GLOBAL EMPLOYMENT TRENDS FOR YOUTH 2012

Transcription

1 GLOBAL EMPLOYMENT TRENDS FOR YOUTH May 2012

2 Global Emloyment Trends for Youth 2012 International Labour Office Geneva

3 Coyright International Labour Organization 2012 First ublished 2012 Publications of the International Labour Office enjoy coyright under Protocol 2 of the Universal Coyright Convention. Nevertheless, short excerts from them may be reroduced without authorization, on condition that the source is indicated. For rights of reroduction or translation, alication should be made to ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by [email protected]. The International Labour Office welcomes such alications. Libraries, institutions and other users registered with reroduction rights organizations may make coies in accordance with the licences issued to them for this urose. Visit to find the reroduction rights organization in your country. Global Emloyment Trends: May 2012 / International Labour Office Geneva: ILO, 2012 ISBN (rint) ISBN (web df) International Labour Office emloyment / unemloyment / economic recession / develoed countries / develoing countries ILO Cataloguing in Publication Data The designations emloyed in ILO ublications, which are in conformity with United Nations ractice, and the resentation of material therein do not imly the exression of any oinion whatsoever on the art of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The resonsibility for oinions exressed in signed articles, studies and other contributions rests solely with their authors, and ublication does not constitute an endorsement by the International Labour Office of the oinions exressed in them. Reference to names of firms and commercial roducts and rocesses does not imly their endorsement by the International Labour Office, and any failure to mention a articular firm, commercial roduct or rocess is not a sign of disaroval. ILO ublications and electronic roducts can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new ublications are available free of charge from the above address, or by [email protected] Visit our website: Photocomosed in Switzerland Printed by the International Labour Office, Geneva, Switzerland WEI

4 Contents Acknowledgements Executive summary Introduction Youth unemloyment crisis continues in both develoed and develoing economies Regional imact and the aftermath of the economic crisis Particiation or dro-out? Longer-term consequences of the youth jobs crisis Temorary emloyment and art-time work: Transition or tra? Emloyment rotection legislation and labour market duality Youth in develoing economies Education and the labour market Education as a shield in develoed economies Not only more but better education and training is needed in develoing economies The crisis has brought an increased detachment of youth from the labour market Youth emloyment olicies References Annex 1. World and regional tables Global unemloyment and unemloyment rates, youth (15 24), adult (25+) and total (15+), 2007 to a. Youth unemloyment rates 2000 and , by region (%) b. Change in youth unemloyment and unemloyment rates between 1998 and 2008 and between 2008 and 2011, by region a. Change in male youth unemloyment and unemloyment rates between 1998 and 2008 and between 2008 and 2011, by region b. Change in female youth unemloyment and unemloyment rates between 1998 and 2008 and between 2008 and 2011, by region Gross enrolment ratio in tertiary education, by region, (%) Gender gas in youth labour force articiation rates, by region, 1991, 2001 and Five-year average of youth labour force growth, thousands Unemloyment rates by educational level, selected develoed economies, 2000 and 2010 (%)

5 8. Youth emloyment, overty and NEET rates in selected develoing economies, by sex (%) Annex 2. Note on global and regional rojections Annex 3. Inventory of current country measures to address the youth emloyment crisis Boxes 1. The imact of emloyment rotection legislation on the youth labour market Measuring labour market transitions: ILO s Work4Youth Project Figures 1. Global youth unemloyment and unemloyment rate, Youth unemloyment rate estimates and rojections ( , %) Youth unemloyment rates and adjusted youth unemloyment rates to account for reduced labour force articiation, by sex, world and regions, 2011 (%) Youth labour force articiation rate in France and Sain, (%) Youth labour force articiation rate in Pakistan, (%) Part-time emloyment rates for youth and adults in the Euroean Union, (second quarter, %) a. Change in the incidence of temorary emloyment in total emloyment in the Euroean Union, youth and adults, (second quarter, %) b. Change in the incidence of temorary emloyment in total emloyment in the Euroean Union, youth and adults, (second quarter, %) a. Share of unaid family workers in total emloyment, youth and adults (%) b. Share of own-account workers in total emloyment, youth and adults (%) Changes in unemloyment rates by educational level, selected develoed economies, (ercentage oints) Youth NEET rates in the Euroean Union, , by sex (%) Youth emloyment and overty in selected develoing economies, by sex (%) Average overty rates of NEETs, emloyed and unemloyed youth in selected develoing economies, by sex (%) Global Emloyment Trends for Youth 2012

6 Acknowledgements The Global Emloyment Trends for Youth 2012 reort was reared by Theo Sarreboom from the Emloyment Trends Team, headed by Ekkehard Ernst, with contributions from Sandrine Cazes, Sara Elder and Steven Kasos (ILO) as well as from Isabel Ortiz and Matthew Cummins (UNICEF). The roduction of the reort was suervised by Moazam Mahmood, Director of the Economic and Labour Market Analysis Deartment, and José Manuel Salazar- Xirinachs, Executive Director for Emloyment. Azita Berar-Awad, Director of the Emloyment Policy Deartment, rovided helful comments. Secific mention should be given to Valia Bourmoula for rearing the global and regional estimates on the basis of the Global Emloyment Trends econometric models and for helful research assistance. Derk van Wijk (ILO consultant) assisted in the roduction of country tabulations, Christian Viegelahn reared a review of the literature, and Pinar Hosafci rovided research assistance. The ublication would not have been ossible without the contributions of other members of the ILO s Emloyment Trends Team Philie Blet, Francisco Guerreiro and Alan Wittru. The analysis rovided in the Global Emloyment Trends series is only as good as the available inut data. We take this oortunity to thank all institutions involved in the collection and dissemination of labour market information, including national statistical agencies and the ILO Deartment of Statistics. We encourage additional collection and dissemination of country-level data in order to imrove the analysis of emloyment trends rovided in future udates of this reort. We would like to exress our thanks to colleagues in the ILO Deartment of Communication and Public Information for their continued collaboration and suort in bringing the Global Emloyment Trends to the media s attention worldwide. 5

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8 Executive summary Youth unemloyment crisis continues The economic crisis abrutly ended the gradual decline in global youth unemloyment rates during the eriod Since 2007 the global youth unemloyment rate has started rising again, and the increase between 2008 and the height of the economic crisis in 2009 effectively wied out much of the gains made in revious years. Globally, the youth unemloyment rate has remained close to its crisis eak in At 12.6 er cent in 2011 and rojected at 12.7 er cent in 2012, the global youth unemloyment rate remains at least a full ercentage oint above its level in Nearly 75 million youth are unemloyed around the world, an increase of more than 4 million since Medium-term rojections ( ) suggest little imrovement in youth labour markets. By 2016, the youth unemloyment rate is rojected to remain at the same high level. Large increases were exerienced in articular by the Develoed Economies & Euroean Union, Central & South-Eastern Euroe (non-eu) & CIS, Latin America & the Caribbean and South Asia. In the Develoed Economies & Euroean Union, as well as in South Asia, little rogress has been made in rolling back the imact of the global economic crisis. In North Africa, the youth unemloyment rate has increased sharly following the Arab Sring, rising by almost 5 ercentage oints between 2010 and 2011 and adding to an already very high level of youth unemloyment in this region as well as the Middle East. Although (large) differences in regional youth unemloyment rates remain, all regions face major youth emloyment challenges. Even in East Asia, the youth unemloyment rate in 2011 was 2.8 times higher than the adult rate. Aart from the immediate negative economic and social effects of high youth unemloyment, it is imortant to consider its detrimental effects on future emloyability and wages. Economic crisis and youth labour force articiation Discouraged by high youth unemloyment rates, many young eole have given u the job search altogether, or decided to ostone it and continue their stay in the education system. If the unemloyment rate is adjusted for the dro-out induced by the economic crisis, the global youth unemloyment rate for 2011 would rise from 12.6 to 13.6 er cent. The crisis-induced withdrawal from the labour force amounts to 6.4 million young eole worldwide, and is articularly ronounced in the Develoed Economies & Euroean Union. Pressure on young job seekers will mount further when those young eole that have been delaying their entry into the labour market will return to activity, and start searching for work. In contrast, the youth articiation rate in Central & South-Eastern Euroe (non-eu) & CIS is higher than exected on the basis of re-crisis trends, which is likely to be artly overty-driven. Particiation rates of young men and women are not only driven by economic conditions but also by institutional factors such as broader societal values, culture and norms which are articularly imortant in regions with large gender gas such as South Asia, the Middle East and North Africa. Tyically, female articiation rates show a U-shaed attern, with high 7

9 articiation rates at low levels of income er caita that decrease as countries develo before rising again at higher income levels. This makes it difficult to disentangle the effect of the economic crisis on female articiation rates from institutional or cultural factors. Temorary emloyment and art-time work: Transition or tra? Around the world, many youth are traed in low-roductivity, temorary or other tyes of work that fall short of their asirations and that often do not oen oortunities to move to more ermanent, higher-roductivity and better-aid ositions. In develoed economies, youth are increasingly emloyed in non-standard jobs and the transition to decent work continues to be ostoned. The growth of temorary emloyment and art-time work in the ast decade, in articular since the global economic crisis suggests that this work is increasingly taken u because it is the only otion available. For examle, in the Euroean Union youth art-time emloyment as well as youth temorary emloyment has grown faster than adult art-time and temorary emloyment both before and during the economic crisis. The trend towards an increasing incidence of temorary contracts has fuelled the debate over labour market flexibility in general, and labour market duality in articular. Although the evidence on the imact of emloyment rotection legislation (EPL) on aggregate emloyment/unemloyment levels is inconclusive, EPL could affect the osition of articularly vulnerable labour market grous such as young eole. A artial (dual-track) reform strategy of EPL involving labour market reforms only at the margin and for new hires while leaving the emloyment security entitlements of incumbent workers unchanged could have been felt disroortionately by youth. In addition, the trend towards shorter tenure among young workers in many Euroean countries could be due to the combination of easing in the legislation governing dismissal costs and rocedures of regular contracts (and not of temorary contracts) with the weak individual bargaining ower of young eole. Youth in develoing economies face strong structural barriers in their search for decent work. The share of aid emloyment in total emloyment in much of the develoing world is low, and a high share of youth is likely to engage in unaid family work suorting (informal) family businesses or farms. The school-to-work transition may also include unemloyment sells or eriods of temorary or casual emloyment if such oortunities arise while the final station is likely to be own-account work. Demograhic trends are such that the youth labour force continues to grow in recisely those regions where few oortunities for aid work exist and where working overty is widesread, in articular in Sub-Saharan Africa and South Asia. Education and the labour market Education and training are essential for young eole to enter the labour market successfully as they increase their otential roductivity and emloyability. In develoed economies, education also serves as a shield against unemloyment for many youth, and there is a strong link between educational attainment and emloyment outcomes. In articular, individuals with rimary education or less often have the highest unemloyment rates, and fare worse than those with higher levels of education at times of crisis. However, more human caital develoment and higher levels of education do not automatically translate into imroved labour market outcomes and more jobs. In develoing economies, available job oenings are limited by small formal sectors, and youth do not necessarily ossess the right skills to qualify for the existing oenings. Fast structural change in these economies creates skill and geograhical mismatches that ose secial challenges for education and training systems and their resonsiveness to labour market needs. In this resect, roer labour market information is necessary to facilitate both the role of education in meeting current labour demand and in facilitating change. 8 Global Emloyment Trends for Youth 2012

10 Young eole that are neither in emloyment nor in education have become a serious concern for olicy-makers, in articular in develoed economies. This grou, called NEET (not in education, emloyment or training), often constitutes at least 10 er cent of the youth oulation, and disroortionally includes youth with a low level of education in develoed economies. Many countries have introduced olicies to tackle this henomenon, targeting secific subgrous of the NEET such as school dro-outs or unemloyed youth. Youth emloyment olicies As youth unemloyment rates are rojected to remain essentially unchanged in 2012, and most regions face major youth emloyment challenges, youth emloyment olicies warrant the highest riority. Imortant areas for interventions include: y Macroeconomic and growth olicies: where fiscally feasible, it is crucial to maintain or enhance measures that can hel boost emloyment generation and jum-start a sustainable jobs recovery. Youth emloyment is a rising riority in national olicy agendas but often it is not sufficiently translated into scaled u rogrammes, funding is often limited and resources underestimated. y Active labour market olicies and rogrammes: active labour market measures such as develoment of ublic emloyment services, wage and training subsidies or tax cuts can motivate emloyers to hire young eole as well as to counteract the excess suly of young workers in times of crisis. Equally imortant are rogrammes that aim to offset the mismatch of technical skills among youth, such as vocational training rogrammes, re-training of unemloyed or discouraged youth, worklace training schemes, the creation or imrovement of arenticeshi systems, entrereneurshi training rogrammes, soft and life skills training rogrammes for disadvantaged youth. y Better strategies are needed to imrove social rotection for young eole, and to tailor labour market reforms for their secific needs. Decent emloyment is not only about generating any jobs, but also about imroving the quality of jobs. y Social dialogue and artnershis for youth emloyment: the establishment of broad-based artnershis to turn commitment to youth emloyment into reality. Partnershis among governments, emloyers organizations, trade unions and other organizations can be instrumental in determining the most aroriate action to be taken at national and local levels for the romotion of decent work for young eole. y Suorting strong labour market information and analysis systems which rovide the basis to monitor labour markets and design and imlement effective olicies. Executive summary 9

