There is growing evidence that youth unemployment is becoming a bigger issue and challenge than adult unemployment (Manpower group, 2012). While young labour participants and adult
participants can be affected by similar opportunities and barriers to work, youth may experience these barriers to a greater degree and may also face additional constraints. This report explores
factors that constrain youth access to work opportunities in low-income countries. Most of the literature focuses on Africa. While there are a few empirical studies, most of the literature is
based on qualitative analysis. Barriers to work opportunities identified include demand-side factors (economic constraints; labour market failures; poor access to credit) and supply-side factors (educational and skills mismatch; lack of social capital). They are cross-cut by social, economic, and political biases against youth (Moore, 2015). Urban youth and female youth are more likely to face obstacles in accessing work opportunities.
I. Demand-side factors
Barriers to employment and work opportunities on the demand side are often not necessarily youth-specific but can affect job seekers generally (Betcherman & Khan, 2015). These include the state of the economy, the absence of a business-friendly environment and infrastructure shortfalls (Ibid). Young people are particularly vulnerable, however, to demand-side fluctuations (Choudhry et al., 2012; in Baah-Boateng, 2016). During difficult economic times, youth are often the first to be laid off. This hinders their ability to build skills and experience (see Baah-Boateng, 2016; Manpower Group, 2012). Young people are also more likely to be affected by certain constraints, such as poor employer perceptions of them; lack of entry-level jobs; inefficient information systems; and weak access to credit.
Unemployment is closely linked to the state of the economy (Broussara & Tekleselassie, 2012). There is a debate about the role of real gross domestic product (GDP) on youth employment in Africa. While Anyanwu (2013)’s empirical analysis of macroeconomic determinants of youth employment challenges finds that real GDP growth has a significant positive effect on youth employment, Baah-Boateng (2016)’s econometric analysis finds that real GDP growth has no significant effect on youth employment.
There is consensus in much of the literature on Africa that poor progress in the structural transformation of the economy toward a modern, export-oriented enterprise sector has resulted in limited economic opportunities and weak employment generation (Baah-Boateng, 2016; Fox & Thomlin, 2016; Betcherman & Khan, 2015). Baah-Boateng’s (2016) study on Africa finds that the quality of economic growth (measured by the share of agriculture and manufacturing value-added in total national output) has a significant negative effect on youth unemployment. Growth is largely due to the extraction of natural resources and capital intensive service sectors that do not advance labour absorption and youth employment (Ibid; Baah-Boateng, 2014). There is also a low share of the labour force working in private industry, in contrast to Asia or Latin America (Fox & Thomas, 2016). East Asia has undergone a more labour absorbing transformation, with labour-intensive manufacturing and services accounting for a greater share of national output and
generating sufficient employment (Betcherman & Khan, 2015; Grant, 2012).
Literature on various areas of the world (Africa, the Middle East & North Africa; Eastern Europe & Central Asia) finds that the limited number of formal jobs (stemming from economic structures
that do not foster job creation) is a key obstacle to youth economic opportunities (see Morre, 2015; Malik & Awadallah, 2013; Nkechi et al., 2012; Elder et al., 2015). This youth employment
problem is considered to be a subset of overall employment challenges (Fox & Thomlin, 2016), although the degree of impact may vary (Baah-Boateng, 2016).
Neglect of employment as a core component of the development agenda
Employment has not been a focus of economic policies in many countries but has been treated instead as a residual outcome of economic policies (Baah-Boateng, 2014). Even where policy statements do promote employment, few cities actually promote labour-intensive growth (Grant, 2012). In terms of agricultural policy, the separation of efforts to accelerate agricultural growth in Africa and job creation has undermined the generation of income and employment for large numbers of young people (Filmer, Fox et al., 2014). Governments have also ignored or undermined the potential of household enterprises/the informal sector, which could serve as a key area of work for young people. Vendors, for example, are often considered a nuisance and sent away from business districts (Ibid).
Employer perceptions and lack of entry-level jobs
The literature on Sub-Saharan Africa and Asia and Pacific finds that employers and enterprises are often sceptical about hiring young people, citing a lack of expertise and professional and personal immaturity. At the same time, they are reluctant to invest resources in training young people when they could hire more experienced adult workers (Elder & Koné, 2014; Elder, 2014; Grant, 2012; Manpower Group, 2012). (See also a section on skills mismatch.) Labour markets in low-income countries often lack available jobs suited to entry-level skills, with job postings requiring substantial work experience (Baah-Boateng, 2016; Manpower Group, 2012).
