Objectives of Sustainable Development and Youth Employment in Colombia

: The sustainable development goals (SDGs) aim to raise quality employment, gender equity in access to employment and increase coverage in education. However, in Colombia, high unemployment rates and the informality of young people are risks of achieving these goals. The purpose of this research is to estimate the determinants of youth unemployment and its relationship with SDGs Objective 8, and linking it to the objectives of quality education and gender equity. Using the microdata of the Colombian household survey, DANE, this relationship is estimated with a methodology of age, period, and cohort, through a Probit/Logit Multinomial model. As a novel result for the Colombian case, it is shown that, although new generations of young people are more educated, education per se is not enough to guarantee them a quality insertion into the labor market, penalizing, above all, young women. Lack of work experience and segmentation of the labor market would help explain this outcome. Employment policies, therefore, to achieve the SDGs must not only invest in education, but also expand dual education programs, considering gender. effects of the age and cohort dummies show that

Introduction
The United Nations wants to overcome poverty and generate a sustainable path for economic growth through the strengthening of freedom and peace [1]. The document establishes a set of goals and schedules to achieve these objectives in a term up to the year 2030, with actions that must be followed by member countries. In Colombia, as in the rest of the world, these objectives have been applied above all with the increase in the influence of environmental movements and the concern with the generation of wealth in parallel in this regard and preservation of the environment [2,3].
Among the established goals, three of the objectives have a close relationship with the labor market. Objectives 4, 5, and 8 discuss, respectively, the quality of education, gender equality, and the generation of decent employment, forming a set of goals on access to employment and formalization of work, aimed at reducing the number of workers who live in poverty and extreme poverty. These aims include recurrent access to employment of vulnerable populations such as youth and the condition known as NEET, young people who do not work nor study.
In Colombia, the SDGS became a pattern politics, joining various plans national and local development in recent years, as shown by the study of the National Planning Department [4]. However, the report on the progress of the SDGs for Colombia shows that one of the main problems remains unemployment and the general structure of the labor market, especially for the younger labor force. With an unemployment rate almost double the adult population, in addition to the high incidence of young people who do not work and do not study (also known as NEET generation). Although there has been a reduction in overall unemployment, unemployment rates remain higher among women and, especially, among younger groups, in addition to informality, which remains at levels above 60% [1]. These data allow observing the difficulty of Colombia to achieve the SDGs up to the deadline of Agenda 2030.
One of the ways to reduce the distances to these goals and the generation of better-quality jobs postulated by the economic literature is investment in human capital. However, there is evidence that, in developing countries, the components of human capital have distinct effects on employability. Research such as [5][6][7] shows that people with higher levels of education are less likely to be employed, while less educated workers remain in lower-quality positions. This highlights a problem in meeting the SDG target since these objectives are already defined as a roadmap in the socioeconomic policy of the countries, which in this case will be affected by the lack of employability in a quality position determined by young unemployment. Thus, this article aims to find the determinants of the employment of Colombian youth, investigating the determinants of employment and the type of employment. Understanding these relationships can help to understand the extent to which the Colombian labor market can meet SDGs Objective 8.
The most novel finding of this research, for its contribution to the design of employment policies aimed at young people, so that the SDGs are achieved in terms of access to quality employment, is that work experience would be the key component in the employability of young people, so employment policies should not only focus on training and formal education (which are fundamental) but will strive more to generate the first job, and employment policies should not only focus on training and formal education (which are fundamental), but will strive more to generate the first job, involving the labor market, with programs such as apprenticeships and dual education models. At the same time, progress is needed in the schooling of the workforce, especially to lead the poorest to higher education, and thus increase the chances of formal jobs and long-term social mobility.

Literature Review
Human capital is one of the most discussed and empirically analyzed theories in the economic sciences, in particular, to investigate the relations of salary, productivity, and employment. According to the postulates of the classical vision, the productivity of the individual is a function of the level and form of accumulated human capital, that is, of the investment in training and qualification that favors the performance of the work. This would impact on salary levels and the form of occupational insertion, in which the workforce with the largest stock of human capital would have facilitated access to the best jobs [8,9].
However, later developments in the theory admit the existence of heterogeneity in the distribution of human capital among labor, both in its level and in the modality of investment made. This observation derives from the concern to explain the existence of a salary differentiation between workers of the same educational level. This heterogeneity originates in two types of investment, the specific and the general. The second is the type of human capital used in various activities or companies, with perfect or almost perfect factor mobility. From an empirical point of view, the level of formal education is one of the components that are most used to represent this type of investment. On the other hand, there is a form of human capital that cannot be completely transferred between occupations or companies, called specific human capital and that transforms the workforce into an almost fixed component of the firm's production function. It is traditionally represented by experience in the labor market. The two investment modalities second the theory of human capital, must increase productivity and, consequently, wages and employability of labor. However, the way companies combine these components with their characteristics is also a determinant of the allocation of labor between employment and unemployment and between occupational segments.
Following the postulates of human capital, a series of criticisms and complementary studies emerged that strengthen the analysis of the relationship between education and experience with the labor market. The theories of the filter and signaling [10][11][12] argue, for example, that education is not a reflection of productivity but serves as a signal for the labor market about the skills that a person could have. However, one of the problems detected in the so-called mismatch of education or of the skills demanded and offered, which reflects a disconnection from formal education with labor demand. In this way, phenomena such as over-education or under-education are observed more specifically, in which the first refers to the job for which the person has a higher educational level than the required and, the second case, occurs when people have a lower level of training than requested in vacancies.
In the Colombian case, [13,14] found that the most educated and younger people tend to be more vulnerable to unemployment. Likewise, the higher incidence of low-quality employment causes young workers to have low social protection, increasing the wage gap and, therefore, inequality. Likewise, it causes underestimation of unemployment because of hidden or informal employment, exhibiting a myopic vision of the labor market [15].
Analysis such as those presented by [16,17] reveals a strong labor segmentation in Colombia, which unequally distributes the active population in economic segments with different levels of formalization and quality of employment. In addition, as shown in [18], women have increased their labor participation, but especially in the informal activities of the economy. Finally, [19] they also found that experience favors labor participation and that education especially favors formality, so that human capital, including education to a greater extent, would help to enter higher-quality jobs achieving the objective 8 of the SDGs.
In this way, the literature shows a positive relationship between education and employability that affects the dynamics of young employment, nevertheless, it leaves aside a deeper analysis of the role of the experience that was addressed in this study in order to be able to establish the determinants of young employment that will allow or fail to meet the objective of increasing quality jobs, since if these variables that affect the employment insertion of young people are not identified, this objective may not be met. Thus, by identifying these barriers, economic policy solutions can be offered.

