Amid Estonia's high overall employment rate, the country's large number of unemployed young people stands out. According to Statistics Estonia, the youth unemployment rate in the second quarter was over 25 percent — the highest in Europe. The Estonian Unemployment Insurance Fund, however, reports a lower figure: the registered unemployment rate among people aged 15–24 stands at 12.4 percent. The overall national unemployment rate is 7.8 percent.

The discrepancy — nearly twofold — between the two sets of figures comes down to how the data is collected. Statistics Estonia bases its numbers on a labor force survey, while the Unemployment Insurance Fund reports only those who have formally registered as unemployed.

The key difference lies in the inclusion of students: Statistics Estonia's survey counts 16–24-year-olds in full-time education who actively want to work as jobseekers, whereas students cannot register as unemployed with the Unemployment Insurance Fund.

Gert Tiivas, director of the Unemployment Insurance Fund, said he is not surprised by the high number of young people registering as unemployed. "It's clearly visible in the statistics and there are various reasons why their numbers have increased," Tiivas said.

"First, COVID-19 hit sectors with a high proportion of young workers. Those sectors shut down, and by the time they reopened, the landscape had changed — either companies had reorganized their work or young people had moved on. Another reason is that people now work differently: many create content online or participate in international projects, where youth involvement is typically higher," Tiivas explained.

Tiivas pointed to a third factor: greater civic awareness among young people. "Young people today are more aware of their rights and opportunities, including the benefits and support they can receive from the Unemployment Insurance Fund. As a result, they're registering a bit more quickly than they used to," he said.

Parents better off and willing to support their kids

According to Tiivas, employers are still very much in need of young workers. "I hear this sentiment constantly. Over the summer, I visited all the Unemployment Insurance Fund offices across different counties and stopped by one or two businesses in each place. A consistent theme was that companies are looking for employees — and hiring young people in particular is proving to be quite difficult," Tiivas said.

He acknowledged that there is a disconnect between what young people expect from a job and what employers are offering. "There's a gap in both expectations and attitudes. These are two separate but related issues," he said.

At the same time, Tiivas believes that young people want the same things from work as everyone else. "They want interesting work, good pay, decent working conditions and friendly colleagues. It's possible that young people are just a bit more demanding," he noted.

Tiivas added that today's youth also have more options than previous generations. "Over the past 20 to 30 years, Estonia's economy has generally moved upward. If their parents have done well, young people may be able to live at home longer. Their parents support them, which likely means they delay entering the workforce and becoming independent," he explained.

For companies looking to hire young workers, Tiivas recommends being proactive and persistent. "The future belongs to young people. To put it plainly, no business or organization is likely to succeed if it doesn't make a serious effort to recruit, train, motivate and retain young talent. Who's going to do the work 10 or 20 years from now if we're not thinking about young people today?" Tiivas said.

To young jobseekers, Tiivas offered the same advice he gives to employers: be active.

"Make an effort to find opportunities, go to work, study or do both. I recommend being flexible, efficient and constantly on the lookout for possibilities. I believe success won't come to you if you're passive. You have to take initiative and put in the effort," he said.

Jobs preferred by young people in short supply

Work psychologist and coach Tiina Saar-Veelmaa also believes that the reasons behind the high rate of youth unemployment are multifaceted — and that both schools and employers bear part of the responsibility.

"One issue is the lack of career awareness and preparation at school around questions like 'Who am I?' and 'What do I want to do with my life?' Young people often feel enormous pressure to be competitive and focus on getting good grades, but self-awareness — knowing what you actually want to do — is still quite underdeveloped and poorly supported in our education system," Saar-Veelmaa said.

"We teach very little in schools about life skills. It's still all about memorizing formulas in math or doing experiments in chemistry, but we don't teach how to navigate a complex and changing world or how to be a responsible and equal partner in a workplace. That's just not taught anywhere," she added.

According to Saar-Veelmaa, this lack of preparation affects both getting a job and keeping it. "A young person might think a certain job is a good fit, but in reality, it turns out differently. There's a constant feeling that what's expected of them on the job doesn't match their skills or values," she said.

She also emphasized the impact of employer attitudes. "Not all, but many employers still take a top-down approach. Fortunately, we also have some very good examples of employers who've changed their mindset. Instead of saying, 'Come work for us, here's what we offer and what we expect,' they actually ask young people what kinds of jobs they need and what their expectations are, because the meaning of work has changed over time," Saar-Veelmaa said.

Young people, she noted, especially want their work to be sustainable and meaningful. "They want to do something that actually matters, not just fill a position. Unfortunately, there are still far too many employers who aren't offering jobs designed with young people in mind. As a result, the kinds of opportunities that would truly suit them are quite limited," she said.

This often forces young people to find alternative solutions. "They take on short-term gigs and try to combine them with their studies, because they also want to grow as individuals," Saar-Veelmaa explained. "The big question for young people is: if I throw myself into a full-time job that may not even suit me in the end, what is my place in the world? Sure, I'll have an income, but will it nourish my soul?"

Blaming or criticizing young people for struggling to find their footing isn't helpful, Saar-Veelmaa stressed. "It doesn't help to scold them for being distracted or for not sticking with one thing. We have to accept that this is the world we live in — no one, including employers, knows what our society will look like tomorrow or in three years."

"Genuine dialogue, care and flexibility are the keys to treating young people fairly in the job market," Saar-Veelmaa concluded.

Bank of Estonia: Weak state of the economy affecting youth unemployment

Bank of Estonia monitors youth unemployment from a macroeconomic perspective and notes, among other things, that the more full-time students there are among young people, the more pronounced the seasonal fluctuation in youth unemployment tends to be. Job searching peaks in the summer months — when school is out — contributing to record figures like those seen in the second quarter of this year.

"The high level of youth unemployment is primarily due to the weak state of the economy and, by extension, the labor market. Compared to middle-aged workers, young people are more vulnerable to economic downturns for several reasons. First, it's much harder — especially for those seeking their first job — to find work when companies are hiring less," said Orsolya Soosaar, an economist at Bank of Estonia.

Looking at the number of job vacancies listed with the Unemployment Insurance Fund, she noted that postings have been consistently lower since 2023 than in the years before the COVID-19 crisis — and significantly lower than in 2021–2022.

With fewer job openings available, more people are applying for each one. "We're seeing more unemployed individuals across all age groups, and in a highly competitive environment, young people often find themselves at a disadvantage because they lack work experience," Soosaar said.

She added that young workers are also more likely to be affected by layoffs.

Beyond economic and labor market conditions, demographic shifts are also influencing youth unemployment in Estonia.

"The labor market behavior and unemployment rates of 15–19-year-olds and 20–24-year-olds differ significantly. The younger group's unemployment rate is two to three times higher than that of the slightly older group. Because the 15–19 age group has grown over the past decade due to varying birth cohort sizes, the average youth unemployment rate has risen slightly," Soosaar explained.

The economist also emphasized that the more full-time students there are among young people, the greater the seasonal swings in youth unemployment — particularly in the second and third quarters when students look for summer jobs.

"That's why it's more accurate to look at the average figures over the past year," Soosaar concluded.

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