A clear consequence of the current crisis is rising unemployment
It is very likely that recent college & school leavers are being disproportionately affected, the Live Register (a blunt instrument) shows increases as greatest in the sub 35 year old category
Looking at the Quarterly National Household Survey for say males we see a worrying pattern:
Clearly unemployment is sky rocketing in the youth. However youth are affected differently by unemployment.Code:15-19 20-24 25-34 35-44 45-54 55-59 60-64 Apr-Jun2003 15.8 8.1 5.2 3.9 3.6 2.9 * Apr-Jun2009 40.0 30.2 18.0 12.3 10.4 7.7 8.0
David Blanchflower, a very eminent economist was in Dublin recently and his presentation was insightful.
So clearly youth unemployment leads to irreversible damage to a large proportion of those unemployed. In simple terms Ireland has been investing in the human capital of these youth since birth: welfare, children's benefit, health and especially education.Slide 37
The Consequences of Youth Unemployment
In a recent paper, David Bell of the University of Stirling and I, found that
youth unemployment is especially harmful and creates scars
• We used data from the UK 1958 (3rd -9th March) birth cohort the National
Child Development Study (NCDS).
• Youth unemployment while young (≤ age 23) raises unemployment, lowers
wages, worsens health and lowers job satisfaction
• No such effects could be found for spells of unemployment when the
respondents were in their thirties
• The effects continued into middle age when the respondents were in their
Now we risk these assets being devalued, just as they were due to start producing. Not merely will their future worth be diminished - they may even turn to crime !
We need to consider intervening, as per this Irish Economy post on the topic Fás is a joke, at its best it may cater for construction workers
Also seeHowever, those who argue that active intervention in the Irish labour market is counter-productive will be given further credence by the reports on the FAS Work Experience Programme. If the Times is correct, it is very likely that this has flopped and is currently under review.
Philip Lane makes clear here why a classical Keynsian stimulus for Ireland is not appropriateIrish Times - No country for young men
According to two reports this week, young Irish people - and men in particular - are bearing the brunt of the recession, with potentially devastating effects on their lives and the economy. Members of the so-called 'lost generation' discuss their plight. CARL O'BRIEN, Chief Reporter
THEY’RE BRIGHT and they’re eager – but they’re also unwanted.
Leading labour economist Prof David Blanchflower has made headlines in the UK in recent times, warning of a “lost generation” of young people unless the British government moved swiftly to tackle the crisis. Visiting Dublin this week, his message was just as stark. He pointed to research in Britain which found that people who were unemployed in their mid-20s were more likely to be unemployed, have lower health and generate a lower wage later in life.
There is no time to waste, says Brian Mooney,...
“Unless you find work, your skills deteriorate within a few months,” he says. “So if a young person has left college or the construction industry and is out of work for a year, you’re going backwards. Your skills, morale and self-esteem all take a hit.”
However what can we do for the young unemployed ?
Clearly an investment here could save us future fiscal loss , and stave off a reduction in nett human capital. Any ideas ?