How can youth employment be encouraged?

08/11/2021

The evaluation of programmes targeting young jobseekers and other incentives for increasing youth employment were also discussed at the "Labour Economics Research 2021" Hungarian conference in Szirák. 

The session organized by Budapest Institute within the "Labour Economics Research 2021" conference - after participation in several renowned international conferences - was a good opportunity to present our recent results of the Youth Employment PartnerSHIP (YEP) project to Hungarian labour market experts. The hybrid format of this year's conference (in addition to in-person participation, the presentations were also available online) allowed us to invite relevant policy makers to this academic event, who could learn first-hand about the results that could be useful for policy action.

In the first presentation of the session, "The Impact of Payroll Tax Subsidies: Theory and Evidence", Anikó Bíró (Centre of Economic and Regional Studies, Institute of Economics, CERS-IE), presented the extent to which the employer contribution reductions introduced in Hungary under the Job Protection Action Plan have increased youth employment, especially in low-wage (and low-productivity) firms.

In her presentation „Can a short-term job trial programme kick-start young jobseekers’ careers?”, Judit Krekó, BI Senior Researcher, described the purpose and background of the YEP project, namely that researchers from four partner countries conduct counterfactual impact evaluations based on administrative data to evaluate the effectiveness of the programmes targeting the young unemployed. She elaborated on the lessons learned from the 90-day job trial programme introduced in Hungary. The most important is that, although the programme has been shown to have a positive impact on youth employment, its targeting needs to be fine-tuned to increase the participation of disadvantaged young people who are most in need.

In the discussion following the presentation, two suggestions were put forward by experts. Firstly, it could be important to examine whether Roma young people have been included in the program and to what extent the job trial has been able to mitigate discrimination against young people of Roma background. Second, the role of selection on the basis of unobservable characteristics in the selection process should be further elaborated.

In the third and final presentation titled, "Young people in the labour market and in registered unemployment during the COVID-19 crisis in Hungary", Márton Csillag, BI Senior Researcher, first pointed out that the decline in youth employment was substantial, and not only during the first wave of the pandemic. The impact of the pandemic did not disappear without leaving scars, as the proportion of young women who were not in education or employment was still significantly higher in the second quarter of 2021 than two years earlier. Then, looking at unemployment register data, he found that the losers from COVID-19 appear to be young people entering registered unemployment during the winter of 2019-2020, as their exit rates were hit hardest by the first wave. Those who lost their jobs during the first wave had no worse chances of exiting, due to the much more favourable composition of the group, as shown by the fact that more than two-thirds of them were eligible for jobseeker's allowance.

The presentations of the session "How to promote youth employment?" are also available on the CERS-IE website.

The conference session on youth employment was organized within the framework of the international project "Youth Employment PartnerSHIP", co-financed by Iceland, Liechtenstein and Norway, under the EEA Youth Employment Fund and the Norwegian Funds. One of the objectives of the research project, which started at the end of 2018, is to measure the effectiveness of labour market programmes for young people in Hungary, Italy, Poland and Spain.