The corona virus caused severe economic setbacks in economies around the world in the first half of the year. In the euro zone, extensive measures were at least able to protect the labor market from more serious distortions. But things are by no means going equally well for all age groups. Particularly in the group of under 25-year-olds, a fairly rapid increase in the EMU unemployment rate has been recorded since the lockdown measures starting in March.
One of the reasons for the rapid deterioration in youth unemployment is the fact that companies in Corona times provide significantly fewer training places due to increased uncertainty. This poses a particular challenge to all those who left school after graduating in Corona summer and find it difficult or impossible to find an apprenticeship. In addition, fixed-term employment contracts are hardly ever extended in these uncertain times.
The danger here is that these people slip permanently into unemployment. The longer a person is in unemployment, the more difficult it is to integrate into the labor market. After only one year of unemployment, the prospects for job seekers are noticeably worse. In this context, there are two main negative factors for an economy. On the one hand, the economic cycle loses manpower in the form of productive human capital. This means that either the job seekers accept a job that is clearly below their qualification or even unemployment continues despite qualification. On the other hand, the social expenditure of the state increases the more and the longer people register as unemployed. This happens on the one hand, for example, in the form of unemployment benefit transfers, but also through extensive expenditure, for example, in the form of placement attempts or further training opportunities.