Modern Economy, 2011, 2, 880-892
doi:10.4236/me.2011.25099 Published Online November 2011 (http://www.SciRP.org/journal/me)
Copyright © 2011 SciRes. ME
The Employment of Young Graduates in the Period
2000-2010: A Comparison between
Six European Countries*
Paola Potestio
University of Rome, Rome, Italy
E-mail: potestio@uniroma3.it
Received August 31, 2011; revised Oc to be r 10, 2011; accepted October 22, 2011
Abstract
The paper aims to assess the relative importance of participation and unemployment and the interaction be-
tween them in affecting the evolution of employment rates of young graduates in selected European coun-
tries. The Taylor formula is used to read the behaviour of employment rates in terms of movements in activ-
ity and unemployment rates. Using this analytical procedure, the comparison between the selected countries
underscores two aspects in particular: the progressive isolation of Italy, due to the poor results of the reform
of the higher education system at the end of the 1990s, and the widespread progress within the female seg-
ments. On a more general plane, the heterogeneity of European labour markets for young graduates assumes
new characteristics in the decade butit is arguedit remains significant. The relative importance of par-
ticipation and unemployment, the impact of the reforms of the higher education system, the reaction to the
crisis of the late 2000s, and the gender aspects sharply differentiate the evolution of young graduate em-
ployment in the individual countries.
Keywords: European Graduate Employment Rates, Higher Education System, Activity and Unemployment
Rate
1. Introduction
Matching the demand for and supply of labour generally
presents more difficulties for the youth segments of the
labour force. The size of the gap between youth and
overall unemployment rates, particularly in a number of
European countries, has already been stressed in OECD
[1] for the p urpose of p olicy interv entions . Delayed entry
into the labour markets in turn co ntributes, albeit to very
differing extents, to generally lower employment rates
for young people than those for more central age groups.
The issues of training and education and access to the
labour market have been constant features in all subse-
quent steps of the employment policy of the European
Union.1 To facilitate access to the labour market was a
crucial indication within one of the four “pillars”—em-
ployability—of the European Employment Strategy, first
designed in 1997. The aim to adapt “Europes education
and training systems both to the demands of the knowl-
edge society and to the need for an improved level and
quality of employment” was a key point in the Presidency
Conclusions of the Lisbon European Council of 23 and
24 March 2000. Again, to invest in human capital, “rais-
ing educational levels and developing an adaptable
workforce suited to the challenges of a knowledge-based
economy”, was one of the four key requirements stressed
in the Report of the Employment Taskforce established
by the Europ ean Head s of State and Gov ernment in 2 003
[2]. Finally the three priorities of smart, sustainable and
inclusive growth of the current “Europe 2020 Strategy
are founded on seven “flagship initiatives”, one of which
is in fact “‘Youth on the move to enhance the perform-
ance of education systems and to facilitate the entry of
young people to the labour market”.
So far, at the macro level, this attention has not pro-
duced widespread, uniform progress in the employment
of young people in the European Union. The aim of this
paper is to focus on a specific segment of the youth la-
*I wish to thank N. Massarelli and F. Zirilli for help and discussions on
the topics addressed in the paper. The responsibility for all opinions a n d
any errors is mine alone.
1Gold [3] offers a useful overview of the themes and orientations of the
European employment policy.
P. POTESTIO 881
bour force, young graduates aged 20 - 24 and 25 - 29,
and to analyze the evolution of their employment rates in
the decade from 2000 to 2010 in six (rather similar in
many respects) European countries: Belgium, Germany,
Spain, France, Italy and the United Kingdom. The choice
of the focus on employment rates is motivated both by
the fact that the gap between youth and overall employ-
ment rates generally increases with the level of education
and by the interest in some results of the broader process
of reform of the higher education system that started at
the end of 1990s, the so-called Bologna Process, which
many European countries have joined.2 A distinct and no
less important reason for our focus on employment rates
is the belief that this is the variable that best synthesizes
the performance of labour markets.
The initial positions of the six countries and the evo lu-
tion over the decade of the employment of young gradu-
ates show great differences. The micro approach to the
analysis of the many issues connected with the employ-
ment of young graduates is the main framework in the
literature on these themes.3 In this paper we choose a
macro approach and we will follow the evolution of the
employment rates in the six European countries through
the movements and interaction of activity and unem-
ployment rates. In addition to a series of specific charac-
teristics of the single countries, two main aspects emerge
and will be stressed in our analysis. The first is the pro-
gressive isolation of Italy, the particular declines it has
experienced in young graduate employment in both age
groups, and the connection with the Italian reform of the
higher education system. The second is the gender com-
parison, the progress of female segments and some re-
duction in the heterogeneity of women’s position within
our selected countries.