Materials and Methods
To meet the objectives, the data are used in the gran Encuesta Integrada de Hogares (GEIH), which takes the Departamento Administrativo Nacional de Estadisticas (DANE) in Colombia since 2008 and present the microdata about living conditions and labor market. People between the ages of 16 and 39 are selected from the 2008, 2012, and 2016 surveys, with complete information for the variables used in this research. Two models with the selected data are estimated, the first being a logit for the probability that an individual is employed, while the second is concerned with estimating the probability that a person is employed in a certain type of occupation, according to the quality of the job.
The GEIH is in a household survey and focuses on the structure of the workforce (occupied, unemployed and inactive) and its sociodemographic characteristics [20,21]. This feature allows sampling groups to be homogeneous, which is an advantage in the cohort method because it gives the possibility of having not-so-dissimilar age groups, with less biased samples by decreasing the variance of the estimators. In addition, GEIH is not a panel, for that reason requires the use of cohorts for analysis. In this sense, as the sampling unit is the home and the purpose of the sample homes and people, it is possible to characterize and compare the behavior of people within each household and between households because the rotating sample takes similar units of study each year. This advantage allows you to choose cohorts that share similar sociodemographic characteristics, probability distributions.
Moreover, the failure to select in this household survey was dealt with the [20] method, in which the workforce was taken as a reference and if they attend any educational institution, this is how we work on the possible bias in which the results show that there are no changes in statistical significance or the trend of coefficients, in this sense in Colombia there would not be this bias, however, the marginal coefficients derived from the model are presented with the treatment of Heckman for greater statistical accuracy. In this sense, the effect that in younger cohorts who have not completed their education does not generate a bias in determining the employability probability. Similarly, as Table 1 shows, cohorts are balanced, i.e., they are not underrepresented in each generation and each year in which the household survey was taken (2008,2009, and 2012), given the target population of the household survey determined by housing, households, and individuals, as explained above.
For the first, the dependent variable is a dummy of value 1 if the individual is employed and of zero value if he is unemployed, as defined by the DANE. As explanatory variables, the theoretical aspects raised by the theory of human capital are taken as the basis, with education as the main explanatory variable. In addition, a set of variables is introduced to capture the so-called age-periodcohort effect. This method allows analyzing the probability of employment among individuals who were born in the same period of time and who have experienced basically the same socioeconomic changes [22]. This type of analysis has not yet been found in the case of the labor market in Colombia, but it has a long application in international literature, as in [22,23]. In addition, the method makes it possible to overcome the longitudinal non-observation of individuals in the GEIH, avoiding potential bias problems in the estimates because they do not consider the presence of unobservable factors and the evolution of the individuals over time.
In short, you want to estimate the model: Pr (y = 1) = f (sex, head of household, marital status, Education, region, Age, cohort, period) (1) When using the Heckman method for selection bias [24], a control is performed that is shown in the following equation: Pr (y = 1) = f (sex, head of household, marital status, Education, region, Age, cohort, period) select (Workforce-sex, head of household, school attendance) With this model is obtained the so-called Mills inverse reason that is added in the main probability equation in which they Θ represent respectively the density and cumulative functions of the normal distribution, while z and are the set of variables explanatory of the probability of participation in the labor market and their respective vector of coefficients .
In Equation (1), the sex variable is dichotomous of value 1 for men and zero for women; head of household is a dummy that identifies the reference person in households; marital status a dummy to identify people living as a couple (married or in free union); education is a set of dummies to capture at the maximum level of formal education of the individual, divided into Bachelor, Technician/Technologist, University and Postgraduate. The region is composed as categorical for the demographic zones of Colombia (Atlantic, Eastern, Central, Pacific, and Bogotá). Finally, binaries are added to capture the age-period-cohort effect, organized according to the scheme in Table 1. That is, dummies variables that capture the age of the person in each year of the sample, organized in groups of five years (16-19 years; 20-24 years ...; 35-39 years), with the exception of the youngest group, which has four years, increased dummies for the year of birth, or generation of five years and dummies variables for the selected years of the survey.
On the other hand, in the confirmation of the cohorts, it can be observed that the changes in the levels of schooling between generations over time do not follow a monotonous pattern, because of which the selection and analysis of younger people are prioritized, from 16 to 39 years. This implies an average behavior different from that expected for a traditional sample of the labor market (18/65 years), once the probability that people continue in education (frequenting school or another form of education) is higher in this group. Likewise, technical and postgraduate studies increased in the country in the years studied, so high school students who did not previously enter technical education or technology began to be trained, regardless of their age, in addition, people university students they increased their admission to postgraduate studies in these years, so they increased the average level of schooling.
However, these effects on the cohorts do not compromise the results since being pseudo-panels does not follow the same individual but people who represent a certain generation, so they are exposed to structural changes that can alter the composition of the cohort between years, (such as greater departures to unemployment or inactivity and changes in incentives for educational training). In this case, Heckman's selection bias control methodology helps minimize related problems, as shown [25][26][27]. Among the employed, it is estimated a second model for the probability of being employed and n given occupancy group, defined according to the quality of the employment position. For this, the classification of [28] is used, which defines the jobs for Colombia taking as reference the income of the workers, access to social security, and the modality of the employment contract. This methodology is close to the definition of most relevant aspects of the use of SDGs. Besides, it has been used by other studies of employment quality in the country such as [29][30][31]. Three categories of employment are defined: low quality, medium quality, and high quality, whose main references are in Table 2. To verify the probability of occupation in each category, a multinomial logit model is estimated, an expansion of the traditional logit models for the case of more than two categories in the dependent variable. The equation to be estimated is the one defined in (2): Pr (y = j) = f (sex, head of household, marital status, Education, region, sector, Age, cohort, period) In this equation, sex, head of household, marital status, education, region and the dummies of age, period, and cohort are defined as before. The sector is a set of binaries for the sectors of economic activity (commerce, services, and industry). This model has been used to determine labor market participation, labor segmentation and to determine the probability of being employed, for example, in [32][33][34][35][36][37].
The models are estimated in their versions with a standard robust error or with the help of the Stata software and with results presented in the form of marginal effects. These results are presented and discussed below. Table 3 shows the proportions of the unemployed and the average education by gender in each generation and cohort. It can be observed that women have a higher proportion of unemployment than men in all generations and years analyzed, so the goal of gender equity in the SDGs is not met. On the other hand, this employment gap is widened in the most current generations, that is to say, the youngest (generations 1 and 2), the gap in generations 3 and 4 is reduced, and it increases again in generations 5, 6, and 7; therefore, gender inequality in access to employment is broader in older and younger generations.

Results
On the other hand, in all generations, women have on average more years of schooling than men, and it is observed that young people have a higher average education than adults, fewer people of generation 1 who still have to accumulate schooling because they have maximum 16 years. This scenario reflects two things, the first one that has advanced in terms of educational coverage (objective 5 of the SDGs), but it is being wasted in terms of objective 8, since women are the ones who are most educated, but less employed than men, so the country does not take advantage of this human capital to increase the economic growth and quality jobs, so it could not meet this goal on the 2030 agenda. On the other hand, Table 4 presents the marginal effects of the variables used on the probability of an individual being employed in Colombia in the years investigated, using the Heckman method [38] 38 as statistical control of selection bias, for probabilistic models, in this case, it is estimated with an equation of participation in the labor force, determined by the variable sex, head of household, and school attendance. It was found that the estimators do not change in sign or trend, only in magnitude, so the possible bias does not alter the results of the model presented below.
The method consists of a two-stage estimate. In the first, the probability of participation of individuals in the labor market is estimated, with a simple Probit/logit model over a dichotomous dependent variable of value 1 for people acting in the labor market and of value 0 otherwise. The explanatory variables for this study are a gender dummy, a dummy to identify the head of the household and a dummy to identify whether the individual is attending school. With this model is obtained the so-called Mills inverse reason that is added in the main probability equation in a second stage of the model, adapted for the first time by Van de [39], the method is a generalization of the original concept proposed by [38] for the case of binary choice models.
In general, it is observed that males are more likely to be employed in comparison with the female sample, confirming the greater difficulty of women's labor insertion, a typical phenomenon in almost all economies, but with more weight in the Latin American region [40]. Also, other classic results of the empirical literature are observed, such as a greater probability of employment among the reference persons in the home and those living as a couple, reflecting the need for maintenance of the family nucleus [41]. In the same way, the labor market in the region of the capital Bogotá is where the greatest employment opportunities appear.
The impacts of education represent the results of the greatest interest in this research, capturing some of the aspects discussed in the SDGs and human capital theory as discussed previously. In contrast to the expected by traditional human capital theory, more educated individuals in Colombia have lower chances of employment, except for those with level postgraduate. In this sense, the idea that education reasserts itself does not generate stimuli or is not a determinant of occupation. It can also mean that companies seeking low-skilled labor or that there is a gap in human capital competencies, in educational terms. In the case of the variables of age, period, and cohort, the difficulty of obtaining employment for the youngest was observed. While the annual variables show a general increase in employability with respect to the reference year (2008), the negative and significant effects of the age and cohort dummies show that the youngest are less likely to be employed compared to adults. The marginal effects of cohorts can be interpreted as the impact of generational change on the labor market, which is best observed with the help of Figure 1. More recent generations have faced greater employment difficulties throughout the period under investigation, evidencing an increasingly greater difficulty of the Colombian market in absorbing the new labor force entering the economically active population. Together with the effects presented by the years of study, these results can show that the Colombian labor market is more demanding in relation to experience and not with the level of formal qualification of the workforce. On the other hand, Table 5 can observe the behavior of people belonging to the same generation, with models estimated in each year to compare the evolution of the marginal effects of the factors on employment. It is showing that the differential insertion according to gender remains throughout the entire period and among all selected cohorts, although the decreasing effect between and among older people, where younger women have greater problems of labor insertion in the country. As for the regions, Bogotá shows over time as a region that demands more employment compared to the others, but its effect has diminished over time, losing statistical significance in the last two generations.
In this sense, the objectives of the SDGs regarding gender equity and access to employment will not be met for the goal of the 2030 Agenda, since women do not have access to employment, not even women with higher levels of education, this would form a gender gap in terms of employment. Similarly, young people who have barriers to entering the labor market and do not increase the probability of employment will generate an employment gap with adults that will affect the employment rates raised by the SDGs. In summary, these objectives will not be met in objectives 5 and 8 because of the lack of youth access to jobs and the gender gap.
At the center of the specific analysis on education, Table 5 can be analyzed better through the Figures 2-4 soon, where the impact of education is observed in the probability of employment for generations of workers. This allows us to infer about the role of formal human capital in the career of young people and observe that the coefficients have increasing trends as age increases, showing that education has more relevance at the most advanced points of the career path. When comparing the generations, it is observed that the ones with the lowest coefficient, or in which the probability of being employed for each educational level decreases the most, are 2 and 1, that is, the youngest.
The younger people, aged 16-19, have the least probability of getting employed, with an effect profound and university. Likewise, it is shown that in general for young people (16-29 years old) regardless of generation, education has a negative impact on the probability of occupation and this negative impact becomes smaller as age increases. That is, at a higher stage of the work life cycle of people, a phenomenon that could occur due to the accumulation of work experience. These results show two factors. On the one hand, education is relevant as the population ages, that is, a more advanced work cycle and it is also observer that university students have more difficulty than other young people and seem to remain unemployed for longer. This leads to the need to invest in general human capital (such as university students) but also in specific human capital that can be associated with training in companies or work experience, so, within the career path, it must be taken into account both types of human capital to achieve an optimal trajectory.  Desviación típica entre paréntesis. * p < 0.01, ** p < 0.05, *** p < 0.10. Source: Own elaboration based on model results.   Moreover, Table 6 and Figures 5 and 6 shows the results of the multinomial logit model to determine, among employed individuals, whether the use is low, medium, or high quality, using the same factors above in addition to the economy sector. In this way it is observed that men are more likely to be in occupations of medium and high quality, while women are more likely to act in occupations of lower quality of work. In the case of the regions, workers in the Eastern, Pacific and Bogotá observe a decrease in the probability of being in low-and high-quality jobs and increase the probability of being in medium quality jobs. Sectors economic of industry and the services offer more opportunities in jobs of low and medium quality compared to trading activities. When analyzing the specific human capital, the age is observed, again taking as reference the people of 30-39 years. This effect is best seen in Figure 5, which shows that the younger generations are more likely to be in low-quality jobs and this trend decreases as it moves toward the older generations. In the case of education (Figure 6), people with a higher educational level are more likely to be in medium and high quality jobs.  This is where the greatest impact of education lies and it is in selecting, within the segmented labor market theory, as analyzes previously, the best jobs, this education is necessary in order to generate younger chances of getting quality jobs higher.
The work experience, represented by the age factors in the estimated models, has the main positive effects on employability and the possibility of employment in high-quality occupations. These results confirm the difficulty of occupational insertion of young people in Colombia, demonstrating the need for political actions that facilitate this process, especially the search for the first job. This leads to determine that there should be differentiated employment policies within the work trajectory of people, where the government should focus on the formal education of the entire population, however, this is not enough so it should help generate the first years of work experience that the market does not provide, in order to generate a better labor transition. In this way, investment in human capital must not only occur in the education variable (or in health and nutrition as the theory explains) but also in work experience, and from there the work trajectory of people will begin to select the labor segment according to its human capital.
This means that the theory of human capital would have application in the labor news of labor segmentation in Colombia but seen from a temporal spectrum and shown that just focusing on education does not solve the problem of youth unemployment. Moreover, in many cases it can be aggravated by high expectations of the university students and low job demand response and companies' higher quality, especially in formal jobs.