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12 1. Introduction The global youth unemloyment rate has roved sticky, and remained close to its crisis eak. At 12.6 er cent in 2011 and rojected at 12.7 er cent in 2012, the global youth unemloyment rate remains at least a full ercentage oint above its level in Nearly 75 million youth are unemloyed around the world, an increase of more than 4 million since Youth unemloyment and situations in which young eole work under oor conditions incur social as well as economic costs. Youth unemloyment has been shown to be tightly linked to social exclusion, as the inability to find emloyment creates a sense of uselessness and idleness among young eole. The most obvious gains then, in making the most of the roductive otential of youth and ensuring the availability of decent emloyment oortunities for youth, are the social and ersonal gains to young eole themselves. The second clear gain to recaturing the roductive otential of underutilized youth is an economic one. Idle youth are not contributing to the economic welfare of their country. The loss of income among the younger generation translates into a lack of savings as well as a loss of aggregate demand. Many youth who are unable to earn their own income have to be financially suorted by the family. Governments fail to receive contributions to social security systems and are forced to increase sending on remedial services. A lack of decent work, if exerienced at an early age, also threatens a erson s future emloyment rosects and frequently leads to undesirable labour market outcomes over longer eriods. All this is a threat to the growth otential of economies. In order to design aroriate labour market and macroeconomic olicies to romote better labour market outcomes for youth, it is necessary to understand the secific situation of young eole in labour markets. Although this situation is strongly deendent on the overall labour market, youth also face secific barriers as they try to secure decent emloyment. These include the inexerience tra, which means that emloyers refer workers that are exerienced, and youth therefore do not manage to obtain an oortunity to gain exerience. Youth also may be disadvantaged in the sense of having fewer contacts in the world of work. Furthermore, once emloyed, they may still be among the first to be dismissed on the basis of the last-in first-out rincile, as they have the least seniority. But even though young eole might lack exerience they tend to be highly motivated and caable of offering new ideas or insights. They are the drivers of economic develoment in a country, and forgoing this otential is an economic waste. Designing aroriate olicies to suort their transition to stable emloyment should therefore be a country s highest riority. This reort sets out the youth labour market situation around the world. It draws on the overall analysis of labour markets in the Global Emloyment Trends 2012 (ILO, 2012a), and comlements the Director-General s Reort to the 2012 International Labour Conference (ILO, 2012b). Further findings include: 1. Even though some regions have overcome or made rogress in mitigating the imact of the global economic crisis, all regions face major youth emloyment challenges. 2. Youth unemloyment rates continue at dramatic levels in the Develoed Economies & Euroean Union (regionally at 18.0 er cent in 2011) where the actual situation is even worse than suggested by the unemloyment rate due to massive dro-out from the labour 11

13 force. Youth continuing their stay in the education system will ut further ressure on unemloyment rates once they enter the labour market. 3. Many youth in develoed economies are increasingly traed in non-standard and/or unstable emloyment due to both the imact of the economic crisis and labour market reforms. The effects of emloyment rotection legislation reforms have been felt disroortionally by young workers. 4. In contrast to the develoed economies, in Central & South-Eastern Euroe (non-eu) & CIS the crisis has increased articiation of youth in labour markets which is likely to be artly overty-driven. The youth unemloyment rate in this region, at 17.6 er cent in 2011, has declined somewhat since the height of the economic crisis. 5. The Middle East and North Africa continue to exerience excetionally high levels of youth unemloyment (with youth unemloyment rates at 26.5 and 27.9 er cent in 2011, resectively). Together with South Asia, these regions are also characterized by large gender gas in youth labour force articiation. 6. Youth in develoing economies face strong structural barriers in their search for decent work. Young women are articularly disadvantaged with regard to labour market access as reflected in their low articiation rates. 7. In develoed economies, education still serves as a shield against unemloyment for many youth. Therefore, those youth who are neither in education nor in emloyment warrant secial attention. This so-called NEET grou includes the unemloyed as well as discouraged youth who have effectively disconnected from the labour market. The rise of NEET rates during the crisis in many develoed economies is therefore a strong concern. 8. Although education and training is critical in develoing economies as well, more labour market information and analysis is needed to better match the demand and suly of skills in the develoing world. 12 Global Emloyment Trends for Youth 2012

14 2. Youth unemloyment crisis continues in both develoed and develoing economies The economic crisis abrutly ended the gradual decline in global youth unemloyment rates during the eriod In contrast, since 2007 the global youth unemloyment rate has started rising again, accelerating to an unrecedented 0.9 ercentage oints increase between 2008 and the height of the economic crisis in This increase has taken a heavy toll on young eole around the world and effectively wied out much of the gains made in revious years (see figure 1). At 12.6 er cent in 2011, the global youth unemloyment rate remains a full ercentage oint above its level in In 2011, nearly 75 million youth were unemloyed around the world, an increase of more than 4 million since 2007 (see table 1).1 Projections for 2012 show no imrovement, with the global youth unemloyment rate rojected at 12.7 er cent. Mediumterm rojections ( ) also suggest little imrovement in youth labour markets. By 2016, the youth unemloyment rate is rojected to remain at the same high level (see table 2a and figure 2). In comarison to other grous on the labour market, youth face a articularly difficult situation, as is catured by the ratio of youth-to-adult unemloyment rates. Globally, this ratio was 2.8 in 2011 and is rojected at 2.7 in 2012 (see table 1). This means that, in comarison with adults, youth continue to be almost three times as likely to be unemloyed, and elevated unemloyment rates continue to hit them disroortionally. Regional imact and the aftermath of the economic crisis Youth unemloyment rates by region show large variations, ranging from 8.6 er cent in South Asia to 25.7 er cent in the Middle East in Even though youth unemloyment rates increased in most regions since then, there are imortant regional differences. The Develoed Economies & Euroean Union have been hit hardest by the crisis and its aftermath, and the change in both the unemloyment rate and the number of unemloyed youth from 2008 to 2011 were largest in this region. Over this eriod, the number of unemloyed youth increased by a massive 26.5 er cent while the unemloyment rate rose by 4.7 ercentage oints above the level in Most of this increase occurred between 2008 and 2009, which resulted in historically high rates in several develoed economies.2 Since 2009, not much rogress has been made with the reduction of youth unemloyment, and the regional youth unemloyment rate reached 18.1 er cent in 2010, its highest level since at least the early 1990s. Projections suggest a youth unemloyment rate of 18.0 er cent in the Develoed Economies & Euroean Union in 2012 (see tables 2a and 2b), in art reflecting the weak recovery in many countries. As shown in figure 2, the youth unemloyment rate in the medium term is rojected to decrease but re-crisis levels are not likely to be reached even by The economic crisis has also resulted in a dramatic increase in the youth unemloyment rate in Central & South-Eastern Euroe (non-eu) & CIS, juming from 17.0 er cent in 1 All tables are being referenced in Annex 1. 2 See, for examle, Bell and Blanchflower (2011) on youth unemloyment in Sweden and the United States. 13

15 Youth unemloyment (millions) Figure 1. Global youth unemloyment and unemloyment rate, Youth unemloyment (millions) Youth unemloyment rate (%) 12.4 J J J 11.7 J J 11.4 J J J J J 12.8 J J J J 12.8 J 12.3 J J J 12.6 J 12.7 J J J Youth unemloyment rate (%) = rojection Source: ILO, Trends Econometric Models, Aril to 20.5 er cent in However, contrary to the Develoed Economies & Euroean Union, the rate decreased between 2009 and 2011, and fell to 17.6 er cent. This is still 0.6 ercentage oints above its level in 2008 but reflects a decrease of 2.9 ercentage oints since the height of the crisis (see figure 2). The decrease in the youth unemloyment rate in Central & South-Eastern Euroe (non-eu) & CIS has also contributed towards a slight reduction in the number of unemloyed youth in the region since Latin America & the Caribbean have also exerienced a shar increase in youth unemloyment rates during the crisis, from 13.7 in 2008 to 15.6 in However, much of the imact of the economic crisis has been overcome, and the rate decreased to 14.3 er cent in Nevertheless, the youth unemloyment rate remains above its re-crisis level and is not rojected to decline in the medium term (see figure 2), artly owing to weaker growth. In South Asia, the youth unemloyment rate has increased by 0.5 ercentage oints between 2008 and 2009, and by a further 1.1 ercentage oint during Since 2008, South Asia added 1.2 million youth to the ranks of the unemloyed, by far the largest number outside the Develoed Economies & Euroean Union. Similar to the develoed economies, South Asia has also made little rogress in rolling back the negative imact of the slowdown in growth during on youth unemloyment (see figure 2). North Africa and the Middle East stand out in terms of their overall unemloyment roblem, and these are the only two regions where the unemloyment rate exceeded 10 er cent in 2011 for the oulation aged 15 and above. Moreover, the ratios of youth-to-adult unemloyment rates are excetionally high, at 4.0 in the Middle East and at 3.9 in North Africa, and youth unemloyment rates have been at very high levels for decades in these regions. North Africa was relatively resilient to the global economic crisis but following the Arab Sring economic growth decreased and the youth unemloyment rate increased sharly by 4.9 ercentage oints in 2011 (see figure 2). The Middle East is one of the two regions in which the youth unemloyment rate decreased from 2008 to 2009 but since 2009 the rate has increased. In 2011, the youth unemloyment rate stood at 26.5 er cent in the Middle East and at 27.9 er cent in North Africa. South-East Asia and the Pacific has been affected less by the crisis in terms of the youth unemloyment rate, and managed a slight reduction in the rate between 2008 and In 2011, at 13.5 er cent the youth unemloyment rate was 0.7 ercentage oints below the level in 2008 (see figure 2). Following the shar rise in the youth unemloyment rate in the early stages of the global economic crisis, the youth unemloyment rate remained close to 9 er cent in East Asia in recent years. The youth unemloyment rate in Sub-Saharan Africa, at 11.5 er cent in 2011, has been fairly stable since Global Emloyment Trends for Youth 2012

16 Figure 2. Youth unemloyment rate estimates and rojections, (%) 32 World 32 Develoed Economies & Euroean Union Central & South-Eastern Euroe (non-eu) & CIS 32 East Asia South-East Asia & the Pacific 32 South Asia Latin America & the Caribbean 32 Middle East North Africa 32 Sub-Saharan Africa = rojection Note: The charts deict the evolution of global and regional unemloyment rates between 2000 and 2010 as well as unemloyment rate rojections for 2011 to Projections are resented in the form of a fan chart, indicating the robability of various outcomes for the unemloyment rates. Each shade of the fans corresonds to one-third of the confidence interval around the central rojection (see Annex 2 for methodological information). Source: ILO, Trends Econometric Models, Aril Youth unemloyment crisis continues in both develoed and develoing economies 15

17 Although the economic crisis has been detrimental for both young men and women, at the global level as well as in most regions the imact of the economic crisis on female youth unemloyment rates was greater than on male rates. The difference in imact was very ronounced in North Africa where the female youth unemloyment rate rose by 9.1 ercentage oints in comarison to 3.1 ercentage oints for male youth. Only in the Develoed Economies and the Euroean Union was the imact more detrimental for young men (tables 3a and 3b). In sum, youth unemloyment rates have increased in most regions since 2008, at times to dramatic levels. Even though there are large differences in regional youth unemloyment rates, and some regions have made better rogress in mitigating or rolling back the imact of the global economic crisis than others, all regions face major youth emloyment challenges. Even in East Asia, erhas the most economically dynamic region, the youth unemloyment rate in 2011 was 2.8 times higher than the adult rate. In the medium term, uward ressures on youth unemloyment rates are rojected in several regions, including the Middle East, East Asia and South-East Asia and the Pacific. Particiation or dro-out? High youth unemloyment rates discourage young eole from looking for work, and those who are not reared to give u face long eriods of job search. Unsurrisingly, some of the countries with very high youth unemloyment rates also have a high incidence of youth longterm unemloyment (the number of unemloyed for one year or longer as a roortion of all unemloyed). Data from Eurostat show that, in 2011, the youth unemloyment rates in Croatia, Slovakia and Sain were 35.8, 33.6 and 46.4 er cent, resectively; the highest rates among Euroean countries with available data at the time of writing this reort. Around onethird of the unemloyed youth in Sain were looking for a job for more than a year while in Croatia and Slovakia the long-term unemloyed accounted for more than half of the unemloyed youth in the third quarter of Such extremely adverse labour market conditions lead many youth to give u the job search altogether or to decide to ostone it and continue their stay in the education system.3 An indication of the ga in labour force articiation induced by the crisis can be obtained through a comarison of re-crisis trends in youth labour force articiation and the ILO s estimates and rojections of the economically active oulation. In figure 3, such a comarison is made for each region in 2011, and searately for young men and women. Globally, this labour force ga amounted to 1.2 er cent for young men and 0.5 er cent for young women. In other words, if the unemloyment rate is adjusted for dro-out induced by the economic crisis, the global youth male unemloyment rate would rise from 12.4 to 13.6 er cent, and the global youth female unemloyment rate would rise from 13.0 to 13.5 er cent. The crisisinduced withdrawal from the labour force amounts to 6.4 million young eole worldwide, which means that the adjusted global youth unemloyment rate would be 13.6 er cent (comared with an actual rate of 12.6 er cent). Labour force gas show striking differences between regions. In the Develoed Economies & Euroean Union, the crisis resulted in around 2 million youth withdrawing from the labour market. In the OECD, higher unemloyment rates have been linked with lower articiation rates, roviding evidence of a discouraged worker effect (Bell and Blanchflower, 2011). Pressure on young job seekers will mount further when those young eole that have 3 Young eole may also seek work elsewhere, including abroad, but issues relating to relocation or migration of youth are beyond the scoe of the current reort. 16 Global Emloyment Trends for Youth 2012

