The Great Recession and the Working Conditions of Youth: A Descriptive Analysis of the European Labour Market

Abstract

The objective of this report is twofold. First, it represents an accompanying user manual to the third release of the KOF Youth Labour Market Index (hereafter abbreviated KOF YLMI). Second, the report uses index-based tables and graphs to analyse the evolution of the working conditions that young people faced in Europe after the beginning of the Great Recession in 2008. The KOF YLMI — developed by the KOF research division Education Systems in 2014 — offers a multidimensional approach for the comparison of the youth labour market situation across countries and over time. Besides applying widely used indicators such as the youth unemployment rate, the KOF YLMI also considers the working conditions, the provided education, and the ease to entry into the labour market for youth in a specific country. The media attention and the political recognition received by the two previous releases encouraged us to maintain and improve the index and the associated web tool1. The main improvement to the third release of the KOF YLMI is the addition of new data from 2014 to the set of indicators composing the index. Due to larger datasets provided by our repositories2 and ameliorations in the aggregation’s procedures, we also increased the data coverage of years prior to 2014. Altogether this increased the data coverage by about 8%. The detailed descriptions of data sources and availability are reported in Section 2. This section also reviews the indicators’ definitions and why they are included in the index. From a methodological point of view, the only relevant modification is the shift of some upper bounds used to standardize the indicators’ values. The dramatic evolution of some indicators has forced us to shift the bounds that are used to standardize values into scores. One prime example is the share of youth working involuntarily part-time, whose median value has more than doubled between 2008-2014. Without a modification to the upper bound, the values of all countries overtaking the original upper bound would be assigned the lowest possible score, and no further distinctions would be possible. The shift of the upper bounds is described in Section 3. These modifications to the bounds are not only applied to the data added from 2014, but retroactively applied to all values in the index from 1991-2013. This report, besides keeping track of changes in data availability and calculation methods, aims to show the potential of the KOF YLMI in analysing the youth labour market situation. In this regard, Section 4 offers both a general overview of the index’s evolution during the period 2008-2014, as well as case studies of selected countries. The attention here is mainly concentrated on the working conditions that youth face on the labour market. Working conditions, together with the indicators describing the activity state, are the components that were most strongly affected by the 2008 Great Recession. In particular, we highlight the heterogeneity that characterizes the working conditions in the countries impacted most by the crisis. Section 5 concludes and briefly suggests future areas of work.