1

Youth:Employment, Unemployment and

Labour Market Programmes

Niall O’Higgins, Senior Research Specialist,

Youth Employment Programme, ILO, Geneva

CREATING JOBS FOR EQUITY AND PROSPERITY, REGIONAL CONFERENCE ON EMPLOYMENT AND SOCIAL INCLUSION, 16-17 APRIL 2015, SKOPJE

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Introduction

• Youth Labour Market Situation

• Policies and programmes to promote youth employment

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Youth Unemployment is a major challenge

Alban

ia

Bosni

a an

d Her

zego

vina

Mac

edon

ia, F

YR

Mon

tene

gro

Serb

ia

Turk

ey

Bulga

ria

Croa

tia

Roman

ia

Euro

pean

Uni

on0

10

20

30

40

50

60

70

200320082013

4

As can be seen also from the ratio of the youth (15-24) unemployment rate to the adult (25-49) unemployment

rate

Mace-donia,F

YR

Turkey Bulgaria Croatia Romania EU280

0.5

1

1.5

2

2.5

3

3.5

4

200320082013

5

But the real ‘unemployment’ problem concerns the long-term unemployed, also

amongst the young

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0

10

20

30

40

50

60

70

80

Macedonia,FYRTurkeyBulgariaCroatiaRomaniaEU28

Lon

g-t

erm

un

em

plo

yed

as

a %

of

all

un

em

plo

yed

(ag

ed

15

-24

)

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Also, job quality is an issue for young people

Male Female Urban Rural Total0

10

20

30

40

50

60

70

Informal Employment amongst young people (15-29) in Macedonia, FYR

% o

f all y

ou

th e

mp

loym

en

t,

Informality and poor quality employment

• Informal employment rates (and other indicators of poor job quality) are disproportionately high for the young

• Concentrated amongst the least educatede.g. in Macedonia, FYR prevalence is around 70% amongst young people with primary education or less; under 20% for those with tertiary education

• Consequences:Strongly associated with

– job dissatisfaction– ill-health– Lower wages

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What to do about it? Youth unemployment strongly dependent on Aggregate

Demand Labour Market Institutions:

reducing employment protection is not the answer EPL associated with lower job turnover, not more jobs for YP

Tax wedge (Gap between wages received by workers and labour costs paid by employers) - consistently found to have a strong positive impact on youth unemployment (e.g. Jimeno & Rodriguez-Palenzuela, 2002), and negative impact on youth employment (Bassanini & Duval, 2006; Bertola et al. 2007)

Need to recognise (and exploit) complementarity amongst institutions and programmes

Stronger EPL associated with productivity gains – supports economic growth

Resolving problems associated with regulation is more about designing AND APPLYING rational rules rather than removing regulations per se

Education and Training systems – important, but long term solution

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ALMPs ALMPs = promising avenue to develop and

improve Effectiveness varies greatly according to a

number of factors Comprehensive interventions Job Search Assistance Training vs. employment subsidies On-the-job training Public vs. Private Business Cycle Targetting Social partner involvement Timing of evaluation

• Encouraging Youth Entrepreneurship?

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Thank You & Best of Luck