Ungdomsarbetslösheten - om övergångsregimer, institutionell förändring och socialt kapital
Youth unemployment - transition regimes, institutional change and social capital
Author
Summary, in English
Youth unemployment in Sweden has reached record levels during the first decade of the 21st century. In 1970, the unemployment rate for 20-24 year olds was approximately 2%. Now, forty years later, this rate has risen to 20%. Relative youth unemployment (youth unemployment in relation to unemployment for the 25-64 year olds) has also risen. Today, the unem¬ployment rate for 20-24 year olds is three times higher than the rate for 25-64 year olds and is among the highest in Europe.
Contacts in the form of bridging social capital are of importance to young people in getting a job. The reason is that transaction costs can be lowered by social capital. Because young people generally have less bridging and thus less useful social capital than adults, they represent higher transaction costs (risk). Therefore, employers require a higher risk premium to employ them. If we assume that the initial wage is fixed (i.e. the possibility of lowering the wage of those with higher risk is limited), people with higher risk will have difficulties getting a job.
Two studies in the thesis estimate the role of social capital. Both conclude that people who have bridging social capital, defined as active participation in an association, also have a reduced probability of being unemployed. Both studies also show that participation in associations decreased between 1996 and 2006 (2000 – 2008 for the second study). Thus, in line with the theoretical model, social capital lowers risk and hence employers’ risk premium. Theoretically, a lower risk premium should, with sticky and exogenous wages, decrease the individual’s probability of being unemployed. Empirically, the studies show that the probability of being unemployed decreases by 20% - 50% for someone who is active in associations.
The transition regime that exists in Sweden today does not take into account lowering this risk, and thereby becomes sub-optimal. This change to a sub-optimal transition regime has gone from a full-time work regime via a part-time work regime to a regime that focuses on formal education in the school environment. This development may be characterized by punctuated equilibrium where endogenous processes and discretionary decisions have been combined. The results in this thesis show that young people’s formation of their social capital has to be taken seriously. Today it seems like this is neglected. The challenge for the future will be to combine formal education with social capital formation.
Contacts in the form of bridging social capital are of importance to young people in getting a job. The reason is that transaction costs can be lowered by social capital. Because young people generally have less bridging and thus less useful social capital than adults, they represent higher transaction costs (risk). Therefore, employers require a higher risk premium to employ them. If we assume that the initial wage is fixed (i.e. the possibility of lowering the wage of those with higher risk is limited), people with higher risk will have difficulties getting a job.
Two studies in the thesis estimate the role of social capital. Both conclude that people who have bridging social capital, defined as active participation in an association, also have a reduced probability of being unemployed. Both studies also show that participation in associations decreased between 1996 and 2006 (2000 – 2008 for the second study). Thus, in line with the theoretical model, social capital lowers risk and hence employers’ risk premium. Theoretically, a lower risk premium should, with sticky and exogenous wages, decrease the individual’s probability of being unemployed. Empirically, the studies show that the probability of being unemployed decreases by 20% - 50% for someone who is active in associations.
The transition regime that exists in Sweden today does not take into account lowering this risk, and thereby becomes sub-optimal. This change to a sub-optimal transition regime has gone from a full-time work regime via a part-time work regime to a regime that focuses on formal education in the school environment. This development may be characterized by punctuated equilibrium where endogenous processes and discretionary decisions have been combined. The results in this thesis show that young people’s formation of their social capital has to be taken seriously. Today it seems like this is neglected. The challenge for the future will be to combine formal education with social capital formation.
Department/s
Publishing year
2011
Language
Swedish
Publication/Series
Lund Studies in Economic History
Volume
55
Full text
Document type
Dissertation
Topic
- Economic History
Keywords
- Ungdomsarbetslöshet
- övergångsregim
- socialt kapital
- utbildning
- riskpremie
- risk
- arbetslöshet
- heltidsarbete
- deltidsarbete
- blind alley-jobs
Status
Published
Supervisor
- Christer Gunnarsson
- Anders Nilsson
ISBN/ISSN/Other
- ISSN: 1400-4860
- ISBN: 978-91-7473-181-1
Defence date
9 December 2011
Defence time
10:15
Defence place
EC3:211
Opponent
- Eskil Wadensjö (Professor)