Abstract
Labor market uncertainties have plagued all countries in recent years, but young workers have borne the brunt of these uncertainties. Liberalization of labor markets has transformed work, creating a variety of nonstandard employment relations as well as increasing the number of people who do not have traditional employers. Macro social, political, and economic forces have also made it harder for young adults to gain solid footholds in the labor market. The articles in this issue of The ANNALS present empirical evidence about labor market uncertainties and youth labor force experiences from diverse regions of the world, both in the Global North and Global South: Asia (China, South Korea, Hong Kong, Caucasus and Central Asia); Latin/South America (Mexico, Brazil); Eastern Europe (Lithuania); Western Europe; and the United States. In this epilogue, I summarize the main insights from the articles and draw some broader conclusions about the future of labor market policies to address concerns related to workers’ insecurities and uncertainties.
Economic, political, and social transformations in recent years have led to changes in labor markets and restructuring of jobs and career opportunities. In the Global South as well as the Global North, and in postsocialist and more long-standing capitalist countries, structural changes in labor markets and in work—punctuated by economic crises and recessions—have created greater uncertainties for all workers. The impact of these changes on young workers has been especially profound and disproportionate, however, as young people are always more vulnerable to adverse labor market conditions due to their relative lack of work-relevant skills and experience, smaller social network connections, fewer economic resources to support them as they search for work, and less information about how to find jobs. The economic crises of 2007–2009, in particular, increased their vulnerability as fewer jobs were available and those that were tended to be short-term, poorly paying jobs. Finding jobs that meet their needs, values, and expectations was difficult, even for those who had college degrees, though education has become a crucial factor in explaining differences in labor market outcomes.
Youth unemployment is the most commonly studied aspect of this problem and is often a significant hurdle, more so in some periods and labor markets than others, and for people with different education and skills. But a larger challenge is to enhance the quality of jobs that young people have and are available to them. The jobs available to young workers are often low-wage and do not lead to career opportunities, which frequently result in workers being underemployed or overqualified. Workers may also choose—subject to the opportunities and constraints created by their education and skills, as well as characteristics such as their gender, race, age, and immigration status—to participate in education and training, in addition to not being in the labor force.
Young peoples’ labor market challenges also depend on the social institutions of their countries, which mitigate the impacts of the changing terms and nature of work. For example, educational systems that provide better matches for workers and jobs, along with the social support systems that enable people to have greater access to the labor market, help to facilitate the transitions from school to work. Moreover, labor laws that provide older workers with high employment protections hamper the progress of young people in many countries. 1
Much of the literature on the labor market uncertainties faced by youth has focused on Europe and liberal market economies in North America and Australia (e.g., O’Reilly et al. 2019), though there is considerable research as well on Asia (e.g., Brinton 2011). The articles in this issue of The ANNALS come from diverse regions of the world, both in the Global North and Global South: Asia (China, South Korea, Hong Kong, Caucasus and Central Asia); Latin/South America (Mexico, Brazil); Eastern Europe (Lithuania); Western Europe; and the United States. The research findings from dissimilar countries represented in this volume help to identify ways of addressing the labor market uncertainties faced by youth as they underscore both common challenges faced by young people everywhere as well as lessons from countries that have been able to facilitate better transitions into the workforce.
In this epilogue, I first briefly outline some of the changes that have led to transformations of the employment relationship between workers and employers and what these mean for labor market opportunities. I then discuss how the articles in this issue advance our understanding of the impacts of labor market uncertainties and insecurities on young people’s labor force experiences on a range of important outcomes, from wages to fertility. Last, I outline some policies that are suggested by the articles in this issue that would improve the ability of young people to gain a foothold in the labor force and have satisfying work careers.
Transformations in Work and Labor Markets
The difficulties that youth now experience with regard to low quality jobs reflect the broader rise in polarized and precarious work in a number of countries. There has been a growing polarization of jobs into good, well-paying jobs, and bad, low-wage, relatively dead-end jobs in many countries. In addition, there has been a general increase in the uncertainty and insecurity associated with all jobs, most notably temporary and involuntary part-time work, but also jobs that were formerly relatively permanent and part of job ladders that facilitated wage growth and training opportunities. Young people have borne the brunt of this expansion of low-quality work, especially those with less education.
