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Young and Aspiring but Unqualified and Jobless: What July 15 Means to Youth Unemployment?

FROM: Katharina Walker, Zenebe B. Uraguchi – 14. July 2016
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In November 2014, the United Nations General Assembly declared 15 July as World Youth Skills Day. This year the day is celebrated for the second time. The day highlights the importance of youth skills development at the global level and the need for better ways of tackling high youth unemployment/underemployment. While celebrating the day is important, much more needs to be done to enable young people to successfully transition into labour markets.

In this blog post, we use this occasion to reflect on some key issues of skills development – what it means, the main opportunities and challenges it entails and how it can best be addressed. We argue skills development: a) is part of the broader knowledge system and b) can contribute to meaningful youth employment if it is seen as one of the key dimensions of labour market systems development.

Skills as part of knowledge system

Skills development determines success in the labour markets. It’s a strong predictor of stable and quality jobs among young people. Young people with enhanced skills and looking for their first job are better prepared for a smooth transition from school to work.

For this, it’s important to define skills as one component of knowledge system that includes know-how, attitudes and competencies. Skills development goes beyond formal vocational education and training; it includes non-formal and informal types of training. Young people need different type of skills to meet the different challenges in life: foundation skills, technical skills, and transferable skills.

Labour markets are constantly evolving. For example, employment relationship is becoming less secure: only half of workers globally are in salaried/waged employment; new models of employment is on the rise: part-time, temporary, own work; informal and unpaid family work is wide spreading, especially among young women. This calls for the need for young people to have different and relevant skills to get and retain a job, progress at work, cope with changes or secure another job.

Root causes of youth unemployment

The global youth unemployment rate remains very high. Most young people face bigger labour market inequalities, and longer and more insecure school-to-work transitions. The International Labour Organisation (ILO) estimates young people are three times more likely to be unemployed than adults. More than 73 million youth worldwide are looking for work. This is highly alarming: two out of every five young persons of working age either are unemployed or have jobs that don’t pay enough to escape poverty. In particular, the situation is more serious for young people who are neither in employment nor in education or training (NEET).

One of the root causes is skill shortages or mismatches – available skills are not fitting well with the demands of the labour markets. Training and education institutions provide low quality and less relevant skills, creating a mismatch between young people’s skills and the needs of employers. There is lack of effective mechanisms/platforms for dialogue between employers and education institutions.

Even if young people have appropriate skills, they aren’t spotted by potential employers. There is often a lack of relevant and adequate information to find a stable, gainful job they really aspire. They also lack affordable and quality career counselling and coaching services. The problem also lies in the demand side: institutional barriers (e.g. weak investment climate) [1] leading to weak private sector investment for jobs and higher competition for fewer job opportunities.

Solutions, therefore, should address skills development in an integrated way together with other dimensions of labour market system — that is, intermediation (e.g. job matching services) and job creation (e.g. through private sector development and investment). Active labour policies are also critical around these three dimensions of labour market development (skills-intermediation-demand). Policies shape, for example, wages, collective bargaining guidelines, unemployment benefits, job-search assistance and employment incentives.

Emerging experiences

What works to support young people in the ever-evolving labour markets?

Training and employment services need to be closely tied to job prospects. This is the key lesson from the Employment Fund project in Nepala project of the Swiss Agency for Development and Cooperation (SDC), the Department for International Development (DFID) and the World Bank. The project, implemented by Helvetas, facilitated the training of over 100,000 youth, and more than 75,000 of them were employed. To get more young people employed, the project applies a results-based financing approach. Training providers receive the biggest share of their payment only if graduates are placed in gainful employment and earn an income above a pre-defined threshold. The Employment Fund furthermore puts special emphasis on the inclusion of women and disadvantaged groups, for instance, through financial incentives and counselling.

In remote areas of Kosovo, the Skills for Rural Employment (S4RE) project, funded by Medicor and Helvetas, targets unemployed youth that are not sufficiently serviced by the formal vocational education and training system. Based on the learning group methodology, young people come together in peer/opportunity groups, check their employment ideas with the market reality, and acquire new technical, entrepreneurial and life skills. Skills development takes place on-site where youth people live, it’s imparted by local training providers and it focuses on local market opportunities.

The Enhancing Youth Employment (EYE) project of SDC implemented by Helvetas and its local partner in Kosovo shows how skills development and intermediation are linked. By applying a systemic approach, the project facilitates career counselling as a means to strengthen linkages between vocational schools and companies. The Pristina Career Counselling Centre provides students of VET schools with opportunities to acquire knowledge, skills, and experience necessary to identify options, explore alternatives in the labour markets, and succeed in choosing a suitable profession. Companies, through internships, have the opportunity to identify future employees and talents, reducing search time and selection expenses.

Three key takeways

In conclusion, three main messages stand out from this blog post.

  • First, youth unemployment requires identifying root causes and not symptoms. Many people know the gravity of the problem; what is important is to understand why the education and training, and labour market systems underperform or fail in creating jobs for young people.
  • Second, skills development is part of a broader knowledge system, going beyond formal training of young people. To meet the different challenges in life and the evolving labour markets, young people need different and relevant skills.
  • Third, ‘we cannot always build the future for our youth, but we can build our youth for the future.’ [2] Thus, solutions designed need to be innovative to tackle the root causes by facilitating the right actors in the education and training as well as labour market systems. The solutions need to address skills mismatch (the ‘wrong’ qualifications), lack of means or tools to find potential jobs (the information and guidance gap) and weak private sector investment (‘few’ or ‘no’ jobs). Quite often policies are critical for ensuring quality jobs.

Additional sources:

 

[1] Weak investment climate incurs costs: contract enforcement difficulties, stifling regulation, rampant bribes and crime, and unreliable infrastructure. See https://www.imf.org/external/pubs/ft/fandd/2005/03/pdf/smith.pdf

[2] Franklin D. Roosevelt

Authors
Advisor Vocational Skills Development
Senior Advisor Value Chain & Market Development
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