Quarterly Economic Observer - Spring 2013 - "Youth Unemployment in Northern Ireland"

In this edition of the Quarterly Economic Observer (QEO), the NERI outlines our expectations for Northern Ireland’s economy in 2013 and for the Republic of Ireland over the next three years.

Our projections for the Republic of Ireland remain downbeat, despite recent positive developments on debt and apparently encouraging figures for unemployment. For Northern Ireland we see a continuation of a UK-wide productivity paradox where employment may begin to stabilise despite the absence of growth.

In this quarterly we project that:

  • In the Republic of Ireland GDP will increase by 1.0% in 2013, while unemployment will remain persistently high at 14.7%;
  • In the Republic of Ireland the general government deficit will fall to 7.1% in 2013 while government debt is expected to peak at 121.1% of GDP; and
  • In Northern Ireland output will fall by 1.0% in 2013, while employment is expected to rise by 0.4%.

In this Observer our main analytical and policy focus is on the youth unemployment in Northern Ireland. Young people have been adversely affected by the recession and youth unemployment continues to rise to dangerous levels. The number of young people not in employment, education or training also remains persistently high. Focused action is required to prevent long-term youth unemployment and to reconnect with young people who have become perilously detached from the labour market. We examine policy responses including a Youth Guarantee scheme that would:

  • Provide relevant training, work experience or paid employment for every young person unable to find work;
  • Provide employment opportunities that are additional, either to the person through ‘on-the-job training’ or to society through community employment; and
  • Aim to reduce structural youth unemployment in the long term

International evidence estimates the cost of youth unemployment could be in the region of £300m in Northern Ireland. In addition to existing resources, significant resources from Europe could be available to Northern Ireland under the European Social Fund.

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