These changes in the terms and nature of work have often been referred to as “precarious work,” or work that is uncertain, unstable and insecure and in which workers bear the risks of work (as opposed to businesses or the government) and receive limited social benefits and statutory entitlements (e.g., Kalleberg 2011). Examples of precarious work include “nonstandard employment relations,” such as temporary and contract work in the formal economy and independent contracting, in which workers do not technically have an employer. These work arrangements represent a shift from the normative forms of employment during the three decades after World War II in the United States, Europe, and some Asian countries (such as Japan and South Korea) that were embodied in the notion of a “standard employment relationship” that featured open-ended contracts and the exchange of security and training for commitment and loyalty. However, precarious employment can also be found in standard employment relations: the shifting of risks from employers to workers has reduced protections for standard workers as well, leading to greater uncertainty and insecurity for many who are employed on a “permanent” basis.
The recent rise of precarious work is rooted in employers’ and governments’ strategies to increase their workforce flexibility in response to growing competitive pressures associated with the internationalization of the economy and rapid technological changes. Labor markets were liberalized (i.e., employers’ hiring and firing flexibility was increased, employment protections for workers were decreased) in both liberal market and coordinated capitalist economies, though the form this liberalization has taken depends on countries’ political and economic dynamics driving employers’ and workers’ flexibility in the labor market (e.g., Thelen 2014; Kalleberg 2018). Countries that transitioned from socialism to more capitalistic economies experienced a liberalization of labor markets too, and, like those in the capitalist market economies, also weakened formerly secure employment relations and welfare protections. Labor market liberalization was exacerbated by the economic crisis of 2007–2009 that affected all countries one way or another (though the timing of the crisis may differ among countries), which created the greatest economic upheaval since the Great Depression of the 1930s. However, the changes in work and labor markets noted above represent long-term structural transformations in employment relations rather than simply reflections of short-term business cycles.
Changing Labor Markets and Youth Labor Force Outcomes
These changes in labor markets have led to a number of challenges for young workers as they seek to make the transition from school to work. The articles in this issue of The ANNALS focus on several interrelated themes that encapsulate many of the central research questions about youth and work. First, several articles address the characteristics of the transition from school to work (STW). The trends toward precarious work have made it more difficult for young people to make the transition from STW, as Schoon shows for the United Kingdom since the 1970s. Employment opportunities for young people have become more uncertain, as reflected in an increase of youth unemployment as well as the proportion of young people working on temporary contracts and not being in education, employment, or training (NEET). How does the STW transition operate in formerly socialist countries that have liberalized their labor markets?
Second, what is the impact of economic crises on young workers? Who are the most vulnerable persons during periods of economic turbulence? A third research question from the articles in this volume focuses on the labor force participation of young people—what are their experiences with unemployment and what are the characteristics of their employment? Last, what about those not in the labor force or in education or training, the so-called NEETs? Articles in this issue speak to each of these four questions.
School-to-Labor-Market Transitions in Formerly Socialist Countries
The evolution from socialist to capitalist economic regimes has been accompanied by changes in the transition from school to the labor market. Political-economic structural changes provide opportunities for some people (especially those who are well educated in the types of schools that facilitate access to the labor market) and provide constraints for others (such as those lacking important education credentials). Several articles examine this transition from socialist to more capitalist economic systems in China as well as in formerly Soviet countries.
Hao and Zhang show that there is growing social inequality in the college-to-work transition in China as it rises to an economic power. Unlike other societies, the emerging divide in early adulthood is dictated by types of degrees in the college-educated population. The accelerated expansion of higher education in China in 1999 delayed the ability of graduates from technical colleges to obtain skilled jobs but did not affect the graduates of four-year colleges. This reflects the widening gap between the historically lower quality of instruction in technical colleges compared to four-year colleges. It also signifies the slower adaptation of technical colleges to the rapid innovation in digital technologies. Students of lower family origins and lower social positions during childhood are often sorted into technical colleges. Moreover, at-birth rural household registration (hukou) college students who graduate successfully from college are more competitive in finding skilled jobs.
