Social Preneur

Social Preneur

New World Bank Youth Report: Shaping the Future of Africa’s Workforce

A new joint approach paper by the World Bank and the Global Labor Market Conference (GLMC) finds that the total number of inactive youth in the Global South – individuals who are not in education, employment or training (NEET) – is set to rise to 295 million by 2033, a figure equivalent to the population of Indonesia.[1] This is around 14 times higher than the number of inactive youths in the Global North, which is currently 20 million and is projected to remain stable over the next decade.

The approach paper titled “Making Labor Markets Work for the Youth” shows that youth NEET rates are disproportionately higher among females, with two thirds of the global NEET in 2023 being female).

Many of them live in low- and middle-income countries where they tend to marry and have their first child earlier, or where women take on care duties on unpaid work in family enterprises or farms and are therefore classified as NEET.

Global labor markets are currently unprepared to absorb the large and growing influx of young people seeking employment, and the costs of inaction are high. Youth inactivity has several negative socio-economic impacts, including impacting lifelong opportunities, earnings, mobility and mental health, the report shows. It also limits productivity and human capital development, hinders economic growth, and can lead to anti-social behavior and social unrest.

The paper highlights the main constraints which need to be addressed to support young people transition into work and unleash what could be a significant growth engine for the Global South and the whole world economy. These include the lack of employment opportunities for young workers, youth being unprepared for work in terms of educational and skills development, and labor market costs and frictions.

Even though the macroeconomic environment drives employment opportunities, training and employment programs can support better youth transitions into the labor market.  Programs and policies that support youth entry into the labor market fall into three categories: those enhancing employment opportunities, training programs to address skills gaps, and those facilitating youth integration into the workforce.Because a strong start is key for the future of young workers, programs that enhance employment prospects for the youth (even temporarily) can be beneficial when job opportunities are limited. These programs may include grants supporting small business creation, initiatives aimed at improving the productivity of the self-employed, or those offering incentives for hiring youth. On the other hand, where job opportunities are available, youth may lack the necessary skills or access to training programs that address these skill gaps and equip young individuals with relevant labor market skills can prove effective. Furthermore, when youth are unaware of how to access opportunities, or when regulations or social norms limit such opportunities, interventions that facilitate youth placement such as intermediation services or regulatory reforms can facilitate their entry into the labor market.

Evidence shows that proper program design and implementation are crucial for success, emphasizing the need to tailor interventions to local contexts and youth profiles. One-size-fits-all solutions are often ineffective. Successful youth transition strategies identify local economic and social constraints and design a combination of programs to address them. The profile of youth entering labor markets can vary, even within a single country, so programs and policies also need to cater to the needs and vulnerabilities of their target groups. Moreover, given that many youth face multiple constraints simultaneously, programs offering multifaceted support (for example, combining training with search assistance or grants) tend to be more impactful.

The paper also argues that the private sector role has a critical role to play, beyond job creation. The private sector should be involved in policy decisions to ensure that programs address employers’ needs. Its efforts should also complement the public sector in the provision of quality training and employment services. When wage employment opportunities are scarce, private initiative through self-employment and small-scale entrepreneurship should also become significant pathways for youth to access the labor market. The GLMC and World Bank’s approach paper was published today during GLMC, an event which – in partnership with the International Labour Organization, World Bank, Misk Foundation and United National Development Program – brings together leaders, decision makers, innovators, and experts to collaborate on real-world strategies that tackle labor market challenges. This year, GLMC is convening over 5,000 attendees, delivering an agenda featuring more than 200 international speakers, including 45 labor ministers, CEOs, international experts, and public sector leaders from over 50 countries. To access the full paper and an executive summary, please visit https://globallabormarketconference.com/pdf/Making-Labor-glmc.pdf


[1] World Bank Data

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