Youth Unemployment & Economic Growth in Italy

Running Head: YOUTH UNEMPLOYMENT & ECONOMIC GROWTH, CASE STUDY OF ITALY 1
YOUTH UNEMPLOYMENT & ECONOMIC GROWTH, CASE STUDY OF ITALY
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YOUTH UNEMPLOYMENT & ECONOMIC GROWTH, CASE STUDY OF ITALY 2
Introduction
In accordance with the standards of European Union, youth unemployment refers to
unemployment rate affecting people between the ages of 15 to 24 years. Statistics have ranked
Italy among the 35 member countries of OECD with the highest youth unemployment rates
(Dietrich & Möller, 2016). Youth unemployment rate in Italy has been rising dramatically since
the financial crisis hit the country in 2008 to a peak rate of 42.67% in 2014. In the year 2017,
among all the EU members, Italy’s youth unemployment rate (35.1%) was only exceeded by
Spain and Greece. Its youth unemployment rate was double to that of total EU rate (16.7%) in
2017 (Leonardi & Pica, 2015).
Coincidentally, the youth unemployment rates in Italy have been followed by fluctuations
in the economic growth of the country. For instance, the Italian economy has recorded no growth
in the third quarter of this year, following a 0.25% expansion in the second quarter and below the
market expectation of 0.1 % growth which was the very first time GDP stalled in the country
since 2014 (Caporale, Di Colli, Di Salvo & Lopez, 2016). Italy’s GDP Growth Rate has,
therefore, averaged 0.59% since 1960 until 2018, with an all-time high rate of 6% in the second
quarter of 1970 and the lowest record of -2.80% in the second quarter of 2009 (Magazzino &
Forte, 2016). Comparing these two records (youth unemployment & GDP growth rate) in the
country indicates an inverse proportional relationship between the youth unemployment rate and
the GDP growth rate. This paper discusses the consequences of high youth unemployment rates
in the economy of Italy.
First of all, high youth unemployment rates facilitate the breeding of highly energetic and
potential youths with personal demands and bills to meet but with no income to enable them to