Determinants of youth unemployment rate: case of Slovakia
Abstract
Research background: The employment rate of young individuals in the labour market has considerably decreased in developed countries recently. Due to lower labour capital, skills, and generic and job-specific work experience, youth consider finding suitable job challenging. If they fail to succeed in the labour market soon after graduation, it leads to long-term unemployment, unstable and low-quality jobs, and even social exclusion.
Purpose of the article: This paper aims to analyse the unemployment rate of high school-graduated students and the factors impacting this unemployment rate, such as GDP per capita, total unemployment rate, apartment price per square meter and results from state exams. Identifying the determinants affecting youth unemployment is crucial for theoretical knowledge and for policymakers to ensure youth inclusion in the economic mainstream. As a result, society can reduce social and economic costs and avoid structural problems in the future.
Methods: Data about 464 Slovak high schools from National Institute for Certified Educational. Data include the graduate unemployment rate for each high school in Slovakia. Furthermore, two logistic regression models have been developed to investigate the impact of selected factors on high school graduates? unemployment rate immediately after graduation and nine months after graduation.
Findings & value added: This paper indicates the existence of statistical dependency between unemployment of high school graduates and overall unemployment rate in the region, GDP per capita in the region, quality of high school education and cost of living in the region immediately after graduation. Analysis of the period nine months after graduation has shown the important decline of education quality provided by high schools. To reduce youth unemployment, the state should focus primarily on improving overall unemployment itself by implementing a dual-learning system, simplifying business opportunities, making part-time work available, or introducing lifelong learning to help transform the economy into a knowledge base.
Keywords
youth unemployment, unemployment rate for graduated students, work motivation, determinants of unemployment, quality of high schools
References
- Arslan M., & Zaman R. (2014), Unemployment and its determinants: a study of Pakistan economy (1999-2010). Journal of Economics and Sustainable Development, 5(13), 20?24. doi: 10.2139/SSRN.2515075. DOI: https://doi.org/10.2139/ssrn.2515075
View in Google Scholar - Aquilino, W. S. (2005). Impact of family structure on parental attitudes toward the economic support of adult children over the transition to adulthood. Jour-nal of Family Issues, 26(2), 143?167. doi: 10.1177/0192513X04265950. DOI: https://doi.org/10.1177/0192513X04265950
View in Google Scholar - Bal-Domańska, B. (2021). The impact of macroeconomic and structural factors on the unemployment of young women and men. Economic Change and Restructuring. Advance online publication. doi: 10.1007/s10644-021-09341-9. DOI: https://doi.org/10.1007/s10644-021-09341-9
View in Google Scholar - Bayrak, R., & Tatli, H. (2018). The determinants of youth unemployment: a panel data analysis of OECD Countries. European Journal of Comparative Economics, 15(2), 231?248. doi: 10.25428/1824-2979/201802-231-248.
View in Google Scholar - Brada, J. C., Marelli, E., & Signorelli, M. (2014). Young people and the labor market: key determinants and new evidence. Comparative Economic Studies, 56(4). 556?566. doi: 10.1057/ces.2014.30. DOI: https://doi.org/10.1057/ces.2014.30
View in Google Scholar - Brzinsky-Fay, C. (2007). Lost in transition? Labour market entry sequences of school leavers in Europe. European Sociological Review, 23, 409?422. doi: 10.1093/esr/jcm011. DOI: https://doi.org/10.1093/esr/jcm011
View in Google Scholar - Buttler, D. (2019). Employment status and well-being amongst youth: explaining. In B. Hvinden, J. O?Reilly, M. A. Schoyen & C. Hyggen (Eds.). Negotiating early job insecurity. Cheltenham: Edward Elgar Publishing, 19?45. doi: 10.433 7/9781788118798.00008. DOI: https://doi.org/10.4337/9781788118798.00008
