Switzerland scores well on youth job market conditions but suffers from skills mismatch

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Investec
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A recent report places Switzerland second in a ranking of 33 european countries on conditions in the youth labour market in 2016 – youth are those between 15 and 24.

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Switzerland’s overall score of 5.67 out of 7.00 is close to Denmark’s 5.72. Switzerland’s highest scores are for employment rate (6.01) and working conditions (5.77), with education (5.36) and smoothness of transition to work (5.52) coming in lower.

This version of the report is focused on the skills mismatch, a measure of how much worker qualifications fail to fit what employers are seeking. The report uses the International Labour Organisation (ILO) definition, which compares the share of people employed with a certain education level with the share of people unemployed with the same education level.

In Switzerland there are too many young people with primary education chasing too few jobs. At the other end, there are too few tertiary educated youth to fill all the jobs available for them. For those in the middle, with a secondary education, the match is about right.

An oversupply of young workers with little education is the norm across Europe. Only Greece and Turkey have a shortage of these young people. A shortage of highly qualified worker is also the norm. Only Turkey, Greece, Romania, Poland, Montenegro and Lithuania have too many.

Malta, Finland, Netherlands, Ireland, Sweden and the United Kingdom have the largest oversupply of young people with little education.

The rate of unemployment among young people in Switzerland was 6.4% in the second quarter of 2018, 1.4 times higher than the overall rate (4.6%) – rates are calculated using the ILO method and exclude those studying.

A key driver of youth unemployment is the state of the economy – it’s hard to enter the work force when things slow down.

Compared to the rest of Europe, youth unemployment in Switzerland is low. Across the EU the rate was 15% in the second quarter of 2018, compared to 6.4% in Switzerland. Only the Czech Republic, Germany, Sweden, Luxembourg, Norway and the Netherlands have lower rates.

The key take away from the study appears to be: study hard.

About Investec

Investec is a distinctive Specialist Bank and Asset Manager. We provide a diverse range of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia, as well as certain other geographies. Investec’s strategic goals are motivated by the desire to develop an efficient and integrated business on an international scale through the active pursuit of clearly established core competencies in the group’s principal business areas.

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