18 Figure 3. Youth unemloyment rates and adjusted youth unemloyment rates to account for reduced labour force articiation, by sex, world and regions, 2011 (%) Unemloyment rate Unemloyment rate adjusted for labour force ga Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female World Develoed Central and East Asia South-East Asia and the Pacific South Asia Latin America and the Caribbean Middle East North Africa Sub-Saharan Africa Economies and Euroean Union South-Eastern Euroe (non-eu) and CIS Note: The adjustment of the youth unemloyment rate has been made on the basis of a comarison of re-crisis trends in youth labour force articiation and the ILO s estimates of the economically active oulation. Source: ILO calculations based on ILO, Trends Econometric Models, October 2011, and ILO (2011d), Economically Active Poulation Estimates and Projections, 6th edition. been delaying their entry into the labour market will return to activity, and start looking for work.4 In contrast, the youth articiation rate in Central & South-Eastern Euroe (non-eu) & CIS was higher than exected on the basis of re-crisis trends. Imortant factors exlaining these oosing trends are the relative underdeveloment of social rotection mechanisms in Central & South-Eastern Euroe (non-eu) & CIS in comarison to develoed economies, as well as the more detrimental imact of the economic crisis on wages in at least some countries in Central & South-Eastern Euroe (non-eu) & CIS (ILO, 2010b). The loss of family income due to stagnant or declining wages or due to the lack of unemloyment benefits uon job loss by family members is likely to have ushed youth into the labour market. In other words, these youth would have referred to remain inactive, for examle to continue their studies, if the economic environment would have been more favourable and their families could have continued their suort. The uward effect on youth articiation rates is consistent with the shar slowdown in the growth of tertiary enrolment ratios in Central and Eastern Euroe and the decrease of these ratios in Central Asia at the height of the economic crisis in 2009 (see table 4). In Ukraine, for examle, the tertiary enrolment ratio increased on average by 3.7 ercentage oints annually from 2000 to 2008 but this increase slowed down to 1.5 ercentage oints in 2009 and, in 2010, tertiary enrolment decreased by 1.1 oints. In the absence of sufficient decent jobs, many youth in Central & South-Eastern Euroe (non-eu) & CIS may also have been forced to rely on jobs with low barriers to entry, such as own-account work or contributing family work (see section 3 below). Labour market distress and discouragement on the one hand, and the need to work and sustain (family) income on the other, underlie much of the regional variations shown in figure 3, but these factors should also be analysed in the context of regional structural economic and labour market conditions. Many low-income economies in Sub-Saharan Africa weathered the crisis well, mainly due to their more limited trade and financial linkages with 4 In the Netherlands, for examle, analysts exect a rise in youth unemloyment in the course of 2012 due to the entry of youth who have been delaying their labour market entry; see De Volkskrant, 16 March 2012 (htt:// nl/vk/nl/5273/werk/article/detail/ /2012/03/16/positie-jongere-o-arbeidsmarkt-holt-achteruit.dhtml). 2. Youth unemloyment crisis continues in both develoed and develoing economies 17

19 Figure 4. Youth labour force articiation rate in France and Sain, (%) 50 France 65 Sain Men Men Women Women Source: ILO (2011a), Key Indicators of the Labour Market, 7th edition (Geneva), table 1b (national estimates). the global economy and their reliance on agriculture as a source of emloyment and income. In these countries, labour force articiation rates tend to be high and little affected by global economic conditions. Aart from short-term and structural economic conditions, articiation rates of young men and women are driven by institutional factors such as broader societal values, culture and norms. Institutional factors are articularly imortant in regions with large gender gas such as South Asia, the Middle East and North Africa (see table 5). At the country level, this can be illustrated if we comare articiation rates for young men and women in two develoed economies, France and Sain, on the one hand, and in Pakistan (South Asia) on the other. As shown in figure 4, the gender ga in youth articiation rates for young eole in France and Sain is limited, in line with the relatively small ga in articiation rates in the Develoed Economies & Euroean Union. Furthermore, the develoment of articiation rates for young men and women in these two countries is fairly similar over time. Economic oortunities certainly lay an imortant role in this develoment, as indicated by the dro in articiation for both men and women in the most recent years. In Pakistan, in contrast, youth male and female articiation rates show little similarity in their develoment over time, and are at very different levels, with some rogress towards closing the still large articiation ga (see figure 5). Indeed, articiation rates of young Pakistani men are among the highest in the world but less than one out of five young Pakistani women articiates in labour markets, which rimarily seems to reflect cultural barriers to female labour force articiation. Since the early 1990s there has been some convergence between (youth) male and female articiation rates in Pakistan but this rocess is not linear. Tyically, female articiation rates show a U-shaed attern, with high articiation rates at low levels of income er caita that decrease as countries develo before rising again at higher income levels.5 This attern has been confirmed by a number of (cross-) country studies (Durand, 1975; Goldin, 1995; Mammen and Paxson, 2000), including for Pakistan (Fatima and Sultana, 2009). Consequently, it is difficult to disentangle the effect of the economic crisis on female articiation rates from institutional or cultural factors in South Asia, and the differences between young men and women in figure 3 may have little to do with short-term global or regional economic conditions. Emirical studies of countries in South Asia have often found that female articiation is lower if household income increases (e.g. Bangladesh Begum and Lawson, 2009; India Dasguta and Goldar, 2005; Pakistan Faridi et al., 2011). Such studies give weight to the assertion that women rimarily enter the labour market in the 5 Note that articiation of young males is not necessarily following a linear trend either, as illustrated in figures 4 and 5. However, female articiation has attracted much more attention, given the very low levels seen in some develoing countries and the related issues of both equity and the otential for economic develoment. 18 Global Emloyment Trends for Youth 2012

20 Figure 5. Youth labour force articiation rate in Pakistan, (%) 74 Men 20 Women Source: ILO (2011a), Key Indicators of the Labour Market, 7th edition (Geneva), table 1b (national estimates). case of economic necessity. They also hel exlain why considerable economic growth in ast decades has resulted in little rogress in reducing gender gas in youth articiation rates in South Asia (see table 5). As economic growth by itself is not sufficient to render suort for convergence between male and female articiation rates, strong gender olicies are needed in regions with large gender gas to overcome the ersisting structural barriers to female labour force articiation. In this resect, it is noteworthy that the unemloyment ga adjusted for labour force dro-outs would actually be larger in the South Asia, Latin America & the Caribbean and Middle East regions. Longer-term consequences of the youth jobs crisis Persistent and high youth unemloyment has also imortant adverse longer-term consequences for currently young eole. These include a higher risk of future unemloyment, a rolonged eriod of unstable jobs and a otentially deressed income growth (Arumlamlam et al., 2001). Such consequences may result from a deterioration of skills but also from rosective emloyers negative ercetions of youth who have been out of work for rolonged eriods. Moreover, these effects are believed to be more severe for youth entering the workforce with an education level below the tertiary level who are already in a relatively disadvantaged osition comared with their better educated eers (see section 4 below). Aart from its detrimental effects on future wages and emloyability, youth unemloyment may hurt hainess, job satisfaction and health for many years thereafter (Morsy, 2012). Increased vulnerability to future shocks: the jobs crisis has forced many households to sell their assets and borrow money which has increased the vulnerability of youth, in articular, to ongoing or future shocks. In order to meet consumtion needs during eriods of unemloyment or reduced or erratic wages, many households have drawn down savings and sold ossessions, or turned to friends, relatives, membershi-based clubs, community grous and banks, where ossible, for financial hel. This behavior has been observed in a wide range of countries since 2008, including Bangladesh, Cambodia, the Central African Reublic, Ghana, Kazakhstan, Kenya, Mongolia, the Philiines, Serbia and Thailand (Heltberg et al., 2012), Armenia, Bulgaria, Latvia, Montenegro and Romania (World Bank, 2011), Nigeria (Samuels et al., 2011) and Tonga (Patel and Thaa, 2010), among others. Wage scars: unemloyment roduces ermanent scars rather than temorary blemishes, esecially on youth oulations. Fairlie and Kletzer (1999) estimated that being unemloyed while young results in lower future earnings by a magnitude of 8.4 and 13.0 er cent for males 2. Youth unemloyment crisis continues in both develoed and develoing economies 19

21 and females, resectively. More recently, a study by Kahn (2010) estimated that a 1 ercentage oint increase in unemloyment in the United States results in a 6 to 7 er cent decrease in the wages of college graduates. In addition, although the cost in terms of foregone wages decreases over time, it still remains significant 15 years later. In the United Kingdom, Burgess et al. (2003) found that youth unemloyment raises the robability of unemloyment later on; Gregg and Tominey (2005) estimated an earnings loss of u to 21 er cent at age 41 for workers who exerience unemloyment in early adulthood; and Bell and Blanchflower (2010) showed that unemloyment in a erson s early twenties negatively affects emloyment and earnings rosects, as well as health and job satisfaction, u to two decades later. Social instability: the jobs crisis further threatens the well-being of households and young workers through rising levels of social discontent and instability. In this resect, the ILO s social unrest index indicates a significant aggravation of social unrest in 45 of the 118 countries surveyed (ILO, 2011f). The regions under greatest threat include the Middle East and North Africa, arts of Asia and the grou of develoed countries. One of the most obvious manifestations of these findings is the increasing number of street demonstrations and rotests observed worldwide since 2010, which have been closely linked to the Arab Sring and Euroean sovereign debt crises. 20 Global Emloyment Trends for Youth 2012

22 3. Temorary emloyment and art-time work: Transition or tra? The tye and quality of work are imortant determinants of the long-term labour market rosects of young eole. In this regard, it is worrying to note that around the world, many youth are traed in low-roductivity, temorary or other tyes of work that fall short of their asirations and that often do not oen oortunities to move to more ermanent, higherroductivity and better-aid ositions. Young eole often go through a transition eriod, during which work, study, travel and other activities comlement each other. Although such a transition eriod by itself is no reason for concern, there are signs that youth in develoed economies are increasingly traed in non-standard jobs and the transition to decent work continues to be ostoned. The growth of temorary emloyment and art-time work in the ast decade, in articular since the global economic crisis, suggests that this work is increasingly taken u because it is the only otion available. Part-time work has been growing for many years, more recently due to the growth of male art-timers (ILO, 2011b).6 Many youth choose art-time work because of the constraints in the number of hours available for work. An increase in the art-time emloyment among young eole can therefore be a ositive sign that young workers combine work with study or other activities as a means of gaining exerience and broadening their networks. However, the sheer magnitude of the increase in art-time emloyment among youth in Euroean countries since the onset of the crisis suggests that art-time work is not only increasing because youth choose to work art-time (ILO, 2011c). In the Euroean Union, youth art-time emloyment has grown faster than adult arttime emloyment both before and during the economic crisis (see figure 6). Between the second quarter of 2008 and 2011, the youth art-time emloyment rate increased by 3.6 ercentage oints in the Euroean Union as a whole while it increased by 11.8 ercentage oints in Sain and 20.7 ercentage oints in Ireland.7 In many countries, including Cyrus, Denmark, Greece, Hungary, Portugal and Slovenia, the increase during the same eriod exceeded 5 ercentage oints. During both and , art-time emloyment grew faster for young women than for young men (see figure 6). The ILO s KILM database also shows a raid increase of the youth art-time emloyment rate between 2008 and 2010 in Australia, Canada, Jaan and New Zealand (ILO, 2011a). Youth are also more likely than adults to work as temorary emloyees. In the second quarter of 2000, 35.2 er cent of youth emloyees worked on temorary contracts in the Euroean Union, comared to 8.9 er cent of adult emloyees (aged years). In other words, youth were already almost four times as likely as adults to be a temorary emloyee at that time. As shown in figure 7a, between 2000 and 2008 the share of temorary emloyment in total emloyment increased for both youth and adults in the majority of Euroean Union Member States. However, the increase for youth, at 4.3 ercentage oints, was more than double the increase for adults (2.1 ercentage oints). In five countries, the increase for youth exceeded ten ercentage oints (Italy, Luxembourg, Poland, Portugal and Slovenia). Since the 6 There is no internationally agreed definition as to the number of hours below which one is considered to work arttime. Tyically, the dividing line is between 30 and 40 hours er work. The OECD is using 30 hours as its cut-off line (see ILO, 2011a, ch. 6). 7 Quarterly comarisons are made in view of data availability. 21

