The cost of youth unemployment

September 28, 2009

Tony McAleavy-Tony McAleavy is the Director of Education at CfBT Education Trust. The opinions expressed are his own.-

In response to fears that 16 and 17 year olds were the forgotten victims of the recession, the government announced an extra 72,000 school, college and apprenticeship places from this month. If all the places are taken up, non-participation might dip from 14 percent to around 10 percent. And yet, as many as 100,000 16 and 17 year olds currently in employment (with or without training) would still be at risk from the recession.

This isn’t the first time youth unemployment has seen a worrying bulge. Since the early 1970s, policymakers have tried 34 different schemes – from the Training Opportunities Programme launched in 1972, to the Youth Training Scheme of the 1980s.

So what worked, what didn’t and have we learned anything from the millions spent about what actually gets young people off benefits and into work or full-time education? Our study of past schemes highlights ways forward for dealing with a very current problem.

The context, of course, has changed. In the 1980s, the majority of 16- to 17 year-olds were in work of some kind, with just 39 percent in full-time education in 1987. This figure had risen to 73 percent by 2007. Currently, participation in full-time education falls by around 11 percent between the ages of 16 and 17. Faced with limited job opportunities, the choice for many 17 year olds is between remaining in education or unemployment. Many will, hopefully, stay on in full or part-time education. But some might reject both unless labour market interventions can increase the number of jobs with training, and especially jobs with Apprenticeships.

The research shows that financial incentives for employers haven’t worked – they will employ young people if they need them, no financial reward or otherwise. In a minority of cases, employers used financial incentives to replace existing full-time staff with cheaper alternatives. The main problem has been that wages in youth schemes have been too low compared with market rates. Employers saw themselves being perceived as “mean”, and young people were turned off the whole idea.

Also, the training provided by employers has sometimes been poor (for example, in one study, 90 percent of employers said they’d provided training, only 70 percent of those recruits thought they had actually received any). At the same time, employer thinking is important, and those schemes based on consultation with employers in the design stage were found to be more successful.

Financial payments to young people in general are inevitably a working incentive. Historically, there was a split between allowances paid at 16 and 17. This principle has been forgotten in current financial support policy. Policy makers need to consider a higher rate of financial support to encourage 17 year olds either to stay on in full-time education or enter unwaged training such as programme-led apprenticeships.

The most effective programmes included a level of personalization. One-to-one support from individual mentors works, as do individual plans with incremental targets which build confidence and allow progress to be monitored. National programmes need flexibility to meet different local needs and participants’ expectations need to be managed – inaccurate information and unrealistic expectations have previously been the root cause of disillusionment and dropping out.

Lessons from History: Increasing the number of 16 and 17 year olds in education and training is available to download from www.cfbt.com

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