ECB warns youth face growing hurdles entering the labour market; ICT records largest drop

The European Central Bank warns that young people in the euro area are finding it increasingly difficult to enter the labour market, with the information and communication technology (ICT) sector suffering the steepest drop in youth employment.

According to the ECB’s analysis, hiring slowed from 2023 and, while overall labour market indicators remain relatively stable, the adverse effects have fallen disproportionately on 15-to-24-year-olds. In the first quarter of 2026 the euro area unemployment rate fell to 6.3 percent, but youth unemployment reached 15.1 percent.

The report finds that many sectors — including trade, hospitality, construction, industry and services — have seen reductions in employment largely as part of a normal cooling after the strong post‑pandemic expansion. The largest contraction, however, occurred in the ICT industry: youth employment in that sector declined by 18.6 percent between the first quarter of 2023 and the first quarter of 2026.

Structural changes beyond the business cycle

The ECB notes the fall in ICT jobs cannot be explained solely by cyclical factors and points to deeper structural shifts within the tech industry that have reshaped demand for labour. Those changes are, the bank says, contributing to a more difficult entry path for many young jobseekers.

Results from the ECB’s Consumer Expectations Survey show that unemployed young people with higher education are becoming less optimistic about their employment prospects, commonly citing a shortage of suitable vacancies that match their qualifications. Young people with lower levels of education report somewhat less pessimistic expectations.

The ECB warns these trends could have lasting consequences for the labour market if recent graduates remain unable to secure first work experience for an extended period, potentially hindering skill development and future career prospects.

Photo: press material from the event