Section 2 provides a brief overview of European em-
ployment rates by age group and highest levels of educa-
tional attainment. In Section 3 we develop an analytical
procedure for reading the behaviour of employment in
terms of movements in activity and unemployment rates.
After defining a simple relation between the three crucial
labour market variables—the employment rate, activity
rate and unemployment rate—we utilize the Taylor for-
mula to decompose the change in employment in each
period into two effects that measure the contribution of
activity and unemployment rates to the evolution of em-
ployment. Section 4 applies this construction to under-
score the rather different charapan class="ff3 ls4e"> –6.0 4.1 –0.1 –3.9 –5.3 3.0 2.7 –0.2 –3.33.4
Second Order Correction 0.2 –0.2 0.0 0.2 0.1 0.1 –0.1 0.0 0.2 0.0
e –8.9 0.8 4.4 –7.3 –6.9 4.3 1.1 –7.2 –7.22.7
BelgiumF
a –8.5 1.7 –5.5 4.3 –4.3 3.8 –3.9 –5.3 –5.6–2.0
1 – u 93.1 92.5 91.5 95.2 92.0 86.2 84.2 89.1 89.5 84.0
Activity Rate Effect –7.9 1.6 –5.1 4.1 –3.9 3.3 –3.3 –4.8 –5.0–1.6
u 0.6 1.0 –3.7 3.2 5.7 2.0 –4.9 –0.5 5.6 –2.3
()a –89.9 –81.4 –83.1–77.5–81.8–77.5–81.3–77.5 –72.1 –66.6
Unemployment Rate Effect –0.5 –0.8 3.1 –2.5 –4.7 –1.6 4.0 0.4 –4.01.5
Second Order Correction 0.0 0.0 –0.2 –0.1 0.2 –0.1 –0.2 0.0 0.3 0.0
e –8.4 0.7 –2.2 1.4 –8.4 1.6 0.5 –4.4 –8.7–0.2
GermanyM+F
a –0.6 –3.3 1.1 1.3 –0.7 6.3 –8.7 5.1 –3.0–0.9
1 – u 93.2 96.2 95.1 94.8 92.8 88.4 93.4 94.4 92.3 91.7
Activity Rate Effect –0.6 –3.2 1.0 1.2 –0.6 5.6 –8.2 4.8 –2.7–0.8
u –3.0 1.1 0.3 2.0 4.4 –5.0 –0.9 2.0 0.6 –1.7
()a –85.9 –85.3 –82.0–83.0–84.3–83.7–89.9–81.2 –86.3 –83.3
Unemployment Rate Effect 2.5 –0.9 –0.3 –1.7 –3.7 4.2 0.8 –1.7 –0.51.4
Second Order Correction 0.0 0.0 0.0 0.0 0.0 0.3 –0.1 –0.1 0.0 0.0
e 2.0 –4.0 0.7 –0.5 –4.3 10.0 –7.4 3.0 –3.20.6
SpainM
a 1.0 3.6 –2.0 2.5 2.3 –1.2 1.9 –4.0 0.1 –2.5
1 – u 80.6 85.3 83.4 84.2 80.5 85.3 87.2 88.3 84.5 75.4
Activity Rate Effect 0.8 3.1 –1.6 2.1 1.8 –1.0 1.6 –3.5 0.1 –1.9
u –4.6 1.9 –0.8 3.7 –4.8 –1.8 –1.1 3.8 9.1 6.2
()a –61.3 –62.3 –66.0–64.0–66.5–68.8–67.5–69.4 –65.4 –65.5
Unemployment Rate Effect 2.8 –1.2 0.6 –2.4 3.2 1.3 0.8 –2.6 –5.9–4.1
Second Order Correction 0.0 –0.1 0.0 –0.1 0.1 0.0 0.0 0.2 0.0 0.2
e 3.7 1.9 –1.1 –0.4 5.1 0.2 2.4 –6.0 –5.9–5.8
SpainF
a –2.4 4.1 –0.2 1.8 0.8 0.3 0.1 –2.4 0.3 1.1
1 – u 68.1 76.3 75.1 77.6 76.2 81.3 82.4 85.2 85.0 75.7
