It’s not quite “the lowest rate for almost forty years”, as stated by Elisabeth Borne, the Minister of Labour, but it remains impressive. If unemployment generally fell in the fourth quarter of 2021, according to figures published Friday February 18 by INSEE, it is among 15-24 year olds that the drop is the most significant. Unemployed workers no longer represent “only” 15.9% of this age group. A rate that had not been reached since 2001 – and not exceeded since 1990. Even if 15-24 year olds remain the most affected by unemployment (twice as much as the general population), this drop is substantial, especially that France is emerging from a major economic crisis. So how can these results be explained?
Because the economy is doing better
If young people find it easier to find a job, it is primarily because the economic situation in the broad sense is improving. French GDP, which had collapsed due to the Covid-19 pandemic and health measures, returned to its pre-crisis level at the end of 2021, according to a first estimate from INSEE.
However, according to Eric Heyer, director of the analysis and forecasting department of theFrench Observatory of Economic Conditions (OFCE)young people are the most exposed to fluctuations in the economy, for better or for worse.
“When an economic crisis arrives, we do not lay off from the start: we generally start by not renewing fixed-term contracts or temporary contracts.”
Eric Heyer, economistat franceinfo
On another side, “Youth employment is very sensitive to the economic situation, so as we have been in a favorable economic period since the autumn, a drop in unemployment is logical”abounds Christine Erhel, professor of economics at the National Conservatory of Arts and Crafts.
The recovery is particularly visible in the service sectors, such as tourism or hotels and restaurants, which had been confined for several months. Sectors that usually employ a lot of young people. “The lifting of health restrictions, with the reopening of cafes and restaurants in the spring, has greatly benefited youth employment”confirms Sylvain Larrieu, labor market specialist at INSEE.
Because there is a shortage of manpower
The economy has also picked up so quickly that many sectors are complaining of a labor shortage: more than half of companies had difficulty recruiting in January, according to the Banque de France, in particular in industry and construction, and the ranks of temporary work agencies are still less provided than before the health crisis.
Companies must therefore be less difficult to hire. According to Philippe Askenazy, labor economist at the CNRS, interviewed on franceinfo, this drop in unemployment among young people “most likely corresponds to a drop in requirements on the part of employers who, previously, demanded in particular to have experience and who now take on young people, even without experience”.
A reduction in requirements which benefits “young people who could be out of school, but also students”. And especially women: “You have to go back to 1978 to have such a low unemployment rate for young women”he adds.
Because the number of apprentices has exploded
The last parameter to take into account is the sharp increase in the number of apprenticeship contracts. 2021 is also a new record with more than 718,000 contracts signed, a figure up 37% over the year, after an initial jump of 42% in 2020. This increase can very quickly have visible effects on the rate unemployment, since the number of unemployed between the ages of 15 and 24 amounted to 555,000 in 2020.
According to Sylvain Larrieu, the multiplication of alternations reflects the government’s investment in this area since 2017, and especially since 2020. “There has been substantial aid, in particular the ‘One young person, one solution’ plan which has provided additional aid [entre 5 000 et 8 000 euros] for hiring apprentices. But Eric Heyer reminds us that this development is precarious:
“Apprenticeship has exploded because the cost of an apprentice is compensated almost entirely to the employer. What will happen the day we remove these aids?”
Eric Heyer, economistat franceinfo
Especially since the effect of apprenticeships on employment is in reality difficult to assess: some employers who have hired an apprentice to benefit from aid would perhaps have hired a fixed-term contract without them. In these cases, the effect of apprenticeship on the unemployment rate is nil. “All employment assistance schemes have more or less significant windfall effects”, tempers Sylvain Larrieu. Eric Heyer is more skeptical: “Many apprentices are in their third year of a bachelor’s degree, a master’s degree, etc. and have qualified profiles.”