23 35 Figure 6. Part-time emloyment rates for youth and adults in the Euroean Union, (second quarter, %) Youth 35 Female youth Adult Male youth Source: ILO calculations based on Eurostat Figure 7. Change in the incidence of temorary emloyment in total emloyment in the Euroean Union, youth and adults (a) , second quarter (%) Youth Adult Sain Denmark Romania Latvia Austria Finland Belgium United Kingdom Lithuania (b) , second quarter (%) Greece Cyrus Malta Czech Reublic Slovakia Germany Euro area (17 countries) Euroean Union (27 countries) Ireland Hungary Sweden Netherlands Portugal Italy Slovenia Luxembourg Poland 12 Youth Adult Luxembourg Cyrus Denmark Germany Greece Portugal Netherlands Finland United Kingdom Source: ILO calculations based on Eurostat. Austria Euro area (17 countries) Sain Malta Euroean Union (27 countries) Sweden Hungary Poland Romania Lithuania Italy Latvia Slovenia Belgium Czech Reublic Slovakia Ireland 22 Global Emloyment Trends for Youth 2012

24 onset of the global economic crisis there has been a further acceleration in the use of temorary contracts for young workers. Between 2008 and 2011, the share of temorary emloyees increased by 2.7 ercentage oints, or around 0.9 ercentage oints er year comared with 0.5 oints er year during In contrast, the average share of temorary emloyment for adult workers in the EU remained unchanged during the same eriod (see figure 7b).8 Many temorary emloyees have good reasons to work on temorary contracts, for examle, because they are still studying. This is, in fact, the most imortant reason for youth to take u temorary jobs in the Euroean Union (41.3 er cent of temorary emloyees in 2010 were students). Nevertheless, the increasing imortance of temorary work as an otion of last resort is confirmed by the fact that more than one out of three youth state that they could not find a ermanent job, and this roortion has been rising since the crisis started (from 36.3 in 2008 to 37.1 er cent in 2010). Emloyment rotection legislation and labour market duality The trend towards an increasing incidence of temorary contracts has fuelled the debate over labour market flexibility. In articular, the discussion on labour market duality has been increasingly attracting attention. Labour market duality is by no means a new henomenon but in the context of a job crisis the relationshi between emloyment rotection legislation (EPL, e.g. hiring and firing rules) and labour market outcomes has become a to riority for olicy-makers. Much emirical work has been roduced on the imact of EPL on labour market outcomes. For more than two decades, this has been a highly controversial toic and many studies have tried to identify a causal link between EPL and (un-)emloyment across OECD countries (see box 1). So far, there is a general consensus that the evidence on the imact of EPL on aggregate emloyment/unemloyment levels is not conclusive but EPL could have some ositive/mitigating effects articularly for vulnerable labour market grous such as young eole. At the same time, many economists have argued that the growing segmentation in Euroean labour markets over the last two decades was due to a artial (dual-track) reform strategy, involving labour reforms only at the margin (for new hires) while emloyment security entitlements of incumbent workers remained unchanged (Boeri, 2011; Eichhorst and Marx, 2011). Accordingly, it is the deregulation of the use of fixed-term contracts and agency work (rather than the reduction of rotection for workers on ermanent contracts) that led to increased duality between the insiders and outsiders, esecially in countries where strict EPL for regular workers was combined with little rotection of fixed-term contracts. Due to the asymmetric treatment of different grous of workers, the effects of these EPL reforms have been felt disroortionately by new entrants, in articular by youth (Dolado et al., 2002; Kahn, 2007; Cazes and Tonin, 2010). Fewer studies have assessed the causal link between EPL and labour market duality, in articular (temorary) youth emloyment. Boeri (2011) highlights the fact that labour market duality would not only be characterized by a high share of temorary contracts but also by the lower robability of transitioning from temorary to ermanent contracts due to the asymmetry between the two tyes of contracts. Cazes and Tonin (2010) found a trend towards shorter tenure among young workers in many Euroean countries, and their findings suggest that this job instability was due to the combination of the easing in legislation governing dismissal costs and rocedures of regular contracts (and not of temorary contracts) with weak individual bargaining ower of young eole. 8 It can be noted that the fact that the share of temorary emloyment for adult workers did not change during in the Euroean Union may also be the result of a disroortionate reduction in the number of temorary contracts, as oosed to the creation of new ermanent contracts. 3. Temorary emloyment and art-time work: Transition or tra? 23

25 Box 1. The imact of emloyment rotection legislation on the youth labour market Protecting emloyment and stabilizing jobs can be achieved using different instruments. Traditionally, countries have resorted to introducing clauses governing individual labour contracts to revent emloyers from firing workers at will. In addition, in some countries, the legal system allows for an extensive use of anti-discrimination acts to revent or limit firing workers with certain characteristics (related to their sex, age or ethnic grou). Increasingly, countries have sought alternative ways of securing emloyment, either by differentiating social security ayments across firms to account for the level of job turnover i.e. effectively enalizing those comanies that have a very high turnover of workers, such as the exerience rating system in the United States or by considering emloyment rotection as art of the overall social security system with entitlement rights transferable from one job to another, as in the recently reformed system in Austria. When imlemented at the level of individual contracts, emloyment rotection legislation (EPL) makes rovisions for severance ayments, advance notice eriods and other rocedural asects related to the dismissal of emloyees. These regulations rovide an insurance scheme to workers, avoiding unexected income fluctuations and allowing sufficient time for the search of a new job (Pissarides, 2001). They are suortive of emloyment relations that are more long-term in nature, offering incentives for general and job-secific training investments that may result in higher roductivity (Fella, 2005) and more innovative activity, esecially when combined with articular wage bargaining systems (Bassanini and Ernst, 2002). Job security can also be crucial when it comes to the wellbeing and health of workers (Komier et al., 2009). However, dismissals are more costly for emloyers in the resence of stringent regulations. It is these higher costs that may have an imact on youth unemloyment. In theory, EPL may have oosing effects on youth unemloyment. On the one hand, emloyers may hire fewer workers in anticiation of higher dismissal costs. Job creation would then be reduced, which would make it more difficult to find jobs in articular for young jobseekers that form a considerable art of the unemloyed. On the other hand, higher dismissal costs also lower the dismissal rate and therefore reduce the inflow into unemloyment. This may encourage training activities that are exected to strengthen the emloyability of youth (Forrier and Sels, 2003). The magnitude of the effects also hinges on the degree to which wages can adjust in order to reflect higher dismissal costs (Lazear, 1990). Emirical evidence on the imact of EPL on youth unemloyment is inconclusive. While many tend to be suortive of the view that there is an adverse imact on youth unemloyment (Addison and Texeira 2003; Heckman and Pagés, 2000; Botero et al., 2004; Bernal-Verdugo et al., 2012), this imact has been questioned by others (Freeman, 2005; Howell et al., 2007), and there are some studies that reject an adverse imact of EPL on youth unemloyment (Noelke, 2011). Some of the critical oints that are brought forward include concerns over the indicators that are used to measure EPL (Bertola et al., 2000; Berg and Cazes, 2008) and the fact that statistical inference is mostly based on cross-country comarisons, which raises issues related to olicy endogeneity. If country-secific institutional features such as the degree of unionization are related to both youth unemloyment and EPL, then there is a high risk that results are surious when the estimation methodology fails to take this into account. Finally, EPL is often analysed in an isolated way, ignoring interactions with other labour market olicies. In Euroe, the introduction of a single contract has been debated in both academic and olitical circles as a resonse to labour market duality. The idea would be to narrow the differential between temorary and ermanent workers through a more gradual and continuous increase of rights with tenure (Bentolila et al., 2010). While it is clear that an exit strategy from duality is needed, it is not obvious that the best aroach would be through the introduction of a single contract. Many southern Euroean countries where such a olicy otion is being considered have additional roblems that hamer labour markets from functioning effectively, such as high school dro-out rates or inadequate active labour market olicies. Also, imlications of an easing on wage develoments need to be considered: Existing emirical studies suggest that lowering EPL would increase entry-level wages, making it more difficult for young eole to access emloyment (Leonardi and Pica, 2007, 2010). Therefore, a well-balanced aroach towards EPL, which is coherent with other labour market olicies and institutions, and which is based on social dialogue should be a key ingredient for youth emloyment olicies (ILO and OECD, 2011). 24 Global Emloyment Trends for Youth 2012

26 Youth in develoing economies In the develoing world, youth have traditionally faced strong structural and other barriers in their search for decent work. This is reflected in high rates of vulnerable emloyment and working overty. Globally, vulnerable emloyment, defined as the sum of own-account work and unaid family work, accounts for 56.2 er cent of the emloyed in develoing regions in Such a high share of workers in vulnerable emloyment indicates widesread informal work arrangements, whereby workers tyically lack adequate social rotection and oortunities to influence their conditions of work. Vulnerable emloyment is also often characterized by low ay and difficult working conditions, in which workers fundamental rights may be undermined.9 The share of workers in vulnerable emloyment by region in the develoing world in 2011 ranges from one in five in Central & South-Eastern Euroe (non-eu) & CIS (20.6 er cent) to more than three out of four workers in South Asia and Sub-Saharan Africa (77.7 and 76.6 er cent, resectively, see table A12 of ILO, 2012a). Conversely, the share of aid emloyment in much of the develoing world is often low. Wage and salaried workers account for 48.3 er cent of all emloyment at the global level but this roortion is as low as 20.9 er cent in South Asia and 22.9 er cent in Sub-Saharan Africa. In addition, even if aid work can be found, the risk of low-wage emloyment is substantially higher for young workers both in develoed and develoing economies (Grimshaw, 2011; ILO, 2010b). In art, this is due to the fact that entry-level jobs are more likely to be low-aid, reflecting limited exerience of young workers. The question then focuses on how much time it takes for young workers to move to better aid jobs (see box 2). So far, the limited availability of aid work or decent work clearly oses strong barriers in develoing economies, articularly in low-income economies. In develoing economies, a relatively high share of youth is likely to engage in unaid family work, starting their working life suorting (informal) family businesses or farms. Among a samle of 24 develoing economies for which breakdowns by age and status in emloyment are available, the share of contributing family work in youth emloyment exceeded the corresonding share for adult workers in all countries (see figure 8a). The school-to-work transition may also include unemloyment sells, or eriods of temorary or casual emloyment if such oortunities arise while the final station is likely to be own-account work. With the excetion of one, in all countries the share of own-account work in total emloyment was lower for youth than the corresonding share for adults (see figure 8b). In Sub-Saharan Africa, schoolto-work transitions tyically have a long duration and youth often have to deal with a drawn out eriod of job search and/or inactivity (Guarcello et al., 2005). Difficulties that youth face in starting their own enterrises are confirmed by a study based on household data collected by the Inter-American Develoment Bank (IDB) for 14 Latin American countries. This study showed that only 12.8 er cent of workers between the ages of 16 and 24 were entrereneurs (Llisterri et al., 2006). The IDB also noted that many businesses were fragile and driven mostly by necessity, and young entrereneurs in Latin America face major obstacles. They have less caital in the form of skills, knowledge, exerience, savings, and access to credit. In addition, they have limited business networks and less access to information about job vacancies. Banks and financial institutions regard them as high risk. At the same time, entrereneurshi rogrammes that integrate skills training, mentoring and access to caital have demonstrated success in boosting business creation. Evaluations of the Calificación de Jóvenes Creadores de Microemresas rogramme in Peru and Proyectos Productivos in Argentina, for examle, suggest numerous ingredients for success. 9 As noted in ILO (2010a), the vulnerable emloyment indicator has some limitations: (1) wage and salary emloyment is not synonymous with decent work, as workers may carry a high economic risk desite the fact that they are in wage emloyment; (2) the unemloyed are not included in the indicator, though they are vulnerable; (3) a worker may be classified in one of the two vulnerable status grous but still not carry a high economic risk, esecially in the develoed economies. For a discussion see Sarreboom and De Gier (2008). 3. Temorary emloyment and art-time work: Transition or tra? 25

27 Figure (a) Share of unaid family workers in total emloyment, youth and adults (%) Youth Adult (b) Share of own-account workers in total emloyment, youth and adults (%) Youth Adult Benin, 2003 Bhutan, 2003 Burkina Faso, 2003 Cambodia, 2004 Colombia, 2003 Congo, 2005 Gabon, 2005 Guatemala, 2006 Indonesia, 2002 Jordan, 2002 Madagascar, 2005 Mali, 2006 Mexico, 2004 Morocco, 1998 Mozambique, 2003 Nicaragua, 2005 Niger, 2005 Pakistan, 2005 Peru, 2006 Philiines, 2003 Senegal, 2001 Thailand, 2002 Togo, 2006 Uganda, 2005 Benin, 2003 Bhutan, 2003 Burkina Faso, 2003 Cambodia, 2004 Colombia, 2003 Congo, 2005 Gabon, 2005 Guatemala, 2006 Indonesia, 2002 Jordan, 2002 Madagascar, 2005 Mali, 2006 Mexico, 2004 Morocco, 1998 Mozambique, 2003 Nicaragua, 2005 Niger, 2005 Pakistan, 2005 Peru, 2006 Philiines, 2003 Senegal, 2001 Thailand, 2002 Togo, 2006 Uganda, 2005 Source: ILO calculations based on national household surveys. These include demand-driven training content; rivate sector articiation in rogramme design and imlementation; aroriate targeting and screening mechanisms to leverage youths cometitive advantages and reduce rogramme dro-out rates; and access to financial caital and the develoment of financial and youth-tailored banking instruments that encourage savings and rovide a athway for credit (Salazar-Xirinachs, 2012). Demograhic trends are easing ressure on youth in most regions, giving rise to a demograhic dividend. However, the youth labour force continues to grow in recisely those regions where few oortunities for aid work exist and where working overty is widesread. In Sub-Saharan Africa, an average of 2.1 million young eole will be entering the labour market every year between 2011 and 2015 while in South Asia the youth labour force is rojected to grow by an average of 465,000 each year over the same eriod, reversing a decline in recent years (see table 6). In both regions, the share of working oor at the internationally adoted level of US$1.25 a day (at urchasing ower arity) is much higher than in other regions. The new estimates of the working oor released by the ILO in 2011 showed that globally 14.8 er cent of workers were living below the overty line in this year. However, whereas in most regions the roortion of oor workers was below 10 er cent, 35.9 er cent of workers in South Asia and 26 Global Emloyment Trends for Youth 2012

