A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Hadjivassiliou, Kari P; Tassinari, Arianna; Eichhorst, Werner; Wozny, Florian Working Paper Assessing the Performance of School-to-Work Transition Regimes in the EU IZA Discussion Papers, No. 10301 Provided in Cooperation with: IZA – Institute of Labor Economics Suggested Citation: Hadjivassiliou, Kari P; Tassinari, Arianna; Eichhorst, Werner; Wozny, Florian (2016) : Assessing the Performance of School-to-Work Transition Regimes in the EU, IZA Discussion Papers, No. 10301, Institute for the Study of Labor (IZA), Bonn This Version is available at: http://hdl.handle.net/10419/149160 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 E-mail: [email protected] Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. IZA Discussion Paper No. 10301 October 2016 ABSTRACT Assessing the Performance of School-to-Work Transition Regimes in the EU* The Great Recession that has engulfed Europe since 2008 has had a profound impact on the process of young people’s school-to-work (STW) transition. Countries’ institutional configurations considerably matter in shaping the structure of young people’s STW transitions and mediating the impact of the Great Recession on youth unemployment. Drawing upon Pohl and Walther’s concept of ‘youth transition regime’ (2007), we have assessed the performance of selected EU countries belonging to different clusters regarding the speed, ease and quality of STW transitions. Differences in performance across regimes exists, with some faring better than others, although at the same time a common, worrying trend can be identified across clusters, comprising a progressive deterioration of the quality of youth transitions across the board, despite the positive policy intentions to strengthen and improve the efficacy of transition regimes. JEL Classification: I2, J23, J24 Keywords: school-to-work, youth unemployment, transition regime, European Union Corresponding author: Werner Eichhorst IZA P.O. Box 7240 53072 Bonn Germany E-mail: [email protected] * This paper summarizes results from a work package of the STYLE (Strategic Transitions for Youth Labour in Europe) project that has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under Grant Agreement no. 613256. 1. Introduction The Great Recession that has engulfed Europe since 2008 has had a profound impact on the process of young people’s school-to-work (STW) transition, exacerbating the challenges arising from the long-term structural transformations affecting youth labor markets across the European Union (EU). However, despite the impact of the crisis having been felt everywhere, profound cross-country differences in the performance of STW transition regimes persist and the type and severity of challenges faced by countries belonging to different institutional clusters considerably vary. The challenges surrounding young people’s STW transitions that surfaced during the Great Recession have also acted as a catalyst for policy change in many Member States. Often following European Commission recommendations, numerous countries have embarked upon ambitious reform programs - such as the introduction of the Youth Guarantee (YG) and structural reforms of vocational education and training (VET) and activation policies - which have the potential to significantly alter the way in which STW transitions are structured. This paper seeks to tackle two central questions pertaining to the performance and evolution of STW transition regimes in Europe during the Great Recession. First, what role have the institutional characteristics of distinct STW transition regimes played in mediating and structuring the impact of the crisis on young people’s labor market situation? Second, in what ways are the policy changes introduced during and after the Great Recession changing the structure and logic of European STW transition regimes? Moreover, what are their implications for our conceptualization of youth transition regimes and – empirically - for the quality and sustainability of young people’s STW transitions in the future? Following an institutionalist approach, this chapter tackles these two analytical puzzles through a comparative case study design, drawing upon the typology of ‘youth transitions regimes’ advanced by Pohl and Walther (2007) as a framework for comparison. First, we investigate how country-specific institutional configurations that structure the STW transition process have mediated the impact of the crisis on young people’s labor market situation between 2007 and 2015 in a sample of eight Member States belonging to different clusters. We explore how performance varied between and within country clusters, focusing especially on the mediating role of labor market regulatory institutions and policy instruments in the fields of active labor market policy (ALMPs), education and training, including VET. Our findings show that institutional legacies mattered considerably in determining the type and severity of challenges that different countries faced regarding young people’s STW transition during the crisis. However, institutional factors interacted in complex ways with the broader macro- economic environment and availability of fiscal resources. Second, we analyze the main changes in the design of regulatory institutions and policy instruments in STW transition regimes across five country clusters between 2007 and 2015. By reviewing the main developments in three policy domains – ALMPs and NEET policies, VET and employment protection legislation (EPL) – we assess the extent to which recent reforms have brought about substantial change in the underlying logic and design of STW transition regimes in Europe, as well as whether these are likely to lead to future improvements in performance. Our analysis identifies conflicting trends of convergence and persisting divergence in institutional design in different policy areas. Institutional configurations appear to be in a state of flux, blurring the distinctive characteristics and internal coherence of the STW transition regimes captured by Pohl and Walther’s (2007) typology. In terms of empirical outcomes, considerable challenges persist despite intense reform activity, and the post-crisis quality of STW transitions post-crisis appears to have deteriorated across all country clusters. The chapter proceeds as follows. In Section 2, we outline the theoretical and case study selection framework. Section 3 presents the institutional features and performance of each of the five STW transition regimes 2 represented by the eight case study countries. Section