The role of the education systems and the labour market institutions in enhancing youth employment: a cross-country analysis

Youth are a vulnerable category of workers, since they are in a delicate phase of their working life, the first entry in the labour market. Young graduates and early school leavers are involved in the school–to–work transition process, whose duration considerably varies across countries. In this paper we explore the impact of labour-market and educational institutions on youth labour-market performance across OECD countries for the 1985-2013 period. We build from different sources (mainly the IECD and the UNESCO) a data-set including series about labour-market institutions, youth population, schooling and the vocational education and training participation rates. We estimate a dynamic panel model, building upon Bassanini and Duval (2006), and articulating the analysis upon various age groups (15-24, 20-24). Union density, the minimum wage and the level of economic activity stand out as important determinants of youth employability (educational attainment and expenditure on public education mattering to a lesser extent). VET participation also matter, although only in countries where the dual apprenticeship system is important.