28 Box 2. Measuring labour market transitions: ILO s Work4Youth Project The International Labour Office (ILO) and The MasterCard Foundation have forged a unique artnershi to hel young eole find the ath to decent work in a labour market that is markedly different from that of their arents. The five year, $14.6 million Work4Youth (W4Y) artnershi will increase the global awareness of the secific challenges facing young eole in the world of work. The artnershi suorts the collection and dissemination of information on youth labour markets and aims to suort youth emloyment olicy making and rogramme develoment both nationally and worldwide. It should serve as a good examle of how olicy-makers, the social artners and the rivate-sector can engage in the romotion of decent work for young women and men around the world. Through the W4Y roject, the ILO works with government institutions to imlement school-towork transition surveys in 28 countries across five regions. These surveys will increase the knowledge on difficulties facing young eole during their transition to decent work, esecially in develoing countries. The data and information generated by these surveys will be included in a series of analytical national, regional and global reorts on youth emloyment, including the next version of the ILO s Global Emloyment Trends for Youth lanned for early The reorts are designed to assist olicy-makers and ractitioners in shaing evidence-based rogramme and olicies that romote decent work for youth. For more information on the roject, see website: htt:// youth-emloyment/wcms_170261/lang--en/ index.htm er cent of workers in Sub-Saharan Africa were counted as the working oor. Data from household surveys also show that youth account for a disroortionate share of oor workers, comrising 23.5 er cent of the working oor for countries with available data, comared with 18.6 er cent of non-oor workers. Many oor workers are traed in a vicious circle of low levels of education and low-roductivity emloyment (ILO, 2012a). 3. Temorary emloyment and art-time work: Transition or tra? 27

29

30 4. Education and the labour market Education and training are essential for young eole to enter the labour market successfully. They increase the otential roductivity and emloyability of young eole, oening u new oortunities in different sectors and occuations. On the back of continuous technological rogress and globalization, recent years have seen a continuous shifting of emloyment oortunities towards higher-skilled occuations. At the same time, and artly in resonse to these challenges, educational attainment of the labour force has been increasing in most countries. Nevertheless, there are still many countries with large shares of the labour force having only rimary education or less. These can be redominantly found in Sub-Saharan Africa, the Middle East and, to a lesser extent, Latin America and Asia (see ILO, 2011a, sections on indicators 5 and 14). Education as a shield for youth in develoed economies In develoed economies, there is a strong link between educational attainment and emloyment outcomes, and eole with higher levels of education enjoy a cometitive advantage in the labour market, including higher wage levels. For examle, in a samle of 27 develoed economies, those with rimary-level education or less had the highest unemloyment rates in 25 countries in 2010 (see table 7). The labour market advantage of comleting higher education was articularly striking in Slovakia. The unemloyment rate of eole with a rimary education or less in this country stood at 44.2 er cent in 2010, versus 14.1 er cent for those with secondary education and 5.8 er cent for those with a tertiary education. Figure 9 shows changes in unemloyment rates by level of educational attainment between 2000 and As 2010 was the height of the economic crisis in many countries, unemloyment rates in 2010 tended to be higher than those in Individuals with rimary education or less fared worst in terms of rising unemloyment rates, with increases observed in 23 out of 27 countries. The degree of increase in the unemloyment rates between 2000 and 2010 was largest among ersons with rimary education in 21 countries. Among those with secondary education and tertiary education, unemloyment rates rose in 15 and 18 countries, resectively. The differential imact of the economic crisis for eole with different levels of education is underlined by OECD (2012), which also notes that skills of more educated eole better match labour market demand, even during times of crisis. Nevertheless, the graduate unemloyed were not sared in the face of the economic crisis. In the samle of develoed economies shown in figure 9, the unemloyment rate of ersons with tertiary education rose in 18 countries and declined in eight countries. In two countries, Cyrus and Slovenia, the educated unemloyed were the hardest hit, showing the largest increase in the unemloyment rate over the eriod. Given the stronger labour market osition of better-educated eole in develoed economies, the resonse of young eole to continue their stay in the educational system is understandable and may ay off in the future. However, more education in itself does not result in more jobs, and the scale of the withdrawal of youth from the labour market may result in 29

31 Figure 9. Changes in unemloyment rates by educational level, selected develoed economies, (ercentage oints) Primary or less Secondary Tertiary Austria Belgium Bulgaria Cyrus Czech Reublic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Netherlands Norway Poland Portugal Romania Slovakia Slovenia Sain Sweden Switzerland United Kingdom Source: ILO (2011a). future imbalances in the labour market. The literature suggests that, desite the ositive link between educational attainment and labour market outcomes, even receding the global economic crisis, skill mismatches such as overeducation were affecting significant roortions of the emloyed in many develoed economies (Groot and Maassen van den Brink, 2000; Kori and Tålin, 2009; Verhaest and van der Velden, 2010). Workers are considered to be overeducated if the level of education they ossess exceeds the skill level required for that job.10 The incidence of overeducation in the future may be aggravated as more and more younger eole substantially extend their education and training eriods in these economies. Not only more but better education and training is needed in develoing economies More and better education and training is critical to advance decent work in develoing economies. Nevertheless, more human caital develoment and higher levels of education do not automatically translate into imroved labour market outcomes and more jobs. In many Sub-Saharan African countries higher educational attainment does not lead to lower unemloyment rates (Guarcello et al., 2005). Similarly, in many Latin American countries, unemloyment rates are highest for those with secondary education (e.g. in Argentina, Bolivia, Brazil, Chile and Mexico) while those with rimary and sometimes tertiary education show lower rates (see table 14c of ILO, 2011a). Furthermore, in Pakistan higher educational attainment has been shown to increase the likelihood of unemloyment for both adults and youth. These facts notwithstanding, educational attainment has also been ositively associated with the likelihood of securing aid emloyment in the case of adults in this country. These findings suggest that even though more education may not automatically result in more jobs, it allows young eole to secure entry into non-vulnerable emloyment (Sarreboom and Shahnaz, 2007). In other words, the situation that youth in many develoing countries are facing is such that education does not guarantee a decent job but such a job is very difficult to secure without education. 10 The incidence of overeducation can be measured in several ways, for examle on the basis of the difference between years of schooling of workers in comarison with the average years of schooling for workers within an occuation, but it can also be measured based on self-reorts by individual workers on the rate of skill utilization. According to 25 studies reviewed by Groot and Maassen van den Brink (2000), the incidence of overeducation varies from 10 to 42 er cent. 30 Global Emloyment Trends for Youth 2012

32 Several factors exlain why more education does not automatically lead to more jobs for young eole in develoing economies. These include small formal sectors, skills mismatches, the need to work (in articular for the oor) and asirations of youth (in articular of the welleducated). In addition, the articular characteristics of develoing economies ose secial challenges for education and training systems and their resonsiveness to labour market needs. In develoing economies where structural change is dee, education and training needs to kee u with this change in order to suly the skills necessary for economic develoment and creation of decent work (ILO, 2008). At the same time, aggregate demand management has to create the conditions for structural transformation to successfully lead to strong rivate investment and job creation in more advanced sectors. To find the right balance between demand and suly of skills can be a challenging task (ADB, 2007). If historical trends are taken as benchmarks, several Asian countries would be considered to raise educational attainment levels too fast. At the same time, education can serve as a driver of develoment, by emowering eole to develo or adot new technologies and diversify roduction structures. Recent ILO research found that countries that have managed to successfully catch u with develoed economies, such as the Reublic of Korea, tyically exerienced a transformation of the education system that receded the transformation of the roduction structure (Nübler, 2012). In this resect, roer labour market information is necessary to facilitate both the role of education in meeting current labour demand and in facilitating change. With regard to the first role, it is imortant that exectations of the contribution of education to structural change are based on an emirical understanding of what workers are likely to do with their education. In other words, analysis of trends in emloyment, including the sectoral distribution and wage develoments, should inform education and training olicies. Information requirements are likely to increase as the economy exands, transforms and integrates with global markets, and skills develoment systems become more comlex. If skills develoment olicies are used as a driver of develoment, it becomes more imortant that information is roduced on future skills requirements (early identification of skills), and skills olicies are synchronized with other olicies through aroriate institutional structures and arrangements. The crisis has brought an increased detachment of youth from the labour market Young eole that are neither in emloyment nor in education have become a growing concern for olicy-makers, in articular in develoed economies. This grou, called NEET (not in education, emloyment or training), has been raidly increasing, esecially since the onset of the crisis. The concern with NEETs artly results from the fact that this grou reflects a growing detachment of young eole from the labour market. Labour statistics such as unemloyment or articiation rates do not cature what youth are doing outside the labour market. If youth are economically inactive (outside the labour force) because they are in education or training, they invest in their skills and in this way imrove their future emloyability. However, youth who are not emloyed and also not in education or training risk labour-market and social exclusion. The share of youth not in emloyment or education/training as a ercentage of the youth oulation (the NEET rate) is non-negligible in develoed economies. In Jaan, New Zealand and the United States, for examle, the NEET rates were 9.7, 13.1 and 15.6 er cent in 2010 resectively whereas the average for the OECD was 12.8 er cent in this year.11 As shown in figure 10, the NEET rate in the Euroean Union at the beginning of the 2000s was just 11 See htt:// 4. Education and the labour market 31

33 16 14 Figure 10. Youth NEET rates in the Euroean Union, , by sex (%) Women Total 12 Men Source: Eurostat. above 13 er cent but came down to 10.9 er cent before the global economic crisis in 2007 and However, due to the global economic crisis, the downward trend in the NEET rate in the Euroean Union was broken, resulting in an increase by 1.9 ercentage oints in the average rate between 2008 and The rate in the latter year exceeded 15 er cent in Bulgaria, Ireland, Italy, Latvia, Romania and Sain. The crisis-induced increase in the Euroean Union was much greater for young men, at 2.6 ercentage oints comared to 1.1 ercentage oints for young women. The convergence between male and female NEET rates in the most recent years in art reflects the stronger imact of the crisis on male youth unemloyment in develoed economies including the Euroean Union (see tables 3a and 3b). As both the unemloyed and the economically inactive are included in the NEET grou, the crisis-induced increase of the NEET rate in Euroe is consistent with the effects of the crisis on the unemloyment rate as well as the withdrawal of youth from the labour force in many develoed economies discussed in earlier sections. However, the fact that many youth continue their stay in the education system may aear contradictory with the increase in the NEET rate. This may be exlained by the different rofile of NEETs in comarison with the overall youth oulation. Contrary to those extending their stay in the education system, many of whom are already among the better-educated, young eole with a low education level are more likely to belong to the NEET grou, as are those with a low household income and those with an immigrant background (EFILWC, 2011). Accordingly, art of the rise in the NEET rate in recent years may have been due to higher-educated workers crowding out lower-educated ones. Nevertheless, the economic crisis also increased the risk for better-educated youth to end u in the NEET grou (EFILWC, 2012). In develoing economies, the NEET grou is equally imortant but often reflects a different reality. As emloyment in many develoing economies is at least artially overtydriven, and resources for education are more limited, youth emloyment-to-oulation ratios (EPRs) tend to be higher in oorer countries. This is illustrated in figure 11, which shows overty rates (at the US$1.25 a day level) and EPRs for a samle of develoing economies (see alsotable 8). This relationshi is much stronger for young women, in art because of the u -shaed attern of female labour force articiation that was discussed in an earlier section. In other words, at lower overty levels, young women may withdraw from the labour market, but this is less likely to be the case for young men. The rofile of young eole who are neither in education nor in emloyment in develoing economies is different from that of the emloyed. As shown in figure 12, the overty rate among the NEETs is lower than the overty rate of the emloyed. Moreover, for both young men and young women, overty rates are lowest for the unemloyed, which are art of the NEET grou. This suggests that emloyment in these develoing countries is rimarily driven by lack of adequate alternative sources of income. Even though the differences 32 Global Emloyment Trends for Youth 2012

