Euro, crisis and unemployment: Youth patterns, youth policies?

- Different shock responses in adult and youth unemployment rates
- Youth ones do not experience significant structural breaks as result of the GFC.
- Youth unemployment behaviour associated to the relative performance of the educational system
- Generic labour market reforms not effective enough to solve the youth unemployment problem
- Educational policies constitute suitable complementary cures.

This paper examines the occurrence of structural breaks in European unemployment associated with major institutional events. We uncover different responses of adult and youth unemployment rates. While adult unemployment is more prone to experience structural breaks, youth unemployment is more sensitive to business cycle oscillations, especially in the recent crisis. This calls for fine tuning policy measures specifically targeted to youth unemployed in bad times. One important implication of our findings is that generic labour market reforms are not effective enough to solve the youth unemployment problem. Educational policies raising average qualifications and helping school-to-work transitions are suitable complementary cures.