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Youth Unemployment in Spain: Causes and Solutions

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Youth Unemployment in Spain: Causes and Solutions
Working Papers
Number 11/31

Youth unemployment in Spain: causes and solutions
Economic Analysis Madrid, 27 September 2011

11/31 Working Papers
Madrid, 27 September 2011

Youth unemployment in Spain: causes and solutions*
Juan Ramón García. September 2011

Abstract
Youth unemployment in Spain is a persistent phenomenon that has worsened during the current crisis. And at the levels now being registered (46.1% in 2Q11), the measures to fight it can be delayed no longer. The evidence presented in this document indicates that there are serious shortcomings in Spain's education system and labour market, which explain the country's relatively high level of youth unemployment. The former include early school leaving and the imbalance between job supply and demand at the different education levels attained, which complicates youngsters' access to the labour market and has a negative impact on their professional career. While the most significant among the latter are the segmentation of the labour market and the ineffectiveness of active labour market policies. Therefore, extenuating youth unemployment requires coordinated action between education and the labour market trough measures as the ones suggested in this document. Keywords: Youth unemployment, early school leaving, overqualification, temporariness, active labour market policies.. JEL: C25, I21, J24, J64,

* I would like to thank Miguel Cardoso, Rafael Doménech, Ignacio González-Panizo, Nicolás Trillo, Jorge Rodríguez, Félix Lores and Camilo Ulloa, for their helpful comments.

Page 2

Working Papers
Madrid, 27 September 2011

1. Introduction
Youth unemployment is one of the main malfunctions in the Spanish labour market, impacting directly on the current and future economic situation of those unemployed youngsters and their environment and indirectly on the wider economy. While highlighted by the current crisis, it has been a problem in Spain for several decades. The unemployment rate among the active population
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