By NELSON D. SCHWARTZ

MADRID - Like hundreds of thousands of other young people, Jesus Pesquero Penas dropped out of school to go to work when the Spanish economy was booming. But since he was laid off from his construction job two years ago, he has been living on unemployment benefits.

Now Mr. Penas finds himself part of a lost generation in Spain, where unemployment among people ages 16 to 24 is 42.9 percent, the highest in Europe, and more than double the overall rate.

“I went to work because the money was good, the lifestyle was good and I really wanted to get out of school,” Mr. Penas, 25, said as he waited on a long line snaking down the block from an employment office in suburban Madrid.

“I totally regret it now,” Mr. Penas said, who has a 5-year-old daughter by a former girlfriend who is also out of work. Spain is the extreme, but the experience of younger workers here reflects similar problems in the United States and other European countries still struggling to emerge from the recession.

In the last 12 months, the jobless rate in the United States among workers ages 16 to 24 has risen to 19.1 percent from 13.9 percent. Economists expect the rate to remain high even as the overall jobless rate in the United States - now 10 percent - begins to shrink.

That is because the sectors that employ young people in the greatest numbers - fast food, construction, retail - are expected to take the longest to recover.

In the United States, workers on the first rungs of the job market run the risk of lower earnings even after the recovery gets going, said Paul Osterman, a professor at the Sloan School of Management at M.I.T. who also teaches at the Institute de Empresa business school in Madrid.

Young Spanish workers, like their counterparts in the rest of Europe, face other obstacles like union rules, long-term contracts and legal protections that shelter older workers and discourage new hiring, Mr. Osterman said.

“There is a cohort of people who are condemned to a permanently stagnant career path in Spain,” he said. “It’s very worrisome.”

People like Mr. Penas, with few skills, bleak prospects and little desire to go back to university alongside younger students, are the most vulnerable.

“There has been a loss of human capital,” said Jose Antonio Herce, director of economics at ASI, a Madrid-based consulting firm. “It will take a long time for this cohort to be absorbed.”

Adding to Spain’s woes, its government is unable to inject more stimulus and offer further support for job creation while its economy languishes as one of the weakest in Europe. The outlook on Spanish sovereign debt was recently downgraded, and the government is moving to raise taxes and cut spending.

The country’s budget deficit, which hit 11 percent of gross domestic product this year, is supposed to be within the 3 percent threshold enshrined in the treaty that established the euro. The European Union wants Spain and other European countries relying on the euro to return to that range by 2013.

To be sure, Spain has traditionally suffered from relatively high unemployment, and at 19.3 percent, its overall rate today is double the 9.8 percent average for the European Union.

But the sharp increase among young people is particularly problematic. It has jumped from 17.5 percent three years ago at the height of the boom to the current 42.9 percent.

Spain stands out from other troubled European countries. In Greece, the youth unemployment rate is 25 percent, while Ireland’s is 28.4 percent and Italy’s is 26.9 percent. Spain is even worse off than countries in Eastern European where youth unemployment has traditionally been high. In Slovakia, for example, unemployment among young people is 27.9 percent. In Poland, youth unemployment is 21.2 percent, down from over 35 percent a few years ago.

Spain is spending roughly 30 billion euros ($43 billion) a year on unemployment benefits, but the money is doing little to prepare younger workers for the future. Mr. Herce said that Spain needed to invest more heavily in vocational education and retraining, and require the jobless to improve their skills.

That is what Carlos Herras, 26, is counting on. He is taking a course in renewable energy and hopes to find a job installing solar panels. But at this stage, he too would be happy with almost anything.

“I started working so young,” he said, ticking off jobs beginning at 14 in a bar, then a hotel and finally in the construction industry until last January. “I am optimistic. I may not find a job that I want, but I’ll find a job.”


Spain has the highest unemployment rate for people ages 16 to 24. Carlos Herras, 26, hopes to find work as a solar panel installer. / ERIC THAYER FOR THE NEW YORK TIMES