The “scarring effect” on youth employment during the pandemic

Several recessions have allowed experts to study its short and long-term effects on the labor market, especially in youth, one of the most vulnerable groups. Even though this time the source is a pandemic, studies say its effects will most likely be the same.

The difficulty of finding a job due to the pandemic and its consequent economic crisis will have long-term consequences for young people looking for a job or who just started one, studies say. With the highest percentage of unemployment in Macedonia (34,8 percent, according to official Macedonian Government statistics), youngsters are not only struggling with starting a career online – they may also struggle in the future with lower wages, changes in occupation, and social consequences as criminal activities and poor mental health.

“This year is hard for everybody, especially for young people and especially for young people that are searching for a job for the first time”, says GjokoGrdanosvki, president of the NGO Youth Council Next Generation.Grdanosvki also points out the lack of mentorship and comfort felt for the ones who are starting a job online for the first time in their life.

Elena Badaloska is one of the people affected by this crisis. The recent graduate of English Language and Literature from Ohrid, Macedonia, was studying to become a teacher. “I had completely different plans for this year but then covid-19 happened”, says the 23-year-old youngster. “I wanted to continue with my studies, I wanted to go to another country for my master’s degree, but, unfortunately, I was not able to and that’s why I chose to work while this pandemic is still on”, sharesBadaloska.

After a month of looking, she finally found a job. “It’s something I really enjoy doing but it’s completely different from what I have studied”, continues, referring to “working with the accountant department” of a company and “dealing with invoices, confirmations, writing e-mails, making calls”. Since “it’s really hard for young people to find a job, especially in smaller cities”, Badaloska feels lucky to be already working and enjoying it.

According to official Macedonian Government statistics, the country had an unemployment rate of 16,5 percent in the third quarter of this year, a much higher percentage than the 7,8 percent unemployment rate of the Euro area published by Statista in June. If the age range from 15 to 24 was already one of the most affected by unemployment (34,8 percent in Macedonia and 17 percent in Euro area, according to the same sources), now the situation is much worse since a lot of business closed and all of the working sectors were impacted by this economic crisis.”The numbers can actually be higher because there are some people that don’t declare themselves as unemployed”, reminds Grdanosvki.

This “scarring effect” of the labor market crisis has been studied for several decades now and everything suggests that we’ll be living that again soon. But what does this mean? What real consequences can youth expect?It means effects on earnings (reduction of about 10-15 percent initially) that “tend to fade after 10-15 years in the labor market”. It is also accompanied by “changes in occupation, job mobility, and employer characteristics”, according to Till von Watcher, an economist at California University, who published a study about the subject, this year.

However, Badaloska is feeling optimistic. “I don’t think that I’ll have some issues further in my career”, says, since she sees this time as a break and she’s gaining experience. “I’ve always wanted to teach kids. I love teaching and I love working with kids but unfortunately,I can’t now, maybe in the future”, says hopefully.

However, the consequences aren’t only work-related. According to Till von Watcher’s study, this can havesocial consequences which include “fertility, marriage and divorce, criminal activities and risky alcohol consumption”. Some evidence also suggests that “early exposure to depressed labor market lowers health and raises mortality in middle age”.

Grdanosvki agrees and points out young people who are not in education nor training nor employment “are the most vulnerable group in our society and they can easily switch to crime or gambling”. It is also bad for their mental health and can lead to depression or anxiety if they feel they can’t sustain themselves and have to depend on their parents again or they can’t just find a job. “After I graduated, for one month I was looking for a job and, to be honest, I felt useless like I couldn’t do it”, confesses Badaloska.

Keep going and improving is Grdanosvki advice. “Do something and even work for free, volunteer so you can do something good for the society and you because you are also learning some new skills that can help you in the future”, sustains. Making friends, networking and learning other languages, soft skills or IT skills are some of the advantages that might help in future careers.“That’s why we are helping young people by offering them these opportunities”, says, referring to training and education. The goal? Never stop learning.

Some advice from the economist Till von Watcher to youth:

1) Your first job out of school may not be what you had expected, but that’s OK. Being flexible in your choice of, say, occupation, or where you live will give you more options.

2) Your career will take longer to develop than that of luckier peers. Do what you can to avoid being locked into that first job, by continuing to accumulate general skills and looking for opportunities to move to other jobs.

3) If things are going slow, remember, it is hard for everyone. At the same time, all findings discussed here are for averages, and do not necessarily apply to you – you have agency in shaping your life and career.

4) You may need to save a higher percentage of income early in life to meet long-term wealth goals.

5) Your desired patterns of marriage and fertility may take more effort to achieve.

6) Take particular care to develop and maintain a healthy lifestyle and be kind to yourself, in part because it will help you weather difficult initial labour market conditions.

Rute Cardoso

Sources:
https://www.publico.pt/2020/11/23/economia/noticia/azar-longo-prazo-procurar-emprego-meio-crise-1940108
http://www.stat.gov.mk/pdf/2020/2.1.20.34_mk.pdf
https://www.statista.com/statistics/264887/monthly-unemployment-rate-in-the-eu-and-euro-area/
https://www.statista.com/statistics/276424/youth-unemployment-rate-in-the-eu-and-euro-area/
http://www.econ.ucla.edu/tvwachter/papers/von_Wachter_JEP_final.pdf

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: