Economic and Social Reports
Youth unemployment in Canada, Germany, Ireland, and the United Kingdom in times of COVID-19
DOI: https://doi.org/10.25318/36280001202200300003-eng
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From the start of the COVID-19 pandemic, there were widespread concerns about young people’s labour market prospects. The COVID-19 youth economic activity and health monitorNote (YEAH) project at University College London (UCL) in collaboration with Statistics Canada and other institutes in Europe aimed to shed light in this area by examining the pandemic’s impacts on the dynamics of youth employment and well-being. Indeed, very few countries managed to avoid a hit to their economy or young people’s employment in the wake of COVID-19. The economic fallout from the pandemic has been as global as the health crisis itself. This spotlight article shows that despite economic and institutional differencesNote , youth unemploymentNote figures in Canada, Germany, Ireland, and the United Kingdom (UK) initially rose during the COVID-19 pandemic with peak levels in the summer of 2020, but have recovered since then.
During the 2010s prior to the COVID-19 pandemic, youth unemployment rates in Canada, Germany, Ireland, and the United Kingdom decreased steadily but this trend reversed in 2020
Chart 1 shows the annual unemployment rates among youth for Canada, Germany, Ireland, and the UK from 2005 to 2020. During the Great Recession (2007-2009), the annual youth unemployment rate in Canada, Ireland, and the UK increased, while it decreased in Germany. From 2013 to 2019, the annual youth unemployment rate in all of these countries decreased, although to a lesser extent in Canada and Germany. In 2019, one year before the onset of the COVID-19 pandemic, youth unemployment rates in Germany and the UK were at their lowest points since 2005 at 5.8% and 11.4%, respectively. In Canada, the youth unemployment rate was at 11.0% similar to its lowest rate in 2007 at 10.9%. By comparison, in Ireland, the youth unemployment rate was at 12.5%, which was higher than its lowest point in 2005 at 8.7%. In 2020, the first year of the pandemic, the annual youth unemployment rate increased in all four countries. Among them, Canada experienced a much steeper increase than Germany, Ireland, and the UK. In addition, the youth unemployment rate in Canada also increased to a greater extent in the 2020 pandemic year than during the Great Recession.
Data table for Chart 1
| Year | Youth unemployment rate | |||
|---|---|---|---|---|
| Germany | Canada | United Kingdom | Ireland | |
| 2005 | 15.5 | 12.4 | 12.9 | 8.7 |
| 2006 | 13.8 | 11.4 | 14.1 | 8.8 |
| 2007 | 11.9 | 10.9 | 14.4 | 9.2 |
| 2008 | 10.6 | 11.4 | 15.1 | 13.5 |
| 2009 | 11.2 | 15.0 | 19.2 | 24.5 |
| 2010 | 9.8 | 14.6 | 20.0 | 28.1 |
| 2011 | 8.5 | 13.9 | 21.4 | 29.6 |
| 2012 | 8.0 | 14.1 | 21.4 | 30.8 |
| 2013 | 7.8 | 13.5 | 20.9 | 26.7 |
| 2014 | 7.7 | 13.2 | 17.1 | 23.4 |
| 2015 | 7.2 | 12.9 | 14.9 | 20.2 |
| 2016 | 7.1 | 12.8 | 13.3 | 16.8 |
| 2017 | 6.8 | 11.4 | 12.3 | 14.4 |
| 2018 | 6.2 | 10.9 | 11.6 | 13.8 |
| 2019 | 5.8 | 11.0 | 11.4 | 12.5 |
| 2020 | 7.4 | 20.1 | 13.8 | 15.3 |
|
Notes: Youth refers to persons aged 15 to 24 in Canada, Germany and Ireland and persons aged 16 to 24 in the United Kingdom (UK). To make data comparable over Brexit times, for the UK, data from the Office for National Statistics Labour Force Survey (ONS-LFS) are used instead of the European Labour Force Survey (EU-LFS) statistics published by Eurostat. Sources: Statistics Canada, Table 14-10-0327-01 Labour force characteristics by sex and detailed age group, annual; European Labour Force Survey (EU-LFS); UK Labour Force Survey (UK-LFS). |
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After the initial shock of the COVID-19 pandemic, Canada faced a greater increase in the youth unemployment rate compared to Germany, Ireland, and the United Kingdom
