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Without Advanced Education, Young People Likely to Stay Unemployed

The level of education has a direct impact on young Russians’ chances of getting a job. Young men and women with some post-secondary education – in particular those with higher education – experience a shorter transition to their first employment and a fairly low risk of staying unemployed, while those with just nine year of compulsory secondary school – in fact, 20% of Russians under 29 – are likely to remain unemployed for prolonged periods, according to Elena Varshavskaya, professor of the HSE Department of Human Resources Management.

Young Russians' employment prospects – and specifically the risks of not finding a job once out of school – are the main theme of Varshavskaya's paper 'Successful Transition from Studies to Employment: Who Finds It Easier?' presented at the Fourth International Conference of the Russian Association for the Study of Higher Education 'Rethinking Students: Ideas and New Approaches to Research'.

There is a inverse correlation between one's level of education and their risk of becoming unemployed or economically inactive, according to Varshavskaya. In other words, post-secondary education increases the chances of employment, while those who have worked their way through college or university are at a clear advantage in getting a decent job. In contrast, young people with just nine years of compulsory secondary school without any additional training face the highest risks of remaining unemployed for a long time.

The latter group of young people are described internationally by the acronym NEET – Not in Employment, Education or Training (see E. Varshavskaya ‘Russian Youth NEET: Certain Characteristics and the Need for More Research’ in Statistics and Today's Challenges: a Collection of Conference Papers. M., 2015, pp. 71-75). The increase in this group observed in Europe and North America since the early 1980s reflected a worsening situation in the labour market for young people. In Russia, a decline in young people's economic activity was first observed in the 1990s and persisted throughout the more prosperous 2000s and 2010s, when other age groups were restoring their positions in the labour market. These processes caused many young Russians to begin work later in life. 

On the other hand, the difficult economic situation in the country, combined with financial challenges faced by households and a few other factors, such as employers' preference for hiring people with relevant work experience, forced many students to work part-time or even full-time while studying, thus shifting their career start to an earlier age.

Varshavskaya's research is based on findings from the ILO's School-to-work Transition Survey (SWTS) conducted in 28 countries, including Russia, where it was included as part of Rosstat's employment survey and involved 11 regions – Bryansk, Volgograd, Voronezh, Nizhny Novgorod, Irkutsk, Novgorod, Rostov, Sverdlovsk and Chelyabinsk Regions, and the Republics of Bashkortostan and Dagestan. Out of the total sample of almost 3,900 people aged 15 to 29, a subsample of 2,254 was selected which included respondents who had completed their education or training before 2012 (the survey was conducted in July 2012).

Vocational Education and Training Increases the Chances of Employment

Two indicators are particularly significant for studying work-to-school transition: employment status, i.e. whether or not a young person is employed within three, six or twelve months of completing their studies, and how long the school-to-work transition has taken them. The survey respondents differed in terms of employment status (employed, unemployed, economically inactive) and the level of education, ranging from the compulsory nine years of secondary school to higher education.

Varshavskaya found a stark contrast in the rates of employment between young people with just nine years of secondary school and their peers with post-secondary education: after six months of completing their studies, just over half (55.6%) of the former group were employed, in contrast to more than 80% of the latter group (regardless of the level of post-secondary education).

Working While Studying Increases the Chances of Employment

According to Varshavskaya, combining work and studies increases the likelihood of finding employment soon after graduation and minimizes the risks of unemployment for young people. University graduates have the greatest advantage, and working while studying further increases their chances of finding employment by almost 12 p.p. (93.5% vs. 81.8%), while the chances of this group staying unemployed or economically inactive stand at 2.8% and 3.7%, respectively.

Varshavskaya found a gender gap in the rates of employment, with women facing lower chances of employment and higher chances of economic inactivity – the latter by almost 1.7 times (13.8% vs. 8.2%).

However, the higher the education level, the less difference between men’s and women's status in the labour market. In the group with compulsory schooling only, the gender gap in employment rates stands at 28 p.p. – 64% for men and 36% for women. As education levels go up, the gender disparity goes down, with 86% of men and nearly 83% of women with vocational training being employed.

Just over a third (36%) of young women with no education beyond secondary school are employed. According to Varshavskaya, "Almost half of them (47.2%) are economically inactive and one in six (16.7%) are unemployed." This may be due not only to their levels of knowledge and skills, but also to their reproductive behaviour, as women in this social group tend to have children earlier and thus do not enter the labour market.

More than Half of All Graduates Employed after Three Months

Another key characteristic of the school-to-work transition is its duration, based on which the respondents fall into two groups:

  • The first and largest group moved from school to work within three months. One in five (21%) started working immediately after graduation (zero-time transition), half of the respondents found employment two months after completion of their studies, and two-thirds got jobs after five months.
  • The second group is worse off and stays unemployed or economically inactive much longer – for more than a year in a quarter of cases and more than two years for one-sixth of cases.

As a result, the average duration of school-to-work transition stood at nine months – or eleven months, if 'zero-time transitions' are excluded.

People with the lowest education levels tend to have the longest transitions, while those with higher education enjoy the shortest transitions from school to work. 

The steeper the curve, the faster young people with the corresponding level of education find jobs. Three months after completing a university course, 75% of the graduates were in employment, in contrast with just 40.7% (marked in light blue) of those with compulsory schooling only. Between these two extremes are young people with secondary vocational training (63.4% in employment after three months, marked in red) and basic vocational training (56.2%, marked in green). "Each successive level of education tends to shorten the school-to-work transition by 2 to 4 months," according to Varshavskaya.

Young people with no education beyond secondary school experience the longest time lag between finishing school and finding employment; nearly half of them (43.6%) find jobs more than a year after school, and 29.6% take more than two years – almost twice the average – to become employed.

Salary Expectations Higher for Men

Urban youth tend to find jobs earlier than their peers in the countryside, as urban labour markets are usually more expansive and diversified.

Interestingly, men often take longer to get employed than women – perhaps due to salary expectations, which are lower in women than in men, who therefore spend some more time shopping around for higher pay.

Thus, the risk of unemployment is the highest for young people with no education beyond secondary school, and this group can remain excluded from the labour market for prolonged periods. According to some estimates, this disadvantaged group is quite numerous in Russia, more than one-fifth of all Russians aged 29 and younger.

 

Author: Olga Sobolevskaya, October 27, 2015