This thesis investigates the relationship between an aging workforce, youth unemployment, and union density in 19 European countries over the period 2012–2023. Using a high-dimensional fixed-effects panel regression model, the study examines whether an increased share of older workers correlates with higher youth unemployment and the extent to which union density influences this relationship. Contrary to the initial hypothesis, the findings reveal a negative correlation between the proportion of older workers and youth unemployment. This suggests that part- and full-time retirements among older workers may create job openings for younger individuals. However, the positive correlation between union density and youth unemployment supports the insider-outsider theory, indicating that strong union protections for incumbent workers may limit entry opportunities for younger job seekers.
The findings also reveal that higher educational attainment among young people does not always correspond to lower youth unemployment, possibly due to labor market mismatches and overqualification. These results emphasize the importance of targeted policy interventions, such as phased retirement schemes, vocational training programs, and anti-discrimination measures, to foster more inclusive and dynamic labor markets. While the study provides valuable insights, it acknowledges the limitations of the selected time frame and potential reverse causality, suggesting that future research should extend the temporal scope and explore cross-national differences in labor market structures for a more comprehensive understanding of youth unemployment dynamics.