Exploring the Link Between Education Length and Employment Outcomes among Youth in Europe: A Hierarchical Clustering Approach

Abstract

Background: As the world rapidly evolves, digitalisation continues, and artificial intelligence is used, it is crucial to understand how education systems are preparing future generations to succeed in this very dynamic environment where there is a tremendous demand for skilled workers. Objectives: This paper analyses similarities and differences between European Union Member States regarding the educational attainment of young adults and their performance in the labour market. Methods/Approach: Ward's cluster method in hierarchical cluster analysis for output and outcome indicators of young adult education systems is used for two selected years: 2012 and 2021. Results: Belgium, Cyprus, Denmark, France, Ireland, Latvia, Lithuania, Luxembourg, and the Netherlands have the highest average percentage of young adults with tertiary education in 2021. On the other hand, Belgium, Bulgaria, Hungary, Ireland, Lithuania, Malta, Poland, and Romania have the highest average employment and income benefits of tertiary education for young adults. Conclusions: The average share of 25-to 34-year-olds with tertiary education increased significantly in the EU-27 between 2012 and 2021, partly due to higher demand for skilled workers in labour markets. Higher levels of education are generally associated with better employment opportunities and higher wages. However, there are large differences across EU economies. The results can help governments and education policymakers design future policies and provide insights into cross-country comparisons.