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PurposeThe paper aims to provide comparative empirical evidence on young people neither in employment nor in education and training (NEET-youth) under the influence of the digital divide, education and sectoral growth across the EU regions, with a focus on the transition patterns followed over time by EU regions in bridging the digital divide and their specific implications on school-to-work transition (STWT).Design/methodology/approachFirstly, five variables on Internet usage activities are aggregated into an index of E-skills. Secondly, linear dynamic panel data regression models are used to explain the influence of various factors on regional rates of NEET-youth, with or without grouping regions upon the digital divide in relative terms.FindingsAdvanced digital literary skills are found to have a stronger effect on the STWT than the basic ones. The growth of employment in specific economic activities like “Information and Communication” enhances STWT, but only when considering regional differences in the digital divide and E-skills as well. However, the negative effect of deprivation and low educational attainments on STWT is offset by a low level of the regional digital divide. In addition, more R&D expenditure in higher education is necessary to compensate for the effect of the digital divide on the STWT.Practical implicationsOn brief, the policy implications are twofold. Firstly, regions will need to focus more on reducing the digital divide, because it will not only generate positive effects for STWT but will also enhance the positive impact of education and sectoral growth on STWT and even compensate for their low progress. Secondly, in the context of the EU single market, to better address the situation of young people, regions should monitor the relative progress in bridging the digital divide and improving E-skills, with respect to the other EU regions. Improving the relative position on the EU map of E-skills increases the effectiveness of regional policies targeting the STWT.Originality/valueThe originality of the paper lies in the regional approach to the relationship between STWT and the digital divide, which allows us to derive new policy measures for the EU regions. Other innovative contributions rely on the identification of (1) transition patterns that region follow over time in improving STWT while bridging the digital divide and (2) policy measures addressing the NEETs in the context of the regional digital divide.

PurposeAssess and compare scarring effects of unemployment in Germany to other countries and to consider firm heterogeneity.Design/methodology/approachThe author uses linked employer-employee data to analyze the effect of unemployment and its duration on future wages in Germany. Using administrative data on workers and firms in Germany and considering registered and unregistered unemployment episodes, the results show long-lasting wage losses caused by unemployment incidences. Furthermore, the estimations indicate that unemployment duration as well as selectivity into firms paying lower wages is of particular relevance for the explanation of wage penalties of re-employed workers.FindingsUnemployment causes massive and persistent wage declines in the future, which depend on the unemployment duration. Furthermore, reduced options of unemployed workers and selectivity in firms contribute to a large part of unemployment scarring.Practical implicationsFindings are relevant for current debates on unemployment and can help design measures to avoid huge costs of unemployment.Originality/valueThis paper analyses long-term unemployment scarring by considering not only unemployment duration but also selectivity in firms and its effect on the scarring effect.