Drivers of change in the European youth employment: a comparative structural decomposition analysis

This paper uses a structural decomposition approach to examine the proximate causes of change in the EU15 youth workforce from 1995 to 2011. Besides the traditional sources considered by the literature, I include age-specific factors: a labor utilization index that accounts for the hours that employed youth work by showing the extent of part-time contracts; an age mix factor that indicates the share that youth comprise of total employment and, finally, changes in the inverse of the overall sectoral labor productivity, which describes variations in total labor demand. By applying this approach, I identify the core drivers behind the recent changes in the evolution of youth employment in each of the 15 countries; this is crucial for tailoring policy strategies. Results suggest that to foster youth employment, most Mediterranean countries should implement youth-specific measures while other EU15 countries could do so by enhancing overall employment.