Education and Unemployment in the European Union: A Panel Data Analysis (2013– 2023)

This thesis examines differences in unemployment rates across education groups in the 27 member states of the European Union between 2013 and 2023. Using harmonised Eurostat data, it investigates whether higher educational attainment is associated with lower unemployment and whether the magnitude of this unemployment gap varies across regional labour-market contexts. The theoretical framework draws on human capital theory, signalling theory, and structural and institutional approaches to unemployment. The empirical analysis combines descriptive evidence with panel regressions using country–year fixed effects, which compare low-, medium-, and high-education groups within the same country and year. Regional heterogeneity is examined through interaction terms, while GDP growth and the youth population share are analysed separately as secondary macroeconomic and demographic factors. The results show a substantial education gap in unemployment. Relative to the low-education group, unemployment is approximately 6.1 percentage points lower among those with upper-secondary education and 8.7 points lower among the tertiary-educated. Eastern Europe displays the largest estimated tertiary unemployment gap, while Southern Europe is distinguished by a comparatively small upper-secondary gap. However, the full regional ordering is only partially supported by formal significance tests. No robust evidence is found that a larger youth population share is associated with higher unemployment once between-country and within-country variation and common time trends are separated. Overall, higher educational attainment is consistently associated with lower unemployment across the EU, although the magnitude of this association varies across regional labour-market contexts. Because the analysis uses aggregate data, the findings are interpreted as associations rather than individual-level causal effects.