Discussion
The econometric models of the previous section show a greater difficulty of employment among the youngest, in addition to evidencing a behavior of occupational segregation of the Colombian labor market according to gender. Men are more likely to be in high-quality employment compared to women, despite having a similar level of formal qualification (with higher average schooling for women). As Table 1 shows, where the most recent generations show a higher gender gap with a participation of women in unemployment of those of 60% in the youngest and more than 50% in adults, even with levels of average schooling of women above that of men.
Within the labor demand variables, the region variable shows that Bogotá in the area where people are most commonly used and that they also do it in the formal sector (with respect to the Atlantic), the Pacific and Central region decrease the probability of being employed, but increasing the probability of being in formal employment and the Eastern region increases the probability of being employed, but decreases the probability of formal employment. This indicates that only the city of Bogotá generates an optimal employment space for young people, the rest of the regions that are most likely to use them are in the informal sector, and those that generate the lowest probability of employment leave out young, but those who occupy do it in formality. This regional disparity occurs in the areas of business development and human capital, where regions with greater industrial capacity such as Central and Pacific employ people with greater education, and the other areas with more service and agricultural vocations employ more informal youth with less demand for qualifications.
The economic sector indicates that the services and industrial sector increase the probability of labor insertion with respect to trade, in the same way among young people who overcome the barrier of first employment, the industrial sector is the one that most helps to incorporate young people both for their labor insertion and to a greater extent in young people, so does the services sector, although to a lesser extent in the case of young people. This could happen because the most qualified young people can go to sectors with greater demand for skills such as industry or services, however, these sectors are not very developed in the country, so their demand is not as high with respect to sectors such as trade, or services, since within this sector there are jobs of high qualification, but also of very low qualification. This implies that without industrial development or business development in sectors that demand more and more qualified skilled labor, young people will have problems to deal with since the most educated will compete in the formal sector and the least educated in the informal sector.
Within the analysis, it has been stated that a fundamental characteristic of human capital, which is education, has differentiated effects between adults and young people. In addition, education has a different impact on general employability and on the modality of occupational insertion. On the one hand, people, especially young people, with a higher educational level are less likely to be employed. Focusing on the youngest, these results lead to greater difficulty in accessing a first job position, delaying the entry into the occupied labor market. If this delay is linked to the continuity of youth studies, this would mean an increase in the stock of human capital in the long term. However, the data also show an increase in the incidence of young people who do not work and do not study (the NEETs) in Colombian reality, which would indicate a possible lack of labor market at the same time that no formal qualification accumulates. This can be partially explained by the difficulty of the most educated young people in achieving a job, demotivating occupational insertion and investment in studies.
On the other hand, education shows positive effects for those already employed, in the sense of facilitating the insertion into occupations of better socioeconomic quality levels. But this result is more relevant for adults, showing that the Colombian labor market has a preference for the accumulation of human capital through experience to the detriment of formal education. In this sense, the greatest difficulty lies in those seeking the first job, that the lack of experience is not compensated by education (both human capital factors). P or both, which are more educated young people are less likely to be employed because they have high expectations about wages and jobs.
In this case, efforts should be made so that young people have work experience, during their study period or in the transition from school to work, so that the barrier of first employment is overcome as soon as possible and to accumulate the years of experience that it requires demand. If this goal is achieved, education will not only cause young people to be employed in higher quality occupations but do so faster. In addition, faster and easier entry into the labor market can serve as an incentive to reduce the rates of young Neets and achieve better conditions as it stands [42,43].
These results show that the theory of human capital applied to the context of young unemployment today in Colombia should be seen from labor segmentation, since the theoretical and empirical components of this theory as shown by the works of [44][45][46][47] show a direct relationship between education and employability that would allow SDGS Objective 8 to be met, however, these studies do not fully address the labor market and they just study the formal segment, which leaves aside the larger part that is informality. These studies see on the path of others conducted in developed countries, however, these countries do not have a serious problem of informality, so the effects of education can be similar only if they look at the formal segment.
These results also show the empirical analysis shown in studies such as [40,41]. They do not address the complete relationship between unemployment, education, and experience, as their models address descriptive studies and models that do not confront the two segments to explain unemployment, even though young unemployment is about the entire market of work. In this sense, this research is not the only novel in this analysis but implies that the short-term employability policy must be reformulated to meet SDGs Target 8 to reach the 2030 target.
At the heart of the debate I have to focus on how the labor market is involved with human capital variables, so this research does not invalidate the direct relationship of education and experience with employability but shows how these variables act in a way where experience is the key factor of employability (and quality jobs) in the short term, and education in the medium and long term, rather than all in high-quality jobs. In this way, to meet Objective 8 of the SDGs it is necessary to generate the first years of experience in young people to use them quickly and then education levels will place them in the segment (formal or informal) depending on the credentials Have.
Thus, public policy must comply in the medium and long term with SDGS objective 5 in educational coverage and quality of education, and then generate incentives in the market such as the dual model of education or apprenticeship programs, which lead young people to generate the first periods of experience required by the market to make an upward trajectory and thus be able to meet the goal of the 2030 agenda. In this way, the institutional intervention must be done in all human capital, not only in education as a sample [48]

