According to data from the International Labour Organization, published from Ernst & Young, 15% of young people in Romania have too much education. Although folk wisdom would suggest that education is not something one can have too much of, in reality, the proportion represents a substantial mismatch between supply and demand in the country’s workforce.
This means that the country’s education system is not doing as good a job as it could to fill the needs of Romania’s employers. Still, the latest data did contain some good news, both for Romania and other countries surveyed by ILO. Although the mismatch between the skill level of Romanian youth and the labor market is larger than average, it still represented the third-largest decline from 2010-2011.
These numbers are also reflected in the unemployment rate among young people – which is roughly 12.6%. So dire has the problem become that the ILO data refers to this generation of Europeans as “lost.”
The global youth unemployment rate (aged 15 to 24) is estimated by ILO to 12.6 percent in 2013 (in the Global Employment Trends for Youth 2013 study), close to that recorded during the peak of the crisis, that is 12.7 percent in 2009. In absolute values, this percentage means 73.4 million young people, and the trend is going up. By 2018, the youth unemployment rate is estimated to increase to 12.8 percent, while the ratio of youth to adult unemployment rates will remain within the levels from the past few years, namely 2.7. This means it is almost 3 times more likely for a young person to be unemployed than for an adult.
The Romania-Insider blog proposes a number of solutions to this problem, but warns that they will be quite expensive. How well the countries – Romania especially, since it was hit hard by the recent economic collapse – can afford these solutions is open to debate, but Romania can solve the youth unemployment problem and close the skills gap by adopting policies that encourage the development of small businesses.
But in order to increase the number of entrepreneurs, funding and mentoring is needed, two lines of action that are imperative to supporting their activity (according to the EY study EY Avoiding a lost generation, which surveyed 1,500 entrepreneurs from G20 countries, of which 1,000 did not turn 40). Funding without mentoring is inefficient, as well as mentoring without funding. Overall, 88 percent of entrepreneurs who have experienced business leaders as mentors survive on the market. The need for some kind of support mechanisms is very high, especially for young entrepreneurs, who are just starting out.