View in Google Scholar - Caroleo, F. E., Rocca, A., Neagu, G., & Keranova, D., (2022). NEETs and the process of transition from school to the labor market: a comparative analysis of Italy, Romania, and Bulgaria. Youth & Society, 54, 109?129. doi: 10.1177/00441 18X211056360. DOI: https://doi.org/10.1177/0044118X211056360
View in Google Scholar - Cvecic, I., & Sokolic, D. (2018). Impact of public expenditure in labour market policies and other selected factors on youth unemployment. Economic Research-Ekonomska Istraživanja, 31(1), 2060?2080. doi: 10.1080/1331677X .2018.1480970. DOI: https://doi.org/10.1080/1331677X.2018.1480970
View in Google Scholar - Danacica, D.-E. (2014). Determinants of youth unemployment spells and exit destinations in Romania and Hungary. Acta Oeconomica, 64(3), 335?365. doi: 10.1556/AOecon.64.2014.3.4. DOI: https://doi.org/10.1556/aoecon.64.2014.3.4
View in Google Scholar - Dagume, M. A., & Gyekye A. (2016). Determinants of youth unemployment in South Africa: evidence from the Vhembe district of Limpopo province. Environmental Economics, 7(4). doi: 10.21511/ee.07(4).2016.06. DOI: https://doi.org/10.21511/ee.07(4).2016.06
View in Google Scholar - Demidova, O., & Signorelli, M. (2012). Determinants of youth unemployment in Russian regions. Post Communist Economies, 24(2), 191?217. doi: 10.1080/14 631377.2012.675155. DOI: https://doi.org/10.1080/14631377.2012.675155
View in Google Scholar - Dimian, G. C. (2011). The role of education in explaining youth labour market imbalances in CEE countries. Journal on Efficiency and Responsibility in Education and Science, 4(3), 105?115.
View in Google Scholar - Dolado J. J., Jansen, M., Felgueroso, F., Fuentes, A., & Wölf, A. (2013). Youth labour market performance in Spain and its determinants. OECD Economics Department Working Papers. doi: 10.1787/18151973. DOI: https://doi.org/10.1787/18151973
View in Google Scholar - Draper, N. R., & Smith, H. (2014). Applied regression analysis. Wiley series in probability and statistics. John Wiley & Sons. doi: 10.1002/9781118625590. DOI: https://doi.org/10.1002/9781118625590
View in Google Scholar - Ductor, L., & Grechyna, D., (2020). Determinants of ins and outs of unemploy-ment. Applied Economics Letters, 27, 892?898. doi: 10.1080/13504851.201 9.1646858. DOI: https://doi.org/10.1080/13504851.2019.1646858
View in Google Scholar - Dvouletý, O., Lukeš, M., & Vancea, M. (2020). Individual-level and family back-ground determinants of young adults? unemployment in Europe. Empirica, 47, 389?409. doi: 10.1007/s10663-018-9430-x. DOI: https://doi.org/10.1007/s10663-018-9430-x
View in Google Scholar - Egessa, A., Nnyanzi, J. B., & Muwanga, J. (2021). Determinants of youth unem-ployment in Uganda: the role of gender, education, residence, and age. IZA Journal of Labor Policy, 11, 20210008. doi: 10.2478/izajolp-2021-0008. DOI: https://doi.org/10.2478/izajolp-2021-0008
View in Google Scholar - European commission (2020). Unemployment statistics. Retrieved from https://ec.europa.eu/eurostat/statistics-explained/index.php/Unemployment_stat is-tics#Unemployment_in_the_Member_States.
View in Google Scholar - Estévez-Abe, M., Iversen, T., & Soskice, D. (2001). Social protection and the formation of skills: a reinterpretation of the welfare state. In P. A. Hall & D. Soskice (Eds.). Varieties of capitalism: the institutional foundations of com-parative advantage. Oxford/New York: Oxford University Press, 145?183. doi: 10.1093/0199247757.003.0004. DOI: https://doi.org/10.1093/0199247757.003.0004
View in Google Scholar - Faraway, J. J. (2002). Practical regression and Anova using R. Retrieved from https://cran.r-project.org/doc/contrib/Faraway-PRA.pdf.
View in Google Scholar - Goldin, C., & Katz, L. F. (2007). The race between education and technology: the evolution of U.S. educational wage differentials, 1890 to 2005. NBER Working Paper, 12984. doi: 10.3386/w12984. DOI: https://doi.org/10.3386/w12984
View in Google Scholar - Hasan, Z., & Sasana, H., (2020). Determinants of youth unemployment rate in Asean. International Journal of Scientific & Technology Research, 9(6), 6687?6691.
