The Effectiveness of Policies to combat Youth Unemployment

This study provides quantitative estimates on the impact of Active Labour Market Policy (ALMP) on youth unemployment in Europe based on a macroeconomic panel dataset of youth unemployment, ALMP and education policy variables and further country-specific characteristics on labour market institutions and the broader demographic and macroeconomic environment for all EU Member States.

Using Blundell, Bond and Windermejer’s (2000) GMM estimator for dynamic panel data models, the study estimates the impact of different ALMP options on youth unemployment ratios. The results show that participation in vocational education at ISCED-3 level and some programmes of ALMP show significant effects on aggregate youth unemployment, while ALMP training programmes did not show a significant impact.