The Determinants of Youth Unemployment in the Netherlands during the Great Recession

In this paper the determinants of the development of the youth unemployment rate during the past Great Recession in the Netherlands are investigated. Our main research question asks which groups are most sensitive to the recession, and why. In general youths are more than twice as sensitive as the general population in terms of unemployment. However, large differences within the youth group exist. We find that native Dutch, higher educated and men tend to have a stronger position on the labor market because their sensitivity is significantly lower. However, lower educated, women, non-student and non-western immigrants are more sensitive than the average youths. Especially non-western immigrants are vulnerable with a disproportionately large sensitivity estimate. Furthermore, youths are less likely to utilize social assistance than could be expected based on their unemployment sensitivity. This could be regarded as unequal. Turning to the mechanisms through which certain youth groups are more sensitive than other groups, we obtain no evidence for contract type or sector of employment to be the mechanism that drives the differences between the youth groups.