The effect of higher education on youth unemployment in European regions during a period of economic instability

Hermannsson, K. , Scandurra, R. and Graziano, M. (2021) The effect of higher education on youth unemployment in European regions during a period of economic instability. Journal of Education Finance, 46(4), pp. 477-495.

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This paper examines the impact of higher education on youth unemployment. Following the 2008 financial crisis, youth unemployment returned to the fore as a serious concern among policy makers in Europe. A crucial difference from previous recessions is that this time around supply of higher education opportunities was much higher than in the 1980s, and indeed higher education participation rates grew rapidly in many regions during this period. Drawing on previous work on youth unemployment and the economic impacts of education we identify a variety of channels through which higher education is likely to influence youth unemployment. We examine this issue using a macro-panel of European regions for the period 2002-2012. This decade was characterized by variation in economic activity and higher education rates. Our results suggest that expansion of higher education during this period had a mitigating effect on youth unemployment and not recognizing this external benefit of education risks underestimating the effects of macroeconomic shocks on young people.

Item Type:Articles
Additional Information:This research benefitted from the Young Adult project funded by the European Union's Horizon 2020 research and innovation program under grant agreement No. 693167. Additionally, Rosario Scandurra acknowledges financial support from a Juan de la Cierva Grants Programme Fellowship (Ref. IJC2019-040056-I).We are grateful for feedback from participants at the 47th annual conference of the British and Irish Section of the Regional Science Association International at the University of Cambridge and seminar participants at the University of Birmingham.
Keywords:Youth unemployment, higher education, higher education externalities, spillover effects, displacement effects, Europe, economic crisis, macro-panel.
Glasgow Author(s) Enlighten ID:Hermannsson, Professor Kristinn
Authors: Hermannsson, K., Scandurra, R., and Graziano, M.
Subjects:H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic Theory
L Education > L Education (General)
College/School:College of Social Sciences > School of Education
College of Social Sciences > School of Education > Educational Leadership & Policy
Journal Name:Journal of Education Finance
Publisher:University of Illinois Press
ISSN (Online):1944-6470
Copyright Holders:Copyright © 2021 Journal of Education Finance
First Published:First published in Journal of Education Finance 46(4):477-495
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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Project CodeAward NoProject NamePrincipal InvestigatorFunder's NameFunder RefLead Dept
172500YOUNG ADULLLTOscar ValienteEuropean Commission (EC)693167ED - The Robert Owen Centre for Educational Change