Youth Unemployment and Youth Employment Policy: Lessons from French Experience

The last crisis has merely amplified what is an increasingly problematic structural issue in France: Youth unemployment. In the last 30 years, the youth unemployment rate has never dropped below 15% and has regularly exceeded 20%. Yet, integrating young people into the labour market has been an ongoing public policy objective since the end of the 1970s. In a paper to be presented in autumn I examine the causes of youth unemployment in France, taking into account the lessons from the last 40 years of public policy.

The problems begin with the framework used to assess the youth unemployment rate. France is said to have a low activity rate amongst young people (40 %) compared to other countries. So, when INSEE published a 22.8% unemployment rate for 15-24 year-olds in March 2011, it only applied to 40% of the active population. On that basis, the youth appear over-unemployed considering their particular position in the labour market. The high concentration of youth in insecure jobs (short-term contracts and temporary work) explains why their employment is so sensitive to economic cycles. Due to labour market segmentation, youth are integrated into sectors with a high labour rotation rate or in less skilled jobs.

The second part of the analysis will describe the demographics in France and the role of the education system. Both contributed to the significant drop in the number of working youth in the last 30 years, yet simultaneously, the sharp rise in the proportion of young graduates. However, there still remain 17% of school leavers who don’t successfully complete their upper-secondary education programs and are strongly exposed to long-term unemployment.

In the third section, the position of young women is examined in light of not only the inertia in both educational and professional career choices, but also the existence of job discrimination. The discrepancies between men and women can be observed at all levels from initial schooling (although the gap reduces with higher level diplomas): higher risk of unemployment, higher rate of part-time work, lower wages, more difficult access to management positions. Even when women have chosen more ‘masculine’ career paths such as mechanics, electricity, public works, physics or IT, they are still not on an equal footing with men.

The fourth part examines the hypothesis of excessive labour market rigidity and suggests potential responses – although these hypotheses have been called into question due to the crisis.

In the fifth and last part, the role of public policy on the professional integration of young people is re-examined, emphasizing numerous potential levers of action. Since 1975, more than 80 different schemes have been created, replacing or adding to previous measures. In the backdrop to the flurry of new acronyms there is more stability than one would think. The main policy consists of special work contracts that apply to the market and non-market sectors. At the end of 2010, close to one quarter of those under the age of 26, benefited from government subsidized work contracts – compared to 4% for the entire active population. The growing share of state-subsidized contracts in youth employment has contributed to temporary work becoming the most common pathway to accessing the job market.

The drop in labour costs has been the main common denominator with no commitment on the part of employers to avoid the windfall or deadweight effect, or to enable these first jobs to become part of a real upwardly mobile career path for the youth. Moreover, the most fragile young people, in particular the dropouts without a diploma, are not able to gain access to subsidized jobs in the market sector. Indeed for these youths without skills or qualifications, the real challenge lies upstream in the school system. That is why the author suggests that subsidized contracts could be more concentrated on the most disadvantaged groups and above all governed by collective bargaining agreements in order to ensure that they remain statutorily transient and that they lead to recognized qualifications.

The contract between generations to be implemented by the new government following recent Presidential elections can be considered as an innovative incentive for employers to train youth using their senior employees. However, it would no doubt be risky to continue extending substandard work contracts to a population with a higher and higher level of education. Although with the increasing age, the proportion of part time or temporary jobs tends to decrease, the deeper structural effects of these long periods of work under sub-standard contracts must be stressed. Each generation occupies fewer stable jobs than the previous generation. In other words, the structural effects of today’s youth job market give us a preview of what lies ahead. In this context, the main challenge for employment policy is invent and promote a new professional status for the entire body of active people based on secure professional pathways.

This article is part of a project on youth unemployment in Europe run by the Friedrich-Ebert-Stiftung and Social Europe Journal