Young people face higher rates of labour market turnover, and spend time moving between jobs before settling on a stable career path. The main ‘scarring’ effects of periods of joblessness are an increased likelihood of unemployment at a later age, and a lower earnings potential. Evidence suggests that young people suffer a ‘wage penalty’ (the difference between the actual wage earned and that earned by comparable people who have not experienced unemployment) on their return to work. At the worst case, unemployment increases the probability of illness, mental stress, helplessness, and depletion of self-esteem, which can all lead to depression and finally loss of income generating capacity.
Even the available job opportunities in the market usually require a lengthy work experience while the youth do not have it and this is often their central barrier to employment and income generating capacity.