Gebel analyzes how the end of the socialist state and the growing capitalist economy has changed the labor market experiences of young women in three former Soviet countries (Azerbaijan, Georgia, and Tajikistan). Under socialism, these countries had strong education-occupation linkages, a robust vocational orientation and tertiary education, and institutional support for the integration of women into the labor force. The political and economic upheavals of the postsocialist period in these countries led to pressures on vocational education, diminishing of education-occupation linkages, expansion and differentiation of tertiary education, and an end to lifetime employment guarantees and basic economic security for young people. These shocks created greater uncertainties for youth and undermined the gender egalitarianism characteristic of socialism. Gebel shows that parental social resources enhance the chances of getting a formal sector job in Georgia and Tajikistan, and parental economic resources increase women’s chances in Azerbaijan and Georgia. Women with higher education attainment are more likely to be active in the labor market and get a formal sector job. Moreover, a high proportion of women in all three countries do not participate in the labor market, which is due mainly to early family formation (though early family formation does not affect their chances of getting jobs in the formal sector).
Braziene studies another post-Soviet country (Lithuania) that has also undergone profound social, economic, and political changes during the last decades. After regaining independence in the 1990s, Lithuania underwent a complete restructuring of the education system and the labor market, which was characterized by educational expansion, labor market restructuring, and enormous emigration of young people from the country. Braziene finds that youth from lower educated families had relatively greater difficulties in the labor market transition and in obtaining decent working conditions, in part because they lacked general competences.
Economic Conditions and Labor Market Outcomes
STW transitions are shaped in part by broader economic considerations as well as the educational and labor market institutions that are developed to facilitate these transitions. The economic crises of the late 2000s (called the Great Recession in the United States) made it more difficult for young people to establish strong footholds in the labor market. Education and skills became increasingly important resources in achieving success in ever more polarized labor markets.
Choi and Bae look at changes in early labor market outcomes in South Korea, where the unemployment rate among youths (aged 20–29) increased sharply from 6.6 percent in 2002 to 9.8 percent in 2016. Almost all young people in South Korea finish high school, and about 70 percent go to college. Because one’s first job has a strong impact on a person’s long-term career trajectories (as is also the case in Japan), many students delay their college graduation until they find a job that matches their skills and has good long-term career prospects. This helps to explain why the proportion of those searching for a job, rather than working or staying in school, has increased over time. Moreover, job quality has deteriorated for those who are employed, and there is a growing divergence in labor market outcomes depending on college major and the reputation of one’s university.
Mont’Alvao and Costa Ribeiro find that the labor market prospects of youth also declined considerably during the most recent economic recession (2014–2017) in Brazil, one of the world’s largest developing countries. Like in many other countries, young people are affected more than adults during economic downturns, though the situation for Brazilian youth is unusually difficult, as they have higher rates of unemployment and informal work than adults. A major reason for this is the lack of institutionalized bridges between the educational system and the labor market. During the height of the latest recession (2016–2017), the authors found that there was an increase in the differences between white and African Brazilian youth, as well as between college-educated youth and those with a high school education or less.
Unt and Täht examine the career experiences of a cohort of young workers in Estonia, a country that recovered fairly quickly after being hit hard by the economic crisis that started in 2007. They find that the main result from being unemployed early in a youth’s career was recurring unemployment, not a loss of income or the risk of being in poverty five years later. They suggest that employers are less likely to see being unemployed as a sign of lower productivity or depreciation of skills when unemployment is high.
Youth Labor Force Participation: Unemployment and Employment
Several articles analyze the pattern of changes in youth labor force participation (LFP). Yang reports that there has been a decline in LFP in the global youth population since the 1990s, dropping from 59 percent to 47 percent from 1991 to 2014 (International Labour Organization 2015). LFP reflects both those who are employed and unemployed, and articles in this issue address each of these topics.
