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Young people may face particular challenges in the post-corona labour market
The coronavirus pandemic has resulted in both a global health crisis and a financial crisis on a scale never before seen in modern times. The labour market that emerges in the wake of the crisis may impact younger workers harder than others.
The existing body of research, including research conducted at OsloMet, offers some indications of the job market that young people may face once the corona crisis is over. And the picture is quite bleak.
“Research shows that a crisis such as the one we are experiencing now can have a serious impact on young people’s possibilities in the job market, both in the short term, but also in the longer term,” says Christer Hyggen, a senior researcher at Norwegian Social Research (NOVA), a research institute at OsloMet.
Together with researchers from nine countries across Europe, Christer Hyggen participated in the Horizon-funded research project Negotiate in 2016. The aim was to suggest ways to overcome early job insecurity in Europe, and the development of the job market after the financial crisis in 2009, especially for youth. Negotiate examined the attitudes of employers in countries such as Norway, Bulgaria, Greece and Switzerland when it came to employing younger workers, and the research project resulted in two books and several academic articles.
“The Negotiate project showed that young people entering the job market are affected more quickly and more seriously than others in the labour market when a crisis of such a magnitude occurs,” Hyggen notes.
No two crises are alike, and neither are their impacts
The current corona crisis is different from the 2008-2009 financial crisis in that we are not only experiencing a serious threat to our health, but also a collapse in the job market and the global financial market at the same time. This is largely due to the fact that almost all countries have closed down much of society in an attempt to protect vulnerable groups against the virus.
“Norway is proving to be much more affected by the corona crisis than was the case during the financial crisis. We are also experiencing a steep drop in oil prices. The combination of these factors is influencing the sectors of the labour market where youth primarily work harder than other sectors,” Hyggen explains.
According to the OsloMet researcher, most youth are overrepresented in the hospitality or retail sector, sectors that have already been badly affected in terms of job loss. Young people also tend to be employed in the private, rather than the public sector, thereby giving them less job security.
“Our findings from the Negotiate project suggested that a crisis such as the one we are experiencing now acts as a catalyst for increasing the differences between groups,” Hyggen continues.
“We also observed differences in degree and kind in how countries belonging to the European Union were affected by the financial crisis. We may witness a similar divergence as a result of the corona crisis."
Closed borders may exacerbate differences
In an effort to protect their inhabitants from coronavirus, most European countries closed their borders. This has also resulted in an airline industry that has mostly grounded its fleets, making it challenging for youth to move between countries in search of a job. It also remains unclear how long the current situation will last or whether countries will eventually open their borders simultaneously.
“Based on our previous research, it appears as if youth from Spain, Italy and Greece may face the most challenges in the job market once the current crisis is over, compared to youth from the Scandinavian countries,” Hyggen said.
Germany and other northern European countries within the EU seemed to recover from the financial crisis more quickly, according to findings from Negotiate. There is reason to believe a similar pattern may emerge in the wake of the coronavirus pandemic as well.
Lessons from the financial crisis
One of the reasons the Scandinavian countries fared better than other European countries in the aftermath of the financial crisis is that they are all advanced welfare states.
In Norway, authorities have moved swiftly in an attempt to mitigate the effects of the crisis and have introduced several financial stimulus packages. For the first time, workers with less stable incomes—like freelancers and owners of small companies—have access to the same financial support from the state as other workers.
“I think our politicians learned something from the financial crisis, and understood that it was important to allow the entire workforce to apply for benefits and financial support when they are made redundant. That way, people will have the peace of mind and security they need to be able to apply for the jobs that are left,” Hyggen remarks.
In the wake of the financial crisis, significant numbers of young people who struggled to find jobs chose to return to higher education. The downside of this, Hyggen explains, is that it may well contribute to reinforcing inequalities among younger workers.
“We saw after the financial crisis that when some young people decided to return to higher education, the result was sharper differences within this age group. What we know today is that it appeared to be those who were best off economically who were able to pursue more higher education,” according to the researcher.
Hyggen urges both employers and the authorities to keep in mind the impact long-term unemployment can have on young people—in the worst case, it can have a lasting effect on their entire careers. In order to ensure that young workers will be able to build satisfying careers after the corona pandemic, Hyggen believes employers must offer young people jobs they are qualified for, and the authorities must step in and offer practical assistance if needed.
“What is most important now,” Hyggen says by way of conclusion, “is that we ensure that young peopele are financially secure, while making sure employers are in an economic position to hire new employees when the crisis is over.”
This article is produced and financed by OsloMet
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