Economic costs of youth unemployment in the European Union
2018
Grinevica, L., Latvian Academy of Sciences, Riga (Latvia) | Rivza, B., Latvia Univ. of Life Sciences and Technologies, Jelgava (Latvia)
Unemployment is considered a broad macroeconomic problem that is associated with job absorption, the wasting of human resources, and the performance of the labour market, the success of economic policy and even with the risk of inflationary pressures. Unemployment itself has hidden potential and has become a significant and serious social problem of the society (Novak, Darmo, 2015). Young people have been among those most affected by the recent financial crisis. National labour force surveys (Hoffman, 2011) show that since 2008 the youth unemployment rate has risen in all the EU Member States (Hjuza & Borbejs-Pece, 2012). The current economic instability in the context of youth’s prospects and opportunities in the labour market is uncertain (Balan, 2014). Youth unemployment has also a negative effect on economic growth and productivity. The aim of the paper is to identify the importance of youth unemployment and draw the society’s attention to the consequences. In the paper, the authors provide a better understanding of losses for the country due to unemployed young people by analysing the cost of youth unemployment in the European Union using the gross domestic product (GDP) approach.
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