34 Poverty rate Figure 11. Youth emloyment and overty in selected develoing economies, by sex (%) Men B BJ J Women J B B J BJ B J B J J B B JB JB J B J J B J J J B J J B B B B J J J B J J JB B B J JB J B B Emloyment-to-oulation ratio Note: The estimated coefficient of the regression line for young women is significant at the 99 er cent confidence level. Source: ILO (emloyment) and World Bank (overty) calculations based on national household surveys (see table 8 for a list of countries and years). 40 Figure 12. Average overty rates of NEETs, emloyed and unemloyed youth in selected develoing economies, by sex (%) All NEETs Emloyed Unemloyed All NEETs Emloyed Unemloyed WOMEN MEN Note: NEETs are youth neither in education nor in emloyment, including the unemloyed. Source: ILO (NEET) and World Bank (overty) calculations based on national household surveys (see table 8 for a list of countries and years). in overty rates are significant, the figure also shows that all grous have considerable overty rates even at the low level of the internationally agreed US$ The average NEET rate in the 24 develoing economies in figures 11 and 12 is 12.4 er cent for young men. In other words, even if many young men in develoing economies have little alternative but to work, the overall rate is not lower than in the Euroean Union, and a considerable share of young men are not rearing for the labour market. For young women, the average NEET rate is much higher (28.1 er cent). A number of countries have started to take measures to address this henomenon. For examle, the resonse of the United States Government to the economic crisis included the exansion of tax credits to emloyers hiring disconnected youth, meaning those youth who were neither in emloyment nor in education (Bell and Blanchflower, 2011). In Latin America a wide variety of initiatives and rojects have been ut in lace to address the NEET challenge (Salazar-Xirinachs, 2012). In many Euroean countries, measures have been taken ranging from tackling early school leaving to facilitating the transition to emloyment, often targeting 12 The US$1.25 a day was designed to be reresentative of the overty lines in the oorest countries, and therefore is necessarily relatively low. Many countries use higher overty lines for national olicy-making uroses. 4. Education and the labour market 33

35 secific subgrous of the NEET grou (EFILWC, 2012). In the Netherlands, for examle, the Drive to reduce dro-out rates encourages the develoment of local rogrammes to revent dro-out, including long-term erformance agreements between schools, municialities and the national government, in artnershi with business and youth care workers, and a funding olicy linked to the reduction of the number of early school leavers.13 A number of countries also have youth guarantees in lace which aim to ensure that young eole have a job offer or an educational or related oortunity within a certain timeframe, or offer secialist job search assistance. According to a recent olicy review, NEET-relevant olicies based on artnershi aroaches with stakeholders outside the ublic sector are likely to be articularly effective (EFILWC, 2012). 13 See htt:// 34 Global Emloyment Trends for Youth 2012

36 5. Youth emloyment olicies 14 As youth unemloyment rates are rojected to remain essentially unchanged in 2012, and most regions face major youth emloyment challenges, youth emloyment olicies warrant the highest riority. To address these challenges, countries have already enacted a wide range of olicies targeted secifically at young, first-time jobseekers.15 To tackle the youth unemloyment crisis successfully, these measures need to be steed u and extended also to those countries that have not yet enacted olicies in this resect. Imortant areas for interventions include: (i) macroeconomic and sector olicies, (ii) active labour market olicies and rogrammes, (iii) labour standards and social rotection for young eole, (iv) social dialogue and artnershis for youth emloyment, and (v) suort for labour market information and analysis systems, as summarized below.16 Macroeconomic and growth olicies: ultimately, job growth will not come from labour market interventions alone. Macroeconomic and fiscal olicies should include or enhance measures that suort emloyment generation, bring about a sustained job recovery and finance the necessary investments in youth emloyment romotion. Youth emloyment is a rising riority in national olicy agendas but often it is insufficiently translated into action, and funding is often limited and resources underestimated. Globally, rogress in rebalancing world demand based on effective measures by the G20, and stability in the euro area are essential for aving the way to stronger outut and emloyment growth. In this resect, austerity measures currently imlemented in a wide range of develoed economies bode ill for a quick recovery of youth labour markets (ILO, 2012a). Growth olicies can also influence youth emloyment by encouraging economic diversification and roductive transformation through sectoral strategies, removing constraints on rivate sector investment and growth, in articular for small enterrises. Active labour market olicies and rogrammes: a series of different active labour market rogrammes and olicies can be tailored for secific needs of the youth. These include: (i) direct emloyment generation (romoting small enterrise develoment, cooeratives, wage subsidies, ublic works, guaranteed job schemes, etc.); (ii) labour exchanges or emloyment services facilitating young eole s transition into the labour market (e.g. job brokerage and counseling offices, linking emloyers with educational institutions); and (iii) skills develoment rogrammes. It is articularly imortant to: y Address barriers to job growth: the lack of labour demand romted by insufficient or job-oor growth has a significant imact on unemloyment and leads to discouragement, 14 For a detailed discussion of olicy areas, see the ILO Reort The Youth Emloyment Crisis: Time for Action (htt:// wcms_ df). The forthcoming 2012 International Labour Conference will discuss the youth emloyment crisis and udate the olicy conclusions to address the challenge. The latest olicy conclusions date from the 2005 International Labour Conference and are included in the Resolution concerning youth emloyment (htt:// ilc/ilc93/df/resolutions.df). 15 For an overview of olicy measures enacted by member countries to address the emloyment challenge caused by the crisis see the ILO/World Bank Inventory of Policy Resonses to the Financial and Economic Crisis online tool available at: htt:// 16 For an evaluation of lessons learned in youth emloyment rogrammes, see Chater 4 of ILO (2010c). Annex 3 in the current reort rovides an inventory of crisis resonse interventions directly affecting youth emloyment, by country. 35

37 articularly among youth. Active labour market measures, such as the develoment of ublic emloyment services, wage and training subsidies or tax cuts can incentivize emloyers to hire young eole and counteract the excess suly of young workers in times of crisis. y Address skill mismatches: rogrammes that aim to offset the mismatch of technical skills among youth, such as vocational training rogrammes, re-training of unemloyed or discouraged youth, worklace training schemes, the creation or imrovement of arenticeshi systems, entrereneurshi training rogrammes, soft and life skills training rogrammes for disadvantaged youth, and secial rogrammes that link emloyers with educational institutions which can facilitate young eole s transition into the labour market. yadjusting the focus of technical and vocational education to make it relevant to the requirements of comanies and the labour market is another essential orientation. ypromote entrereneurshi: enabling motivated youth access to start-u caital and facilitating a broad range of services, including high quality mentoring, can be effective ways of reducing recarious and informal emloyment among young eole and may also roel job creation. Labour standards and social rotection for young eole: decent emloyment is not only about generating any jobs, but also about imroving the quality of jobs. Poor young workers work long hours, often in unsafe conditions and still are unable to move their families out of overty. Hence emloyment olicies must not merely focus on creating jobs but also on ensuring adequate wages and working conditions. Wage olicies, for instance, are imortant from both an economic and a human rights ersective. A decent remuneration can enable workers to rovide for themselves (and their families) and hel fulfill the basic human right to a decent standard of living which includes food, clothing, housing and medical care. Raising the incomes of workers including young workers also increases domestic demand which, in turn, encourages economic growth and recovery. A articular concern in this resect is the inadequate social rotection for young eole, in art because they are engaged in non-standard forms of emloyment. As a result, better strategies are needed to imrove and exand social rotection rogrammes for young eole, and tailor labour market reforms for their secific needs. It is also imortant that such social rotection measures are not viewed as a cost to society but rather as an investment (Cichon et al., 2006). Investing in young ersons has significant ositive imacts on human develoment and roductivity. Social dialogue and artnershis for youth emloyment: equally imortant is the establishment of broad-based artnershis to turn commitment to youth emloyment into reality. Partnershis among governments, emloyers organizations, trade unions and other organizations can be instrumental in determining the most aroriate action to be taken at national and local levels for the romotion of decent work for young eole. To bring high youth unemloyment rates down, it is essential that emloyers, unions and governments not only dialogue together about how to achieve a socio-economic recovery, but mobilize to develo secific rojects and interventions, including in artnershi with young eole. Social acts can be an effective strategy to articulate labour market olicies that can create ositive synergies between economic and social develoment. They are esecially wellsuited to arrive at otimal solutions in macroeconomic olicy, in strengthening roductivity, job and income security, and in suorting emloyment-generating enterrises. Social dialogue can be fostererd further when governments strive also to reair and regulate their financial systems. To this end, it is critical that olicymakers reduce the fear and uncertainty that is hindering rivate investments so that the rivate sector can re-start to be the main engine of global job creation, including for youth (ILO, 2012a). Suorting strong labour market information and analysis systems: suort in the areas of data collection, tabulation, analysis and dissemination of labour market information, 36 Global Emloyment Trends for Youth 2012

38 and strengthening institutional relationshis between roducers and users of information and analysis rovides a solid basis to monitor labour markets, and design and imlement effective olicies. More information is needed articularly on the athways of youth to decent work. In sum, to revent the emergence of a lost generation, it is imortant that youth emloyment is rioritized on national olicy agendas, and countries establish or develo integrated strategies aimed to ensure long-term, sustained and concerted action for the romotion of decent work for young eole. Assigning riority to youth emloyment requires a coherent olicy framework, with measurable targets and achievable outcomes that addresses youth emloyment in national develoment strategies and emloyment olicies. 5. Youth emloyment olicies 37

39

40 References Asian Develoment Bank (ADB) Asian Develoment Outlook 2007 (Manila). Addison, J.T.; Texeira, P The economics of emloyment rotection, in Journal of Labor Research, Vol. 24, Arumlamlam, W; Gregg, P.; Gregory, M Unemloyment scarring, in Economic Journal, Vol. 111, No. 475, Bassanini, A.; Ernst, E Labour market regulation, industrial relations and technological regimes: A tale of comarative advantage, in Industrial and Cororate Change, Vol. 11, No. 3, Begum, S.; Lawson, D The influence of gender on labour market outcomes of the oorest of the oor, aer resented at the annual EALE Conference (Tallinn). Bell, D.N.F.; Blanchflower, D.G Young eole and the great recession, IZA Discussion Paer No (Bonn). Bentolila, S. et al Two-tier labor markets in the Great Recession: France vs. Sain, IZA Discussion Paer No (Bonn). Berg, J.; Cazes, S Policymaking gone awry: The labour market regulations of the Doing Business Indicators, in Comarative Labor Law and Policy Journal, Vol. 29, No. 4, Bernal-Verdugo, L.E.; Furceri, D.; Guillaume, D Labor market flexibility and unemloyment: New emirical evidence of static and dynamic effects, IMF Working Paer No. 64 (Washington, DC). Bertola, G.; Boeri, T.; Cazes, S Emloyment rotection in industrialized countries: The case for new indicators, in International Labour Review, Vol. 139, No. 1, Boeri, T Institutional reforms and dualism in Euroean labor markets, in Handbook of Labor Economics, Volume 4b, Chater 13 (Amsterdam, Elsevier). Botero, J.C. et al The regulation of labor, in Quarterly Journal of Economics, Vol. 119, No. 4, Burgess, S.; Proer C. Rees H.; Shearer A The Class of 1981: The Effects of Early Career Unemloyment on Subsequent Unemloyment Exeriences, in Labour Economics Volume 10, No. 3, Cazes, S.; Tonin, M Emloyment rotection legislation and job stability: A Euroean crosscountry analysis, in International Labour Review, Vol. 149, No. 3, Dasguta, P.; Goldar, B Female labour suly in rural India: An econometric analysis, Institute of Economic Growth (Delhi). Dolado, J.J.; García-Serrano, C.; Jimeno, J.F Drawing lessons from the boom of temorary jobs in Sain in Economic Journal, Vol. 112, No. 480, Durand, J.D The labor force in economic develoment (Princeton, Princeton University Press). Eichhorst, W.; Marx, P Reforming German labour market institutions: A dual ath to flexibility, in Journal of Euroean Social Policy, Vol. 21, No. 1, Euroean Commission Youth emloyment measures. Euroean Emloyment Observatory Review (Luxembourg) Euroean Foundation for the Imrovement of Living and Working Conditions (EFILWC) Young eole and NEETs in Euroe: First findings (résumé) (Dublin). Euroean Foundation for the Imrovement of Living and Working Conditions (EFILWC) Recent olicy develoments related to those not in emloyment, education and training (NEETs) (Dublin). Fairlie, R.; Kletzer L.G The Long-term Costs of Job Dislacement among Young Workers, in Industrial and Labour Relations Review, Vol. 56, No. 4,