Youth unemployment
Young workers compose about 40 percent of the world’s unemployed, and their global unemployment rate of 13 percent is estimated to be three times that of adult rates (Mawn et al. 2017). The high unemployment of young people results from several factors. They generally lack the experience that employers are increasingly demanding given employers’ reluctance to provide on-the-job training (Cappelli 2012). They also do not have the networks that more experienced workers have, and hence are not aware of many job opportunities that are available or what kinds of work best suits them. Employers also cannot easily assess the productivity potential and trainability of young applicants and so must rely on very imperfect signals, such as education or race and ethnicity, which disadvantages particular groups of young people (Gebel 2015).
A prominent indicator of young workers’ difficulties in the labor market has been the sharp increase in their unemployment rates since the Great Recession and later economic crises (for Europe, see O’Reilly et al. 2019). Overall, unemployment figures underestimate somewhat the employment difficulties faced by young workers; however, the overall unemployment rate masks the very high rates of joblessness among racial minorities; those who have given up looking for a job; and those who are underemployed or working in unpaid internships.
Shibuya, Fong, and Guo investigate how local-born and migrant youth populations in Hong Kong differ in their likelihood of finding employment. They find that those who are younger and who arrived in Hong Kong after 1997 were less likely to be unemployed than others, suggesting that migrant youths have benefited from the changing nature of postcolonial Hong Kong and the stronger economic relationship with mainland China.
Youth employment
Youth unemployment rates provide only a partial picture of the difficulties that young people in these countries have in obtaining a foothold in the labor market. Young people who cannot find jobs might decide not to continue to search for them, but rather choose to stay in school or otherwise pursue training opportunities that delay their entry into the labor market until their chances of finding a suitable job have improved. The decision to forgo labor force entry might also reflect young peoples’ decision to wait until a “good” job comes along rather than to take a job that they regard as a “bad” one. This is especially likely if parents are willing to subsidize their children living at home for an extended period of time and if there is little stigma attached to such arrangements.
Yang shows that from 1991 to 2014, the decline in youth employment has been severe in East Asia, where the proportion of those working dropped from 76 percent to 55 percent. She finds that the large youth population in China has contributed greatly to this regional change, due largely to the dramatic increase in educational attainment among the Chinese youth in the past two decades. Moreover, China has lost its demographic dividend (i.e., the growth in an economy that is the result of a change in the age structure of a country’s population) since 2012 as the share of the youth population has shrunk due to rapidly declining fertility since the 1970s.
The quality of jobs is also important for assessing trends in employment. Sun shows that men in the United States have slowly increased their presence in the kinds of paid care-work jobs that have long been considered as “women’s” jobs. Nevertheless, job growth in the paid care sector is polarized between “good” jobs and “bad” jobs in terms of pay and job security. Young black men—especially those without a college education—are more likely to enter low-paying care-work jobs, a black-white disparity that is not fully explained by racial differences in individual-level characteristics.
Young workers are also more likely to work in part-time work. There are of course many reasons for the relatively high incidence of part-time work among young workers, notably the fact that some are also going to school. But a key factor is also their inability to secure full-time work due to the lack of availability of such jobs.
NEETs
In addition to having difficulty finding jobs, young workers often find themselves excluded from both jobs and educational and training opportunities. NEET (i.e., persons who are not in employment, education and training) is a broad indicator of participation of young people in productive economic activity as well as a measure of the degree of exclusion of youth from the labor market and other major societal institutions. This indicator was developed by the government in the UK in the mid-1990s as part of its social exclusion framework to create awareness of marginalized social groups (Mascherini 2019). The concept rapidly gained prominence among international organizations and the media as a barometer of the degree to which youth are socially excluded and disconnected from major institutions in society, such as education and work. Its spread to other countries and regions is reflected by the studies in this issue (China, Brazil, and Mexico). NEETs are the most marginalized group of young people, as being detached or disconnected from both school and work is likely to harm both their current and future career prospects as they do not have the opportunity to develop their human capital at a critical time in their lives.
The proportion of youth (usually defined as 16- to 24-year-olds) who are NEETs varies among regions and countries and depends on labor market conditions (it increased during the economic crisis at the end of the first decade of the twenty-first century, for example). The global NEET rate is about 21.8 percent among young people (International Labour Organization 2017). It was reported to be at 23.4 percent in the European Union, 15.5 percent in the United States, 12.2 percent in Australia, and 22.2 percent in the United Kingdom (Mawn et al. 2017).
