Alumni and Friends

On top of the scrapheap?

9 April 2019

By Dr Olena Nizalova – Senior Research Fellow in Health Economics

Youth unemployment in the UK is currently at 12%. That means that every one person out of eight young people is not working even though they would like to work. At our recent discussion at the House of Commons event, we asked people to stand up if they knew anyone who has experienced unemployment at a young age. It was astonishing to see almost everyone standing. Youth unemployment is close to every one of us.

What is the EXCEPT project?

Youth unemployment and insecurities in the labour market have increased significantly in Europe in recent years. Because of difficulties in getting and keeping a job, young people are getting more exposed to the risks of poverty, material deprivation, insecurity, lack of autonomy and social exclusion. EXCEPT is a research project which aims to analyse these aspects of the youth situation in the labour market and the risks of social exclusion; and to assess related policy measures in the EU-28 and in Ukraine. The central aim of the EXCEPT project is to develop effective and innovative policy initiatives to help young people in Europe overcome labour market insecurities and related risks.

With youth unemployment at 12%, the UK is closer to the middle of the distribution of youth unemployment rates in Europe. Yet there are countries where it is much lower. For example in Germany it's 6%; however in some other countries the situation is really terrifying. Spain and Greece are struggling at around 40% unemployment rate. And this is a real improvement from 55% and 60% respectively in 2013 – imagine every other young person unemployed.

However, a young person in the UK is four times more likely to be unemployed than an adult, while the EU average is 2.5 times. Such unprecedented levels of youth unemployment in Europe are referred to by some experts as a corrosive legacy of the great recession, and they pose serious societal challenges: from anti-social behaviour, to lost opportunities for technological advancement because of the wasted talent, to potential risks to the democratic ways of life in modern societies. Countries are putting a lot of effort to tackle the issue of youth unemployment, but even if by some magic we had all young people who wanted to work employed tomorrow we would still have to deal with the consequences of their past unemployment experiences. There is a considerable body of research that shows that spells of unemployment when young create permanent scars in terms of future employment prospects and earnings.

In the EXCEPT project we looked beyond labour market outcomes and focused on three aspects of life. These three aspects form important parts of adulthood: health and wellbeing; autonomy; and poverty or material deprivation. We relied on a mixed-methods approach to combine secondary data analysis with in-depth interviews and cross-country policy comparisons. Throughout the research process, we engaged with young people to make sure that what we are documenting from the data and the way we are interpreting our findings is in correspondence with their actual experiences.

One of the areas the Kent team focused on was health and wellbeing. As a measure of health we used an indicator for reporting poor or fair health versus good, very good or excellent. For wellbeing, we used two measures, reported life satisfaction and level of happiness, both on a ten-point scale.

A simple comparison shows that when unemployed, young people are much more likely to report poor health and lower levels of wellbeing. For example, in the United Kingdom, an unemployed young person is 1.5x more likely to report poor health than an employed one. The differences are more dramatic when looking at life satisfaction. In most countries, unemployed young people are more dissatisfied with life than the employed ones. On average, in the EU, an unemployed young person is twice as likely to be dissatisfied with life than an employed one.

Applying more sophisticated methodologies, we confirmed that being unemployed has negative effects on health and wellbeing. Moreover, the effect on wellbeing is much larger than the effect on health. We also looked at the effect of having a part-time or temporary job and found that in many cases, there is little difference in terms of health and wellbeing from the individuals who are employed full time with permanent contracts. In short, having any job is better than having no job.

To give some perspective, the effect of having lost your job at a young age, is equivalent to the health deterioration due to the aging process of ten years. Or it is equivalent to the effect of having parents who were heavily drinking during the person's childhood. To inform policies, it is important to understand how the effect on the outcome operates. For example, if the effect of unemployment on health is entirely due to the increased risk of future unemployment, or overall employment instability, then the only relevant policy is to focus on getting the person to work as soon as possible.

However, we find that this is not the case. Hence, it is important to explore other mechanisms and in our project we have managed to study some of them and reached the conclusion that youth unemployment partially effects health via changes in health-compromising behaviours. In general, if work has occupied a significant place in one's life, the negative consequences of losing a job to a person's health are larger. We found there is an increased alcohol consumption at young age and higher prevalence of smoking at middle ages. We also found that men are affected more than women. Interestingly, there is a spillover effect of unemployment on partners. If a husband loses a job, the wife's health deteriorates as well.

We also find that a number of institutional factors mitigate the negative effects of unemployment on health and wellbeing. Not surprisingly, higher unemployment benefits reduce these negative risks, as do the following
features of the educational system: availability of higher education; lower levels of stratification in education; and availability of second-chance opportunities. Furthermore, labour market policies that specifically target young people tend to be more effective than the general ones. Clearly, youth unemployment is not a small matter from a societal or individual perspective. And its consequences are long-lasting.

Does it have to be a verdict, or can anything be done to avoid or mitigate these negative consequences? We have taken this question to youth, youth workers, NGOs, policy makers and the general public. It was very difficult to keep this discussion focused on our question regarding health and wellbeing as many of the participants tended to slip into talking about the policies which focused entirely on labour market outcomes.

The first idea was to create an information pack for at-risk youth, focusing on health and wellbeing. That information pack would provide tips for maintaining good health, self-diagnostic tools for mental health and information and contacts for various support services.

The second approach was related to our finding that any job is better than no job at all. So it is important to ensure that young people have access to volunteering opportunities and internships. Respondents in our interviews emphasised how instrumental the volunteering experiences were for them to acquire work-related skills and boost their self-esteem.

The third option is an enhancement of employment services with a provision of psychological support for the unemployed. Provision of training to youth workers and NGOs so that they are able to detect emerging health problems and either support young people or refer them to corresponding professional services.

Coming to the more difficult policy recommendations, there is a need for a decreased stratification of the educational system and development of further opportunities for second chances in education. However, this recommendation has yet to be carefully explored in terms of its effect on other outcomes beyond the effect on health and wellbeing, but also in terms of the involved costs and feasibility in the setting of any particular country.

Last comes the most difficulty policy recommendation. Nothing is perhaps harder to implement than changes in cultural norms and attitudes. Yet there is a really great need to start the discussions, both in educational settings and in communities regarding the changing nature of work and the social attitudes towards the unemployed. It is important that unemployment experience could be viewed by affected individuals not as a complete failure but as a chance to learn and to adapt to the change in circumstances. We will no longer have jobs for life. Thus it is important to stop treating the loss of a job as the end of the world.

You can read more about the EXCEPT findings on the website:

We would very much like to hear from you if you have any thoughts on how to minimise the impact of unemployment on health and wellbeing. Please do get in touch via the website.

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Last Updated: 29/01/2019