Youth Unemployment in Italy and Russia: Aggregate Trends and the Role of Individual Determinants

Abstract

Youth unemployment is a serious problem in many European countries. In the first part of the paper, we consider the aggregate trends in some EU countries and in Russia; we especially investigate the recent period after the global crisis and the Great Recession. We then consider the different types of determinants, including macroeconomic conditions, structural determinants, labour market institutions and regulations. However, the focus of our analysis is on the role played by individual and family determinants such as age, gender, education level, marital status, health, household income, housing conditions.

The econometric part of the paper makes use of Eurostat micro-level data EU-SILC for Italy and RLMS-HSE data set for Russia. We use a Heckman probit model to estimate the unemployment risk of young people during the period 2004-2011. Our main research question is to explain the probability of being unemployed for young people in terms of their personal characteristics and compare these outcomes with results for the same model for adults. We take also into account some macro variables, such as living in urban areas or the regional unemployment rate. The results are of interest, since the two countries have quite different labour market institutions, besides having different levels of youth unemployment. However, most of the explanatory variables act in the same direction in both countries and it is interesting to compare the relative size of such effects, which we measure through the average partial effects.

Keywords: youth unemployment, individual determinants of unemployment, regional unemployment, Heckman probit.

JEL Classification: J64