The relationship between education and employment in Europe is analyzed with particular emphasis on the trends toward mass education, apparent saturation of the labor market, and a new structure of employment opportunities. The objective of the report is to contribute toward a redefinition of the nature of the education/employment relationship which is more congruent with recent social changes in Europe. The document is presented in six chapters. Chapter I reviews theories and assumptions concerning youth unemployment. Chapter II summarizes national studies of unemployment among youth in The Netherlands, Norway, Sweden, Germany, and the United Kingdom. Chapter III evaluates theories and evidence related to youth unemployment. Chapter IV considers policy measures by which various European governments attempt to cope with youth unemployment. Chapter V surveys and evaluates government policies. The final chapter summarizes the report and offers conclusions. Major conclusions are that programs should be developed to initiate early school leavers to the world of work, work and formal schooling should be combined to form educational and training activities, and more jobs should be created to provide training for early school leavers. (DB)