Development Dialogue: Improving Youth Employment : Challenge Profile

With some 75 million young people in the developing world unemployed and hundreds of millions more underemployed, youth employment is one of this century’s most pressing problems. Every year, 20 million young people enter the labor force in Africa and Asia alone. In the Middle East and North Africa, 80 percent of young workers work in the informal sector. One in four young people globally cannot find work for more than US$1.25 a day. Yet global growth and poverty reduction over the next 15 years will be driven by today’s youth. This has obvious economic and social consequences, and societies—and governments—are motivated to find new ways to create productive employment and promote economic growth. So are private sector actors, since for them, young people will be today’s workforce and tomorrow’s customers.

The youth employment challenge, however, is not just a manifestation of the broader employment challenge faced by the world today. Youth unemployment rates are two to three times higher than those of adults. To just pick some illustrative numbers from the World Bank databank and recent reports—in South Africa, the 2012 youth unemployment rate was 52 percent; the comparable adult unemployment rate was 25 percent; in Armenia, the comparable numbers were 38 and 19 percent; in Lebanon, 23 and 9 percent; in India, 10 and 3.5 percent. Even in Germany, comparable numbers were around 8 percent for youth and 5.4 percent for adults. Young people are also much more likely to be either out of the labor force, or “NEET” (not in employment, education or training). And obviously, the unemployment rate paints a very incomplete picture, especially for poorer countries, where most people have to work in some way to survive. Wage jobs (formal and informal) are just around one-eighth of all employment in Sub-Saharan Africa.  Even there, only around one-fifth of African teenagers in wage employment have a contract; but around 60 percent of 30-year-olds do.

This is the challenge. Young people are at higher risk of unemployment, underemployment, or insecure low paying jobs. So interventions are urgently needed. These interventions clearly have to include broader “demand-side” measures – the macroeconomic and private sector activities that economic growth boost the demand for all labor. But these measures, while necessary, are unlikely to be enough – they will create more jobs, but will they always create more opportunities for youth, especially the most vulnerable young people?

Research shows that for many youth, what is needed are skills to make them more employable in the labor market. This goes beyond just education—beyond literacy and numeracy (though these are essential) and just years of formal education. Today’s job markets increasingly demand specific job skills, higher level cognitive skills (problem solving, critical thinking) and “soft” skills (teamwork, emotional maturity, etc.). For would-be entrepreneurs, the list of needs is even more demanding, including resilience (the ability to persist after failure), conscientiousness and grit.
Though we are beginning to understand what may be needed, we don’t yet have knowledge of good practice to impart these skills or the broader set of conditions to turn the corner into successful solutions. Among what is lacking are the rigorous program evaluations needed in order to build and disseminate evidence on youth employment outcomes and proven methods to improve them. 

So join us to discuss "what works," and what’s needed, to increase youth employability. Discuss what packages of interventions, public and private, are needed to make a dent in this issue. Let’s break down the elements of a successful skills development strategy and share examples of policies across sectors—and across countries and contexts. We look forward to discovering and discussing global innovations and new initiatives enabling youth to improve their own economic livelihoods.