Conclusions
Youth unemployment is a condition in which young people seek employment without being able to do so, likewise, young people face the possibility of insertion into precarious employment. Because of the magnitude of young unemployment in Colombia, the present study investigated its determinants, conditioned on the informal employment contexts that this population places in a scenario of vulnerability in their career, due to the fact of remaining unemployed or being placed in informal occupations and without social protection.
The economic literature places the theory of human capital at the center of analysis to find education as the main determinant (from the labor supply) of young employment. This theory comes from the classical and neoclassical postulates that speak of the heterogeneity of the workforce, their specialization, and the greatest returns, so that more educated young people have higher salary expectations among higher schooling, which increases their salaries backup.
Likewise, in this investigation the general and specific human capital, proposed by Becker, has different connotations and effects on young people, where this population has greater general but little specific human capital, because they cannot be inserted in companies that provide this training, Thus, companies when valuing specific human capital at the beginning of their career can leave young people with less experience out of the occupation. This also creates difficulties with the salary returns of education, which lead to greater schooling being invested as a maximizing decision of utility, so it increases the opportunity cost of young people by seeing that they are not easily used and changing their salary expectations.
This result is novel for Colombia since it shows that, within human capital, the experience and other aspects of specific human capital, is what most helps to employ young people, in addition to helping them to do so in higher occupations quality.
However, when young people overcome the barrier of first employment they are in greater advantage than adults because they are more educated and with an accumulation of experience, this is reflected in a greater probability of entering medium-and high-quality jobs. This also shows that the employment policy must guarantee the first periods of experience with apprenticeship programs or practices that certify the experience since this is valued more than education at the beginning of the work life cycle, then education selects young people toward one of the labor segments and provides better conditions for educated youth.
Similarly, gender is an important determinant of youth unemployment, since men spend less time seeking employment compared to women, increasing their likelihood of being employed both in people entering the labor market and in young people who have experience (also in adults). The effect of this variable shows that, although women have conditions equal to or similar to those of men, they will have greater difficulties in employing themselves, so they will transition between unemployment, informality, and inactivity (more in-home care than educating yourself).
Thus, economic policy must value the work history, give more importance to the experience in the first years of this practice and help young people who are in the informal sector have training necessary and sufficient to strengthen their specific human capital, so that they are better valued by demand and represent a lower cost for entrepreneurs. The foregoing as a complement to formal education, so necessary in every economy, so in the end the human capital thesis does explain the employability behavior of young people, but not as the literature clearly reflects, but the condition of segmentation labor and the temporality of their effects, lead to occur in a particular way in these economies.
By confronting these findings with studies on unemployment and its relationship to human capital, it is found that education and experience remain decisive in the employability of young people and can help to meet the SDGs, however, their impact is on different moments of time, something that other studies did not take into account when assuming that the experience naturally occurred after finishing the levels of formal studies.
The implications of these results are seen in the country's labor policy, where, at least in the short term, the target of SDGs Objective 8 should involve the labor market with programs such as the dual model and apprentices that are not just in the program university, as they are the most vulnerable populations in terms of employability. These public policy interventions should be made by generating greater incentives for the recruitment of women since young women are the least likely to be employed.
The results of this research open up several lines of research in countries with segmented labor markets, such as Colombia, since young unemployment in these countries and high informality lead to the same conditions and limitations for young people. This compared to labor productivity, does not make clear the contribution of education alone, as more and more people are educated, but labor productivity is not increasing but falling, which implies that the most educated young people are not entering the productive system, that there is a formal market saturation, or that the most educated people are not contributing to productivity because they do not acquire the necessary or required skills. This in itself generates a worrying situation for young people, although they are more educated, they have greater problems of labor insertion and youth unemployment in the region.
Finally, the career path of young people should continue to be observed because of the displacement effect of the adult workforce that has an average educational level (bachelor's degree), and the analysis of the possible increase in informality in adulthood or unemployment of less qualified adults, for which the training carried out by the Public Employment Service will be vital for this population to be rearranged in the labor market.


THE ANALYSIS OF GOLD SAVING PRODUCT APPLICATION ACCORDING TO DECISION OF DSN-

Gold used as a currency standard in many countries and also as a medium of exchange that is relatively lasting and accepted in all countries in the world. In this case, financial institutions hold a variety of products in the context of increasing the amount of investment in gold with various forms. Especially Islamic Financial Institutions, because in Islam and it has been mentioned in the Qur’an that what is meant by assets is gold and silver including dinars. This research aims to determine the gold savings procedures and systems that are in effect and run by PT. Pegadaian Syariah Solo, and the opinions of the scholars formulated in the DSN-MUI /No. decision. 7/V/ 2010 concerning the sale and purchase of non-cash gold savings resulting in the conclusion of an analysis of gold savings products with a certified DSN-MUI review. This research was arranged using qualitative methods. The results empirically indicate that many scholars agreed that gold could be resale as terms of its goods on the grounds after the presence of banknotes society modern assume that gold now is no longer regarded as a medium of exchange but equally as well as items that can be bought and sold. 1Lecturer of The Law of Islamic Economics Department, Sharia Faculty, University of Darussalam Gontor. 2 Lecturer of The Law of Islamic Economics Department, Sharia Faculty, University of Darussalam Gontor. 3Student of The Law of Islamic Economics Department, Sharia Faculty, University of Darussalam Gontor The Analysis of Gold Saving Product Application According To Decision.. 250 Volume 14 Nomor 2, September 2020

Rasulullah saw. Prohibit the two sale and purchase in another sale. 5 In essence the sale and purchase of gold is the exchange between gold and money. And that means exchanging ribawi goods which are the same good, still in one group. Conditions that apply are must be done from hand to another hand. So both (money and gold) must be at the place of the transaction. Islamic Pawnshop in this case does not have gold, so when a customer gives up his money, the gold has no form. This is clearly nasiah usury transaction.
And if we look more closely, the nature of the transaction is not buying and selling gold. If it is called buying and selling gold, Islamic Pawnshop means selling fictitious goods. Because it does not have it at all. So what happens is debt money but its value is converted to follow the price of gold. The customer hands over money worth 50 million 4 Waqar Masood Khan, "Saving and Investment in an Interest-Free Economy", told by Islamic Economics Lecture, Jeddah: Islamic Research and Training Institute, 1987, p. 277-278. املﻌارف مكتبة ايض: الر الرتمذي، سنن الرتمذي، سورة ﺑن عيسى ﺑن حممد احلافظ إمام 5 .292 ص. يع، التوز و للنثر Volume 14 Nomor 2, September 2020 rupiahs and he only gets a proof of ownership of gold at that price. Furthermore, when the customer takes the money and changes the value of the currency, the customer will get money with a value that is not the same as he had deposited to the Islamic Pawnshop. If the price of gold rises, customers will benefit. In other case, most gold savings customers sell the existing gold balance to the Pawnshop, and the sale and purchase agreement arises without the handover of goods that are the object of the sale and purchase agreement.

RESEARCH METHOD
The type of this research is qualitative descriptive method. In this qualitative research, the main instrument is to make a conversation or an interview with senior manager of PT. Pegadaian Syariah Solo Branch and also one of gold savings Solo Branch then be processed and analyzed by including data that is not a number or data whose provisions cannot be expressed in the form of numbers.

Investment Theory
Investment is defined as the investment of money or capital in a company or project for the purpose of making a profit. In the Complete Economic Dictionary, investment is defined as exchanging money with other forms of wealth, such as stocks or immovable property that is expected to be held for a certain period of time in order to generate income. Investment in Islam, apart from being knowledge, is also spiritual in nature, because it uses sharia norms, as well as being the essence of an amaliyah science. Therefore, investment is highly recommended for every Muslim. This is explained in the word of Allah in the Qur'an Al-Hasyr verse 18: The word interpreted by "count and introspect yourself before being introspected, and look at what you have saved (invest) for yourself from pious deeds (after here investment) as your provision for the day of the calculation of charity on the Day of Judgment for the salvation of yourself in front of Allah SWT. Thus, Allah Almighty commands all His servants who have faith to invest in the hereafter by doing good deeds from an early age as provisions to face the day of reckoning. 7 Unlike savings and consumption, investment is also a business that is unpredictable and risky, because investment does not have to follow the same movement with gross national product (GNP) as is the case with consumption expenditure that can be affected by the value of gross national product (GNP). Investment is a separate activity from the private sector and the government sector.
Events where investment is not in line with the rate of growth of gross national product are found at the time of recession in the economic cycle also in an economy that is experiencing inflation. If the value of gross national product remains high and interest rates are also high this situation can reduce investment. 8 According to some contemporary views, a Muslim who invests funds or savings will not be taxed on the amount invested, but taxed on the profits generated from his investment, because in an Islamic economy all assets that are not utilized are subject to taxation, Muslim investors will be more good use of funds for investment rather than maintaining funds in a form that is not useful.
Islam also prohibits forms of speculation that in conventional economics are inseparable, the types of speculation that are prohibited in Islam include not only competitions, card games and other gambling activities, but also forms of transactions that involve future results. Another major factor that influences investment behavior in the Islamic economy, the interest rate is not included in the investment calculation, the opportunity cost of lending funds used for investment purposes is the zakat paid on these funds. Its mean, funds or savings that are not utilized in real investment will be subject to zakat at a certain level.

