This European country is beating youth unemployment – what the UK can learn

The UK government is preparing to announce measures to tackle youth unemployment, with 946,000 young people aged 16-24 currently not in education, employment, or training (NEETs). Alan Milburn, the government’s jobs adviser, will publish a review identifying systemic failures, including a welfare system that spends £1 on employment support for every £25 on benefits. The review warns that young people with health conditions face a stark choice: higher benefits and stability or the risk of losing financial support if they attempt to work. Milburn’s report highlights mental health struggles, anxiety, and neurodiversity as key drivers of economic inactivity among young people. It notes that those on benefits risk losing up to £2,000 monthly if they return to work, creating a perverse incentive to remain inactive. The current system offers no gradual transition, leaving young people with no safety net if a job does not work out. In contrast, Austria maintains one of Europe’s lowest youth unemployment rates at 11%, significantly below the UK’s 16%. The country’s success stems from its Youth Guarantee program, introduced in 2014, which ensures every young person under 18 can access an apprenticeship or state-funded training. For those aged 18-25, the guarantee provides tailored employment or training within three months of registration. Austria’s approach also focuses on early intervention to prevent long-term unemployment and reduce school dropouts. The model contrasts sharply with the UK’s welfare-dependent system, where only a quarter of 24-year-old PIP recipients remain in work. Work and Pensions Secretary Pat McFadden has emphasized the need for urgent action, warning that youth unemployment could have lifelong consequences. The UK plans to create 300,000 additional work experience placements over the next three years, but critics argue deeper structural reforms—such as Austria’s apprenticeship-focused model—are needed to address the root causes of youth unemployment.