over the period 2008 to 2017, Ireland had the second highest youth unemployment rate in Western Europe with, at times, up to 1 in 4 young people between 17 to 25 years jobless and 1 in 3 young men unemployed (1)  In fact, over the period young people were twice as likely than people in older cohorts to find themselves in unemployment.

In 2008 (pre-recession), the percentage of young persons unemployed was 12.7%, rising to 24.2% in 2009. (2)

However, there has been a significant reversal in this pattern of youth unemployment  in recent years.  In the year to July 2017 the number of persons aged 25 and over on the Live Register decreased by 37,004 (-13.3%), and the number of persons aged under 25 decreased by 7,606 (-19.1%) (1).   Annual decreases in persons aged under 25 have occurred in all months since July 2010. The percentage of persons aged under 25 on the Live Register now stands at 11.7% for July 2017, down from 12.5% in July 2016 and 13.8% in July 2015. See tables 1(b) and 1(c) and figure 3.  (1)

The recovery in the Irish Labour Market, somewhat modest particularly when seen alongside year on year growth in national output figures can probably be attributed to a number of contributory factors:

a practical (however painful) resolution of the banking industry issues that had arisen in 2008 with the attendant debt issues,

Continued levels of Foreign Direct Investment in Ireland and resulting employment creation, brought about mainly as a result of Government industrial policy operated through the Industrial development Authority (IDA)

The operation of a range of Labour Market activation measures formulated and implemented by the Irish authorities viz The Department of Social Protection.

However youth unemployment is still over twice the pre-crisis rate of 8-9% recorded in 2007 and there are also 18,500 young people under 25 years who are long term unemployed (have been in receipt of Jobseekers payments for one year or more)

Perhaps the policy makers’ response has been largely unimaginative and ineffective.  Too much of the official response has been haphazard, ad-hoc and motivated by a desire to cut public spending rather than supporting unemployed people to re-enter the labour market.

In a very specific piece of research carried out by National Youth Council of Ireland (NYCI,) (2) on the subject of youth unemployment, the researchers suggest that the following predominant themes emerge in discussions with unemployed young people:

Lack of workplace experience is identified as a key impediment to obtaining employment

Access to Education and Training and restrictions placed thereon is a critical issue for unemployed youth

Unemployment, because of the uncertainty it creates in the life experience of the unemployed person interrupts planning for normal life expectations such as family formation, incurring long-term financial commitments

Unemployed persons are often hampered in their job searching activities by not having the requisite soft skills associated with job searching (i.e. writing CV’s, interviewing etc)

Unemployed people face very particular challenges in trying to present a positive impression of themselves during the various job search phases while internally experiencing the inner emotional turmoil associated with the condition of unemployment.

In general Third level graduates are not enthusiastic about engaging in further higher level education

A significant proportion of unemployed young people experience problems to do with personal debt

Unemployed young people tend to have a difficulty with locating a sufficiently engaged customer service and focus within the agencies charged by the State assisting them into employment, i.e. Solas, Department of Social Protection (DSP)

Unemployed young people believe strongly that,  even after labour market conditions improve, there is a strong likelihood that they will be “left behind” and unable to account for the gaps created in their CV’s owing to periods of unemployment

Policy Responses

In relation to the various mechanisms employed by the State in addressing the problems of unemployment, these are of six sorts:

Employer Supports (includes employment subsidisation measures – for example Jobs Bridge, Internships, and enterprise development)

Employee and Jobseeker supports (includes financial supports as well as educational supports)

Market supports (provision of job and jobseeking information)

Education and Training provision (includes specially devised programmes including Springboard and Momentum).

Community Employment Schemes, set up with the intention of providing work experience and training opportunities to unemployed people while also serving perceived local community needs.

A fifth element, comprising other government initiatives aimed at supporting enterprise both at general and specific levels including financial and informational supports is also included (this includes elements of labour market regulation)

Effectiveness of Policy Initiatives

The OECD (3) have made a general observation that unemployment as it has been experienced in Europe largely results from insufficient demand conditions in product and labour markets, as such, we can expect that longer term sustainable solutions to endemic levels of unemployment will be found in the natural recovery of demand conditions over time: these may be found in the general macroeconomic policies pursued by European governments.  The OECD also observed that younger workers are affected in different ways by the boom and bust cycles than their older counterparts in that they are more easily hired into employment during boom cycles (where there are reduced requirements for educational qualifications and younger workers are more likely than their older counterparts to settle for lower wages or those at or near the minimum rate of pay where minimum wage legislation exists, as it does in Ireland), and less easily hired than their older counterparts during bust phases owing to their lack of educational requirements and experience.  Undoubtedly, government supports aimed at enhancing the educational attainments of younger jobseekers will have some impact on the employability of younger workers.  In Ireland, the specific educational programmes aimed at unemployed youth (Momentum and Springboard) which are tailored to the recruitment needs of specific employment sectors (catering and hospitality are good examples), by closing this gap for younger workers have made some valuable contribution to youth employability.  Further, as we have seen above, a significant obstacle suggested by unemployed younger workers is lack of skill or knowledge or capacity to engage in the jobseeker market, suggesting that programmes and initiatives aimed at enhancing such skills (CV writing, interview skills etc) will also have been a significant factor in enhancing employability in addition to helping the younger worker to give a positive impression of themselves to employers when the experience of unemployment in itself will have diminished personal self confidence.  Moreover, schemes and programmes aimed at giving work experience (job-bridge, employer subsidies, internships, community employment schemes) further address the problem where younger workers are hampered by lack of relevant work experience.

Conclusion

Youth unemployment has become a persistent problem in Ireland and across the European Union and as a problem presents particular sorts of challenges for those charged with managing and responding to it.  While the underlying problem is undoubtedly prevailing labour and product market conditions, perhaps the most reliable levers available to policy makers are the general macroeconomic ones that aim to enhance investment and stabilise market conditions through stimulating demand, the other “supply side” policies directed at enhancing employability have and have had an ameliorating impact on youth unemployment.

 

References

  • Irish Central Statistics Office, labour market cso/statistics/labour market (Dublin 2017)
  • Youth Unemployment in Ireland, The forgotten Generation, The experience of young job seekers and their interaction and engagement with key support services, National Youth Council of Ireland, (Dublin November 2010)
  • What should be done about rising unemployment in the OECD, Authors, Bell, David N.F., Blanchflower, David G., OECD (September 2010, Bonn)
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