View in Google Scholar - Huber, E., & Stephens, J. D. (2014). Income inequality and redistribution in post-industrial democracies: demographic, economic and political determinants. Socio.Economic Review, 12, 245?267. doi: 10.1093/ser/mwu001. DOI: https://doi.org/10.1093/ser/mwu001
View in Google Scholar - Chambers, J. M. (1992). Linear models. In J. M. Chambers, T. J. Hastie & T. Hastie (Eds.). Statistical models in S. Wadsworth & Brooks/Cole.
View in Google Scholar - Kabaklarli, E., Hazeler, P., & Buhus, A. (2011). Economic determinants of Turk-ish youth unemployment problem: cointegration analysis. In Proceedings of the international conference on applied economics. Scientific Research. An Academic Publisher, 267?272.
View in Google Scholar - Kanfer, R., Wanberg, C. R., & Kantrowitz, T. M. (2001). Job search and employ-ment: a personality-motivational analysis and metaanalytic review. Journal of Applied Psychology, 86. 837?855. doi: 10.1037/0021-9010.86.5.837. DOI: https://doi.org/10.1037/0021-9010.86.5.837
View in Google Scholar - Kang, Y. (2021). Determinants of youth unemployment: empirical analysis of OECD and EU member countries in 2000-2017. Journal of Economic Devel-opment, 46(3), 109?131. doi: 10.35866/caujed.2021.44.3.006.
View in Google Scholar - Kobylińska, U., Rollnik-Sadowska, E., & Samul, J. (2017). Young people on the labour market in Poland ? the point of view of the employer. Oeconomia Copernicana, 8(4), 553?568. doi: 10.24136/oc.v8i4.34. DOI: https://doi.org/10.24136/oc.v8i4.34
View in Google Scholar - Korpi, T., de Graaf, P., Hendrickx, J., & Layte, R. (2003). Vocational training and career employment precariousness in Great Britain, the Netherlands and Swe-den. Acta Sociologica, 46, 17?30. doi: 10.1177/0001699303046001002. DOI: https://doi.org/10.1177/0001699303046001002
View in Google Scholar - Lallukka, T., Kerkelä, M., Ristikari, T., Merikukka, M., Hiilamo, H., Virtanen, M., ?verland, S., Gissler, M. & Halonen, J. I., (2019). Determinants of long-term unemployment in early adulthood: a Finnish birth cohort study. SSM Population Health, 8, 100410. doi: 10.1016/j.ssmph.2019.100410. DOI: https://doi.org/10.1016/j.ssmph.2019.100410
View in Google Scholar - Lim, J.-Y., & Lee, Y.-M., (2019). Exit duration and unemployment determinants for Korean graduates. Journal for Labour Market Research, 53(5), 2?14. doi: 10.1186/s12651-019-0255-2. DOI: https://doi.org/10.1186/s12651-019-0255-2
View in Google Scholar - Luijkx, R., & Wolbers, M. H. J. (2009). The effects of non-employment in early work-life on subsequent employment chances of individuals in the Nether-lands. European Sociological Review, 25(6), 647?660. doi: 10.1093/esr/jcp002. DOI: https://doi.org/10.1093/esr/jcp002
View in Google Scholar - Marelli, E., & Vakulenko, E. (2016). Youth unemployment in Italy and Russia: aggregate trends and individual determinants. Economic and Labour Relations Review, 27(3), 387?405. doi: 10.1177/1035304616657959. DOI: https://doi.org/10.1177/1035304616657959
View in Google Scholar - Maynou, L., Ordó?ez, J., & Silva, J. I. (2022). Convergence and determinants of young people not in employment, education or training: an European regional analysis. Economic Modelling, 110, 105808. doi: 10.1016/j.econmod.2022.10 5808. DOI: https://doi.org/10.1016/j.econmod.2022.105808
View in Google Scholar - Mincer, J. (1984). Human capital and economic growth. Economics of Education Review, 3(3), 195?205. doi: 10.1016/0272-7757(84)90032-3. DOI: https://doi.org/10.1016/0272-7757(84)90032-3
View in Google Scholar - Ngai, S. S. Y., Cheung, C. K., Yuan, R., & Lin, S. (2016). Work motivation of unemployed youths: moderating effects of financial dependence on parents. Children and Youth Services Review, 71, 157?165. doi: 10.1016/j.childyouth.2 016.11.005. DOI: https://doi.org/10.1016/j.childyouth.2016.11.005
View in Google Scholar - O?Higgins, N. (2017). Rising to the youth employment challenge - new evidence on key policy issues. International Labour Office ? Geneva: ILO.