The global NEET rates are much higher for women (34.4 percent) than men (9.8 percent) (International Labour Organization 2017). Despite more women than men having graduated from tertiary education in more than 100 countries, many of these women end up in NEET, not necessarily voluntarily. This reflects the presence of serious gender discrimination in the labor market and unequal involvement of men and women in domestic divisions of labor.
Yang examines the incidence and correlates of being in NEET in China among individuals aged 16 to 35 (16 is the legal working age in China and most finish education, enter the labor market, get married, and have children by 35). The NEET rate was 8 percent during the study period (2011–2012). Individuals aged 22 to 25 and women (especially married women and migrants) have higher risks of being in NEET. Migrant women are more likely to be in NEET, though the risks of being NEET are small for migrant men. Those with tertiary education (especially women) are also less likely to be NEETs.
Sánchez-Soto and León investigate the frequency and causes of being in NEET in Mexico City. This is an especially relevant country within which to study NEETs, as nearly 8 million Mexican youth are in NEET, making Mexico the country with the fifth highest proportion of NEETs in the countries composing the Organisation for Economic Co-operation and Development (OECD). Their data analysis shows a divergence among youth: a college education for some leads to increased risk of being in NEET; while for others, higher education is associated with being a full-time student. (While men with some college education are more likely to be NEETs, higher education does not have a significant effect for women.) NEETs are more likely to be disadvantaged youth, women, children or spouses of the householder, and living in households where the head is educated. NEET status increases when work opportunities are scarce or when seeking college admission. The authors also identify both barriers to school (such as an inability of universities to absorb most applicants and vocational mismatch) and to employment (such as discrimination of inexperienced workers and the undesirability of low-wage employment).
Dias and Nogales Vasconcelos examine the diverse nature of the NEET category in Brazil for people aged 15–29 years. They argue that NEETs represent groups that differ in both the reasons for and consequences of not being in the labor market or in school, as is also the case with Mexico. NEET status results from structural barriers and social inequality for a considerable proportion of youth, but for another substantial group—such as women responsible for domestic and care tasks—NEET status is not really a problem; these women are not idle but spending much of their time on “invisible” work. The issue of NEET in Brazil is thus more due to intersections of gender and class in the light of social inequalities than it is a problem in the labor market. Their study also highlights the main difficulty faced by youth in Brazil, which is not necessarily getting a job but staying in one. This instability is especially problematic for young people with low education. They also argue that the problem of NEET in Brazil is more related to social structural factors than it is due to employment crises, as it is in the countries of the Global North.
Policy Implications
The difficulties young workers have had in recent years in making the transition from school to good jobs and careers are likely to persist for at least the near future. Younger workers will continue to struggle as they seek to establish themselves in the labor market and find jobs that provide them with opportunities to develop satisfying career narratives. In many countries, there will be a continued growth in older workers, due to the maturation of the post–World War II Baby Boom cohort and declines in fertility. This aging of the labor force will be exacerbated over the next several decades, especially if workers are less able to retire because they are economically insecure. An older workforce is likely to continue to make it more difficult for younger workers to find good jobs: as older workers stay in jobs that might otherwise have gone to younger people. So, young people are more likely to be relegated to bad jobs, as well as being unemployed, underemployed (involuntary part time), overqualified, in NEET, and discouraged workers.
Policies to address the negative impacts of labor market uncertainties and insecurities for young peoples’ labor market experiences need to first consider whether differences between younger and older workers are due to differences in their age, cohort/generational differences, or the effects of the historical period. For many labor market outcomes, there are more similarities between younger and older workers who participated in the labor market in different periods (see endnote 1). Nevertheless, young workers have particular needs (such as making the transition from school to work), and so some policies should be targeted at strengthening institutions that can mitigate the negative consequences of labor market uncertainty for them.
Policies to alleviate labor market uncertainty have broader implications for individuals and families. Karabchuk shows how institutions affect nonwork outcomes, such as fertility among European youth. She finds that job instability (i.e., temporary employment, informal work, and unemployment) reduces fertility intentions. In countries with rigid labor market systems (characterized by high levels of employment protections, or EPL), young unemployed adults are less likely to intend to have a first child in the next three years. In countries with low levels of EPL, people in temporary or informal employment are also less likely to plan to have a first child in the next three years.
