Speaking at a fringe event on youth unemployment at the Labour party conference, James Reed, chairman of Reed, said the move would incentivise businesses to employ more young people.
"Reducing employers national insurance contributions would make it cheaper to hire young people whilst they are still developing their skills," he said.
The idea was backed by Wes Streeting, president of the National Union of Students, who said there is a strong case for taking under-25s out of national insurance contributions completely.
"Employers need a much greater degree of incentivisation," he said.
Streeting also called on the government to urgently bring forward plans to raise the age of participation to 18.
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