Development and the Next Generation

Meeting the Challenge of Youth Employment

Messages from World Development Report 2007Emmanuel Jimenez, Staff Director, WDR07

And Director, Human Development, East Asia and Pacific

www.worldbank.org/wdr2007

I. Why youth?

A higher base on which to build human capital to grow and reduce poverty even more

A large youth cohort is a potential demographic dividend

Demographic Windows of Opportunity

19501960

19701980

19902000

20102020

20302040

2050

India

Egypt

Window closes >10 years

Tunisia

China

Window will close < 10 years

Germany

Japan

Window closed

Similar countries: Timor Leste, Lao PDR, Afganistan, Yemen, and most of Sub-Sahara African countries

Similar countries: Thailand,

Kazakhstan, Iran, Chile,Russia Federation,

Sri Lanka

Similar countries: Ireland, Italy, France, Czech Rep.

and 25 othercountries

Similar countries: Algeria,Lebanon,Colombia,Nicaragua,Indonesia, Philippines, Vietnam

Year window opens

Year window closes

Window remains open beyond 2050

South Africa South AfricaNamibia

Uganda

II. Why Youth Employment?

Motivation

Structure/Framework of the Report 5 Transitions 3 Policy Lenses

Applying Framework: Policy Message

Human capital during 5 youth transitions key for poverty reduction and growth

12

100 % of Cohort

Age24

Learning in school after primary-age Working

Forming families

Participating in civic lifeTaking health risks

III. Youth Lens on Policy: 3 types of questions asked of each transition

Opportunities Capability Second-chances

Policies affecting human capital formation during Youth transitions:

-- Economy widepolicies and insts: macro stability,invest. climate, governance, labor market regulations-- Education-- Training-- Health services -- Welfare & familyservices -- Infrastructure

Youth ‘Lenses’

“Youth friendly”policies

Countries need to facilitate entry to work

Broadening Labor Market Opportunities

Apply youth lens to policies to improve the investment climate: Access to world trade good for many youth Reforming institutions that hinder the demand for youth labor

Removing disincentives to hire inexperienced workers Closing the gap between public and private sector pay Helping youth entrepreneurs access the capital market

Facilitating mobility

Source: WDR 2007

Across Borders: Migration broadens opportunity for youth

Facilitate movement Reduce remit costs Info campaigns to reduce risks Improve invest climate at home

Migrants are concentrated among youth.

(Figures: Migrants to South Africa and Migrants to United States)

Most young people wish to migrate temporarily

Outline Motivation Structure/Framework of the Report Applying Framework: Examples

Opportunity: Countries HAVE policies to expand employment, but it’s important to assess their impact on youth

Capability Second-chances

3 types of questions asked of each transition: a ‘youth lens’ on policy

Opportunities Capability Second-chances

Policies affecting human capital formation during Youth transitions:

-- Economy widepolicies and insts: macro stability,invest. climate, governance, labor market regulations-- Education-- Training-- Health services -- Welfare & familyservices -- Infrastructure

Youth ‘Lenses’

“Youth friendly”policies

Capability: Improve educational quality and relevance

Inadequate preparation for adolescence Improve access to secondary; quality of basic

Relevance of education for jobs Curriculum reform, Flexibility in educ systems

Learning achievement may be low

Figure 3. PISA 2003 Mathematics Test Scores

200

300

400

500

600

Poorest quintile students Richest quintile students Average

Source: WDR 2007

Capability Beyond School: Skills and Entrepreneurship

Skills development to meet the demands of the labor market: Formal Apprenticeship:

• German “Dual System”

• Australia new apprenticeship combines practical work and structured training

Training by employers• 60% of firms in EAP provide training

Entrepreneurship:• Networking with private sector and mentoring (examples:

Endeavor in Argentina, Brazil, Chile, and Mexico)

• Finance and technical assistance to entrepreneurs (example: Chile seed capital program led by CORFO)

Capable decision-making: % of youth who think they have the most influence on human capital decisions

Relieving the Information Constraint: Education in the Dominican Republic

Measured = Actual earnings based on worker surveys

Perceived = Earnings perceived by 8th grade boys if they finish prim or sec

Perceived returns < measured returns

Information campaigns in AND outside schools

Source: Jensen (2006)

3180

4479

3105 3246

0

1000

2000

3000

4000

5000

Finish Prim Finish Sec

Wee

kly

DR P

esos

Measured Perceived

Incentives also matter.

Conditional cash transfers: Mexico’s Oportunidades:

• .2 more years of schooling at 13-15• reduced child morbidity and mortality

Bangladesh’s Female Secondary Stipend Program

Cambodia’s secondary scholarship program for girls

Higher wages

Outline Motivation Structure/Framework of the Report Applying Framework to SSA: Examples

Opportunity Capability: Countries have education

programs but quality and relevance have to improve; and information and incentives given to youth

Second-chances

3 types of questions asked of each transition: a ‘youth lens’ on policy

Opportunities CapabilitySecond-Chances

Policies affecting human capital formation during Youth transitions:

-- Economy widepolicies and insts: macro stability,invest. climate, governance, labor market regulations-- Education-- Training-- Health services -- Welfare & familyservices -- Infrastructure

Youth ‘Lenses’

“Youth friendly”policies

Who needs Second-chances?

0%

20%

40%

60%

80%

100%

Never enrolled Dropout between grades 1 and 5

Dropout between grade 5 and 9 Finished grade 9 without basic skills

Finished grade 9 with basic skills

Composition of educational attainment level among youth (15-19)

Second-chances: Programs are more sustainable if …

They are designed to attract young people (e.g., age-specific education, such as 1/2 of Malawian 19 yr-olds are in primary school; use peer educators)

They help youth reenter the mainstream (e.g., graduate equivalency programs)

Malawi 2000

0% 10% 20% 30% 40% 50% 60% 70% 80%

15

16

17

18

19

Age

Enrolled at primary/secondary level

Second-chance employment programs: Success factors

Provide work experience -- e.g., Senegal’s AGETIP builds infrastructure contractors agree to labor-intensive tech. use inexperienced but trained youth 35,000 person-yrs of employ in 7 yrs

Provide relevant skills: Joven programs combine tech and life skills training In Chile, employment increased by 21 percentage points

among participants In Argentina, employment increased 10 percentage points

and wages increased 10 percent Employers surveyed by Entra 21 valued the combination of

life skills and technical skills.

Outline Motivation Structure/Framework of the Report Applying Framework to SSA: Examples

Opportunity Capability Second-chances: Prevention; lens Help

young people recover from poor outcomes