All countries need to facilitate the integration of young workers into the labor market and enable them to acquire skills that will make them productive and able to work with dignity. Effective policies need to address three basic work-related problems: the paucity of demand for young workers; inadequate education and training opportunities; and the lack of good jobs for young workers, especially college graduates.
First, economic crises exacerbate the higher unemployment rates typically characteristic of young people (see the articles by Mont’Alvao and Rebeiro, Choi and Bae, and Unt and Thät in this issue). Policies that invest in broad-based job creation (such as rebuilding infrastructure or enhancing funding to education), while not targeted specifically at youth, are needed as part of continued strategies to recover from economic crises and lowering overall unemployment rates (Ayres and Dillon 2013).
Second, greater efforts are needed to facilitate the transition from school to work. In many countries, NEETs face institutional barriers and lack of vocational support in school. Formal education is often not very useful for teaching workers the kinds of specific skills needed to perform particular jobs. Such training was usually provided in the past to workers on-the-job, but the growth of precarious and nonstandard work has made companies much more reluctant to invest in training since they are unable (or unwilling) to offer workers long-term employment commitments. The need for enhanced and continuing training is especially important in anticipation of the new digital innovations (e.g., those related to Artificial Intelligence and digitization) that will automate many routine jobs and require workers to have new types of skills.
Germany is the model of a country with a well-functioning system of apprenticeship and vocational training, and, as a result, it has been fairly successful in keeping youth unemployment low. 2 O’Reilly et al. (2015) identify a variety of additional programs designed to address the problem of youth unemployment, most of them associated with Europe 2020, a 10-year strategy proposed by the European Commission in 2010 to guide the economic advancement of the European Union. These include several “flagship initiatives” designed to enhance the quality of education and training as well as to promote the mobility of workers and the matching of young workers to jobs (see also Newman and Winston 2016). Eichhorst et al. (2015) review the literature on vocational training in industrial societies and conclude that vocational education and training is a valid alternative to general education and that apprenticeships are more effective when combined with institutional learning rather than when they are based in schools.
Dias and Nogales Vasconcelos argue that rather than establishing particular public policies to address the problem of NEETs, it would be better to develop policies that improve access to and conditions of employment and education for all groups of young people as well as for those who are no longer young. They argue that the NEET group is too heterogeneous to receive only one type of public policy or treatment.
Schoon recommends policies to create viable career opportunities for those not engaged in higher education in the UK, which would be targeted at the most vulnerable in society. As Sánchez-Soto and León conclude from their study, there is a need for targeted programs to provide greater access to higher education and entry-level work opportunities, such as efforts to increase enrollments in universities and enhance vocational training in high school. In particular, STW training programs and apprenticeships would be beneficial to facilitate the transition from education to work.
A third, and perhaps the most vexing, issue is the need to create more high-quality jobs for young workers, especially those who are not college graduates. This is a difficult problem, as it requires coordinated efforts of government, business, and labor. Implementing policies to create more good jobs and make bad jobs better depends largely on the ability of workers to have a real voice in decision-making and to exercise collective agency. Given the disadvantages faced by women, in particular, some gender-specific structural and behavioral adaptions to counter the effects of discrimination are also needed.
Conclusion
Young people have always had relatively high unemployment rates, as they sample the labor market in search of jobs that fit their interests, preferences, and skills. Even when they are able to find work, it is often in precarious jobs. Their tenuous ability to move from a period of searching to finding a stable career path presents a particular challenge in the current age of precarious and polarized work. Nevertheless, countries cannot afford not to attempt to overcome these obstacles. The articles in this issue of The ANNALS speak to the challenges faced by young workers in uncertain labor markets and suggest ways to develop institutional strategies to help young adults navigate changing labor markets.
Footnotes
Notes
Arne L. Kalleberg is a Kenan Distinguished Professor of Sociology at the University of North Carolina at Chapel Hill. He served as the President of the American Sociological Association in 2007–2008 and is currently the editor of Social Forces, an international journal of social research.