By Niall O’Higgins, Senior Research Specialist, Youth Employment Programme, International Labour Organisation (ILO)
For young people, successful entry into the world of work – that is, successful transition from education to employment – means more than simply finding a job. Successful transition occurs only when young people find decent work. What is actually meant by this has been the subject of much debate for a number of years; but its essence is encapsulated in the ILO’s notion of freely chosen and productive employment.
While it can be hard to define precisely what ‘decent work’ looks like, it is fairly clear what it is not. It is not informal employment. It is not work that provides insufficient income to meet basic needs. It does not involve excessive working time or any form of compulsion. Typically, it does involve some degree of job security, protection from arbitrary dismissal, access to social protection, such as health insurance and pension schemes, and freedom of association.
Globally, youth unemployment has declined slightly from its 2009 peak of 74.6 million. The latest ILO estimates and projections suggest that it fell to 66.6 million in 2017 and is expected to decline further to 65.9 million during 2018. While the youth unemployment rate varies regionally, globally it is projected to stand at 12.9% in 2018.
At the same time, the ILO estimates that almost 145 million young people have jobs but remain in extreme or moderate poverty earning less than USD 3.10 per day. Moreover, over three-quarters of working youth are in informal employment. The ILO’s Global employment trends for youth 2017 points out that over the past decade the involvement of young people in vulnerable employment (comprising the self-employed and contributing family workers) has decreased while wage employment expanded. However, the fact that this growth in wage work is primarily accounted for by increases in informal and in temporary formal jobs considerably moderates this positive message.
To be sure, creating enough jobs is necessary but even more pressing is the need to make sure such employment opportunities are decent ones. Although youth cohorts and labour forces are stable or declining in other regions, in Africa, where informal employment and working poverty are most prevalent, the youth labour force is rapidly expanding and is expected to do so for the foreseeable future.
So, what can be done to meet the youth employment challenge?
First and foremost, investing in inclusive and sustained growth is required to boost formal job creation and provide more and better opportunities for all. Equipping young people with appropriate education and skills is also crucial to support, but not substitute for, large-scale job creation measures based on coherent national development strategies. Such strategies should promote the formalisation of employment, building on successful measures seen mainly in Latin America, but also in some Asian and African countries. One promising approach is early intervention that attempts to capture young people before they embark upon a ‘career’ in the informal economy – which is a path hard to interrupt. An example of this approach is Colombia’s 40 mil primeros empleos programme, which supports the first employment of 40 000 young people in the formal sector. The measure combines work experience with quality training for young people in large enterprises.
The specific strategy to adopt will depend on regional, national and sub-national contexts. For example, the high levels of unemployment in the Middle East and Northern Africa, including amongst highly educated young people, emphasises the need to create formal job opportunities in the private sector, particularly for young women, while improving job quality and incomes for the working poor. In sub-Saharan Africa, the emphasis must be on creating opportunities beyond low productivity subsistence agriculture both by raising agricultural productivity and by expanding opportunities outside the sector. Between 2005 and 2015, the youth labour force in Africa grew by 22.8% while youth employment in non-agricultural jobs increased by only 5.6%.
Active labour market programmes, particularly programmes combining work experience and training, accompanied by or integrated into employment formalisation strategies are also key. Evidence continues to grow on what works, where and why. It is clear that appropriate targeting of those most in need of support, conditionalities on firms and appropriate combinations of work experience with training all play important roles.
And what if we don’t act?
What is absolutely clear is that inaction will be very costly, both for young people and for society. Informal workers on average are paid much less than formal workers and have no access to basic employment rights and social support. At the aggregate level, informality and the poverty that often accompanies it are a direct consequence of a lack of economic development. At the same time, these same factors slow economic growth and impede improvements in the livelihoods of young people and their families. Moreover, for the individual, informality begets informality. This is true particularly amongst the less educated; once they enter into low quality informal jobs, they are condemned to stay there. For young people, entering informal work typically means a lifetime commitment – or sentence. In contrast, among the more highly educated, informality rates fall rapidly with age.
Ultimately, the failure to act might impact lives literally. Evidence from high-income countries show the deleterious long-term health consequences of early career job loss and poor-quality unstable employment. Such long-run, individual-level evidence is lacking in developing and emerging countries. However, is it not reasonable to suppose that the lack of decent work opportunities – often accompanied by the absence of adequate social safety nets – contribute to the relatively high mortality rates and shorter life expectancies (see Preston Curve) evident in lower income countries?
In addition to the embedded links, the blog also drew information from:
ILO. Forthcoming. Women and Men in the Informal Economy: A Statistical Picture, 3rd edition (Geneva).