Technological Change, Educational Expansion, and Changes in The Distribution of Youth Unemployment Risks
Since the postwar boom came to an end in the 1970s, advanced Western economies have entered a phase of sustained economic restructuring. Educational expansion and technological change have been central in reshaping the labour market value of educational degrees in this process. This study seeks to account for the effects of the concurrent dynamics of educational expansion and technological change on youth unemployment risks in 21 European countries in the 1990s and early 2000s. Drawing on cohort panel data and using first difference estimators, we attempt to assess whether a polarization of unemployment risks across skill groups has occurred and to what extent observed changes in the distribution of unemployment risks can be explained by structural factors. Educational expansion is found to raise unemployment among tertiary educated, while it also raises unemployment among individuals with only lower secondary education or less due to crowding out processes. Both effects are amplified in countries operating an extensive apprenticeship system at the secondary level. In contrast, skill-biased technological change, measured by the spread of personal computers, significantly decreases unemployment rates but only for tertiary educated youth. Globalization is not associated with youth unemployment risks in any way.
Noelke, C.