Activity Rate Effect –1.6 3.1 –0.1 1.4 0.6 0.2 0.1 –2.1 0.2 0.9
u –8.2 1.3 –2.6 1.4 –5.1 –1.1 –2.9 0.3 9.2 2.7
()a –62.8 –60.4 –64.4–64.2–66.0–66.8–67.1–67.2 –64.8 –65.1
Unemployment Rate Effect 5.1 –0.8 1.6 –0.9 3.4 0.7 1.9 –0.2 –6.0–1.7
Second Order Correction –0.2 –0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
e 3.3 2.3 1.5 0.5 4.0 0.9 2.0 –2.2 –5.8–0.9
FranceM
a 2.82 2.81 1.70 0.69 –1.053.50 –0.18 0.94 3.15–0.6
1 – u 89.04 92.12 87.3984.8587.7485.1988.9987.61 87.78 85.1
Activity Rate Effect 2.51 2.59 1.48 0.58 –0.92 2.98 –0.16 0.82 2.76–0.5
u –3.08 4.73 2.54 –2.892.55 –3.801.39 –0.17 2.651.0
()a –48.71 –51.54–54.34–56.04–56.73–55.67–59.17–59.00 –59.94 –63.1
Unemployment Rate Effect 1.50 –2.44–1.38 1.62 –1.452.12 –0.82 0.10 –1.59–0.6
Second Order Correction 0.1 –0.1 0.0 0.0 0.0 0.1 0.0 0.0 –0.10.0
e 4.1 0.0 0.1 2.2 –2.3 5.2 –1.0 0.9 1.1 –1.1
FranceF
a –1.65 0.72 6.29 –3.182.55 –2.578.28 –0.25 3.91–8.6
1 – u 88.35 91.80 89.2388.0689.2485.5287.2591.47 91.76 89.0
Activity Rate Effect –1.46 0.66 5.62 –2.802.27 –2.207.23 –0.23 3.58–7.7
u –3.45 2.58 1.17 –1.183.72 –1.73–4.21 –0.30 2.770.1
()a –54.29 –52.64–53.36–59.66–56.48–59.03–56.45–64.74 –64.49 –68.4
Unemployment Rate Effect 1.87 –1.36–0.620.70 –2.101.02 2.38 0.19 –1.79–0.1
Second Order Correction –0.1 0.0 –0.1 0.0 –0.1 0.0 0.3 0.0 –0.10.0
e 0.4 –0.7 4.9 –2.1 0.1 –1.2 10.0 0.0 1.7 –7.8
Italy - M
Copyright © 2011 SciRes. ME
P. POTESTIO 887
a 13.9 –11.68.0 –18.2–14.1–4.7 –0.5 1.8 1.6 –3.1
1 – u 87.2 77.8 75.2 87.8 67.8 75.2 77.6 82.2 79.3 78.9
Activity Rate Effect 12.1 –9.1 6.0 –16.0–9.5 –3.5 –0.4 1.5 1.3 –2.5
u 9.4 2.6 –12.620.1 –7.5 –2.4 –4.6 2.9 0.4 1.8
()a –55.0 –68.9 –57.2–65.3–47.1–33.0–28.3–27.8 –29.6 –31.2
Unemployment Rate Effect –5.1 –1.8 7.2 –13.13.5 0.8 1.3 –0.8 –0.1–0.5
Second Order Correction –1.3 0.3 1.0 3.7 –1.0 –0.1 0.0 –0.1 0.0 0.1
e 5.7 –10.514.3 –25.4–7.1 –2.8 0.8 0.7 1.1 –2.9
Italy - F
a –7.1 2.4 –8.2 4.0 –20.8–1.1 –7.4 6.2 –4.3–2.4
1 – u 67.7 68.1 58.3 82.6 67.8 65.6 74.5 80.0 74.9 66.3
Activity Rate Effect –4.8 1.7 –4.8 3.3 –14.1–0.7 –5.5 5.0 –3.2–1.6
u –0.4 9.8 –24.214.8 2.2 –9.0 –5.5 5.1 8.6 –10.5
()a –74.1 –67.0 –69.4–61.2–65.2–44.4–43.4–36.0 –42.2 –37.9
Unemployment Rate Effect 0.3 –6.5 16.8 –9.1 –1.5 4.0 2.4 –1.8 –3.64.0
Second Order Correction 0.0 –0.2 –2.0 –0.6 0.5 –0.1 –0.4 –0.3 0.4 –0.2
e –4.5 –5.1 10.0 –6.3 –15.13.2 –3.5 2.8 –6.52.2