Ineffective labour market information systems
While the lack of an effective labour market information system is a constraint for job seekers generally, youth are particularly affected by information asymmetry due to their limited labour market experience and weak networking (Baah-Boateng, 2014). (See also a section on social capital). Many countries in Sub-Saharan Africa, for example, do not have efficient employment placement centres to register and facilitate placement of youth in employment (Ibid). Youth may not be aware of how to navigate the labour market or to find and pursue available jobs in the absence of such support (Betcherman & Khan, 2015; Manpower Group, 2012). A case study on Viet Nam finds that weak labour market information systems has resulted in students continuing to apply for courses based on family associations and suggestions that are poorly suited to the economy (Grant, 2012). (See also section on skills mismatch).
Poor access to credit and financial services
Poor access to credit and labour regulations can disproportionately affect young people (Betcherman & Khan, 2015). Anywanu (2013)’s study finds that access to credit has a positive and significant effect on youth employment in North Africa. Poor access to agricultural credit and financial services, along with insecure land rights, is a key obstacle for young people interested in agriculture (Moore, 2015; Filmer, Fox et al., 2014). Young people also struggle to gain access to credit to start non-farm businesses, hindering youth employment (Ibid; Baah-Boateng, 2014;
Msigwa & Kipesha, 2013).
II. Supply side factors
Supply side barriers, such as skills mismatch, are more likely to affect young people than adults (Betcherman & Khan, 2015).
The increasing young population in Africa and its effect on labour market inflows (against the backdrop of limited job opportunities) – the youth population bulge – is often cited as a key cause of youth labour market challenges in Africa (Baah-Boateng, 2014). There are different findings, however, in empirical studies. Baah-Boateng (2016)’s econometric analysis finds that the youth population share has a significant effect on youth unemployment in Africa. Anywanu (2013) also finds that the ratio of youth to total population has a negative and statistically significant effect on youth employment in Africa. In contrast, Lam (2014)’s statistical and regression analyses finds limited evidence that a higher proportion of young people in the working-age population (youth bulge) leads to higher youth unemployment.
The rapid increase in the youth population would not be a concern if young people had the relevant skills to make them useful in the economic development process (Baah-Boateng, 2014); and if the economy had the capacity to absorb them. The labour force in Africa is growing faster than in Asia or Latin America, which makes it harder to transform the structure of employment in
the former (Fox & Thomas, 2016).
Human capital endowment – measured by education, skills and work experience – is considered to be the key determinant of the labour market success of individuals (Baah-Boateng, 2016).
Youth experience greater formal labour market challenges due to their lower level of workrelevant skills. Literature on Africa, Asia and Pacific, Eastern Europe and Central Asia notes that low levels of educational attainment and skills are key obstacles to finding work by young people (Baah-Boateng, 2014; Elder, 2014; Elder et al., 2015).
Studies have also observed, however, that youth with higher education (with at least a secondary school education) in low-income countries (e.g. Africa, Asia & Pacific) are more likely to be unemployed compared to the less educated (see Baah-Boateng, 2016). This finding is attributed to higher employment aspirations on the part of graduates (who hold strong preferences and find work in the informal sector unappealing); and to their greater resources, which gives them the ability to engage in extensive job search and to hold out for their ideal job (usually the formal, wage sector) (Ibid; Fox, Senbet & Simbanegavi, 2016; Betcherman & Khan, 2015; Elder, 2014; Filmer, Fox et al., 2014). This results in educated youth competing for few well-paying, formal jobs in the public sector – and often searching for employment for a long time without success (Fox & Thomas, 2016; Fox & Thomlin, 2016; Filmer, Fox et al., 2014; Elder & Koné, 2014; Grant, 2012).
In contrast, young people with limited or no education are more likely to engage in informal employment (household farms and firms) and agricultural work or to accept lower wages. They often come from low income households and have no choice but to earn income more immediately (Baah-Boateng, 2014; Elder & Koné, 2014; Msigwa & Kipesha, 2013; Mitra & Verick, 2013; Grant, 2012). Young people are often overrepresented in the informal sector, experiencing unstable jobs (Perrot, 2015). In such situations, it is not unemployment that is a concern, but rather underemployment, low productivity and low wages (Fox, 2016; Fox et al., 2016; Ismail, 2016).