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It is clear that investment in the Islamic economy is a function of the expected level. The expected level of profit also depends on the relative portion of the profit allocated between the investor and those who provide the funds in the form of cooperation or loans. 9

Gold Savings
Gold is often regarded by the general public as a form of profitable investment. These advantages include minimal risk, can be sold in a very easy way, and requires a cost that is not too much. Especially now that everyone can take advantage of a service called Gold Savings from Islamic Pawnshop.
This service is a solution provided by Islamic Pawnshop as one of the State-owned Corporations (BUMN) in providing gold easily to the public. Islamic Pawnshop in gold savings is a safe and reliable way of investing in gold through savings starting from 5 thousand rupiahs. It can be used for gold pawning if you need cash bailouts. Unlike the general savings, opening of gold savings can be done through an Islamic Pawnshop digital application available on the Google Play Store. This modern product can already be done online.
Gold savings are gold bars owned by the account holder based on a gold purchase and sale agreement which is agreed by Pawnshop and the account holder. In other words, gold savings is a gold buying and selling service with deposit facilities. Through gold savings means that the customer has made a gold investment in Islamic Pawnshop.
Opening a gold savings account online through Pawnshop application is subject to a deposit facility fee for 12 months totaling 30 thousand rupiahs, and an initial balance purchase of 70 thousand rupiahs. The opening fee and initial balance must be paid before the gold savings can be opened. The cost of opening an account online through Pawnshop digital application is cheaper than opening it through Islamic Pawnshop outlet or via Islamic Pawnshop agent. Besides being cheap, opening an account online is also easier.
Buy and sell gold through gold savings is based on the buying price and selling price set by Islamic Pawnshop. Cannot use other price references, other than those already set by Pawnshop. The price of buying 9 Ibid, p. 297.
Volume 14 Nomor 2, September 2020 and selling gold every day can be seen in Pawnshop digital application. Saving gold or top up is done online through Islamic Pawnshop digital application that includes gold savings facilities. A minimum purchase of 50 thousand rupiahs and a maximum purchase of 10 million for a day.
Gold savings balance can be redeemed into cash by way of the balance of gold deposits resold (buyback) through Islamic Pawnshop digital application. Minimal account balance for resale transactions or transfers is 0.1 gram and transaction costs through Islamic Pawnshop digital application are subject to an administration fee of 2.500 rupiah. Gold savings balances can be transferred between accounts through the gold balance transfer facility. Transfer gold balance through Islamic Pawnshop digital application with a minimum transaction of 1 gram. The minimum account balance for a resale or transfer transaction is 0.1 gram and the transfer transaction via Islamic Pawnshop digital application is free of charge. 10 Gold Savings is the service of purchase and sale of gold by the facility entrusted with affordable price. This service makes it easy for the community to invest in gold.
Advantage of the product among other things are: 11 a. Gold Savings Pawnshop is available at branch offices throughout Indonesia. b. Purchase of gold by the affordable price (ranging from weight 0, 01 grams). c. Professional service staff. d. Alternative investments are safe to keep a portfolio of assets. e. Easy and fast in funding needs.

Buyback Transactions
The buyback transaction is a repurchase transaction by Islamic Pawnshop for the sale of gold by a gold savings customer. In this transaction there are two different transaction patterns, namely the pattern of "sell, print, buy" and "sell, without printing, buy". Gold savings repurchase ("selling, without printing, buying") is the purchase of gold belonging to the account owner contained in the account by Pawnshop based on the price and weight set by Pawnshop self. This means that the customer who initially plays the position of buyer, again sells his gold savings balance to Islamic Pawnshop, which initially plays a position as a seller. While the resale of gold savings ("selling, printing, buying") is the sale of gold bullion by the account owner at the price and weight set by Pawnshop. 12 In terms of language, repurchase and buyback are having the same meaning, but in terminology, between repurchase and buyback have significant differences in theory and practice in economic transactions. As stated by Helleir et al, repurchase is a repurchase intention that is defined as an individual's assessment of the repurchase of services or services from the same company, taking into account the current situation and the bad atmosphere of the individual.
Meanwhile, according to Crafword and Benedetto repurchase itself, if interpreted in the context of non-durable goods means the buyer returns an item after a trial, so it can be interpreted that the repurchase is a continuation of the evaluation based on the trial that was conducted.
The definition of buyback transactions on the stock market is one of the ways companies to distribute cash flow owned by the company to its shareholders in addition to dividends. When buying back shares, the company will usually buy at the price above the market price. The excess of this market price is a benefit for shareholders known as capital gains.
From this explanation, there is a difference between the conclusion that repurchase is the behavior of consumers to choose or buy a particular product that is caused by an experiment based on their own interests and behavior repeatedly or more than once in the same product or item.
In practice, the term buyback is more emphasized on a transaction that aims to collect profits from an economic investment product, such as stocks, gold, bonds by buying back the goods they have sold.

Buy and Sell Gold in Islamic Pawnshop
Buying and selling gold in Islamic Pawnshop are usually in the form of financing, Pawnshop finance customers who want to buy gold for example for investment, and in Islamic Pawnshops called financing for gold ownership, hereinafter referred to as PKE. PKE is financing for gold ownership using murabaha contracts. The object of financing gold ownership in Islamic Pawnshop is gold in the form of bars or jewelry. The amount of financing for gold ownership is the acquisition price of gold.
Scholars who forbid saying the hadith about usury, which among others assert: "Thou shalt not sell gold with gold, and silver with silver, except in cash." They stated, gold and silver are tsaman (price, means of acquisition, money) which should not be exchanged in installments or tough because this causes usury. Meanwhile, scholars who say may put forward the argument as follows: 1) That gold and silver are goods both are sold and bought as well as ordinary goods, and no longer the price of a money payment instrument. 2) Humans really need to buy and sell gold.
3) Gold and silver after being formed into jewelry turn into clothing and goods and are not an acquisition price. 4) If the door of the sale and purchase of gold in installments is closed, then the door of debt and debt is closed, the community will experience unforeseen difficulties. 14

Gold Savings in Murabaha and Wadi'ah Contract
Murabaha gold metal contract for perpetual investment is an agreement or agreement made between Pawnshop and the customer for a number of gold metal purchases along with the agreed profits and costs.
The mechanism of the gold metal agreement is Islamic Pawnshop as the first party to finance the purchase of goods in the form of gold bars ordered by customers or buyers as second parties to suppliers as third parties. Purchase of goods or commodities by customers is done with a tough payment system. Commodity items purchased is the form of precious metal gold are used as collateral to repay the remaining debts of Volume 14 Nomor 2, September 2020 customers to Islamic Pawnshop. After all the debts are paid, the precious metal gold and the documents are handed over to the customer. 15 The implementation of murabaha contract is a contract of sale of goods by stating the tsaman (acquisition price) and ribh (profit) agreed by the seller and buyer. From the understanding that states there is an agreed profit, murabaha has the character that is the seller must inform the buyer about the purchase price of the goods and also state the amount of the profit added to the cost. In this case, the pawnshop states that the selling price and the purchase price of gold based on world gold prices on that day through the android application and on the official website of Pawnshop on the internet.
In some Islamic Pawnshop branches, the implementation of murabaha contracts on gold savings is the buying and selling of gold services with deposit facilities at affordable prices. This service makes it easy for people to invest in gold. This savings is managed in a sharia way and not only uses a murabaha contract but there is a wadi'ah. 16

