YOUTH UNEMPLOYMENT AND EMPLOYMENT RATES IN THE EUROPEAN UNION COUNTRIES AND ITS RELATIONSHIP WITH GOVERNMENT EXPENDITURE LEVEL AND STRUCTURE

The article presents the evaluation of the impact of selected categories of public expenditure in the European Union countries on the rate of employment among the youth aged 20-29. The public expenditures taken into consideration are the ones measured in the percentage of GDP related to education, social protection, health and general public services, according to the Classification of the Functions of Government used by Eurostat. In the area of education expenditures, a division has been made into pre-primary and primary, secondary and tertiary education, as well as subsidiary services to education and education not elsewhere classified (n.e.c.). The subcategories in the area of social protection expenditures are social protection n.e.c., unemployment and social exclusion n.e.c. In order to identify the factors which influence the rate of employment, an econometric model for panel data was prepared. Five independent variables have been demonstrated as influential on the rate of youth employment, namely the public expenditure on pre-primary and primary, secondary and tertiary education as well as expenditures on health and public exclusion (n.e.c.). The factors which had a significant, and at the same time negative influence on the shape of dependent variable are subsidiary services to education and general public services.