Original scientific paper
https://doi.org/10.1080/1331677X.2018.1480970
Impact of public expenditure in labour market policies and other selected factors on youth unemployment
Igor Cvecic
; Faculty of Economics, University of Rijeka, Rijeka, Croatia
Danijela Sokolic
; Faculty of Economics, University of Rijeka, Rijeka, Croatia
Abstract
This study investigates the impact of selected macroeconomic,
demographic, institutional and educational determinants on youth
unemployment rates in Europe, with special attention to effects of
Active Labour Market Policies on unemployment dynamics. Dynamic
panel data estimates have been done with the Generalised Method
of Moments on data from 27 E.U. Members States plus Norway
(2005–2014). The results indicate significant impact of the main
macroeconomic variables on youth unemployment rates, total
unemployment rates and shares of young people (15–24 y.o.) neither
employed nor in education or training. Other variables show various
levels of significance, including variables which describe labour
market policies (L.M.P.s). In all estimations, public expenditure in
L.M.P.s as a percentage of gross domestic product has statistically
significant impact on unemployment rates, with positive coefficients.
However, opposite effects have been estimated when using the
number of participants in L.M.P.s and public expenditure in L.M.P.s
per unemployed person, which suggests that L.M.P.s better target
the general unemployed population than the vulnerable group of
the unemployed youth.
Keywords
Labour market policies; youth unemployment; Europe; NEETs
Hrčak ID:
221066
URI
Publication date:
3.12.2018.
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