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“Giving Youth a Better Start”: Evaluating the OECD’s Youth Action Plan


At the end of the second session of the MCM, Ministers committed to an action plan to tackle youth unemployment. In the process of preparing the Action Plan, the TUAC Secretariat emphasized that bold action and immediate results would be needed to tackle high unemployment and underemployment of the young. The youth unemployment crisis is a crisis our societies can’t afford. Thus, it is welcome that governments have committed to stepping up their efforts to tackle high youth unemployment. Given the fact that the ongoing lack of aggregate demand and the related jobs gap are key determinants of unemployment of young as well as adult workers, it is particularly welcome that the final version of the Action Plan addresses the need to tackle weak aggregate demand in order to promote job creation.

Other key elements of the Action Plan are the provision of adequate income support for unemployed youth, combined with effective employment services and other active labour market measures; more effective investment in education and training to equip all young people with relevant skills; policies strengthening the role and effectiveness of vocational education and training as well as career guidance and assistance regarding the transition into the world of work. The Action Plan also calls for policies addressing the issue of school drop-outs by providing second-chance programmes in order to help those of the young who are in need of strengthening their foundation skills.

It is, however, regrettable that the Action Plan tends to blame persistently high youth unemployment numbers to a large part on labour market institutions, in particular on employment protection. The assertion made in this respect, namely that “strict and uncertain procedures concerning the firing of permanent workers along with high severance payments tend to make employers reluctant to hire youth on an open-ended contract”, reflects a serious misconception of the role of employment protection. It lacks supportive empirical evidence, as the exhibit on youth unemployment rates provided by the Action Plan itself illustrates. In reality, there is neither a correlation nor a causality between youth unemployment and protective labour market institutions. If employment protection would be a major driver of youth unemployment, countries like Germany, Austria and Mexico would display much higher youth unemployment rates than countries like Ireland, the UK, New Zealand or the US. That, however, is not the case. Thus, there are good reasons for challenging the idea that young people are particularly disadvantaged in countries with more stringent employment protection legislation.

TUAC welcomes the intention of the OECD Secretariat, to work with member countries to implement the OECD Youth Action Plan in their national context, to provide peer-learning opportunities and a setting in order to discuss what works and what does not in order to successfully tackling youth unemployment. TUAC is prepared to actively contribute to this work.