View in Google Scholar - OECD (2020a). Youth unemployment rate. Retrieved from https://data.oecd.org/u nemp/youth-unemployment-rate.htm.
View in Google Scholar - OECD (2020b). Youth not in employment, education or training (NEET). Re-trieved from https://data.oecd.org/youthinac/youth-not-in-employment-educat ion-or-training-neet.htm.
View in Google Scholar - Petrakis, I., (2021). Determinants of female labour force participation: evidence from Greece. Labour, 35, 538?567. doi: 10.1111/labr.12206. DOI: https://doi.org/10.1111/labr.12206
View in Google Scholar - Pitkänen , J., Remes, H., Moustgaard, H., & Martikainen, P. (2021). Parental socioeconomic resources and adverse childhood experiences as predictors of not in education, employment, or training: a Finnish register-based longitudi-nal study, Journal of Youth Studies, 24(1), 1?18. doi: 10.1080/13676261.2019.1679745. DOI: https://doi.org/10.1080/13676261.2019.1679745
View in Google Scholar - Robayo, C. D. C., & Estévez, J. G., (2019). Desempleo juvenil en Colombia ?La educación importa? Revista Finanzas Y Política Económica, 11(1), 101?127. doi: 10.14718/revfinanzpolitecon.2019.11.1.7. DOI: https://doi.org/10.14718/revfinanzpolitecon.2019.11.1.7
View in Google Scholar - Šafránková, J. M., & Šikýř, M. (2017). Work expectations and potential employ-ability of millennials and post-millennials on the Czech labor market. Oeconomia Copernicana, 8(4). 585?599. doi: 10.24136/oc.v8i4.36. DOI: https://doi.org/10.24136/oc.v8i4.36
View in Google Scholar - Saxunová, D., & Chorvatovičová, L. (2018). Management of labour force move-ment applied in Slovakia. Social and Economic Revue, 16(2), 35?43.
View in Google Scholar - Schioppa, F. K. P., & Lupi, C. (2002). Family income and wealth, youth unem-ployment and active labour market policies. International Review of Applied Economics, 16(4), 407?416. doi: 10.1080/02692170210161147. DOI: https://doi.org/10.1080/02692170210161147
View in Google Scholar - Solove, E., Fisher, G. G., & Kraiger, K. (2015). Coping with job loss and reemployment: a two-wave study. Journal of Business and Psychology, 30(3), 529?541. doi: 10.1007/s10869-014-9380-7. DOI: https://doi.org/10.1007/s10869-014-9380-7
View in Google Scholar - Stabingis, L. (2020). Impact of youth guarantee iniciatives on NEETs population changes in EU. Management Theory and Studies for Rural Business and Infrastructure Development, 42(2), 145?156. doi: 10.15544/mts.2020.15. DOI: https://doi.org/10.15544/mts.2020.15
View in Google Scholar - Styczyńska, I. (2013). Enhancing youth opportunities in employment: determi-nants and policy implications. Intereconomics, 48(4), 196?235. doi: 10.1007/s10272-013-0464-9. DOI: https://doi.org/10.1007/s10272-013-0464-9
View in Google Scholar - T?hlin, M., & Westerman, J. (2020). Youth employment decline and the structur-al change of skill. European Societies 2020, 22(1), 47?76. doi: 10.1080/146166 96.2018.1552981. DOI: https://doi.org/10.1080/14616696.2018.1552981
View in Google Scholar - Taps?n G. (2011). The relation between national savings, economic growth and employment. ?stanbul: Istanbul University Social Sciences Institute.
View in Google Scholar - Tomić, I. (2018). What drives youth unemployment in Europe? Economic vs non-economic determinants. International Labour Review, 157(3), 379?408. doi: 10.1111/ilr.12113. DOI: https://doi.org/10.1111/ilr.12113
View in Google Scholar - Wesseling W. I. E. (2021). Towards a more all-inclusive evaluation of interven-tions for unemployed youth: a longitudinal investigation of participant, pro-gramme, relational and contextual factors. Social Policy & Administration, 55(7), 1?17. doi: 10.1111/spol.12705. DOI: https://doi.org/10.1111/spol.12705
View in Google Scholar