Are Active Labor Market Policies Reducing Youth Unemployment in the European Union?

Youth unemployment in the European Union (E.U.) is a growing cause for concern among European officials and national level policy makers alike. The 2008 global financial crisis resulted in sharp increases in youth unemployment, particularly long-term. While the E.U. has created the Youth Guarantee Scheme to assist Member States in their policy initiatives, national governments are responsible for implementing individual strategies. Research on the effectiveness of active labor market policies (ALMP) in tackling youth unemployment, both historic and recent, provides mixed results, and there is a particular lack of research involving cross-country and long-term effects. Using panel regression methods, this study analyzes the extent, if any, ALMP are affecting youth unemployment, specifically those neither in employment, education, or training (NEET). Further analysis explored how political ideology affects the adopting of youth ALMP, and how income inequality may affect overall policy efforts to reduce unemployment. The analysis found similarities to existing literature in the positive effects of training schemes, and the ambiguous results from other policies. However, this research notably found differences within Europe and in particular those countries in the south and east.