Chart 2 shows the monthly youth unemployment rate for Canada, Germany, Ireland, and the UK between January 2020 and September 2021. From a monthly perspective, youth unemployment rates in Canada and Ireland started to rise immediately with the COVID-19 restrictions in March 2020. The monthly youth unemployment rate in Germany and the UK also increased but not as sharply as in Canada and Ireland. Among the four countries, Canada had the largest increase in the monthly youth unemployment rate. From the beginning of the lockdowns in March 2020 to the peak of the monthly youth unemployment rate in May 2020, the unemployment rate of Canadian youth increased from 17.1% to 28.8%, representing an increase of 11.7 percentage points. For Germany, Ireland, and the UK, the monthly youth unemployment rate peaked in later months, and increased 1.5 percentage points in Germany, 8.2 percentage points in Ireland, and 2.1 percentage points in the UK, since March 2020.
Between February 2021 and May 2021 (“the third wave”), while Canada experienced a slight decline, Ireland experienced a slight increase in monthly youth unemployment rates, whereas Germany and the UK had almost no fluctuation.Note
Data table for Chart 2
| month/year | Youth unemployment rate (seasonally adjusted) | |||
|---|---|---|---|---|
| Canada | Germany | United Kingdom | Ireland | |
| January 2020 | 10.4 | 6.0 | 11.8 | 11.5 |
| February 2020 | 10.6 | 6.2 | 12.3 | 11.8 |
| March 2020 | 17.1 | 6.4 | 12.7 | 12.4 |
| April 2020 | 27.1 | 6.7 | 13.1 | 13.4 |
| May 2020 | 28.8 | 7.0 | 13.2 | 14.9 |
| June 2020 | 26.4 | 7.2 | 13.8 | 16.9 |
| July 2020 | 24.0 | 7.5 | 14.3 | 19.2 |
| August 2020 | 22.9 | 7.7 | 14.8 | 19.8 |
| September 2020 | 18.6 | 7.8 | 14.8 | 20.6 |
| October 2020 | 18.9 | 7.9 | 14.4 | 17.4 |
| November 2020 | 17.4 | 7.9 | 14.7 | 16.8 |
| December 2020 | 18.3 | 7.9 | 14.6 | 15.4 |
| January 2021 | 19.6 | 7.9 | 14.6 | 16.1 |
| February 2021 | 17.3 | 7.8 | 13.7 | 17.6 |
| March 2021 | 14.1 | 7.7 | 13.5 | 19.0 |
| April 2021 | 15.9 | 7.5 | 13.5 | 20.2 |
| May 2021 | 15.7 | 7.2 | 13.1 | 18.1 |
| June 2021 | 12.8 | 7.0 | 12.9 | 15.7 |
| July 2021 | 11.9 | 6.8 | 12.2 | 12.9 |
| August 2021 | 11.7 | 6.7 | 11.7 | 11.1 |
| September 2021 | 11.2 | 6.6 | 11.3 | 10.3 |
|
Notes: Youth refers to persons aged 15 to 24 in Canada, Germany, and Ireland and persons aged 16 to 24 in the United Kingdom (UK). To make data comparable over Brexit times, for the UK, data from the Office for National Statistics Labour Force Survey (ONS-LFS) are used instead of the European Labour Force Survey (EU-LFS) statistics published by Eurostat. Sources: Statistics Canada, Table 14-10-0287-01 Labour force characteristics, monthly, seasonally adjusted and trend-cycle, last 5 months; Federal Employment Agency (BA), Germany; European Labour Force Survey (EU-LFS); UK Labour Force Survey (UK-LFS), seasonally adjusted, United Kingdom. |
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More long-term unemployment among unemployed young people in Canada, Germany, and the United Kingdom since the COVID-19 pandemic
The COVID-19 pandemic also increased long-term unemployment risks among youth.Note Since March 2020, the share of unemployed youth with more than 12 months of unemployment rose in Canada, Germany, and the UK.Note During the initial shock between March 2020 and September 2020, the proportion of long-term unemployment among youth in the UK (13.1%) was higher than in Germany (8.9%; see Dietrich et al. 2021) and Canada (2.9%) and also rose faster with a peak in September 2020 at 17.3% compared to 3.2% in Canada and 10.7% in Germany in the same month. However, between February 2021 and May 2021 (“the third wave”), compared to the other countries, Canada experienced a higher increase (7.3 percentage points) in the share of long-term unemployment among unemployed youth with a peak in May 2021 at 12.3% compared to 19.7% in the UK and 16.1% in Germany (2.1 and 2.2 percentage points, respectively). In the case of the latter, the overall recovery of youth unemployment figures went faster than that of long-term unemployed which resulted in higher relative long-term unemployment risks.