UK - M
a –2.4 0.2 0.8 1.5 –2.9 0.5 –3.5 3.7 –1.80.0
1 – u 93.0 94.2 92.1 92.7 95.4 90.7 90.0 93.5 88.6 82.2
Activity Rate Effect –2.2 0.2 0.8 1.4 –2.7 0.4 –3.1 3.5 –1.60.0
u –1.2 2.1 –0.6 –2.6 4.6 0.7 –3.5 4.9 6.3 –2.7
()a –88.3 –85.9 –86.2–87.0–88.4–85.6–86.0–82.6 –86.3 –84.5
Unemployment Rate Effect 1.1 –1.8 0.5 2.3 –4.1 –0.6 3.0 –4.1 –5.52.3
Second Order Correction 0.0 0.0 0.0 0.0 0.1 0.0 –0.1 –0.2 0.1 0.0
e –1.2 –1.6 1.3 3.7 –6.7 –0.2 –0.2 –0.8 –7.02.2
UK - F
a 96.4 –1.2 0.7 –3.3 1.6 0.3 3.5 –2.3 0.2 –1.9–1.5
1 – u 96.0 96.3 96.8 96.7 96.3 93.3 94.0 91.4 88.2
Activity Rate Effect –1.1 0.7 –3.2 1.5 0.3 3.4 –2.1 0.2 –1.7–1.3
u 0.4 –0.3 –0.5 0.1 0.3 3.0 –0.7 2.6 3.2 –0.8
()a –87.1 –85.9 –86.7–83.4–85.0–85.3–88.8–86.5 –86.8 –84.9
Unemployment Rate Effect –0.4 0.3 0.4 –0.1 –0.3 –2.6 0.6 –2.3 –2.70.7
Second Order Correction 0.0 0.0 0.0 0.0 0.0 –0.1 0.0 0.0 0.1 0.0
e –1.5 1.0 –2.7 1.4 0.0 0.7 –1.5 –2.0 –4.4–0.7
Table 4. Changes in the employment rates of graduates aged 20 - 24 in the periods 2000-2007 and 2008-2010.
Belgium Germany Spain
2000/2007 2008/2010 2000/2007 2008/2010 2000/2007 2008/2010
M F M F M + F M F M F
Activity Rate Effect –7.4 –11.3 –11.8–11.4–4.7 1.2 6.8 3.6 –5.3 –1.0
Unemployment Rate Effect –5.4 –3.1 –0.2 –2.1 1.0 –0.7 5.1 1 1.1 –12.6–7.9
Second Order Correction 0.4 –0.3 0.2 0.2 0.2 –0.1 0.0 –0.2 0.3 0.0
e 12.4 14.7 11.7 13.3 3.4 0.4 11.8 14.5
17.68.9
France Italy UK
2000/2007 2008/2010 2000/2007 2008/2010 2000/2007 2008/2010
M F M F M F M F M F M F
Activity Rate Effect 9.1 9.3 3.1 –4.3 –20. 4–24.90.3 0.2 –5.3 –0.5 1.8 –2.9
Unemployment Rate Effect –0.8 1.9 –2.1 –1.7 –7.2 6.4 –1.5 –1.5 0.4 –2.0 –7.3 –4.3
Second Order Correction 0.1 0.0 –0.1 –0.1 2.5 –2.9 0.0 –0.2 0.0 –0.1 –0.1 0.0
e 8.3 11.2 0.9 6.1 25.1 21.31.1 1.5 4.9 2.6 5.5 7.1
Copyright © 2011 SciRes. ME
P. POTESTIO
Copyright © 2011 SciRes. ME
888
in both gender segments, and the vector v moves towards
the x-axis. It is worth emphasizing that the increases in
participation strengthen the unemployment rate effect
over the decade.
French graduates make the greatest progress in mat-
ching supply and demand in the young graduate labour
markets. In particular, as regards the male segment, the
growth in the number of graduates (+20% over the
decade)7, the growth in the activity rate and absorption
by the demand side have formed a rather virtuous circle.
