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PARIS (Reuters) - When she embarked on a university degree at 18, Caroline never imagined she would still be living like a student a decade later, unable to land a permanent job and stuck in a cramped spare room in her father's flat.
An engaging 27-year-old with a literature degree and a masters in communications, she is one of hundreds of thousands of young French graduates stuck in a cycle of short-term job contracts and bouts of unemployment that is stunting their career potential.
Twenty-somethings are bearing the brunt of a stagnant economy that has sent overall unemployment lurching towards 11 percent and could set a record for jobless claims when March data land on Thursday.
"My dad can't understand why I don't have a proper job. He says: you have qualifications and experience, what's the problem?" said Caroline, preferring not to give her full name, as she toured the stands at a Paris jobs fair.
At 24.4 percent, youth unemployment in the euro zone's second biggest economy is inching towards the afflicted league of Spain, Italy and Greece and away from Germany where only 8 percent of 15 to 24-year-olds are out of work.
It exposes the failings of an "ins" and "outs" system where companies are loath to add to their permanent staff, who enjoy strong job protection under French labor laws. Instead employers use temporary contracts to pick up and drop young workers as business fluctuates.
In a two-year surge in unemployment, permanent job offers have shrunk and short-term hiring has reached a 13-year high.
Four out of five jobs offered today are on contracts lasting a few months or weeks, and most go to young people.
Among workers under 30, a third are on temporary contracts versus 13 percent for the overall workforce. One in four recent graduates is in a short-term post, up from one in five in 2008, before the global financial crisis hit.
Caroline is a typical case. Since graduating in 2010, she has been snapped up for various short-term jobs as a researcher for a government ministry, a Paris museum and a national TV station. None could give her a permanent post.
Back at square one and struggling to keep up her morale, she spends her evenings cooped up in the room she rents from her father, eating her dinner from a tray as she surfs online ads.
"I'm sick of living with my dad, I feel like a child. At my age I should have a proper job, a home and a family," she said. "I feel like we're a sacrificed generation. When we find work, we're often the best qualified and we work the hardest but we always get pushed out first when there's no hiring budget."
The jobs crisis has become President Francois Hollande's biggest test and made him modern France's most unpopular leader.
Struggling to meet a campaign promise to end the gloom, he has created 230,000 state-aided youth jobs and pays subsidies to firms that hire youngsters to work alongside older staff.
He has also achieved a labor reform, to be voted into law this week, aimed at reducing the disincentives to offering jobs on permanent contracts by making them less rigid.
While unemployed graduates like Caroline hope the law will shift some of the unproductive workers they view as hogging jobs, economists say it will not change things overnight.
"The path to a permanent job is particularly long in France as youths are used to adjust to the business cycle," said Herve Boulhol at the OECD think tank in Paris.
Jobseekers in their late twenties complain the youth schemes stop at the age of 25. "At 28, I am no longer classed as a youth so I can't apply. I am in the invisible category," one graduate, seeking a permanent job since 2008, wrote on an online forum.
As the volume of online rants betrays the frustration of youths unable to start adult lives, French media has coined the term "generation galere" ("generation slog") to describe them.
The generational split is ever more visible as baby-boomers trickle into cosy retirements, while 2 million people aged from 15 to 29 are in neither education nor jobs.
Government data shows hiring on long-term contracts has fallen steadily since the end of 2011 and was down 13 percent year-on-year in the first quarter. Short-term hiring has soared, and the use of interns has jumped 50 percent in four years.
A March OECD report shows unskilled youths, often competing with seasoned workers for the same minimum-wage jobs, struggle to land work and graduates earn less than 20 years ago.
Boulhol notes that ingrained failings, including a high rate of school dropouts and a mis-match between graduates' skills and employers' requirements, have kept youth unemployment above 16 percent in France for three decades.
"It amounts to economic wastage," he said. "Companies are not investing enough in young employees who in turn have limited incentives to acquire skills specific to the company."
Additional reporting by Jean-Baptiste Vey; editing by David Stamp