Australia entered the COVID-19 pandemic with a youth (15 to 24-year-old) unemployment rate of 11.6% in December 2019, three times higher than the 25 to 64-year-old unemployment rate of 3.6%. The strategies taken by governments to minimise the spread of COVID-19 have had widespread economic impacts. By July 2020, youth unemployment had risen to 15.8%. Youth underemployment rose by 11.1% between December 2019 and May 2020. By examining responses to past economic downturns and recessions, both in Australia and internationally, this paper discusses the role of vocational education and training (VET) in mitigating the effects of economic downturns on young people and assisting them to move into employment. Vocational pathways in school, quality career guidance and work-based training are found to be critical to youth employability, especially for disadvantaged young people. VET qualifications with a work-based training component have been shown to protect youth from the scarring effects of unemployment but can be more effective when their training is linked to lasting employment, with the opportunity to progress.