Determinants of Youths Unemployment: A Cross-Country Econometric Analysis of Skills Mismatch, Technical and Vocational Education and Training (TVET), and Industrial Development

Abstract

This study investigates the determinants of youth unemployment using a cross-country panel analysis of 40 countries across Africa, Europe, the Americas, and Asia from 2019 to 2025. Despite rising educational attainment, youth unemployment remains persistently high, reflecting structural imbalances between labour supply and demand. Drawing on Human Capital Theory, job search and matching theory, and structuralist perspectives, the study examines the roles of skills mismatch, Technical and Vocational Education and Training (TVET), and industrial development. Using a fixed effects regression model with robust standard errors, the findings reveal that skills mismatch is the most significant determinant of youth unemployment, exerting a positive and statistically significant effect. In contrast, TVET enrolment and manufacturing value added are negatively associated with youth unemployment, indicating that stronger vocational systems and industrial capacity improve employment outcomes. The results also reveal regional disparities, with Europe and Asia exhibiting better alignment between skills formation and labour demand, while Africa and parts of the Americas face persistent structural constraints. The study concludes that youth unemployment is a multidimensional challenge requiring coordinated policy responses. Effective interventions must simultaneously address skills mismatch, strengthen vocational training systems, and promote industrial development. Policies that target only one dimension are unlikely to yield sustainable employment outcomes.