Can welfare and labour market regimes explain cross‐country differences in the unemployment of young people?

Abstract

AbstractNo single institution can reduce (long‐term) youth unemployment. Welfare and labour market institutions function as “bundles”, through multiple inter‐institutional synergies. Based on a focused literature review for theory and on cluster analysis for empirics, the author identifies five such regimes across the EU‐27 and estimates their effects on the youth unemployment ratio and on long‐term youth unemployment. The most helpful institutional arrangement for young people in the labour market would be a combination of strong dual apprenticeship embedded in a corporatist labour market regime with high levels of social security, active labour market policy, and spending on education and childcare.