THE CONCEPT OF GOLD SAVINGS PRODUCTS IN PT. PEGADAIAN SYARIAH SOLO BRANCH
The gold used in this savings product is in the form of gold bars, which are customers based on the sale and purchase of gold and gold deposits approved by Islamic Pawnshop called ijarah with a gold deposit system because before the gold is taken by the customer the gold automatically is stored in Pawnshop office. There is no problem for customers who have not taken the gold as long as he continues to save up to reach a few grams of gold. Intake in the form of money or gold bars allowed. 17 In other case, gold savings can also be used as collateral in Hajj arrum products with a minimum balance of gold savings of 3.5 grams. The gold used in Islamic Pawnshop is legal gold obtained directly from various mines, especially BUMN that are recognized by the government. Account holders can buy from a balance of 0.1 grams and can sell after reaching a balance of 1 gram and gold can also be printed. In the gold printing system there is a gold printing dependent fee, for 1 gram the cost is 85 thousand rupiahs specifically from PT. Antam, while printing through UBS (private gold factory) of 40 thousand rupiahs. The printing costs for pieces of 2 grams if through PT. Antam is 86 thousand rupiahs and UBS is 66 thousand rupiahs. 5 gram pieces for PT. Antam 127 thousand rupiahs and UBS 83 thousand rupiahs. There is also for 100 grams' piece for PT. Antam 632 thousand rupiahs and UBS 507 thousand rupiahs. After paying the specified printing costs, customers can already get the gold directly in the form of bars.
This gold savings product is a program that has not been around for a long time or is new, the Islamic Pawnshop socializes the community especially the rural community in promoting the gold savings product in Islamic Pawnshop, even Pawnshop provides an opportunity for customers interested in opening a gold savings account free of charge starting from the account opening fees and other administrative costs as a step of Islamic Pawnshop in shading and giving understanding to people who are interested in saving the gold.
Gold savings, including one of the investments that all forms of valuable property. Saving gold means investing in gold. In holding this gold savings product, Islamic Pawnshop cooperates with PT. Antam and UBS own gold issuance. 18 that gold is currently a commodity status.

REVIEW OF FATWA
Major scholars who teach the sale and purchase of worthless gold are Ibn Taymiyah and Ibn Qayym al Jauziyah. Obviously among scholars there are differences of opinion in this matter. If so, the beneficiaries are ordinary people, please take an easy opinion. Especially the contemporary of scholars, as DSN MUI, clearly allow and consider gold as a commodity. The cleric who forbids presenting theorem which with the publicity of the hadiths about usury, which among others emphasized: "Thou shalt not sell gold with gold, and silver with silver, except in cash." Gold will have the status as a tool or medium of exchange if the community accepts it and thinks that gold is indeed a tool or medium of exchange. But in fact today most of the majority of people state that gold is considered an item so that trading can be done.
DSN-MUI Fatwa No. 77 / DSN-MUI / V / 2010 in the discussion of trade no cash in gold, either through nevertheless buy regular or selling murabaha, it's allowed (permissible, ja 'iz) for gold does not become a tool official exchange rates (money).
The limits and provisions of the DSN-MUI Fatwa No. 77 / DSN-MUI / V / 2010 regarding buying and selling gold: 1. The selling price (tsaman) may not increase during the agreement period even though there is an extension of time after maturity. 2. Gold purchased by non-cash payment may be used as collateral (rahn). 3. Gold that is used as collateral as referred to in number 2 may not be bought or used as an object of another contract which causes ownership transfer. Based on the things above, then my opinion is that you can buy and sell gold in installments, because gold is an item, not a price or money, to facilitate human affairs and eliminate their difficulties.

Closing
Based on the results of research and practical work on gold savings products in Islamic Pawnshop, several conclusions can be drawn, namely: 1. Most customers in PT. Pegadaian Syariah Solo branch open a gold savings account with the intention to resell the gold contained in the balance of the gold savings account they have, because it is likely that the amount of money he earns from the sale of gold will be


Real Convergence In The European Union: “New” Versus “Old” Member States

The recent waves of enlargement of the European Union have created not only opportunities, but also challenges, emphasizing the complexity of the integration process and the difficulty to assure cohesion between Members. The aim of this paper is to examine real convergence in an enlarged European Union and to conduct a comparative analysis between the New (13) and the Old Members (15). In this respect, we have studied absolute and conditional convergence between 1995 and 2019, taking into consideration the level of GDP per capita. The methodological tools of the research were β-convergence based on cross-sectional and panel regressions and σ-convergence. The results of our study confirm the 2% law of convergence within the European Union between 1995 and 2019. However, the analysis of the economic performances among the New and Old Members led us to opposite results: while the catching-up speed among the New Member States reached on average 2.7%, in the Old Members we didn’t identify a statistically significant relationship between the initial income and the subsequent growth rates. In order to account for economic and social differences between the Member States, we have examined conditional convergence, illustrating the defining role of investment, trade and labor productivity in catalyzing convergence both in the New and Old Members. In contrast, the empirical study suggests that an increased level of public expenditures and over-indebtedness within the European Union threaten the catching-up process. The results of our paper can be useful for the European decision makers, illustrating the factors that might contribute to the achievement of the objective of real convergence within the European Union. maintain economic growth. In contrast, the European Union should focus on promoting trade liberalization, also adopting measures that encourage public and private investments. Moreover, the results of our study suggest the key-role of the labor productivity and labor force participation. Real labor productivity had a positive and statistically significant influence both at aggregate and subgroup level, being one of the main key-drivers of economic growth between 1995 and 2019. One of the vulnerability of the study derives from the limited number of explanatory variables included in the study. Taking into consideration the complexity of the convergence process, our study shows just a small part of the entire picture. Consequently, we propose to expand the present research by incorporating other determinants that might explain the convergence process in the European Union.

Introduction
The establishment of the European Coal and Steel Community and soon after of the European Economic Community represented an unprecedented initiative that shifted the historical course of the European continent, transforming war in peace, defragmentation into integration and former foes in friends. Being initially founded by six European countries in order to strengthen the economic ties between them and to avoid the political conflicts that affected for long time the regional prosperity and stability, the European Union encompasses nowadays twenty-seven countries, with the prospects to expend towards the East and South of the continent. The accession of the former communist countries brought to the fore the necessity to assure economic convergence between countries and regions given the lower performance of these countries and the structural vulnerabilities inherited from the communist regime. The main purpose of this paper is to study real convergence between 1995 and 2019, trying to respond to the question if income convergence is an achievable objective in an enlarged European Union. Moreover, we have tried to conduct a comparative analysis between two subgroups of countries -New and Old Member States -in order to respond to the question if the Central and Eastern European countries are catching-up or lagging behind. The former group encompasses the Central and European states, together with Cyprus and Malta, while the latter includes the countries that founded the European Union and joined the group in the last century. Our study is based on the assumption that the New Members have made significant progress in terms of income convergence as reflected by β-and σ-indicators.
In order to test the assumptions of our research, we have studied absolute and conditional β-convergence based on cross-sectional and panel regressions and σ-convergence by taking into consideration the coefficient of variation of the data sets. The results of our study indicate an aggregate convergence speed of 1.9% per year under the absolute framework. The subgroup analysis led us to opposite results. Among the New Member States group, the average catching-up speed between 1995 and 2019 was 2.7%. In contrast, we didn't identify statistically significant evidence in favor of the neoclassical assumptions among the Old Members cluster. Taking into consideration that the European economies differ in their initial conditions and may reach different states of equilibrium, we have also tried to study conditional convergence. In contrast with absolute convergence, the conditional model allows for controlling the structural differences between economies. In this respect, we have initially studied the influence of five economic variables (gross fixed capital formation, general government final consumption expenditure, general government debt, general government deficit and trade), then expanding the panel regression with factors aiming the demography and labor market (real labor productivity per person, population growth, labor force participation rate and unemployment). By applying panel regressions using generalized method of moments technique (GMM) (Arellano and Bond, 1991),we have illustrated that investment in fixed assets, the government deficit, the openness to trade and the improvement of the labor productivity had a positive influence on economic growth between 1995 and 2019 both at aggregate and subgroup level. However, our study suggests that an increase level of government spending and over-indebtedness hampered the convergence process between 1995 and 2019. As far as σ-convergence is concerned, the results of our study confirm a decrease of income gaps at aggregate level but opposite trends within the two subgroups.
Overall, we have tried to contribute to the economic growth literature by conducting a comparative analysis between the New and Old Members. In this respect, we have found evidence in favor of the 2% law of convergence, identifying a higher speed of catching-up within the poorer Central and Eastern European countries. The analysis of conditional convergence at aggregate and subgroup level provided us some insightful evidence regarding the economic and social determinants of catching-up process. In this respect, the empirical analysis suggests that the European decision makers should rethink the economic growth model, by focusing on investments, trade liberalization and increasing the productivity of labor. Moreover, our paper emphasizes the need to assure a sustainable convergence between Members, aiming low levels of public expenditures and debt. The recent economic and financial crisis illustrated the vulnerabilities of the economic growth model based on excessive public debt. Particularly, the most affected countries from Southern Europe still face difficulties in promoting economic growth. In the absence of the reconfiguration of the growth model, this group of economies will not succeed to keep pace with the other Members, especially the Central and Eastern European countries. These trends are worrying and might pose into question the objective of economic cohesion within the European Union.
The paper is structured as follows. Section 2 illustrates the relevant theoretical and empirical studies referring to the convergence process in the European Union, while the Section 3 presents the data and methodology used in order to test the assumptions of our paper. In the Section 4, we have tried to explain the main results of the study, while in the last part we have summarized the findings and proposed future directions of research.

