"In the past, the concern was more that young people were dropping out of university because they had already found jobs. Now they have completed higher or vocational education, but they can't find work. What has changed?" said Liina Maria Lepik, executive director of research and consultancy firm Center for Anthropology (AK). Rising youth unemployment is also reflected in national statistics: The unemployment rate among young people stood at 22.8 percent in the first quarter of 2026 and 22.4 percent in the second quarter. "When the overall unemployment rate is 7 percent, but youth unemployment is 22 percent, something is seriously wrong," Lepik said.
Seeking to better understand the reasons behind high youth unemployment and the barriers young people face when entering the labor market, AK teamed up with consulting firm Miltton to investigate the issue. Their qualitative study was based on 13 in-depth interviews with young people in Estonia ages 19 to 26 from a range of backgrounds. The researchers also included an autoethnographic account of one AK intern's experience looking for work.
During the interviews, participants were asked to describe their experiences applying for jobs and how these affected their daily lives and self-esteem. They were also asked to discuss factors that helped or hindered their job searches and the compromises they were willing to make to find employment. "The main problem is that employers demand work experience before young people have had a chance to gain any," said Miltton psychologist Eva Maria Kangro.
A problem for all stakeholders
According to the study's authors, young people in Estonia have found themselves caught in a vicious cycle when trying to enter the labor market. They pursue higher education and eagerly apply for various jobs during or after their studies. After receiving brief rejections, they submit more and more applications, while employers, overwhelmed by the flood of resumes, become increasingly less responsive. "Young people themselves describe this vicious cycle as being expected to have relevant work experience when applying for their first job, but no one is willing to give them the opportunity to gain it," Lepik said.
There is no single party to blame for the situation. According to Lepik, the vicious cycle has emerged through the combined actions of young people themselves, employers, the education system and the government and breaking it will likewise require efforts from all sides. Kangro said another contributing factor is that artificial intelligence is already replacing some entry-level jobs. "It would be easy to blame AI right away, but the problem is more systemic: There is a gap between education and working life," she said.
The study found that Estonia's higher education system and the education system more broadly is slow to respond to changes in society. By the time an OSKA report identifies which jobs are needed in the labor market, the corresponding curriculum updates, commissioned by the Ministry of Education and Research, reach universities several years later. "Ultimately, by the time a young person graduates, the education they chose to pursue may already be outdated and no longer needed in the labor market," Lepik said.
This is particularly painful in fields previously promoted as careers of the future. For years, the prevailing message was that people working in IT would always be able to find jobs, but the rise of AI has now eliminated entry-level positions in that very sector. "There have also been political shifts in the meantime. Now, young people graduating with degrees in sustainability and materials technology say their future has either already passed them by or has yet to arrive," Lepik added.
Employers are increasingly placing greater value on a diverse set of skills than on a university degree. "The ability to adapt quickly and be comfortable with technology is important. What matters now are entirely different skills from those universities have been equipping us with for decades," Lepik said.
Connections matter, but the work must be a good fit
The study also found that young people's socioeconomic backgrounds have a significant impact on how they begin their working lives. For example, only young people whose families can afford to support them can take on unpaid internships. "One young person who participated in our study even made the rather sad comment, 'I feel that if I were from Tallinn, I would have a much more successful life.' This highlights regional inequality," Lepik said.
Even more important than where young people come from are the personal connections they and their families have. Some participants admitted they saw no point in submitting their resumes because they believed no one would read them without the right connections. "Connections and networks matter a great deal. On the other hand, experience shows that when young people take the initiative and contact employers they are interested in directly, they do manage to find jobs that way," Kangro said.
During the interviews, young people were also asked about their expectations of jobs and employers. The findings showed that they increasingly prefer working environments that foster intrinsic motivation. "Young people don't just come to work to do a job. They want to do meaningful work in an environment that supports their development. When that kind of environment is in place, young people are extremely dedicated and willing to put in even more effort than required," Kangro said.
According to Lepik, young people often avoid sectors that conflict with their values. "For example, industries that harm people or the environment, and for some, the defense industry as well," she said. Young people also do not want work to come at a significant cost to their personal lives, involve long hours of overtime or expose them to a toxic workplace. "Perhaps we're the ones who should be learning from young people that this isn't a normal working environment. Maybe young people are wiser now, but the labor market doesn't yet know how to recognize that," Lepik reflected.
'Get in touch when you need me'
In light of the study's findings, the authors have issued recommendations for all parties involved in the vicious cycle of youth unemployment. As a psychologist, Kangro believes the first step should be to offer parents training on how to help young people shape their futures. "Parents have considerable power to encourage their children to explore different opportunities. The idea shouldn't be to choose a particular field because it will pay off, but rather to give children opportunities to try out different skills from an early age," she explained.
Parents can also support their children in gaining early work experience, whether through volunteering, youth work camps, farm work or extracurricular activities. Where possible, the researchers recommend that parents take their children to work to shadow them and introduce them to their professions.
"Education needs to respond more quickly and we probably need to start improving the reputation of vocational education," Lepik continued. She said that while higher education is fashionable and vocational education is still looked down on in some circles, the labor market actually needs people with vocational skills. "Vocational and applied higher education should be presented as positive choices, not as alternatives for those who couldn't get in elsewhere," Kangro agreed.
General education schools could introduce career planning earlier rather than leaving it until the final year of upper secondary school and organize more job-shadowing days and company visits. "Universities and vocational schools could also strengthen their ties with employers by providing practical experience throughout students' education and building a strong network of internship opportunities," Kangro recommended. This would require closer cooperation between universities and professional associations.
The researchers also suggest that the government consider tax incentives for internships undertaken during university studies. "University students already have health insurance coverage and when they take up internships during their studies, it makes a considerable difference to employers if payroll taxes are 33 percent lower," Lepik explained.
The research team also believes employers should give young people fresh out of school a chance, even when choosing from a large pool of applicants, whether through trial assignments or practical assessments. "A motivated young person learns quickly and soon becomes an indispensable employee. Right now, young people aren't even being given the chance to prove themselves," Lepik said. It is also important for employers to offer longer, paid internships, as these help reduce economic inequality when entering the labor market.
For young people who lack connections, the researchers recommend actively building them. Volunteering, joining school or university student organizations and taking the initiative can all help. "If there's an employer you admire, it's worth approaching them even if you don't have anything specific to offer at the moment. Tell them, 'I admire what you do, your work is important and if you ever need me, please get in touch,'" Lepik advised.
The study's report is available on the Center for Anthropology's website.
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