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This chapter is part of a book exploring the condition of young people in the labour market in European countries. The outcome of the project, 'The political economy of youth unemployment', the book investigates questions such as which structural conditions and labour market institutions guarantee better youth performance, which education systems and school-to-work processes are more effective and in which countries is gender differentiation less of an issue.

The presence of skills and education mismatches in European labour markets has recently been viewed as a possible explanation for severe youth unemployment. The authors analyse the influence of country-level education mismatch and individual-level educational attainment on the probability of being unemployed or remaining in alternative labour force statuses for young people aged 15-34 and living in 21 European Union countries (years 2006, 2008 and 2010). The results of their analysis show that more years of education are important to reduce the probability of being unemployed. Improving access to university degrees remains the main strategy for tackling youth unemployment caused by education mismatch, even taking account of the current economic crisis.

Edited excerpts from publication.

The book from which this chapter is taken is available in VOCEDplus at TD/TNC 132.468. Show less

This paper analyses the influence of country-level education mismatch on the individual-level relationship between education and the probability of being unemployed or staying in alternative labour statuses, for young people aged 15-34 in 2006, 2008 and 2010, living in 21 [European Union] EU countries. [The authors] assume that young people may fall in five labour market statuses: (1) employee; (2) self-employed; (3) unemployed; (4) in education; (5) inactive, and perform a multinomial logit model to study the effects of years of education on relative probability of being in labour statuses 2, 3, 4, or 5, compared to the base category (employee). Afterwards, [the authors] interact the individual-level years of education with a country-level indicator of education mismatch in order to identify the heterogeneous effects of the aggregate mismatch among people with different educational attainments.

Results show that more years of education: (i) reduce the relative probability of being unemployed; (ii) have a cumulative effect by extending the period of education; (iii) slightly raise the relative probability to be self-employed. As regards country-level education mismatch, [the authors] found that only after 2008 it produces an additional effect on better educated young people by further reducing their relative unemployment risk when it is compared to that of low educated youngsters. This outcome [indicates] that improving access to university degrees remains the main road to tackle youth unemployment caused by education mismatch, even after the outburst of the current financial and economic crisis.

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