Literature review
Real convergence has become a debated topic with the establishment and advancement of the regional integration process within the European continent, evolving in close relationship with the economic growth theories. In contrast with the nominal convergence criteria, which are defined in the Maastricht Treaty, the real determinants are not strictly determined in the Community's official documents. The absence of a unitary view on its definition, scope or determinants does not make real convergence less important in the analysis of the economic performances of the European Union. By contrast, analysis have become increasingly interested on this topic, usually considering real convergence a complementary pillar of the nominal criteria. According to Matkowski and Próchniak (2007), real convergence aims the reduction of income gaps -income convergence -and the similarity of business cycles between economies -cyclical convergence.
The process of regional enlargement that started in 1973 and quickly advanced at the beginning of the 2000s has changed the European geo-political landscape. The accession of the Central and Eastern European countries has represented an unprecedented moment in the history of the European Union that has been largely discussed in the academic and governmental institutions. Particularly, researchers conducted in-depth analysis of the macroeconomic landscape of the European Union and comparisons between the "Old" and the "New Member Matkowski and Próchniak (2007) found evidence in favor of β-convergence for both Central and Eastern European subgroup (8) and the Old Members (15) between 1993 and 2004, concluding that the growth rates increased mainly between 1998 and 2004. In the European Union, the average GDP growth rate was approximate 2.4% per year, while in Central and Eastern Europe the percentage was slightly higher (2.5%). Similarly, Stanišić (2012) identified a convergence speed around 1.7% at aggregate level between 1993and 2010, but rejected the absolute convergence hypothesis for the subgroup analysis. Rapacki and Próchniak (2009) examined absolute convergence between 1996 and 2007 and concluded that the Central and Eastern European countries experienced a higher convergence speed compared to the Old Members (15), reaching on average 2.8% per year. In another study, Rapacki and Próchniak (2019) examined conditional convergence between 1995 and 2015 and identified a convergence speed of 2.2%. The leaders of the catching-up process were the Baltic States, which recorded annual growth rates of 4.5-5%. In the group of former members, Luxembourg and Ireland experienced the highest growth rates. Rapacki and Próchniak pointed out that the New Member States need 30-35 years to reduce reach the halfway of the transition period towards the equilibrium state. In the same line, Matkowski et al. (2016) studied conditional convergence, identifying a convergence speed reaching on average 3.2% per year for the Central and Eastern European group and 1.5% for the Old Member States. In contrast, Gros (2018) identified higher growth rates between 1999 and 2016 in Central and Eastern Europe, reaching on average 6% per year. In the Old Members group, the catching-up speed was around 2%, and the income gaps between North and South increased. Rapacki and Próchniak (2009) examined the factors that enhanced convergence, taking into consideration variables related to the European Union membership and other indicators aiming the economic and social framework. The researchers highlighted that the accession to the European Union enhanced income convergence in Central and Eastern Europe. At the same time, the process of economic growth was catalyzed by the improvement of institutional quality and trade and financial integration. Similarly, Próchniak (2011) studied the key drivers of convergence in the Central and Eastern Europe between 1993 and 2009, concluding that the determinants from the demand side mainly influence the short-term economic growth, while the factors on the supply side have a long-term effect. The analyst pointed out that FDI and gross fixed capital formation played a major role in enhancing economic growth in the Central and Eastern European region. At the same time, Próchniak highlighted the defining role of human capital, illustrating that a higher proportion of employees with tertiary education will positively influence the GDP growth rate. At the same time, the analyst highlighted the existence of a negative relationship between the deficit and public debt and economic growth, concluding at the same time that the structure of the economy did not influence the GDP dynamics. In terms of population structure, Próchniak pointed out that a higher share of the active population will lead to higher growth rates. Stoica et al. (2019) empirically demonstrated that investment played a major role in aggregate growth, while inflation, capital flows and private lending had a negative impact. The analysis of the subgroups showed that the convergence rate was higher for the Old Member States under the conditional framework, given the favorable influence of the macroeconomic and institutional variables. In the same line, Stanišić (2012) demonstrated that the convergence process was positively influenced by the level of education and life expectancy at birth, investment, exports and a high public balance. In contrast, the growth rate was inversely correlated with the fertility rate and inflation. Overall, the analyst concludes that despite the convergence rates identified, the recovery process is lengthy, so equalization of events is not likely in the near future.
Nenovsky and Tochkov (2013) considered that the implementation of the market oriented reforms in the Central and Eastern European economies, as well as the investments in human capital, played a key role in catalyzing convergence. In contrast, the different capital accumulation rates and the price instability have enhanced the income gaps between economies. Similarly, Diaz del Hoyo et al. (2017) noted that the transition to the market economy and the effort to integrate the acquis communautaire had a more important contribution in enhancing the economic performances in the New Member States, compared to the adoption of the single currency. This conclusion might be increasingly relevant nowadays, when two ex-communist countries, Bulgaria and Croatia, entered into the Exchange Rate Mechanism II.
Apart from studying the absolute and/or the conditional convergence, analysis were also interested in identifying if the income differentials between economies diminish over time, as reflected by σ-convergence. In this respect, Matkowski and Próchniak (2007) concluded that income gaps between subgroups and at aggregate level diminished between 1993 and 2004, although the difference between New and Old Members were still high. Similar conclusion were reached by Rapacki and Próchniak (2009), who illustrated that the disparities decreased both within subgroups and in the European Union (25) between 1996 and 2007. Stanišić (2012) illustrated that income gaps decreased within EU (25) between 1993 and 2010, the process being interrupted by the economic and financial crisis, which negatively influenced convergence in 2009. In contrast, the analysis identified opposite trends between New and Old Members: while in the former group, the income convergence was negatively influenced by the crisis, in the latter, the divergences of the composing countries continued to decrease.