41 Faridi, M.Z.; Chaudry, I.S.; Malik, M.S Why women are self-emloyed? Emirical evidence from Pakistan, in International Journal of Economics and Finance, Vol. 3, No. 1, Fatima, A.; Sultana, H Tracing out the U-shae relationshi between female labor force articiation rate and economic develoment for Pakistan, in International Journal of Social Economics, Vol. 36, No. 1/2, Fella, G Termination restrictions and investment in general training, in Euroean Economic Review, Vol. 49, No. 6, Forrier, A.; Sels, L Temorary emloyment and emloyability: Training oortunities and efforts of temorary and ermanent emloyees in Belgium, in Work, Emloyment & Society, Vol. 17, No. 4, Freeman, R.B Labour market institutions without blinders: The debate over flexibility and labour market erformance, in International Economic Journal, Vol. 19, No. 2, Goldin, C The U-shaed female labor force function in economic develoment and economic history, in T.P. Schultz (ed.): Investment in women s human caital (Chicago, University of Chicago Press), Gregg, P.; Tominey, E The wage scar from male youth unemloyment, in Labour Economics, Vol. 12, No. 4, Grimshaw, D What do we know about low-wage work and low-wage workers? Analysing the definitions, atterns, causes and consequences in international ersective, Conditions of Work and Emloyment Series No. 28 (Geneva, ILO). Groot, W.; Maassen van den Brink, H Overeducation in the labor market: A meta-analysis, in Economics of Education Review, Vol. 19, No. 2, Guarcello, L. et al School to work transition in Sub-Saharan Africa: An overview, Working Paer No. 15, Understanding Children s Work (UCW) Project (Rome). Günter, S China s Emloyment Crisis: A stimulus olicy for change?, in Journal of Current Chinese Affairs, Volume 38, No.2, Ha, B.; McInerney C.; Tobin S.; Torres R Youth Emloyment in Crisis, International Institute for Labour Studies Discussion Paer No. 201 (Geneva). Heckman, J.J.; Pagés, C The cost of job security regulation: Evidence from Latin American labor markets, in Economia, The Journal of the Latin American and Caribbean Economic Association, Vol. 1, No. 1, Heltberg, R., N. Hossain; Reva A.; Turk C Anatomy of Coing: Evidence from Peole Living through the Crises of , Policy Research Working Paer No. 5957, (Washington, DC). Howell, D.R. et al Are rotective labour market institutions at the root of unemloyment? A critical review of the evidence, in Caitalism and Society, Vol. 2, No. 1, International Labour Office (ILO) Skills for imroved roductivity, emloyment growth and develoment, Background reort, International Labour Conference, 97th Session, Geneva, ILO Protecting Peole, Promoting Jobs: A Survey of Country Emloyment and Social Protection Policy Resonses to the Global Economic Crisis in 54 Countries, ILO Reort to the G20 Leaders Summit, Pittsburgh, Setember, Geneva, ILO. 2010a. Global Emloyment Trends 2010 (Geneva). ILO. 2010b. Global Wage Reort 2010/11. Wage olicies in times of crisis (Geneva). ILO. 2010c. Global Emloyment Trends for Youth. Secial issue on the imact of the global economic crisis on youth (Geneva). ILO. 2010d. Reublic of Korea s Resonse to the Crisis, G20 Country Brief on the Reublic of Korea. ILO. 2010e. Emloyment and Social Protection Policies from Crisis to Recovery and Beyond: A review of exerience, ILO reort to the G20 Labour and Emloyment Ministers Meeting, Washington, D.C., Aril, Geneva, ILO. 2011a. Key Indicators of the Labour Market, 7th edition (Geneva). ILO. 2011b. Gender equality, emloyment and art-time work in develoed economies, in Key Indicators of the Labour Market, 7th edition (Geneva). ILO. 2011c. Global Emloyment Trends for Youth: 2011 Udate (Geneva). ILO. 2011d. Economically Active Poulation, Estimates and Projections, 6th edition (Geneva). ILO. 2011e. Policy Otions to Suort Young Workers during Economic Recovery, ILO Policy Brief, Geneva, ILO. 2011f. World of Work Reort 2011: Making Markets Work for Jobs (Geneva). ILO. 2012a. Global Emloyment Trends Preventing a deeer jobs crisis (Geneva). 40 Global Emloyment Trends for Youth 2012

42 ILO. 2012b. The Youth Emloyment Crisis: Time for Action, Reort of the Director-General, International Labour Conference, 101st Session, Geneva, ILO; Organisation for Economic Co-oeration and Develoment (OECD) Giving youth a better start. A olicy note for the G20 Meeting of Labour and Emloyment Ministers (Geneva and Paris). Kahn, L.M The imact of emloyment rotection mandates on demograhic temorary emloyment atterns: International microeconomic evidence in Economic Journal, Vol. 117, No. 521, Kahn, L.B The long-term labor market consequences of graduating from college in a bad economy, in Labour Economics, Vol. 17, No. 2, Komier, M. et al Emloyment contracts: Cross-sectional and longitudinal relations with quality of working-life, health and well-being, in Journal of Occuational Health, Vol. 51, No. 3, Kori, T.; Tålin, M Educational mismatch, wages and wage growth: Overeducation in Sweden, , in Labour Economics, Vol. 16, No. 2, Lazear, E.P Job security rovisions and emloyment, in Quarterly Journal of Economics, Vol. 105, No. 3, Leonardi, M.; Pica, G Emloyment rotection legislation and wages, IZA Discussion Paer No (Bonn). Leonardi, M.; Pica, G Who ays for it? The heterogeneous wage effects of emloyment rotection legislation, IZA Discussion Paer No (Bonn). Llisterri, J.J.; Kantis, H.; Angelelli, P.; Tejerina, L Is Youth Entrereneurshi a Necessity or an Oortunity? A First Exloration of Household and New Enterrise Surveys in Latin America, Technical Paers Series (Washington, D.C., Inter-American Develoment Bank). Mammen, K.; Paxson, C Women s work and economic develoment, in Journal of Economic Persectives, Vol. 14, No. 4, Morsy, H Scarred generation, in Finance & Develoment, Vol. 49, No. 1, Mar Noelke, C The consequences of emloyment rotection legislation for the youth labour market, Mannheimer Zentrum für Euroäische Sozialforschung Working Paer No. 144 (Mannheim). Nübler, I. Forthcoming Caabilities for roductive transformation and emloyment (Geneva, ILO). OECD Education Indicators in Focus 2012/01 (Paris). Patel, M.; Thaa S Imact of the Global Economic Crisis on Children, UNICEF Udate on Real-time Monitoring Efforts in East Asia and the Pacific Islands (Bangkok, UNICEF). Pissarides, C Emloyment rotection, in Labour Economics Vol. 8, No. 2, Salazar-Xirinachs, J.M Generation Ni/Ni: Latin America s Lost Youth, Americas Quarterly, Samuels, F.; Gavrilovic M.; Harer C.; Niño-Zarazúa M Food, Finance and Fuel: The Imacts of the Trile F Crisis in Nigeria, with a Particular Focus on Women and Children Adamawa State Focus, Overseas Develoment Institute (London). Scaretta, S.; Sonnet, A.; Manfredi, T Rising youth unemloyment during the crisis: How to revent negative long-term consequences on a generation, Social, Emloyment and Migration Paer No. 106 (Paris, OECD). Sarreboom, T.; De Gier, M.P.F Assessing vulnerable emloyment: The role of status and sector indicators in Pakistan, Namibia and Brazil, Emloyment Working Paer No. 13 (Geneva, ILO). Sarreboom, T.; Shahnaz, L Assessing labour market vulnerability among young eole, in Pakistan Develoment Review, Vol. 46, No. 3, Verhaest, D.; van der Velden, R.K.W Cross-country differences in graduate overeducation and its ersistence, Research Memorandum 2010/7, Research Centre for Education and the Labour Market (Maastricht). United Nations The Reactions of the Governments of the Americas to the International crisis: An overview of olicy measures u to June 30 (ECLAC, Santiago). World Bank The Jobs Crisis: Household and Government Resonses to the Great Recession in Eastern Euroe and Central Asia (Washington, D.C.). References 41

43

44 Annex 1. World and regional tables Unless the source is stated, the source of all tables is ILO, Trends Econometric Models, Aril are reliminary estimates are rojections; for details on methodology, see Annex 2 and ILO (2012a). Table 1. Global unemloyment and unemloyment rates, youth (15 24), adult (25+) and total (15+), 2007 to Youth unemloyment (millions) Adult unemloyment (millions) Total unemloyment (millions) Youth unemloyment rate (%) Adult unemloyment rate (%) Total unemloyment rate (%) Ratio youth-to-adult unemloyment rate = rojection Table 2a. Youth unemloyment rates 2000 and , by region (%) WORLD Develoed Economies & Euroean Union Central & South-Eastern Euroe (non-eu) & CIS East Asia South-East Asia & the Pacific South Asia Latin America & the Caribbean Middle East North Africa Sub-Saharan Africa

45 Table 2b. Change in youth unemloyment and unemloyment rates between 1998 and 2008 and between 2008 and 2011, by region Change in youth unemloyment (%), Change in youth unemloyment rate (ercentage oint), Change in youth unemloyment (%), WORLD Develoed Economies & Euroean Union Central & South-Eastern Euroe (non-eu) & CIS East Asia South-East Asia & the Pacific South Asia Latin America & the Caribbean Middle East North Africa Sub-Saharan Africa Change in youth unemloyment rate (ercentage oint), Table 3a. Change in male youth unemloyment and unemloyment rates between 1998 and 2008 and between 2008 and 2011, by region Change in youth unemloyment (%), Change in youth unemloyment rate (ercentage oint), Change in youth unemloyment (%), WORLD Develoed Economies & Euroean Union Central & South-Eastern Euroe (non-eu) & CIS East Asia South-East Asia & the Pacific South Asia Latin America & the Caribbean Middle East North Africa Sub-Saharan Africa Change in youth unemloyment rate (ercentage oint), Table 3b. Change in female youth unemloyment and unemloyment rates between 1998 and 2008 and between 2008 and 2011, by region Change in youth unemloyment (%), Change in youth unemloyment rate (ercentage oint), Change in youth unemloyment (%), WORLD Develoed Economies & Euroean Union Central & South-Eastern Euroe (non-eu) & CIS East Asia South-East Asia & the Pacific South Asia Latin America & the Caribbean Middle East North Africa Sub-Saharan Africa Change in youth unemloyment rate (ercentage oint), Global Emloyment Trends for Youth 2012

46 Table 4. Gross enrolment ratio in tertiary education, by region, (%) WORLD North America & Western Euroe Central & Eastern Euroe Central Asia East Asia & the Pacific South & West Asia Latin America & the Caribbean Arab States Sub-Saharan Africa Source: UNESCO Institute for Statistics, online database,table 14. Table 5. Gender gas in youth labour force articiation rates, by region, 1991, 2001 and 2011 Male (%) Female (%) Ga (ercentage oint) WORLD Develoed Economies & Euroean Union Central & South-Eastern Euroe (non-eu) & CIS East Asia South-East Asia & the Pacific South Asia Latin America & the Caribbean Middle East North Africa Sub-Saharan Africa Table 6. Five-year average of youth labour force growth, thousands WORLD Develoed Economies & Euroean Union Central & South-Eastern Euroe (non-eu) & CIS East Asia South-East Asia & the Pacific South Asia Latin America & the Caribbean Middle East North Africa Sub-Saharan Africa Annexes 45

47 Table 7. Unemloyment rates by educational level, selected develoed economies, 2000 and 2010 (%) Country Unemloyment rate, 2000 Unemloyment rate, 2010 Change, (ercentage oints) Primary or less Secondary Tertiary Primary or less Secondary Tertiary Primary or less Secondary Austria Belgium Bulgaria Cyrus Czech Reublic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Netherlands Norway Poland Portugal Romania Slovakia Slovenia Sain Sweden Switzerland United Kingdom Source: ILO (2011a), Key Indicators of the Labour Market, 7th edition (Geneva), table 14c. Tertiary 46 Global Emloyment Trends for Youth 2012

48 Table 8. Youth emloyment, overty and NEET rates in selected develoing economies, by sex (%) Country Year Women Men Emloyment-tooulation ratio Poverty rate NEET rate Emloyment-tooulation ratio Poverty rate Benin Bhutan Bolivia Burkina Faso Cambodia Colombia Congo Gabon Guatemala Indonesia Jordan Kenya Liberia Mali Mexico Mozambique Neal Nicaragua Niger Pakistan Thailand Togo Uganda Viet Nam Source: ILO (emloyment) and World Bank (overty) calculations based on national household surveys. NEET rate Annexes 47

49 Annex 2. Note on global and regional rojections Unemloyment rate rojections are obtained using the historical relationshi between unemloyment rates and gross domestic rofit (GDP) growth during the worst crisis/downturn eriod for each country between 1991 and 2005, and during the corresonding recovery eriod.17 This was done through the inclusion of interaction terms of crisis-year and recoveryrecovery dummy variables with GDP growth in fixed-effects anel regressions.18 Secifically, the logistically transformed unemloyment rate was regressed on a set of covariates including the lagged unemloyment rate, the GDP growth rate, the lagged GDP growth rate and a set of covariates consisting of the interaction of the crisis-year dummy, and of the interaction of the recovery-year dummy with each of the other variables. Searate anel regressions were run across three different grouings of countries, based on: (1) Geograhic roximity and economic/institutional similarities. (2) Income levels.19 (3) Level of exort deendence (measured as exorts as a ercentage of GDP).20 The rationale behind these grouings is the following. Countries within the same geograhic area or with similar economic/institutional characteristics are likely to be similarly affected by the crisis, and have similar mechanisms to attenuate the crisis imact on their labour markets. Furthermore, because countries within geograhic areas often have strong trade and financial linkages, the crisis is likely to sill over from one economy to its neighbour (e.g. Canada s economy and labour market develoments are intricately linked to develoments in the United States). Countries of similar income levels are also likely to have more similar labour market institutions (e.g. social rotection measures) and similar caacities to imlement fiscal stimulus and other olicies to counter the crisis imact. Finally, as the decline in exorts was the rimary crisis transmission channel from develoed to develoing economies, countries were groued according to their level of exosure to this channel, as measured by their exorts as a ercentage of GDP. The imact of the crisis on labour markets through the exort channel also deends on the tye of exorts (the affected sectors of the economy), the share of domestic value added in exorts, and the relative imortance of domestic consumtion (for instance, countries such as India or Indonesia with a large domestic market were 17 The crisis eriod is comrised of the san between the year in which a country exerienced the largest dro in GDP growth, and the turning oint year when growth reached its lowest level following the crisis, before starting to climb back to its re-crisis level. The recovery eriod is comrised of the years between the turning oint year and the year when growth has returned to its re-crisis level. 18 In order to roject unemloyment during the current recovery eriod, the crisis-year and recovery-year dummies were adjusted based on the following definition: a country was considered currently in crisis if the dro in GDP growth after 2007 was larger than 75 er cent of the absolute value of the standard deviation of GDP growth over the eriod and/or larger than 3 ercentage oints. 19 The income grous corresond to the World Bank income grou classification of four income categories, based on their 2008 gross national income (GNI) er caita (calculated using the Atlas method): low-income countries, US$975 or less; lower middle-income countries, US$976 US$3,855; uer middle-income countries, US$3,856 US$11,905; and high-income countries, US$11,906 or more. 20 The exort deendence-based grous are the following: highest exorts (exorts 70 er cent of GDP); high exorts (exorts <70 er cent but 50 er cent of GDP); medium exorts (exorts <50 er cent but 20 er cent of GDP); and low exorts (exorts <20 er cent of GDP). 48 Global Emloyment Trends for Youth 2012