The educational system and the requirements of the
demand side appear to be successfully integrated in the
decade.8
By contrast, Belgium is characterised by a continuous
decline in participation, with a strong accentuation in the
years 2008-2010, for both gender segments. The negative
activity rate effect is dominant throughout the decade.
However, the unemployment rate effect also contributes
significantly to th e decline in the employment rate in the
period 2000-2007, while this effect shows lower values
in the years 2008-2010. This evolution results in an
increasing ratio in both gender segments between the
weights (1 – u) and a. The vector v moves towards the y-
axis and the decline in participation considerably weak-
ens the unemployment rate effect. The particularly ne-
gative value of both the effects over the two periods in-
dicates a serious deterioration in the performance of the
labour market for young graduates in Belgium.
An even more particular picture emerges in Italy. Par-
ticipation collapses in the mid-2000s in both gender
segments. The negative activity rate effect even exceeds
20 percentage points in the years 2000-2007. Conversely,
the unemployment rate effect is substantiall y different in
the gender segments in this period: it is quite negativ e for
male graduates and quite positive for female graduates.
The impact of the crisis results in a moderately negative
unemployment rate effect (–1.5 points in both gender
segments in the years 2008-2010) and a further reduction
of participation in 2009-2010. The fall in participation
drastically increases the ratio between th e weig hts, wh ich
was already comparatively higher in the male segment in
2000 (1.59). In 2009 the ratio between (1 – u) and a
reaches 1.75 and 2.53 in the female and male segments,
respectively. The vector v moves considerably towards
the y-axis: in the male segment the normalized weights
were 0.85 - 0.53 in 2000 and were 0.93 - 0.37 in 2009.
Naturally, the collapse in participation weakens the un-
employment rate effect. At the end of the decade, unem-
ployment is over 20 percent in both gender segments, but
even if the unemployment rate were to fall to zero, while
the activity rate remained constant at the 2010 level, the
male employment rate would increase by only 6.4
percentage points and would reach just 28%!
The weakness of Italian performance at the start of
2000s worsens so much as to place Italy in a totally
isolated position among the European countries.9 The
main cause of the collapse in participation, which is in
turn the main cause of the decline in the employment rate,
has to be connected to the reform of the higher education
system approved in Italy at the end of the 1990s. In a
peculiar interpretation of the Bologn a process, th e reform
introduced two degree levels.10 The new programmes,
introduced with the so-called 3 + 2 reform, are composed
of two cycles: a three-year first-level degree, called the
Laurea Triennale, and a two-year second-level degree,
called the Laurea Magistrale. Achieving a first-level
degree is required for enrolment in the second-level.
From a purely quantitative standpoint, th e sharp increase
over the decade in the number of graduates aged 20 - 24
and the significant increase in the number of students
who have finished tertiary education are positive results
of the reform.11 But the reform has seriously failed (at
least so far) to accelerate the entry of young graduates
into the labour market. The first-level degrees aimed at
shortening university courses for a vast majority of stu-
dents have failed to achieve this acceleration. The current,
massive enrolment of first-level graduates in second
level university courses has de facto undermined this
acceleration. To a large extent, the effect of the reform
has been to lengthen degree courses (replacing the pre-
vious four-year degree courses with the new 3 + 2 pro-
9The very special features of the Italian evolution in the employment o
f
young graduates are widely analyzed in Potestio (2 011) [10].
10A system “based on two main cycles” was the European target in the
Bologna Declaration. “Access to the second cycle—it was stated—
shall require successful completion of first cycle studies, lasting a
minimum of three years.The second cycle should lead to the master
and/or doctorate degree as in many European countries”. A
b
aroque
structure, rather far fro m that designed in the Bologna Declaration, has
been adopted in Italy. This structure is composed by two degree levels,
two master levels, each following the related degree level, and a third
level, the doctorate.
11These results make Italy’s position a little less distant from the other
five countries. Consider that in 2000, in the 20 - 24 age group, the
number of graduates in Italy was about half that in the smaller Belgium
and that in 2010 male graduates are still less than half the number in
France and the UK, while female graduates are just over half. The very
different position of Italy (for example, within the OECD countries) in
the ranking by per capita income and in the ranking by the proportion
of graduates in the population is unfortunately a question to which no
p
articular attention has been devoted by scholars. Today, however, a
more urgent question is the possibility for Italy to achieve sustained
growth in the future without more efficient university courses than
those realized under the 3 + 2 reform.
