Making The Case Ml

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  • 1. ILO/GTZ/WHO/World Bank, Torino, October 2008 Making the case for investing in youth
  • 2. Your tasks
    • What do you need to do?
      • Convince the Finance Minister to invest in programs that benefit youth.
    • How can you do it?
      • Think from the perspective of the Finance Minister.
      • Use her language to make your point.
      • Base your argument on evidence .
  • 3. The Finance Minister
    • What does she care about?
      • Economic growth
      • Jobs
      • Government balances
      • External balances
      • Politics
      •  The entire economy, not just youth.
  • 4. The Finance Minister
    • What constraints and incentives does she face?
      • The short run – election cycles may discourage long-term human capital investments
      • A wide variety of interest groups – all of whom compete for limited resources
      • Political survival – she is sensitive to demands from her bosses and from the people
      • Fiscal space – limits how much she is able to spend
  • 5. The fundamental question:
    • How does your proposal achieve her broader objectives (e.g. jobs, growth) while satisfying her constraints (e.g. short horizon, political economy)?
  • 6. Three basic principles
    • Opportunity costs
      • Not investing is costly
      • Higher returns than to other investments
    • Financial and fiscal responsibility
      • Reallocating resources to things that work
    • Political economy
      • Policymakers are concerned about large numbers of unemployed, disaffected youth.
  • 7. Opportunity costs
    • Resources are fixed – otherwise we’d spend money on everything.
    • We have to set priorities – some things we fund, others we don’t.
    • We want to invest in things that yield the greatest payoff.
    • Must understand costs and benefits .
  • 8. Endogenous opportunities
    • Positive externalities – your investments may provide benefits to other people and in other sectors.
    • Complementarity – investments now enhance the returns to future investments.
    • Dynamic “fiscal space” – what you do this year changes future opportunities.
  • 9. That’s fine, but why youth?
    • Demographic window of opportunity
    • New environment, new challenges
      • Global integration
      • Changing labor demands
      • HIV/AIDS
    • Youth is when adult habits are established.
  • 10. The demographic window Under-5 mortality rate per 1000 live births Source: World Bank
  • 11. The demographic window
  • 12. The demographic window Source: WDR
  • 13. Not investing can be costly Change in GDP growth due to early school leaving Source: World Bank 2007
  • 14. Not investing can be costly HIV prevalence rate (%) in young (15-24) pregnant women Source: UNAIDS
  • 15. Partly because youth don’t have the right information Percent of young people who are aware of multiple ways to prevent HIV/AIDS Source: DHS
  • 16. Partly because youth don’t have the right information Percent of young women, 15-24, who can read a simple sentence or know condoms can prevent HIV/AIDS after six years of primary school
    • Inadequate preparation for adolescence
    • improve quality of basic education
    • Relevance of education for jobs
    • curriculum reform, flexibility in school systems
    Source: DHS
  • 17. Information matters
    • Measured = actual earnings based on worker surveys
    • Perceived = earnings perceived by 8 th grade boys if they finish primary or secondary school
    • Measured returns significantly exceed perceived returns
    • Program provided information campaigns in AND outside schools
    Source: Jensen (2006) Perceived and actual benefits from schooling in the Dominican Republic DR pesos per week
  • 18. to facilitate entry to work
    • Promote growth that leads to greater youth employment
    • Reform institutions that inhibit job creation for and mobility of unskilled youth
      • Excessively high minimum wages or employment protection
      • Opening up opportunities to migrate
    Source: WDR
  • 19. Adult outcomes are a function of early choices Annual cancer deaths, males, United States Source: WDR NB: smoking peaked in 1945
  • 20. And in developing countries? Smoking prevalence among youth Source: WDR
  • 21. Obesity and related diseases Girls more likely to be overweight than underweight Source: WDR
  • 22.
    • to close ineffective programs
      • “ boot camps” for young offenders, paying teachers for test scores, migration restrictions
    • to promote effective programs
      • public-private partnerships, community governance, vouchers for services
    • to test potentially effective programs
      • wage subsidies, apprenticeship programs, entrepreneurship training, “life skills” training, “youth-friendly” services
    Finally, use evidence
  • 23. Betcherman’s youth labour review (14 of 289) WDR review of youth HIV evaluations (6 of 300+) And learn from experience