Tackling the youth unemployment in Europe within the context of the economic crisis

Abstract

The purpose of this thesis is to evaluate the impact of the crisis on the major political and economic problem in Europe, the youth unemployment, which has risen to a level unseen since the Great Depression. Nowadays, there are more than 5.462 million young people (under 25) unemployed in the EU, representing a 22.4% of the total young population. This thesis reviews the social implications of the crisis-related youth unemployment in Europe, from the opportunity costs for governments to the psychological problems for the unemployed. We will try to provide answers to some fundamental questions, e.g., what are the ‘brain drain’ effects for EU countries? Is unemployment relaxed by labour mobility? How is the ageing population affecting the pension system? In addition, a comparative study about the labour market in two European countries, Spain and Germany, will be made in order to analyse the differences between them. Main questions: what are the secrets for the low level of unemployment in Germany? Can the German model be copy-pasted in other EU countries? Moreover, we will analyse how the crisis-related unemployment has affected human rights, and study these violations according to international legal documents. Main question: what economic model is more compatible with human rights and which one promotes better the goal of full employment? At the end of the thesis, proposals to eradicate this problem will be researched, from both macro and microeconomic perspectives. In addition, we will study some important politico-economic aspects like the changing role of the state after the crisis, the deregulation of labour markets or the accountability of financial institutions. We will also adopt a critical view on Europe’s proposals to combat the crisis, from the problem of reducing wages to some other recurring mistakes, such as the lack of fiscal policy coordination, to the democratic deficit of some international financial institutions. Overall, this thesis attempts to prove that, even though European politicians have claimed that the fight against unemployment is one of the top priorities, policy concerns have in fact shifted after the crisis. Preserving price stability to avoid inflation and the implementation of austerity measures, in order to lower the public debt, seem to be the guidelines for economic recovery, while no energetic attempts to create jobs are being held. The conclusion of this thesis will be that the role of the state must be redirected towards the protection of human rights, and the politico-economic decisions must provide a consistent answer to the severe youth unemployment problem.