Have unskilled youths become more vulnerable to unemployment in Switzerland?

Abstract

Unemployment scourges many countries, but Switzerland has been known for a long time as a place where unemployment is a "non-problem" (e. g. Flückiger, 1998). The situation has clearly changed since the mid-nineties, when unemployment rose to national record levels and peaked at around 5% in 1997. Young workers, especially unskilled ones, are the most vulnerable to unemployment, and we therefore focus on this socio-economic group. Our contention is that evolution in trade, new technologies and workplace organisation might have an adverse impact on low-skilled young workers.

The gap between highly qualified workers and those having achieved only intermediate or basic education has widened over the past 20 years in most developed economies, raising concerns about increasing income inequality (Juhn et al., 1993; Card & DiNardo, 2002). This literature has focused on the relative situation of highly educated individuals, and has tried to uncover the determinants of this growing inequality. Among the latter, one can mention technological change, globalization, or the lossof union power.

This paper examines young workers in Switzerland who failed to achieve any formal education beyond compulsory schooling. We focus on the labour market status of these young workers, and compare it with those of adults in order to identify possible changes that have occurred over the last decades.