More on Europe’s new lost generation

I have an article up on ForeignPolicy.com today about a subject which is a bit hard to sex up but is vitally important to countries and governments and people: youth unemployment. 

The point of the piece is that unemployment among under-25s has risen to frankly horrific levels in a number of European countries — nearly 40 percent in Spain, 35 percent in parts of the Baltics, more than 20 percent in a dozen more.

Why’s that so bad? Well, the obvious reason of financial hardship, for one. But there’s also a plethora of economic research showing that young people suffer lasting damage from spells of joblessness — in everything from weight gain to reduced earnings down the road. The effects aren’t so pronounced or persistent in older workers.

I’ll elaborate on the part of the article I found most interesting but unfortunately didn’t get a chance to expand: a demographic phenomenon making the situation much worse in the ex-Soviet countries (now, emerging eastern Europe) which happen to be particularly hard-hit by the Great Recession.

These socialist governments used to encourage families to have children, keeping the birth rate and the population rising via social and economic policy. That ended when the Wall fell. Between 1989 and 1991, birth rates plummeted throughout eastern Europe, as economic uncertainty and political collapse and (in some countries) the easier availability of birth control options meant women started having smaller families.

So, say you visited a kindergarten classroom in Saint Petersburg in 1993 (so the children were born in 1988), and all its 20 desks were filled. If you returned in 1998 (for kids born in 1993), there would only be 12 kids there. That big of a phenomenon.

Fast forward to today. Those Saint Petersburgian kindergarteners from 1993 would be 21 — in the work force or graduating from college this year. They represent a demographic peak, a blip, for the job market.

That is compounding the problem of youth unemployment — which is happening for all sorts of reasons across Europe.

The upside? Starting soon, within a few years, as the recession lifts, there will be fewer and fewer school-leavers and other young workers in these eastern European countries, worst-hit by the recession. Which means the youth unemployment rate should drop as precipitously as it’s risen.

To illustrate the point, I made a chart, above. It shows the 18-to-24 population of each country. Pretty crazy, huh?