Data and Methodology
The empirically studies aiming the topic of economic growth have been developed in the 20 th century, initially by the neoclassical growth model exponents (Ramsey, 1928;Solow, 1956). The debate between the neoclassical and endogenous growth model exponents was accompanied by quantitative studies aiming to demonstrate the role of production factors and technological progress. In order to examine convergence in the European Union, we have employed β-and σ-convergence, two instruments that were popularized by Barro and Sala-i-Martin (1992). The concept of β-convergence aims a potentially negative relationship between the initial level of income and the subsequent growth rates. In the economic growth literature, researchers have developed two frameworks for the study of β-convergence: absolute and conditional. Duro (2012) noted that the exponents of the neoclassical model of economic growth have popularized the concept of absolute convergence, which refers to the process in which less developed economies have higher growth rates than rich ones. In contrast, conditional convergence assumes that the growth rate will be determined by the particular conditions of each economy and the speed of convergence will depend on the distance of each economy from its own equilibrium. According to Barro and Sala-i-Martin (1992), β-convergence may be accompanied by σ-convergence if the income gaps between economies decrease over time.
We have initially studied absolute convergence based on cross-sectional regressions taking as dependent variable the average GDP per capita growth rate between 1995 and 2019 and as explanatory variable the initial level of income. In the second part of our paper, we have examined conditional convergence by expanding the equation and including economic and social variables in order to control the structural differences between economies. In this respect, we have constructed two models, which were estimated on panel regressions for the European Union and the two subgroups. We have initially selected five explanatory variables aiming the economic frameworkthe level of investments, the soundness of the public finance and the trade openness. Then, the equation was expanded with variables aiming the demography and the labor market, which might explain the growth rate differentials between countries. The dependent variable was the difference of logarithms of the GDP per capita. Data included in our research was Available at: Eurostat and World Bank.
In order to study σ-and (absolute) β-convergence, we have taken into consideration the (log) GDP per capita for all the Member States, as provided by Eurostat. The conditional β-convergence included, besides the log of GDP per capita, the following explanatory variables, defined in table 1: In order to test (absolute) β-convergence, we have employed a simple cross-sectional regression, where the independent variable is the log of initial GDP per capita (1995) and the dependent variable the average growth rate between 1995 and 2019: The speed of convergence was computed as follows: The conditional convergence was studied based on panel regression. In this respect, we have initially included as explanatory variables the lagged value of the GDP per capita, the gross fixed capital formation (% of GDP), the government final consumption expenditure (% of GDP), the government debt and deficit (% of GDP) and the volume of trade (% of GDP): As follows, we have expanded the equation 3, by adding other explanatory variables that are representative for the labor market (real labor productivity per person, labor force participation rate, unemployment) and demography (population growth rate) With the purpose to study if the income gaps between the 28 Member States diminish over time, we have computed σ-convergence taking into consideration the coefficient of variation of the data sets: Table 2 illustrates the statistical descriptions of the variables included in our study for European Union (28) and the two subgroups (New and Old Member States). As reflected by the average values of the variables under examination, there still persist significant divergences between the New and the Old Members. Moreover, the minimum and the maximum values suggest that the comprising countries do not have homogenous performances. Based on the values of GDP per capita, we expect to find different convergence speeds in the two subgroups. In the second part of our study, the other explanatory variables will complete the analysis of convergence patterns. In this respect, we expect that the gross fixed capital formation, the level of deficit, debt, trade, real labor productivity and labor force participation to positively influence the dependent variables. In contrast, factors such as government consumption, population growth and unemployment might have negative impact on convergence both at aggregate and subgroup level. Figure 1 illustrates the results of the absolute β-convergence, computed based on equation 1. The negative slope of the trend line confirms the negative relationship between the initial GDP per capita and the subsequent growth rates. Consequently, the initially poorer Members experienced higher GDP growth rates between 1995 and 2019than the developed countries. Particularly, the Central and Eastern European countries, which are mainly grouped in the upper part of the figure, have been catching-up, experiencing average growth rates above Community's average. The highest growth rates were experienced by the three Baltic Countries exceeding 4% per year. In the European Union group (15), the highest GDP per capita growth rates were recorded by Ireland (4%) and Austria (3.7%), while the lowest by Italy (0.3%). Our analysis suggests that the European countries tend to form two different clubs, based on income. The New countries from Central and Eastern Europe are clustered in the upper part of the figure, recording GDP growth rates above 2%, while the majority of the Old Members, with the exception of Ireland and Austria have experienced modest economic performances, below 2%, being grouped in the other extremity of the figure. Table 3 presents the regression results of absolute β-convergence, applied for the European Union (28), the New Member States (13) and the Old Member States (15). As shown by the value R-squared, the initial level of income explains in a large proportion the annual growth rates for both groups. Moreover, the negative sign of the βcoefficient confirms the neoclassical growth model assumptions, as the poorer Member increased faster than the developed ones. Based in the equation 2, we have computed the convergence speed for European Union (28), finding evidence in favor of the "2% rule". According to our calculations, the convergence speed between 1995 and 2019 was 2% in the European Union, which is in line with the previous studies (Barro and Sala-i-Martin, 1992; Stanišić, 2012; Dobrinsky, 2013; Rapacki and Próchniak, 2019). As far as the New Member States are concerned, the convergence speed, as reflected by the β coefficient was 3% per year. Similarly, Matkowski and Próchniak (2007), Rapacki and Próchniak (2009) and Stoica et al. (2019) identified higher speed of convergence in the Central and Eastern European group than the Community's average, reaching on average 3%. However, we rejected the absolute convergence for the Old Member States group, as the value of coefficients is not statistically significant. Moreover, the value of R-squared was too low to confirm a relationship between the initial level of income and the subsequent growth rates. Similarly, Stanišić (2012) found evidence in favor or absolute convergence at aggregate level, but rejected the hypothesis for the subgroup analysis.

Results
In order to study conditional convergence, we have applied panel regressions based on equation 3 for European Union (28) and the two subgroups of country. The negative sign of α (log of GDP per capita) illustrates the inverse relationship between the initial level of income and the subsequent growth rates. Moreover, the value of coefficient is higher in the conditional framework compared to the absolute one, which confirm the importance of economic and social factors. The results of the panel regressions illustrate the positive influence of the investment in fixed assets, as reflected by the coefficient of general gross fixed capital formation, of the public deficit and trade openness. In contrast, the negative sign of the general government final consumption expenditure emphasize the need to avoid excessive public spending. The value of R-squared suggests that the included variables explain in a proportion of almost 50% the variation of the GDP per capita. The results are presented in table 4: Table 4 illustrates the results of the panel regressions employed based on equation 4, which includes both economic and social variables. First of all, the α1 coefficient is also negative and statistically significant (p-value<1%) both at aggregate and subgroup level, confirming the neoclassical growth model assumptions. However, the coefficient is significant lower in the Old Member States group compared to the New Members cluster. The model suggests that factors such as the investment in fixed assets, the openness to trade, the real labor productivity and the labor force participation have a positive influence both at aggregate and subgroup level. The value of R-squared illustrates that the independent variables explain in a large proportion the variation of the GDP per capita between 1995 and 2019, especially in the New Member States group. The two equations confirm the role of the investment in fixed assets, as reflected by the positive and significant value of the gross fixed capital formation and of the trade openness in enhancing economic growth within the European Union. The government deficit had a positive influence on convergence, while general government debt and public consumption hampered the economic growth rates. The second equation illustrate that social determinants have also a strong impact on economic growth, factors such as real labor productivity and labor force participation exerting a positive influence on the convergence process. The results of our research are in line with the previous studies that confirmed the benefic influence of investments and trade (Rapacki and Próchniak, 2009)  In order to study if β-convergence was accompanied by a decrease of income gaps between countries, we have calculated the values of σ-converge for the European Union and two subgroups. At aggregate level, the income disparities decreased during the 25-year period with23%. It seems that the economic and financial crisis obstructed the process of convergence, as no significant improvements took place in the following years. The analysis of the evolution that occurred at subgroup level leads us to paradox conclusions. In the New Member States group, the income gaps decreased with almost 60%, which suggest that the composing countries becoming more and more homogenous in terms of income. The impact of the economic and financial crisis seemed to be on a short-term, as the divergences slightly increased between 2008 and 2010. In contrast, the income disparities between the Old Members almost doubled between 1995 and 2019. As shown above, the income disparities between New and Old Members have increased, mainly starting with 2005. Consequently, we reject the σ-convergence hypothesis for the Old Member States group.

Conclusion
The aim of this paper was to study income convergence in the European Union between 1995 and 2019 and to conduct a comparative analysis between the performances of the Old and New Member States. In this respect, we have tried to respond to the question if income convergence is an achievable goal in an enlarged European Union, by examining absolute and conditional β-and σ-convergence. By applying cross-sectional regressions, we have identified an aggregate convergence speed reaching 2% under the absolute framework. Consequently, we have found evidences in favor of the neoclassical growth model assumptions, as the initially poorer countries from Central and Eastern Europe experienced higher GDP growth rates between 1995 and 2019. However, the subgroup analysis led us to different results. While in the New Members group, the catching-up speed ranged reached 2.7%, no robust evidence in favor of absolute convergence was identified in the Old Member States. In the second part of our paper, we have examined conditional convergence, by including in the regression equation variables aiming the level of investment, the soundness of the public finance, the labor market performances and the demographic trends. Our study confirms the positive influence in the growth process of the gross fixed capital formation, government deficit, trade openness, real labor productivity and labor force participation. In contrast, general government final consumption expenditure, debt, population growth and unemployment had a negative influence of the income per capita growth rates. Consequently, our study emphasizes the need for the European decision makers to rethink the growth model based on over-indebtedness and excessive public spending. The vulnerabilities of this model were brought to the forefront by the economic and financial crisis and its negative consequences are still persistent, mainly among the Southern European Members that find increasingly difficult to maintain economic growth. In contrast, the European Union should focus on promoting trade liberalization, also adopting measures that encourage public and private investments. Moreover, the results of our study suggest the key-role of the labor productivity and labor force participation. Real labor productivity had a positive and statistically significant influence both at aggregate and subgroup level, being one of the main key-drivers of economic growth between 1995 and 2019. One of the vulnerability of the study derives from the limited number of explanatory variables included in the study. Taking into consideration the complexity of the convergence process, our study shows just a small part of the entire picture. Consequently, we propose to expand the present research by incorporating other determinants that might explain the convergence process in the European Union.