| Summary: | Youth unemployment is one of the principal social and economic challenges of this decade in Europe and around the world. Long spells of unemployment can have serious long-term effects for individuals, such as reduced earnings and social exclusion. It is estimated that one year of unemployment during youth can reduce annual earnings at age 42 by up to 21 % (Gregg and Tominey, 2005) and that an extra three months of unemployment prior to the age of 23 results in an extra two months of unemployment, on average, between the ages of 28 and 33 (Gregg, 2001). Prolonged unemployment magnifies these problems and increases the chances that they are passed on to their children. In addition to these pronounced individual costs, the unemployed represent a significant stock of unused economic resources that lowers output and the potential for economic growth
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