7The increase in the number of female graduates is much smaller at
+3%. France and Belgium are the only countries in which the gende
r
ratio decreases slightly in the decade (from 1.7 in 2000 to 1.5 in 2010 in
Belgium and from 1.5 in 2000 to 1.3 in 2010 in France).
8The complex French higher education system, the original interpreta-
tion of the Bologna Process, the strengthening of vocational pro-
grammes and the success of this orientation are well documented and
analyzed in [9].
P. POTESTIO 889
grammes), and thus to delay further the entry of young
Italian graduates into the labour market.
No single conclusion can be drawn from the compari-
son between the six countries. A wide range of processes
emerges in the decade. A certain decrease in the employ-
ment rate in Germany and United Kingdom, due to the
reduction in participation and occurred before the impact
of the crisis, has contributed to reducing a few differences.
The progress of the male segment in France and the fe-
male segments in Spain and France are the most impor-
tant gender aspects. As regards the relative importance of
the two factors—participation and unemployment—the
former has a major role in the observed processes. The
activity rate effect supports the growth in employment
rates in France and strongly depresses employment in
Belgium and Italy. But this major role is not uniform. In
Spain the unemployment rate effect appears dominant,
both during growth and recession. The impact of and the
reaction to the crisis also appear diversif ied. Spain, U n i t e d
Kingdom and Belgium suffer the impact of the crisis the
most. Moreover, the reduction in participation, following
or joining an increase in unemploy ment, is an interesting
aspect that considerably differentiates countries and gen-
ders. Overall, the severity of the unemployment problem
grows worse at the end of the decade, mainly among
male graduates. Quite ap art from the effects of the crisis,
the progress in participation is rather limited, and de-
layed entry into the labour market remains a wide-
spread problem. In Italy the problem is by now quite
serious.
4.2. Graduates Aged 25 - 29
Turbulence in labour markets is much lower within the
25 - 29 age group. Employment rates are obviously
higher (Table 5), fluctuations in activity and unemploy-
ment rates are much smaller, even under the impact of
the crisis, and the differences between countries are more
limited. In 2000 France is in an intermediate position
Table. 5 Employment rates of graduates aged 25 - 29.
M + F M F
2000 20102000 2010 20002010
Belgium 91.2 87.5 89.6 86.7 92.688.0
Germany 87.5 85.9 91.0 86.9 84.185.1
Spain 71.1 71.1 74.4 70.2 68.471.9
France 82.7 84.9 84.2 86.5 81.583.5
Italy 62.2 54.2 67.2 54.4 58.554.0
UK 91.2 88.0 93.6 90.5 88.685.7
between Belgium, Germany and the UK, where employ-
ment rates are around 90%, and Spain and Italy, where
the rates are 71% and 61%, respectively. At the end of
the decade Italy’s position is, again, quite isolated and
differences among the other countries appear reduced.
As regards the paths followed in the decade (Figure 2),
Spain records a strong increase in the employment rate
until 2007, followed by a sharp reduction that brings the
rate back to its initial level. Only France shows an
increase in the employment rate over the decade, while
some decline is observed in Belgium and United King-
dom and a significant decline in Italy. The rate fluctuates
in Germany and suffers some reduction in the final years
of the decade.
Gender differences are significant. In Spain the growth
in employment among women exactly compensates for
the decrease in the male rate. By contrast, France records
a similar increase in employment in both gender segments.
It is also interesting to note that among the six countries
the male rate increases only in France. The decline in
male employment is substantial in Italy and much larger
than the decrease in female employment. Some decline
in both gender segments is recorded in the United King-
dom and Belgium, while in Germany the decrease in the
male rate is partially offset by the increase in the female
rate. Except in the UK, where the male rate remains
about 5 percentage points above the female rate, at the
end of the decade the gender rates are rather close overall
in this age group.12
To analyze the contribution of the activity and unem-
ployment rate effects to the movements in employment
in this age group let us concentrate on the periods 2000-
2007 and 2008-2010. For each gender segment Table 6
sums the two effects and the second order corrections in
each year in the two periods. Most of the features ob-
served among younger graduates are also present in the
25 - 29 age group. The size of the changes and effects are
smaller almost everywhere, but the direction remains the
same almost everywhere as well.
Negative activity and unemployment rate effects in
both gender segments accompany the decline in em-
ployment in Belgium in the period 2000-2007. The im-
pact of the crisis then produces a further reduction in
participation among men and a further increase in unem-
ployment among women. These two effects lead to an
additional decline in employment rates for both genders.
