Europe has a low birth rate giving it a declining and ageing population. This is coupled with a serious problem of youth unemployment. It appears as something of a contradiction, writes Prince Michael of Liechtenstein.
The average number of births in European Union countries is 1.58 but needs to be in excess of two to maintain a stable population.
Youth unemployment is running at about 22 per cent in the EU, with Greece and Spain recording shocking rates of more than 50 per cent. Germany and Austria are the only two EU countries with rates of less than 10 per cent and, outside the EU, Switzerland.
So what are the reasons for youth unemployment? One is likely to be the lack of economic growth, so businesses are not creating new jobs. The public sector cannot employ any more. Businesses may be reluctant to employ inexperienced young people because of the exaggerated labour laws in most countries. Multiple regulations are also one of the reasons for the lack of growth. A third reason could be that education is heading in the wrong direction.
One of the European Commission’s ‘Europe 2020’ growth targets for the coming decade was for 40 per cent of the population to achieve a university degree. But do we need so many academics in the economy?
Today an EU-wide average of some 35 per cent of people aged between 30 and 34 have degrees. Germany and Austria are below average at some 31 and 24 per cent respectively. But Germany, Austria and Switzerland have a system of apprenticeships - training on the job with study-leave at specialised schools. These countries also have youth unemployment rates of less than 10 per cent. So is the EU-wide 40 per cent target reasonable or worthwhile?
Producing such a large proportion of people with academic qualifications could cause unintended problems in the workplace. More rigid job description could lead to better and more senior jobs being reserved for people with these academic qualifications and reduce career opportunities for talented people without degrees, but with practical experience and knowledge of work.
Is Europe over-educating its population? This seems likely. It is a fact that we have trained too many people in human sciences, law, business, social sciences and economics rather than as engineers and natural scientists. This is contributing to the problem and is a clear misallocation of talent.
It has probably meant that too many people are working in the public sector rather than production, development, research and services where they are needed.
Too much bureaucracy has also led to the share of the workforce in public services being too high. This does not mean that people in public services are not good and dedicated. They include brilliant talent.
It seems highly likely that this mismatch of talent causes under-employment, where people are working in jobs for which they are overeducated.
But countries with a lower than average number of university-educated people, combined with a system of apprenticeships, have the lowest youth unemployment and are among the top economic performers in Europe.
It would seem advisable to improve and widen the apprenticeship system across the EU to solve the youth unemployment problem rather than setting high targets for university attainment.
Training more young Europeans in engineering and natural sciences is essential rather than chasing an education target which could continue the scourge of youth unemployment.
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