Unemployment at a Young Age and Later Unemployment in Native Swedish and Immigrant Young Adults

Magnus Helgesson,Eva Vingård,Tobias Nordqvist,Ingvar Lundberg,Bo Johansson

doi:10.4236/me.2014.51004

Abstract

The youth unemployment rate is increasing in many countries and unemployment affects future work participation. Immigrants have more difficulties than natives in succeeding on the labour market. This study examined the long-term effect of unemployment on future unemployment in Sweden. All immigrants born during 1968-1972 and a random sample of native Swedes of the same age are included. The follow-up period was 15 years, 1993-2007. Unemployed individuals had an elevated risk of unemployment during follow-up. The risk of unemployment increased with the length of unemployment in 1992. Immigrants had a higher risk of unemployment both at baseline and follow-up compared with native Swedes, but followed the same pattern as native Swedes when exposed to unemployment. For individuals with ≥100 days of unemployment in 1992, participation in an Active Labour Market Program (ALMP) increased the risk of future unemployment, whereas both higher educational level at baseline and attainment of a higher educational level between 1993 and 1997 decreased the risk. In addition to the human suffering caused, this can result in increased welfare payments and loss of productivity and tax income to a society. Immigrants seem not to be more vulnerable to unemployment than native Swedes.

Highlights

In recent decades, youth unemployment has increased in countries around the world
This study revealed that exposure to both long-term unemployment (≥100 days) and short-term unemployment (1 - 99 days) at a young age were associated with future unemployment during 15 years of follow up (Table 2)
The unemployment rate was higher at baseline for immigrants, but followed a similar curve as native Swedes at follow up for future unemployment

Summary

Introduction

Youth unemployment has increased in countries around the world. In the European Union, almost a quarter of the young population are outside the labour market. The youth (15 - 24 years) unemployment rate in the EU was on average 22 per cent in the last quarter of 2011, compared with around eight per cent for older workers [1]. Sweden entered a deep recession at the beginning of the 1990s when the unemployment rate increased rapidly; this was seen especially among young individuals. The situation was rather similar to the situation in Europe today, with an unstable financial market and rapidly rising unemployment [2,3]. There is considerable variation between countries regarding the youth unemployment rate, since the issue of unemployment is reflected by political perspectives. The consequences of unemployment can be costly, both for individuals and societies

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