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What is the difference between Ukrainian and European youth?

Author : Natalia Shapoval, Olena Nizalova, VoxUkraine

10:12, 24 February 2016
What is the difference between Ukrainian and European youth?

Author : Natalia Shapoval, Olena Nizalova, VoxUkraine

Ukrainian labor market seems to be more favorable to young people than in the EU countries

10:12, 24 February 2016

Read the original text on Evropeyska Pravda.

Today's youth lives in a technologically and economically developed world and has the best health and education.

In 2016 Deloitte study refers to the generation born in the 1980-2000: "They are not the leaders of tomorrow, but more and more they the leaders of today".

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This is easily confirmed by the ratings of 30 to 30, which include young startups and civil society activists.

At the same time, their less "star" of the same age cannot find a place in the modern world, shaken by financial crises, wars and social unrest. In some countries, they feel the same unprotected, as well as youth of their age 50 years ago.

Researchers from VoxUkraine analyzed unemployment among Ukrainian youth and the EU after the crisis of 2008 and during the recent economic downturn.

How big is this problem in Ukraine?

The unemployment rate is low. The youth unemployment rate in Ukraine is lower than the average rate of EU countries. Thus, according to the results of 2013 it amounted to 15% in Ukraine and 22% in the European Union.

This shows the seriousness of this issue for European countries. In six EU countries, unemployment among recent graduates is more than 30%, and in Greece it reached 55%.

The gap between the unemployment among young people and among the adult population varies between 3% in Germany and 32% in Greece, with the average for the European Union at 12%.

Ukraine’sindicator is below average one, with the gap between youth unemployment and adult population at the level of 9%.

Related: 30% of people in agricultural sector in Ukraine work unofficially

Reliable job

Temporary contracts, part-time, precarious employment are considered as uncommon for Ukraine and there is no evidence that this form is more common among young people than among adults.

For example, temporary contracts comprises about 4.6% of Ukrainian graduates, compared with an average of 26% in the European Union. Part-time was 5.3%, compared with 13.3% for the European countries.

The young people of Europe are numerous among temporary workers because, for the first time entering the labor market, they have neither the experience nor the professional network of contacts, or reputation. But in the case of part-time the situation is different.

Youth labor market is more resistant to economic crises. Ukrainian youth labor market is more resistant to economic recessions. In 2013, Ukraine's real GDP was 4% lower than in 2007 - as in many other countries, such as Cyprus, Estonia, Finland, Denmark. At the same time the unemployment rate was little changed among young people, compared with the countries that are also affected by the crisis.

The last economic crisis in Ukraine also did not lead to the appearance of the army of the unemployed - the official statistics show that at constant annual fall of GDP, led to a 20% fall compared with January 2011, the unemployment rate even fell, and it was 9% in the second quarter of 2015.

Related: In Israel Ukrainians work as housekeepers, TOP-managers and builders - Feldman

Does this mean that graduates in Ukraine have the same opportunities as young men in Sweden, the Czech Republic, Great Britain, Estonia and Belgium - countries that are close to Ukraine by the level of unemployment among young people? The answer is negative.

First, a group of young workforce is narrower in Ukraine than in most European countries.

We can see this by comparing the high percentage of young people studying in higher education institutions and a relatively high percentage of people in this category "NEET - not in education neither in employment nor training", which are excluded from the denominator in the calculation of the level of unemployment.

According to the latest report on the index of global competitiveness (Global Competitiveness Index), Ukraine occupies 13th place among 144 countries on the prevalence of higher education - only Greece, Finland and Spain show a higher rate in the European Union.

On the one hand, a country with a low demand for young professionals creates incentives to study longer. On the other hand, the longer people learn, the lower the proportion of the economically active population of youth we have.

29% of Ukrainians, like in European, are not envolved into education, job, or training. Taking into account the large proportion of students, and a large share of inactive youth, we see that the unemployment rate in Ukraine is really low, but it applies only to a relatively small group of young people, which is still involved in the labor market.

Secondly, more than 15% of young people are employed in the shadow economy. If the country was working according to more stringent rules,managing the relationship of employer and employee, as in many countries of the European Union, these people would have been unemployed.

Related: EU congratulated adoption of non-discrimination amendment to Ukraine's Labour Code

According to the European Social Survey (ESS), Ukraine is one of the leaders in terms of employment outside the scope of national legislation. Only two European countries has informal employment higher than in Ukraine - Ireland and Cyprus.

Thirdly, you may find a job in Ukraine easier than in the EU, but the labor charge will be less.

For example, the average salary in Ukraine is very low, now it is about $ 170 a month and the minimum wage is barely $ 60 a month, which makes the Ukrainian salaries the lowest in Europe.

As the study Gorry, in 2013, the minimum wage, as well as labor market regulation as a whole, a negative impact on employment, especially among young people.

Related: Ukrainian Parliament adopted new Labour Code cutting rights of employees

Useful findings

Ukrainian labor market seems to be more favorable to young people than in the EU countries. It is quite resistant to economic downturns.

Unemployment for Ukraine is less complicated problem than in Europe, where it reaches a maximum of 55% with a wide gap between the employment of young people and people over thirty, such as in Greece among young people at the level of 15% in 2013. However, these strong data hides the low level of participation in the labor market, unstable employment and working conditions, long years of education, which are then not rewarded.

Moreover, young Ukrainians who work, receive lower salaries than their counterparts in the European Union, which can be detrimental to the health and well-being in the long term.

Traditionally, labor policies and reforms are on the periphery of the attention of officials. Despite their numerous campaign promises to increase wages and create new jobs.

Related: Labour migration: Ukraine is losing people and future

This phenomenon is in some way due to the fact that all efforts to promote economic growth, liberalization of markets, deregulation of the economy and reducing the tax burden, both are directed on the creation of jobs and the reduction of structural unemployment.

But the state of the labor market - not just a derivative of economic growth. It, in turn, plays an important role either in promoting economic development, either in its containment, damaging human capital and reducing labor productivity.

So, for example, in the Index of Economic Freedom for 2016 Ukraine is 147th out of 186 countries in terms of labor freedom, gaining 47.9 points, and 162 places in the overall ranking of countries.

The indicator includes various aspects of legislative and regulatory labor market field of the country, including regulations regarding minimum wages, layoff, the conditions of termination of the employment contract, measurable regulatory restrictions on hiring and work hours, plus an indicator of participation in the labor force, which measures the potential market opportunities labor.

To get closer to the most successful economies - such as Hong Kong, Singapore, UK or the US - Ukraine should speed up work on the Labour Code, a draft of which is now subjected to severe criticism from trade unions.

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