For virtually all of the country’s democratic history, youth unemployment has plagued Spain. Its youth unemployment rate is the highest in the EU and third highest of all OECD countries; currently, a staggering 28.5% of those under 25 in Spain are unemployed, compared to the OECD average of 10.5% (OECD, 2022). So dire is the problem that a common term has been coined to refer to this group: the ‘Ninis’ are those between the ages of 15-29 that are neither in formal education nor training (the name comes from the Spanish ‘ni estudia ni trabaja’). Why does Spain in particular suffer so severely from youth unemployment, and is enough really being done to alleviate the problem?
[No house, no job, no pension, no fear: Spain's generation of 'Ninis' take to the streets in protest of the youth unemployment crisis which sees nearly 30% of under 25's in Spain without work]
Even in the most general sense, youth unemployment is known to have deep and far-reaching negative effects on an economy. Firstly, it has direct costs in the same way that all unemployment does; it means increased benefit payments by the government, reduced income tax revenues, and a huge waste of human capital potential. But there are also indirect costs of unemployment that are amplified when those unemployed are young. Ambitious young people are more likely to emigrate if they face bleak prospects at home, facilitating a ‘brain drain’ which stagnates the economy (The Economist, 2011). The hysteresis problem is also especially rife, as long periods of unemployment cause a depreciation of skills that trap a young person on low wages when they eventually enter the workforce. The social effects of youth unemployment - increased crime rates, greater unhappiness and worsening health to name a few - can also have long-lasting and wide-reaching impacts.
[Limited post-university job prospects for young people have seen only 37% of spanish students finishing their degrees in expected time, with 12% dropping out of further educational studies.]
What has gone wrong in Spain, then? To understand this question, there are two sides to consider: the education system from which young people leave, and the labour market into which they enter. In the Spanish case, the crux of the problem is that the education system does not adequately prepare students for the world of work. Students believe that there is a lack of opportunity for critical-thinking and problem-solving, and that the only aim is to pass exams (El País, 2015). Due to a lack of variety and overly intensive curriculums providing little motivation for those less academic, school drop-out in Spain is high; only 37% of Spanish students finish their degree in the expected time, and 12% drop out before graduating (El Mundo, 2022). What’s more, the Spanish economy depends largely on sectors that are apt for young people with little experience, such as construction and hospitality, which further diminishes the incentive to obtain higher education qualifications. The result of all this is an outflow of young people from the education system with a lack of transferable skills that inhibits them from obtaining or retaining employment.
This paints a very bleak picture for Spain’s economy. So what is being done to mitigate the problem, and is there anything Spain can learn from its European counterparts? A critical area for improvement in the Spanish case is in their vocational training programme - the ‘Formación Profesional’ (FP). This programme, which serves as an alternative to final secondary school qualifications in Spain, intends to provide job-specific training to prepare students to directly enter the workforce. As such, it has great potential to be a powerful tool in alleviating youth unemployment and enhancing labour mobility - if implemented effectively. In 2015, the OECD advised specifically that there was a need to focus on the promotion of the FP to consolidate the basic competencies, knowledge and skills of young people in Spain (El País, 2015). Spain has gone some way in acknowledging this; in March 2022, the Ley de Formación Profesional was passed, which aims to convert the FP into a lever for economic and social transformation. However, policies put in place to increase the skills and qualifications of the population can take decades to produce results, so more needs to be done in the short to medium term.
[Spain's Formación Profesional aims to promote vocational training to alleviate the high rates of youth unemployment and prepare students directly for work]
More should be done in Spain to promote digital skills and to encourage students to take up IT-related courses, as technological capabilities are increasingly valued in the modern world of work, and represent an important transferable skill. A 2022 OECD report found that only 6% of students are enrolled in such courses in Spain, despite the employment rate for IT subjects being over 80% (OECD, 2022). Spain can, in this regard, be credited with the fact that, as of 2022, it has committed to investing €360 million over a 4-year period in ensuring students learn computer programming skills from a young age, giving teachers digital competencies and better equipping classrooms with technology (El Mundo, 2022).
There are also a number of lessons that Spain can learn from other countries when it comes to reducing youth unemployment. In the UK, for example, it is a requirement for all schools to have a careers advisor. This provides students with an easily accessible source of information on career opportunities, allows them to voice their specific concerns or aspirations to a professional who can set them on the right path, and simply puts the idea of a career in students’ minds from a young age. Lessons can also be learnt from others when it comes to Spain’s Formación Profesional, as the EU also places a strong emphasis on the role of vocational education and training (VET) as a tool for reducing youth unemployment. The German VET system serves as the ideal model from which the EU draws inspiration, and Spain could certainly improve its own system by looking towards Germany. Perhaps the most notable difference in the success of the German model compared to Spain is in ensuring that skills and qualifications gained in the training programmes are actually in line with the needs of the labour market. Germany achieves this through much closer interaction with firms (students often work part-time in a real company during the programme) and a strong participation of trade unions and work councils in the management of the training schemes. For the Spanish system to adopt similar measures and improve the success of its VET programmes, schools, companies and unions need to engage in greater dialogue so that all parties feel they can benefit from employing and training young workers, and can work together in collective bargaining with policymakers.
[Spanish policymakers must focus on a strategy of long-term structural improvements of the quality and efficiency of vocational training whilst encouraging the learning of digital skills in the short term]
The problem of youth unemployment in Spain is enormous, and it is clear that it is not going to subside any time soon. However, that certainly does not mean that Spain should just sit back and accept this as an inherent characteristic of its economy. There is scope for drastic improvement, and Spanish workers and policymakers alike should not lose sight of this. In the long-run, a process of reform must be undertaken to improve the efficiency and uptake of vocational training and to enhance the quality and focus of education - this requires increased collaboration of schools, companies and politicians. In the short-term, more should be done to encourage learning digital skills and getting more young people into sectors with low uptake but high employability. In doing so, Spain can finally begin to take full advantage of its untapped reserve of human capital and begin down a path of greater economic prosperity.
Article by Lara Gigov
Edited by Bailey Rawden
Bibliography
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