Youth unemployment in Spain: an analysis of cost-effctive policy tools to mitigate the youth unemployment problem in Spain

Abstract

This paper investigates major factors of youth unemployment in Spain from 1999–2012 and suggests a policy reform in order to mitigate its structural youth unemployment problem. Previous work in the research area of youth unemployment in Spain has largely focused on the impact of the economic crisis on youth unemployment but failed to identify causes for the structural nature of the problem when providing policy recommendations. In the frame of this research project, a causal model consisting of twelve variables has been established and used in order to disclose which factors have been determining youth unemployment the most in Spain from 1999-2012. The relationships between each of the twelve (independent) variables and youth unemployment (dependent variable) is analyzed using SPSS. Based on the findings of this analysis, a policy recommendation to substantially decrease the youth unemployment rate in Spain is provided. This paper finds that active labor market policies (ALMP) are the key to solving the youth unemployment problem and suggests a three-step policy reform to mitigate the youth unemployment rate in Spain.