Some decline in male employment driven by a negative
activity rate effect is observed in the United King dom in
he years 2000-2007. Subsequently, the impact of the t
12Note that at the end of the decade, the gender ratio in all six countries
is greaterthan unity in this age group as well. It is 1.5 in Italy, 1.4 in
Germany, 1.3 in Belgium, stable at 1.2 in Spain and France, and 1.1 in
the UK.
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P. POTESTIO
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890
Figure 2. Employment rates of graduates aged 25 - 29—M + F 2000 = 100.
Table 6. Changes in the employment rates of graduates aged 25 - 29 in the periods 2000-2007 and 2008-2010.
Belgium Germany Spain
2000/2007 2008/2010 2000/2007 2008/2010 2000/2007 2008/2010
M F M F M F M F M F M F
Activity Rate Effect –1.4–1.9–1.70.2 1.2 3.0 –4.0–1.8 3.6 1.3 –2.72.2
Unemployment Rate Effect –0.7–1.60.7 –1.41.0 –1.6–2.31.5 6.3 9.5 –11.6–9.4
Second Order Correction 0.2 0.1 0.0 0.0 0.1 –0.10.0 0.0 0.0 –0.1 0.1 –0.1
e 1.9 3.4 0.9 1.2 2.3 1.4
6.4 0.3 9.8 10.7
14.1 7.2
France Italy UK
2000/2007 2008/2010 2000/2007 2008/2010 2000/2007 2008/2010
M F M F M F M F M F M F
Activity Rate Effect 2 .8 –0.50.3 2.1 –11.7–8.4–3.6–2.2 –1.9 0.2 0.3 –0.3
Unemployment Rate Effect –1.81.4 1.1 –0.95.5 8.5 –3.2 –2.5 0.7 –0.3 –2.1 –2.4
Second Order Correction –0.1 0.0 0.0 0.0 –0.1 0.1 0.2 0.1 0.0 0.0 0.0 0.0
e 0.9 0.8 1.4 1.2
6.2 0.2 6.6 4.7 1.2 0.1 1.82.8
crisis is considerable and, again, results in a significant
negative unemployment rate effect in both gender seg-
ments. Again, participation does not appear affected by
the crisis in the UK.
Divergent patterns are observed in Germany and, par-
ticularly, in Spain in the two periods. Male employment
P. POTESTIO 891
increases somewhat in Germany in the years 2000-2007,
supported b y both the effects. The smaller increase in the
female rate is led by a dominant, positive activity rate
effect. Both effects significantly depress the male rate in
the years 2008-2010.
Rapid growth in both gender rates characterizes Spain
in the period 2000-2007. The unemployment rate effect
is the main determinant of this growth, especially in the
female segment. The impact of the crisis is very strong,
once again acting mainly through the unemployment rate
effect. This impact is especially negativ e for male gradu-
ates, and it is interesting to note that among women the
activity rate effect remains positive even in 2008-2010.
France is the only country in which male and female
employment increases in both periods. The composition
of this increase is rather different between the gender
segments. In the period 2000-2007, the male employment
rate is supported by the activity rate effect, while the
female rate is driven by the unemployment rate effect.
The opposite is recorded in 2008-2010: participation
supports the increase in the female rate, while the
reduction in the unemployment rate is dominant among
men.
A very special pattern also characterises the gender
segments in Italy. A strong decline in activity in both
gender segments accompanies a highly positive unem-
ployment rate effect in both gender segments in the pe-
riod 2000-2007, which indicates a dominant problem on
the side of participation in this period. The net result of
the period is a marked fall in the male rate, while the two
effects offset each other among women. Subsequently,
the impact of the crisis is significant both on participa-
tion and unemployment. The two negative effects de-
press the male rate further and give rise to a significant
decrease in the female rate. The particular processes in
Italy produce a ratio between the weights (1 – u) and a
that is higher at the end of the decade than th ose observed
in all the other countries. Naturally, this evolution wea-
kens the unemployment rate effect.
The very poor performance of Italian graduates even
in the 25 - 29 age group is again apparently connected
with the Italian reform of the higher education system. In
Potestio (2011) a strong difference in the movements in
participation and unemployment of first- and second-
level graduates since 2004 is emphasised. Participation
falls drastically among first-level graduates, while it in-
creases among second-level graduates. Symmetrically,
unemployment decreases significantly among second-
level graduates, while it increases among first-level gra-
duates, in particular among male graduates in the late
2000s. Some connection between the decline in the (male
and female) participation of first-level graduates and the
general lengthening of th e time spent in education on the
one hand, and the major difficulties experienced by male
first-level graduates in labour market placement and jobs
on the other have had an important role in the poor re-
sults of Italian graduates in this age group.
