20180709-NATIXIS-Youth_unemployment_is_fuelling_structural_unemployment_6页_597kb

Flash Economics Summary

Core Content

This document discusses the relationship between youth unemployment and the overall structural unemployment rate in the euro zone, France, Spain, and Italy. It highlights how the high structural unemployment rate among young people is contributing to an increase in the general structural unemployment rate, potentially limiting economic growth.

Main Views

• Youth Unemployment and Structural Unemployment: There is a debate about whether the structural unemployment rate has increased in the euro zone and its member countries over the past decade. The key argument is that the high structural unemployment rate among the young is a major factor in this increase.
• High Youth Unemployment and NEETs: The youth unemployment rate is significantly higher than the overall unemployment rate, and a high proportion of young people are not in employment, education, or training (NEETs), which contributes to the structural unemployment problem.
• Employability Concerns: The employability of young people has declined, and this trend is exacerbating the structural unemployment rate.
• Hiring Difficulties: Despite high unemployment, companies in the euro zone and other countries are facing significant hiring difficulties, indicating a mismatch between available jobs and the skills of the workforce.
• Economic Growth Implications: If the structural unemployment rate has risen significantly, the overall unemployment rate may now be close to the structural rate, which could lead to slower economic growth.

Key Information

• Structural Unemployment Trends:
  • The structural unemployment rate appears to have increased in the euro zone and several of its member countries.
  • The unemployment rate is now higher than it was before the 2008 crisis, but companies still struggle to find suitable workers.
• Youth Employment Issues:
  • Youth unemployment is much higher than the overall unemployment rate.
  • A high proportion of young people are NEETs, contributing to the structural unemployment rate.
• Country-Specific Analysis:
  • Euro Zone: High youth unemployment and a significant number of NEETs are driving the overall structural unemployment rate.
  • France: Similar trends are observed, with high youth unemployment and a high proportion of NEETs.
  • Spain: The youth unemployment rate is particularly high, and the proportion of NEETs is also significant.
  • Italy: The situation is less severe than in France and Spain, but there is still a notable rise in youth unemployment and NEETs.
• Hiring Difficulties:
  • Companies are struggling to hire, suggesting a structural mismatch in the labor market.
  • This indicates that the labor market is not functioning efficiently, and the unemployment rate may not fully reflect the structural unemployment rate.

Conclusion

The high structural unemployment rate among the young is fueling an increase in the overall structural unemployment rate in the euro zone, France, Spain, and to a lesser extent in Italy. This configuration is likely to lead to slower economic growth, as the unemployment rate may now be close to the structural rate. The document emphasizes the need to address youth unemployment and employability to prevent further deterioration in the labor market.

Disclaimer Highlights

• The document is intended for professional and qualified investors only.
• It is strictly confidential and should not be shared with third parties without permission.
• No liability is accepted for any use of the information contained in the document.
• The views expressed are those of the authors and do not necessarily reflect those of Natixis or its affiliates.
• The document does not constitute a personalized investment recommendation or a financial analysis.
• It is not an offer or solicitation for any purchase, sale, or subscription.