50 less vulnerable than countries such as Singaore and Thailand). These characteristics are controlled for by using fixed-effects in the regressions. In addition to the anel regressions, country-level regressions were run for countries with sufficient data. The ordinary least squares country-level regressions included the same variables as the anel regressions. The final rojection was generated as a simle average of the estimates obtained from the three grou anel regressions and, for countries with sufficient data, the country-level regressions as well. Refinement of the global and regional rojections In Q1 2012, at the time of roduction of the Global Emloyment Trends for Youth 2012 reort, 57 out of a total samle of 178 countries had released monthly or quarterly unemloyment estimates for the whole year 2011 and ten for a ortion of In three countries, estimates were available through November; in four countries, estimates were available through Setember or Q3; and in three countries estimates were available through Q2. These monthly/ quarterly data are utilized in order to generate an estimate of the 2011 annual unemloyment rate. The 2011 rojection for the rest of the samle (countries without any data for 2011), as well as rojections for 2012 onwards, are roduced by the extension of the Trends Econometric Models using the relationshi between economic growth and unemloyment during countries revious recovery eriods, as described above. In generating the 2011 oint estimate for the ten countries for which 2011 data are available, the first ste is to take an unweighted average of the (seasonally adjusted) unemloyment rate over the available months or quarters of 2011, which is defined as the oint estimate. Around this oint estimate a confidence interval is generated, based on the standard deviation of the monthly or quarterly unemloyment rate since the beginning of 2008, multilied by the ratio of the remaining months or quarters to 12 (for monthly estimates) or four (for quarterly estimates).21 Thus, all else being equal, the more months of data that are available for a country, the more certain is the estimate of the annual unemloyment rate, with uncertainty declining in roortion to the months of available data. In order to integrate the short-term and medium-term trends in the movement of unemloyment rates, the above oint estimate is adjusted according to whether the two trends are in agreement.22 Secifically: y If both trends are ositive (negative), then the above oint estimate is recalculated as a weighted average of 60 (40) er cent of the uer bound and 40 (60) er cent of the lower bound. y If the two trends are in oosite directions, the unemloyment rate of the latest month or quarter available is assigned to the remaining months or quarters of the 2011, and the above oint estimate is recalculated as an unweighted average over the 12 months or four quarters of The underlying assumtion is that in cases where there is a clear uward (downward) trend over two consecutive eriods, the tendency will be for somewhat higher (lower) unemloyment rates than in the latest month of available data. In cases in which there is no discernible 21 In cases where the ratio of the oint estimate and the standard deviation is less than or equal to 5, the standard deviation is instead constructed since the beginning of The rationale is that the excetionally high volatility of unemloyment rates during the early eriod of the global financial crisis is unlikely to ersist over the short to medium term. Rather, the most recent level of volatility can be exected to ersist. 22 The short-term and the longer-term trend are defined, resectively, as the ercentage oint differences between the unemloyment rate of the latest month M (or quarter Q) available and the unemloyment rate of the month M-3 (or quarter Q-1), and of the month M-6 (or quarter Q-2), resectively. Annexes 49

51 trend over the ast two eriods, unemloyment is exected to remain at the most recent rate, and therefore more weight is given to the latest information available. The final 2011 unemloyment rate estimate for these ten countries is equal to the adjusted oint estimate. Out of a total samle of 178 countries, 35 had released monthly or quarterly youth unemloyment rate estimates for the whole of 2011 and 14 for a ortion of 2011 (five u to Q2 and nine u to Q3). The same rocedure is followed for the unemloyment rate of the youth sub-comonents for the countries with at least two quarters available in The rojections for the unemloyment rate of the rest of the sub-comonents for 2011 onwards are roduced with the extension of the Trends Econometric Models, using searately for each sub-comonent the same model secifications as for the total unemloyment rate. The nominal unemloyment for the various sub-comonents estimated with the extension of the Trends Econometric Models is aggregated to roduce a nominal total unemloyment, which may differ from what the above rocedure estimates for total nominal unemloyment. The difference between the total nominal unemloyment roduced as the sum of the sub-comonents and the total nominal unemloyment estimated searately is distributed among the sub-comonents in roortion to each sub-comonent s share of total unemloyment.23 These adjusted oint estimates are the final oint estimates for the sub-comonents. Confidence interval for the global and regional rojections For the rojections for 2012 onwards, the confidence intervals around the rojections are generated with rogressively smaller (more restrictive) significance levels the longer the rojection eriod is, in order to reflect an increasing level of uncertainty with resect to labour market conditions over time. In addition, countries are divided into three grous based on the ratio of the standard deviation of their unemloyment rate during the eriod from 1998 to 2008 to their 2011 unemloyment rate estimate. In order to smooth the differences in the confidence intervals between countries with high or low ratios, a lower significance level (and therefore a wider confidence interval) is ascribed to countries with lower ratios to reflect the higher uncertainty associated with labour market conditions in these countries. Many of these countries have few reorted unemloyment observations and consequently estimates for these countries tend to be based on econometric models, which result in less variation over time in estimated unemloyment rates. Secifically, countries with ratios less than 0.06 are given a significance level of 15 er cent in 2012, decreasing rogressively to 5 er cent by 2016 (12 er cent in 2013); countries with ratios between 0.06 and 0.20 inclusively are assigned a significance level of 45 er cent in 2012, decreasing rogressively to 35 er cent in 2016 (42 er cent in 2013); and countries with the highest ratios (historical standard deviation greater than 20 er cent of the 2011 unemloyment rate), are given a 75 er cent significance level in 2012, decreasing rogressively to 65 er cent in 2016 (72 er cent in 2013). In order to construct the confidence interval for each sub-comonent, the ratio of the sub-comonent unemloyment rate to total unemloyment rate is alied to the uer- and lower-bound estimates of the total unemloyment rate. Lastly, in order to encourage the reader to concentrate on the wide degree of uncertainty surrounding the central rojection instead of the recise central oint, the unemloyment rate rojections are resented along with the confidence intervals. The confidence intervals are by default constructed symmetrically around the central rojection and for the figures 23 The underlying assumtion is that the relationshi between the total unemloyment rate and GDP growth is better understood than the relationshi between unemloyment rates of subgrous of workers and GDP growth. 50 Global Emloyment Trends for Youth 2012

52 resented in the main text the confidence interval is divided into three bands. That is, within the confidence intervals, it can be judged that there is a higher or lower chance that the unemloyment rate will be within each band. The choice of three bands in the figures is arbitrary. The central band, coloured with darkest shade, includes the central rojection within one-third of the confidence interval, the middle band reresents the next one-third of the confidence interval and the outside band with the lightest shade reresents the whole confidence interval. For more information on the methodology of roducing world and regional estimates, see Annexes 51

53 Annex 3. Inventory of current country measures to address the youth emloyment crisis Addressing barriers to job Growth Addressing skill mismatches Promoting young entrereneurs Exanding social rotection Building consensus Argentina Launch of Programa Jovenes con Mas y Mejor Trabajo targeting those youth that have not comleted comulsory education and were either unemloyed or receiving social assistance Austria Launch of Camaign for the Future of Young Peole and creation of job lacements, emloyment subsidies and other rojects for unemloyed youth Australia Imrovement of trade training centers in schools and aroval of the Marshall Plan to rovide emloyment for young eole via internshis and training Belgium Increase in the number of arenticeshi and vocational training oortunities for young eole Belize Start-u credits to unemloyed young Bulgaria Introduction of Youth Work Exerience rogramme and offer of a grant u to six months to emloyers to hire young eole who have not found emloyment after graduating from secondary or higher education 52 Global Emloyment Trends for Youth 2012

54 Addressing barriers to job Growth Addressing skill mismatches Promoting young entrereneurs Exanding social rotection Building consensus Chile Passing of Triartite Pact covering six measures in the field of emloyment, training and social rotection China Imlementation of a national vocational training rogramme targeting young migrant workers who returned home Government-sonsored loans for young entrereneurs Costa Rica Training and start-u caital for young entrereneurs ( Projoven ) Croatia Revision of rofessional vocational training courses where aroximately half of all courses were rovisioned take lace within the comanies Denmark Introduction of a hiring subsidy to rivate sector emloyers for recruiting young eole under the age of 30 who had been on welfare for at least a year Introduction of a olicy under which year olds were interviewed, articiated in a job-search training course, and laced in an educational rogramme or worklace within three weeks of alying for unemloyment benefits Dominican Reublic Training rogramme for rural youth and grants of ublic land Estonia Adotion of a develoment lan for vocational education and training system France Launch of the Emergency Plan for Youth Emloyment which consisted of a combination of measures addressing arenticeshis, training rogrammes and subsidized contracts Germany Creation of job search clubs for unemloyed young eole and rovision of training and arenticeshi lacements Hungary Introduction of START and rovision of subsidies to comanies that emloyed young labour market entrants Exansion of safety nets for young eole and reduction in eligibility requirements for social rotection benefits Annexes 53

55 Addressing barriers to job Growth Addressing skill mismatches Promoting young entrereneurs Exanding social rotection Building consensus India Launch of Skills Develoment Initiative to train one million young eole over a five year eriod Jaan Develoment of a Job Card System to allow unemloyed youth gain ractical job training in articiating comanies whereby the card documents articiants training record along with comanies evaluation of articiants abilities Exansion of safety nets for young eole and reduction in eligibility requirements for social rotection benefits Agreement to maintain emloyment for more than 13 million workers through work-sharing arrangements that were subsidized by the government, which contributed to emloyment creation and stability for young eole Kenya Introduction of Kazi Kwa Vijana rogramme and creation of 300,000 jobs for youth over a six month eriod Provision of start-u credit by the Youth Develoment Fund Reublic of Korea Re-launch of Youth Internshi Program and rovision of some 100,0000 young eole with work exerience, regular job contracts and other career develoment oortunities Latvia Provision of a monthly stiend to unemloyed youth aged and offer of on- the-job training for u to 12 months Lithuania Exemtion of emloyers social contribution uon offering young eole their first job Pakistan Introduction of Benayir Bhutto Shaheed Youth Develoment Program and offer of a monthly stiend and access to training for 100,000 young eole Start-u credits for young entrereneurs Philiines Imlementation of a summer work rogramme for young eole subsidized by the government Poland Introduction of an internshi rogramme for unemloyed youth and financial suort equivalent of 120 er cent of the unemloyment benefit for u to a year 54 Global Emloyment Trends for Youth 2012

56 Addressing barriers to job Growth Addressing skill mismatches Promoting young entrereneurs Exanding social rotection Building consensus Portugal Provision of low-interest credit and technical advice for first-time jobseekers Romania Tax exemtions, hiring subsidies and government-backed credit guarantees for start-us created by young entrereneurs Serbia Introduction of First Chance rogramme which gives young job seekers without significant rior work exerience the oortunity to enter subsidized emloyment by rivate emloyers for a eriod of u to 12 months at a re-set wage Singaore Exansion of safety nets for young eole and reduction in eligibility requirements for social rotection benefits Sain Exansion of safety nets for young eole and reduction in eligibility requirements for social rotection benefits Sweden Adotion of a Job Guarantee Scheme targeted to unemloyed youth and subsequent rovision of an immediate job or oortunity to return to education Turkey Reduction of emloyers social contributions for five years uon the recruitment of unemloyed youth United Kingdom Launch of the Future Jobs Fund and creation of 100,000 jobs for long-term unemloyed youth United States Exansion of tax credits for emloyers hiring unemloyed or disconnected youth Exansion of safety nets for young eole and reduction of eligibility requirements for social rotection benefits Source: Euroean Commission (2011); ILO (2009d); ILO (2010d); ILO (2011e); Ha et al. (2010); Günter (2009); United Nations (2009); Scaretta et al. (2010). Annexes 55

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