KOF Youth Labour Market Index: Switzerland Back at the Top

The KOF Youth Labour Market Index (KOF YLMI) uses a multi-dimensional approach to reflect the situation of young people on the labour market. The index comprises twelve indicators, which are divided into the four dimensions ‘Activity State’, ‘Working Conditions’, ‘Education’ and ‘Transition Smoothness’ and are then aggregated to form an index. The index scores range from one to seven; the higher the score, the better the situation.

The results in detail

The sixth release of the KOF YLMI extends its data coverage to 2017. The situation of young people on the European labour market clearly improved between 2016 and 2017. Switzerland overtakes Denmark in the index rank and is now leading with a score of 5.70. Denmark closely follows with a score of 5.69, while Latvia completes the top three positions (score of 5.62). The Netherlands (5.55), Germany (5.46) and Austria (5.43) confirm their positions in the ranking. Slovenia (5.41), Czech Republic (5.37), Lithuania (5.36) and Estonia (5.35) further complete the top ten ranking. Overall, large improvements occur in Eastern European countries. The EU28’s average score is 5.07.

The performance of the individual dimensions

A brief analysis of the performance of the individual dimensions reveals the reason for the changes occurring between 2016 and 2017. In the Activity State dimension, the situation improved in 10 countries, suggesting that young people increasingly participate in the labour market. With respect to the Working Conditions, the differences between 2016 and 2017 are small. Only Estonia experienced a substantial drop in this dimension, whereas Croatia, Romania, Greece and Montenegro experienced a clear amelioration. However, there were large changes with regard to the Education dimension. In particular, substantial improvements in this dimension occurred in Latvia, Cyprus, Croatia and Montenegro, while large drops appeared in Denmark, Lithuania, Luxembourg, Turkey and Slovakia. Finally, the changes in the ‘Transition Smoothness’ dimensions were minor.

Heterogeneity in education and training

This year’s release of the KOF YLMI focuses on the ‘Formal Education and Training Rate’. This indicator reports the share of youth aged 15 to 24 taking part in formal education or training (i.e. general education as well as vocational education and training). It indicates of how much education and skills young people acquire. This indicator shows large differences across countries. In the Netherlands, Luxembourg and Slovenia, about three out of four young persons are in education or training. In Turkey, Malta and the UK, the share is only about 50%. Although these differences strongly correlate with other indicators like the youth unemployment rate, participation in education and training is not a sufficient predictor of the youth labour market situation. Moreover, the fact that several countries show opposing trends in their participation in education and training over the last decade is puzzling.

Opposing trends in the participation in education

Investigations show large differences across countries in the evolution of the participation in education and training. In Poland and Hungary, the participation decreased by about 10%-points between 2007 and 2017. Furthermore, smaller reductions can be observed in Lithuania, Finland, Estonia and Iceland. In contrast, some other countries experienced a clear expansion in the share of youth taking part in formal education and training. In Turkey for instance the share increased by about 20%-points (from approximately 32% to 52%), as well as in Ireland (from 45% to about 65%) and in Spain (from 52% to 70%). Whether these increases correspond to ameliorations on the youth labour market is not clear-cut, but rather depends on country specific situations.