Improving quality and quantity of jobs for youth: A balanced policy approach Gianni Rosas Head of ILO’s Youth Employment Programme Youth Employment Programme
This presentation • Characteristics of youth labour markets • Drivers of youth employment outcomes • A balanced youth employment policy framework • Concluding remarks Youth Employment Programme
Youth employment is bound to overall employment…. Youth and adult unemployment rates 1990 - 2010 Source: Matsumoto, Hengge and Islam, 2012 Youth Employment Programme
…but has own specific dimensions Before and after the crisis: Percentage point changes in youth and adult unemployment rates Source: Based on ILO KILM database Youth Employment Programme
Drivers of youth employment outcomes Long-term factors affecting youth labour markets include: • Size of the youth cohort • Individual characteristics (e.g. age, gender) • Education and training outcomes • labour market institutions • Level of aggregate demand and employment intensity of growth Youth Employment Programme
Youth employment and the supply side (1) • Young people: the best educated generation ever • The higher the education and training, the higher the youth employment outcomes (see graph) • Addressing skills mismatches and lack of work experience alone unlikely to improve youth labour market outcomes • Supply-side measures take the lion share of youth employment strategies and labour market policies Youth Employment Programme
Youth employment and the supply side (2) ! Youth unemployment Youth employment ! 50 80 Youth unemployment rate (%) Youth employment-to-population ratio (%) 40 60 30 40 20 20 10 0 0 6 7 8 9 10 11 12 13 14 6 7 8 9 10 11 12 13 14 Mean years of schooling (age 20-24) ! Mean years of schooling (age 20-24) ! ! Source: Matsumoto, Hengge and Islam, 2012 Youth Employment Programme
Youth employment and labour market institutions • Reforms of provisions concerning recruitment and dismissal (EPL) have not improved long term youth employment outcomes • Segmentation based on differing levels of protection (temporary vs. permanent) for EPL reforms at the margin • Inconclusive evidence of impact of minimum wage on youth employment • In some countries, rebates in non-wage labour costs improved youth employment outcomes when labour costs too high Youth Employment Programme
Youth employment and the demand side (1) • Lack of labour demand is a binding constraint to youth employment • Pace, volatility and pattern of growth play a significant role in explaining youth employment outcomes • Private fixed capital formation can increase youth employment outcomes • Public investment in infrastructure and social protection can multiply employment opportunities Youth Employment Programme
Youth employment and the demand side (2) • Integrated policies with twin objective of growth and job creation • Counter-cyclical measures to reduce volatility and sustain jobs • Measures to loosen constraint to private sector growth (e.g. finance and infrastructure) • Youth-friendly fiscal policies, particularly to support targeted demand-side interventions Youth Employment Programme
A balanced policy framework to promote youth employment Education and training to Pro-employment macro- enhance employability and economic policies to increase facilitate school to work investment, productive transition transformation and growth Entrepreneurship as Targeted labour market career options policies to improve labour Policy Areas market integration of young people Rights @ work and equal treatment Youth Employment Programme 11
Concluding remarks • Integrated strategies for growth and job creation to ensure long-term, sustained and concerted action on youth employment • A balanced approach to address demand- and supply-side factors, as well as quantity and quality of youth employment • Youth-friendly fiscal policies to implement activation policies that combine both active and passive labour market policies Youth Employment Programme
Questions Youth Employment Programme
For more information 4, route des Morillons CH – 1211 Geneva 22 Tel. : + 41 22 799 70 19 Fax: + 41 22 799 75 62 Email: youth@ilo.org Web: www.ilo.org/yep Follow us on twitter: @ILOyouth Youth Employment Programme
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