What drives youth unemployment in Europe? Economic vs non-economic determinants

Abstract

This article explores the main determinants of youth unemployment in Europe in the period 2002 to 2014 by estimating panel data models for the 28 Member States of the European Union (EU). Heterogeneity is acknowledged by estimating models for subsamples of countries with “high” and “low” youth unemployment rates. The main results suggest that youth unemployment is more pronounced in countries with poor GDP growth, a low share of construction activity and high public debt. Reduced mobility (owing to homeownership), corruption, reception of a high level of remittances and a lack of possibilities for young people to live outside parental homes are also important factors.