Despite growing educational attainment, much of the literature cites a lack of skills and experience as key barriers to youth work opportunities in various areas of the world. The education systems in various low-income countries offer a curricula that fails to foster the skills required in the contemporary labour market (e.g. problem solving, communication, cooperation, leadership, critical thinking, creativity, interpersonal, computer literacy, vocational and entrepreneurial skills) (Fox, Senbet & Simbanegavi, 2016; Betcherman & Khan, 2015; Baah- Boateng, 2014; Filmer, Fox et al., 2014; Ajufo, 2013; EFA, 2012; Manpower Group, 2012; Grant, 2012; Nkechi et al., 2012; Roudi, 2011). In Africa and the Middle East, for example, the school system is still geared toward achieving employment in the public sector, which represents an area of low growth (Baah-Boateng, 2014; Roudi, 2011).
Lack of social capital
Alongside lack of work experience and appropriate skills set, lack of networks and connections (especially for youth from families lacking significant social capital) and patronage systems can put youth at a tremendous disadvantage for new job opportunities (BaahBoateng, 2014; Malik & Awadallah, 2013; EFA, 2012; Manpower Group, 2012; Grant, 2012; Nkechi et al., 2012). In MENA, for example, limited economic opportunities are rationed by connection rather than competition (Malik & Awadallah, 2013). A report on the Asia-Pacific region also finds that most Asian-Pacific youth search for jobs through informal networks, which can be discriminatory towards less-connected youth, who are excluded from such job networks (Elder, 2014).
III. Demographic characteristics
Demographic characteristics of youth (e.g. sex, education, geographic location) have implications for their work opportunities and barriers to work (Baah-Boateng, 2016). Marginalized youth, such
as young women, youth with disabilities, youth from minority populations, youth living in remote rural areas and urban slums, face particular challenges in accessing work and engaging in
vulnerable employment (Moore, 2015). As such, youth unemployment needs to be disaggregated and differentiated along with categories of youth (Ismail, 2016).
As discussed above, youth with greater levels of education often experience higher levels of unemployment, whereas youth with less education experience underemployment and greater vulnerability in employment.
Much of the literature, focusing on a range of countries and regions, emphasise that young women are more likely to have difficulty in accessing work opportunities. Youth unemployment rates in countries in Africa and Asia, for example, are consistently higher among females than males (Baah-Boateng, 2016 and 2014; Elder, 2014; Elder & Koné, 2014; Msigwa & Kipesha, 2013). Women who do work are more likely to work in agriculture and/or to find jobs in the informal sector (Fox & Thomas, 2016; Ismail, 2016; Elder, 2014; Broussar & Tekleselassie, 2012; Roudi, 2011). In Eastern Europe and Central Asia, young men are more likely to obtain stable employment than young women, despite similar educational levels (Elder et al., 2015). In Latin America, high levels of education among girls have not improved their labour market position (see Grant, 2012). In MENA as well, more educated women are not necessarily able to find a job more easily than less educated women (Roudi, 2011).
Social and cultural attitudes and norms tend to undermine labour force participation of young women in various contexts, such as in MENA and South Asian countries (Mitra & Verick, 2013;
Roudi, 2011). International data demonstrates that girls and young women often face barriers in accessing good quality, non-stereotyped studies and vocational training courses, which limits
their professional choices and opportunities when they enter the job market (Perrot, 2015).
Youth are expected to comprise 60 per cent of urban populations by 2030 and are overrepresented among the urban poor (Grant, 2012, p. 1). There are broad consensus and extensive evidence that youth unemployment rates are much higher in urban than in rural areas (Baah-Boateng, 2016 and 2014; Ismail, 2016). Youth, in particular, are attracted to urban life and to the prospect of jobs that pay more than agriculture, but these are not readily available (Ibid; Ajufo, 2013; Grant, 2012). Fox and Thomas (2016) find in the case of Africa that the transition from school to work is excessively long for some young people in urban areas – as urban youth can search a long time for a preferred wage job, without success. In Tanzania, young people living in urban areas were found to be five times more likely to be unemployed than employed (Msigwa & Kipesha, 2013, p. 73). In Ethiopia, while youth in rural areas face similar labour market outcomes as the adult rural population, youth in urban areas encounter greater challenges than the adult urban population (Broussara & Tekleselassie, 2012).
Other demographic factors
Youth growing up in poorer and less educated households, with less access to opportunities to build necessary skills and less access to professional networks, will be at a particular disadvantage in entering the workforce (Fox, Senbet & Simbanegavi, 2016; Baah-Boateng, 2016; Elder et al., 2015). Youth with disabilities find it particularly hard to get apprenticeships or job training that would enable them to enter the workplace (Groce & Kett, 2014)