Abstract
Young people have been hit hard by unemployment during the Irish recession. While much research has been undertaken to study the effects of the recession on overall labour market dynamics, little is known about the specific effects on youth unemployment and the associated challenges. This paper attempts to fill this gap by comparing the profile of transitions to work before the recession (2006) and as the economy began to emerge from the recession (2011). The results indicate that the rate of transition of young people from unemployment to employment fell dramatically. The fall is not due to changes in the composition or the characteristics of the unemployed group but to changes in the external environment. These changes imply that the impact of certain individual characteristics changed over the course of the recession. In particular, for youth, education and nationality have become more important for finding a job in Ireland.
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Notes
Eurostat, March 2013: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&plugin=1&language=en&pcode=tsdec460.
Eurostat, October 2012: http://appsso.eurostat.ec.europa.eu/nui/show.do.
OECD, March 2013: http://stats.oecd.org/Index.aspx?DatasetCode=DUR_I#.
Eurostat, March 2013: http://appsso.eurostat.ec.europa.eu/nui/setupModifyTableLayout.do.
In this more detailed discussion of the youth labour market we mainly focus on data relating to Q2 2011, the start point for the panel data relating to the recession that is used in the analysis that follows.
Information provided by the CSO.
We excluded those who transitioned into economic inactivity from the analysis, and also those individuals that did not provide information on their education.
The QNHS contains information on a person’s previous economic sector of employment; however, we were not able to include this variable in our specifications as a significant proportion of young people did not provide this information, and for those that did, there was not enough variation in the data to estimate our models.
nldecompose command in Stata.
An important policy change took place over the period whereby the entitlement to contributions related assistance (Jobseekers Benefit (JB)) was reduced from 15 to 12 months. However, given that individuals in the 15–19 age bracket who became unemployed in 2006 were unlikely to have made sufficient contributions to entitle them to JB for an extended period, we do not believe that the policy switch will have a strong impact in explaining the observed result.
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Kelly, E., McGuinness, S., O’connell, P. et al. Transitions In and Out of Unemployment among Young People in the Irish Recession. Comp Econ Stud 56, 616–634 (2014). https://doi.org/10.1057/ces.2014.23
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DOI: https://doi.org/10.1057/ces.2014.23