Canada experienced a larger change in youth unemployment during the pandemic compared to other OECD countries
OECD (2022) data on youth unemployment rates for June 2019, 2020 and 2021 at the country-specific level offer further insights. In 2019, the year prior to the pandemic, Canada’s youth unemployment rate was 11.0%. The youth unemployment rate in the UK was similar at 11.4%, higher in Ireland at 13.5%, and lower in Germany at 5.7%.
In June 2020, the youth unemployment rate in Canada increased over 16 percentage points to 27.4%. Germany and the UK, where job retention programs were introduced, experienced increases of 1.6 and 2.4 percentage points, respectively. In comparison, Ireland experienced an increase of 3.4 percentage points. The increase in Canada’s youth unemployment rate was also greater than the increase observed for the OECD, where the estimated unemployment rate increased more than 6 percentage points, from 11.6% to 17.9%.
By summer 2021, youth unemployment rates largely recovered but remained elevated compared with their levels in 2019 across most of the OECD countries, and Canada was no exception to this trend. In Canada, the youth unemployment rate in June 2021 was 2.6 percentage points higher than in June 2019. The difference was lower for Germany and the UK at 1.2 and 1.5 percentage points, respectively, but slightly higher for Ireland at 2.2 percentage points.
References
Dietrich, H., G. Henseke, J. Achatz, S. Anger, B. Christoph, and A. Patzina. 2021. “Youth Unemployment in Germany and the United Kingdom in Times of Covid-19.” IAB-Forum, August 4, 2021. https://www.iab-forum.de/en/youth-unemployment-in-germany-and-the-united-kingdom-in-times-of-covid-19/
HM Treasury. 2020. “Policy paper. A Plan for Jobs 2020.” Published July 8, 2020. https://www.gov.uk/government/publications/a-plan-for-jobs-documents/a-plan-for-jobs-2020
Morissette, R. 2021. “Chapter 2: Youth Employment in Canada.” In: Portrait of Youth in Canada: Data Report. Statistics Canada, Catalogue no. 42-28-0001.
OECD (2022). Unemployment rate by age group (indicator). DOI:10.1787/997c8750-en (Accessed on 25 January 2022).
Schoon, I., and J. Bynner. 2019. “Young People and the Great Recession: Variations in the School-to-Work Transition in Europe and the United States.” Longitudinal and Life Course Studies 10(2): 153-173.
Statistics Canada. Table 14-10-0287-01. Labour force characteristics, monthly, seasonally adjusted and trend-cycle, last five months. DOI: https://doi.org/10.25318/1410028701-eng.
Statistics Canada. Table 14-10-0327-01. Labour force characteristics by sex and detailed age group, annual. DOI: https://doi.org/10.25318/1410032701-eng.
Statistics Canada. Table 14-10-0342-01. Duration of unemployment, monthly, seasonally adjusted. DOI: https://doi.org/10.25318/1410034201-eng.
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