Academic journal article Demographic Research

Youth Prospects in a Time of Economic Recession

Academic journal article Demographic Research

Youth Prospects in a Time of Economic Recession

Article excerpt



The paper gives an update to earlier analysis considering youth poverty and transition to adulthood, which is timely given the economic crisis engulfing many countries in Europe. Whereas the crisis is affecting young people in particular, there is also a certain degree of variation across Europe.


We document the short-term consequences of the current recession on the transition to adulthood of young Europeans, focusing on two main cornerstones in the transition to adulthood: economic independence and residential autonomy.


We use a combination of OECD Employment Statistics for 2012 and micro-level data from the European Union Statistics on Income and Living Conditions (EU-SILC) for the period 2005-2011 for 24 countries.


We document an increase in economic hardship experienced by young adults in several European countries during the recession, which is starting to translate into higher rates of co-residence with parents, hence delaying the process of leaving home and gaining economic independence.


The way countries are reacting to the recession is not yet clear-cut, but economic uncertainty and deprivation is on the rise in those countries hardest hit, which is likely to delay the key markers of transition to adulthood.

1. Introduction

The current economic crisis is having an adverse impact on the economic performance of Europe, causing many countries to enter into recession. Besides a considerable fall in asset prices there have been increases in unemployment and financial hardship (Scarpetta et al. 2010). In particular, the crisis has hit the young population very hard. During the recession youth unemployment has increased disproportionately with respect to the overall unemployment level (Bell et al. 2011; Cho and Newhouse 2013). According to official statistics, if the overall unemployment rate increased by 3.3% from 2007 to 2012 on average in Europe, the youth unemployment rate increased by 4.6% for the 30-34 age group, by 5.1% for those aged 25-29, and by 7.3% for the 20-24 age group (OECD 2013).

Declining real earnings and poor employment prospects for young people result in a "failure to launch" (Bell et al. 2007) into economic independence. Stable employment and economic self-sufficiency are shown to be important prerequisites for leaving the parental home and starting a family (Whittington et al. 1996; Aassve et al. 2002; Iacovou 2010). Therefore, as the economy struggles and young people are faced with higher unemployment rates, increased risk of poverty, and increased financial difficulties, it also becomes more difficult to gain or maintain their residential independence from the parental home (Mykyta and Macartney 2011; Mykyta 2012; Lee and Painter 2013; von Wachter et al. 2013). Consequently, a late transition out of the parental home contributes to the postponement of other transitions, such as forming a stable cohabiting partnership and having children, hence making the whole transition towards adult status more protracted (Furstenberg et al. 2004; Furstenberg 2010).

We investigate the patterns of youth unemployment, poverty, and subjective deprivation together with measures of parental co-residence for the period 2005 to 2011. This work extends the analysis by Aassve et al. (2006), which described the economic situation of European youth during the 1990s using data from the European Household Panel Survey (ECHP), thereby providing a detailed description of youth poverty in Europe. Our contribution serves as an update of that analysis by using data from the European Union Statistics on Income and Living Conditions (EU-SILC). Such an update is particularly timely, as many countries are facing a severe economic recession. However, not all countries are hit by the economic crisis; thus young adults of Europe are exposed to different destinies depending on where they reside. An important extension of this analysis is that we incorporate countries of Central and Eastern Europe, for which so far there has been limited available evidence. …

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