One million labor market entrants each month in sub-Saharan Africa and one million in India
Youth make up 25 percent of the working age population worldwide, but nearly half of the unemployed. Across all markets the youth unemployment rate is two to three times higher than the adult unemployment rate, regardless of the level of aggregate unemployment. Unemployment among youth in the Middle East and North Africa is around 25 percent. In most developing countries, the youth unemployment rate is higher in urban areas than in rural areas, and is generally higher for young women than for young men. In general, unemployment is higher among those with less education. Except in parts of this region. In Tunisia, among 20- to 24-year-olds, unemployment is more than 40 percent for youth with higher education compared to about 25 percent for those with primary education.BUT HIGHER UNEMPLOYMENT IS NOT BY ITSELF A REASON TO INTERVENE IN THE LABOR MARKET. YOUNG PEOPLE ALSO LACK EXPERIENCE, CONTACTS, AND OTHER THINGS THAT WOULD ENHANCE EMPLOYABILITY.
What matters is not so much “unemployment,” but vulnerable employment.
Multi-Donor Trust Fund on Labor Markets, Job Creation and Economic Growth: Youth Employment
Towards Youth Employment SolutionsImproving Knowledge, Collaboration, Scale and ImpactArup BanerjiParis, April 30 2013
Renewed World Bank Group GoalsEnd extreme poverty: the percentage of peopleliving with less than US$ 1.25 a day to fall to 3percent by 2030Promote shared prosperity: foster income growth ofthe bottom 40 percent of the population in everycountrySustainability, an overarching themeAchieving these goals require promotingenvironmental, social, and fiscal sustainability
The poverty target of 3% by 2030* Preliminary051015202530354045501980198419881992199620002004200820122016202020242028
GrowthJobCreationPovertyReductionOpportunitiesFor AllTransfersTaxesPathways for shared prosperityHumanCapital, Infrastructure
Poverty Reduction Occurs Mostlythrough Jobs0.4 0.4 0.5 0.30.60.42.91.91.0 1.01.40.80.50.90.3 0.60.10.60.2-0.20.4-0.4-0.2-1.00.01.02.03.04.0Peru(2005-2009)Nepal(1996-2003)Ghana(1998-2005)Brazil(2001-2009)Bangladesh(2000-2010)Thailand(2000-2009)AnnualPovertyReduction(percentagepoints)Demographic Change Labor Income Non-Labor Income Other
But the Jobs Have to be Primarily forYoung People050100150200250300MillionsGrowth45%Percentage change, 2010-2025Source: WB calculations from US Census BureauGrowth8%Growth0%Decline23%Decline34%Growth8%Growth3%SS Africa MENA LAC E Europe China India Other AsiaPopulation 15-24, 2025
Yet today, unemployment among youngpeople is higher than among adultsWB WDR 2007
… and under-employment is a greaterissueSource: WB calculations from International Income Distribution Database32.430.946.829.4184.108.40.206.18.27.03.75.99.112.815.3220.127.116.114.048.229.730.334.934.20% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%East Asia & PacificEurope & Central AsiaLatin America & CaribbeanMiddle East & North AfricaSouth AsiaSub-Saharan AfricaEmployed Unemployed Inactive nonstudent Inactive student8.74.511.6416.718.104.22.1683.339.722.214.171.124.126.96.36.199.58388.873.954.653.932.40% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%East Asia & PacificEurope & Central AsiaLatin America & CaribbeanMiddle East & North AfricaSouth AsiaSub-Saharan AfricaSelf-employed Unpaid Employee Employer Paid Employee
There are some promising interventions• We know that some supply-sideinterventions can work, for somepeople:– Jovenes-type skills programs fordisadvantaged youth (Latin America)– Wage subsidies when there are jobsavailable (South Africa)– Various targeted “packaged” programsaimed at specific groups (“gazelle”entrepreneurs, young girls…)• We also know that demand-sideinterventions hold promise:• Links to global value chains(Vietnam)• Growing industries (India, Nigeria)
• what type of supply-side interventions for youth is most effective (jobskills, “life skills,”…)?• can demand for youth employment by private firms be fostered?• how can private firms be induced to hire younger workers?• can the failings of educational systems to provide work skills be cheaplyremedied?• are there good ways to make rural work more productive for youth?• are combinations of interventions targeting youth employment moreeffective than single interventions?• what environments are conducive to successful interventions on youthemployment?• are the “successful” youth programs cost-effective?• will successful programs aimed at a few youth also work at large scale?But there are still unansweredquestions and scanty evidence
• For tackling the huge challenge ahead, there is a need forconcerted effort to seek out, pilot, evaluate and roll-out arange of interventions that:• Directly involve private sector employers and financiers, aswell as public policy policymakers, regulators andeducators, civil society players and young workers• Are proven effective in different contexts, based on rigorousevidence• Are affordable and scalable, and potentially transformativeTowards building improved solutions
The need for a new kind ofpartnership, involving those who haveInvolving those who have:• Involvement as large employersalong the value chain• Implementation experience• Expertise in generating andbrokering knowledge• Policy influence• Connections to youththemselves• Resources to promote evidence-buildingIn order to:Scale UpEvaluateExperiment