Despite the fact that the magnitude of the changes is
generally smaller, significant processes also emerge from
the comparison between the six countries in the 25 - 29
age group. The activity rate effect continues to have a
major role, whereas the unemployment rate effect is,
again, dominant in Spain. The impact of the crisis differs
appreciably between the countries. Again, an interesting
aspect is the range of reactions of participation: in Ger-
many, male participation falls appreciably, which con-
tributes to mitigating the unemployment rate effect in th e
late 2000s. In Spain, the participation of female graduates
continues to grow, despite the large increase in unem-
ployment. Nor does participation in both gender seg-
ments in the United Kingdom appear to be affected by
the crisis. Overall, etting aside the particular develop-
ments in Italy, the significant reduction of differences in
employment rates among the female segments is the
most positive aspect of the decade.
5. Conclusions
The paper has sought to assess the relative importance of
participation and unemployment and the interaction
between them in affecting the evolution of employment
rates of young graduates in selected European countries.
The investigation using the Taylor formula on the
evolution of employment rates underscores very different
processes and a remarkable, persistent heterogeneity in
labour markets for young graduates. We conclude by
summing up the main aspects and issues that emerge
from our investigation.
1) Some processes of involution have occurred in
young graduate labour markets, independently of the
crisis of the late 2000s. A clear and rapid involution has
occurred in Italy, one that appears strongly connected
with the reform of the higher edu cation system at the end
of 1990s. The reform has de facto slowed the entry of
graduates into the labour market by extending the length
of degree courses. On the other hand, problems involving
labour market placement and jobs for first-level graduates
(in both age groups) combine in maintaining compara-
tively higher levels of unemployment in Italy. The poor
results of Italian higher education policy require new
interventions. Simplifying and increasing the efficiency
of the organization of degree courses as well as removing
restrictions on access to a range of professions for first-
level graduates should be policy priorities. Belgium also
experiences a severe involution (which accelerates in the
late 2000s) among younger graduates. The strong perfor-
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P. POTESTIO
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892
mance of this segment in Belgiu m at the start of the dec-
ade deteriorates sharply over the period. In both coun-
tries participation has a major role in depressing em-
ployment. The processes in Italy and, especially, in Bel-
gium certainly remain open to further analysis.
2) Progress has been curbed to a significant extent by
the crisis of the late 2000s. The impact of the crisis is
particularly severe in Spain, where it has erased the re-
markable progress made earlier. The crisis significantly
affects the United Kingdom, but has only slowed growth
in France. The growth in participation supports the in-
creases in employment in France, whereas unemploy-
ment has a major role in the opposite movement of em-
ployment in Sp ain and in the decline in the late 2000s in
the United Kingdom. A relevant aspect is the different
sensitivity of participation to the crisis and to the move-
ments in unemployment among countries and genders.
The most common phenomenon is a significant sensitiv-
ity of participation to the crisis, an aspect that could rise
interesting analytical qu estions.
3) Gender differences are very interesting. On a gen-
eral plane, the stronger growth of degrees among women
and the widespread increase in female employment rates
are recent, clearly important phenomena. How higher
employment among young female graduates is charac-
terizing by country, sector, field of studies and career are
crucial questions, still largely open to analysis, to be ex-
plored in evaluating these phenomena. In our specific
comparisons, the progress in female employment in
Spain and France, the particular growth of male em-
ployment in France and the different effects that have
supported these developments deserve special attention.
Overall, apart from Italy, the narrower differences in
female employment levels in the remaining five coun-
tries represent the most significant progress in the dec-
ade.
4) In conclusion, the heterogeneity of labour markets
for young graduates in 2000 assu mes different character-
istics at the end of the decade but remains substantial.
The leading performance of France and the lagging per-
formance of Italy are a major part of these changing
characteristics. The results in both countries are signifi-
cantly connected with innovations or new structures of
the higher education system, which confirms the crucial
role that the structure of higher education plays in facili-
tating the matching of the demand for and supply of la-
bour and in accelerating the entry of young graduates
into labour markets.
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