All economies are faced with the challenge of creating sustainable jobs for young men and women entering the labour market. Many young people remain poor despite having jobs. Is it possible for developing economies to break the cycle of insufficient education, low productivity employment and poverty transmitted from one generation to the next?

A report from the International Labour Office (ILO) analyses labour market conditions for young people and identifies barriers to realising global commitments to provide young people with full and productive employment.

Youth unemployment and situations in which young people give up on the job search or are underemployed damage economies, families and individuals. Lack of decent work at an early age can permanently compromise a person’s future employment prospects and lead to unsuitable labour behaviour patterns that last a lifetime.

There is a proven link between youth unemployment and social exclusion. Societies with inactive young people may lose their investment in education, receive fewer contributions to social security systems and have to increase spending on remedial services, policing and drug use prevention.

Many labour market indicators cannot be applied to youth because most countries do not provide data disaggregated by age. It is clear, however, that:

• Around one in three young people in the world are either seeking but unable to find work, have given up looking or are working but still trapped in poverty.
• The proportion of youth in employment globally fell from 51.6 to 47.3 percent between 1995 and 2005.
• Youth are three times more likely than adults to be unemployed.
• 300 million working young people earn under US$2 per day.
• Working poverty among sub-Saharan African youth is still rising and remains a big problem in South Asia, where almost 40 percent of young people work but remain poor.

The ILO estimates that halving the rate of youth unemployment could have added US$2.2 trillion to US$3.5 trillion to the world economy in 2003. This represents 4.4 to 7 percent of the 2003 value of global Gross Domestic Product (GDP). The case for investing in youth, although reiterated several times on paper and speeches, is rarely put into practice. Governments, employers’ organisations, trade unions, international development partners and civil society bodies must tap into this vast productive potential. Investment in job creation and increased employability for young men and women could provide massive returns.

Policymakers need to:

• realise that in developing countries hardly any young people are able to search and choose the best job
• pinpoint the specific challenges that young men and women face entering the world of work so that context-specific policies can be developed
• ensure policies and programmes are based on accurate data and the actual needs of young people
• realise that employment creation in rural areas can have a higher impact on poverty reduction as well as reducing the rate of rural-urban migration among young people
• promote free and universal education in poor countries where the opportunity costs to young people and their families of staying in school are prohibitively high.

Source(s):
‘Global Employment Trends for Youth’, Report from the International Labour Office, by Sara Elder and Dorothea Schmidt, 2006 (PDF) Full document.

Funded by: International Labour Office

id21 Research Highlight: 12 June 2007

Further Information:
Sara Elder and Dorothea Schmidt
Employment and Labour Market Analysis Department
International Labour Office
4, route des morillons
CH-1211 Geneva 22
Switzerland

Tel: + 41 (0)22 7996463
Fax: + 41 (0)22 7997678
Contact the contributor: elder@ilo.org, schmidt@ilo.org,

International Labour Office

Other related links:
'A labour market policy for poverty reduction in sub-Saharan Africa'

'Educating young people in emergencies, Insights Education#4, 2005'

'Vocational educational and training institutes in Nigeria: unable to meet the needs of employers?'

'Where has all the education gone? Tracing the employment outcomes of African school-leavers and graduates'

'Does investing in education reduce poverty? Evidence from Ghana, Uganda and South Africa'