Davos should look at why young people struggle to find work

11 January 2017

As the global elite convenes in Davos next week for the World Economic Forum's Annual Meeting, one topic high on the agenda will be the future of work, and no doubt many of the usual recipes for youth employment will be on the menu: more training, better education, and more support for young entrepreneurs. But young people everywhere don’t lack the right skills or mindset, they lack decent work.

Mass meeting on Jammie Plaza,University of Cape Town Upper Campus on 22 October 2015. Credit: Tony Carr - Flickr

Programmes for youth employment often fail young people by being heavily supply-side biased. A focus on education, skills, and entrepreneurial attitudes misses a crucial fact: there is no work. Better solutions would focus on overcoming the demand-side impasse in labour markets.

Youth unemployment and underemployment are high in many parts of the world, and have risen since the 2008 global financial crisis. Some 30.5 percent of young people in North Africa and 28.2 in the Middle East were counted as unemployed in 2014 (PDF).

The attention that policymakers, particularly in Africa and the Middle East, are now paying to the injustice and loss of potential that youth unemployment represents is to be welcomed. But somewhat more problematic motives are also in the mix, as many see idle youth as security threats; an elite perception which has grown since the Arab Spring revolutions.

In a recently-published IDS Evidence Report, Marjoke Oosterom, Justin Flynn, Santiago Ripoll and I address two critical questions about current youth employment programming in developing countries:

  1. Why do so many programmes focus on the (supposedly) inadequate preparation of young people for work, rather than on how inadequately labour markets often work for them?
  2. Why are young people usually treated in narrowly economistic and individualistic ways, instead of being recognised as socially-embedded members of communities and families, and persons with political agency?

Youth employment programmes focusing on supply-side interventions 

As the double entendre title of our report, Failing Young People?, implies, it isn’t just young people who fail to fulfil their potential, but also current youth work programming that often fails them.

A particularly widespread problem is how programmes are deeply biased toward addressing the supply, rather than the demand side, of labour markets; that is, working to ensure that young people can seek work, rather to ensure there is work to be found.

Most youth employment programmes enacted by governments and donors contain one (or more) of the following four interventions:

  1. improvements in general education, which (among other benefits) aim to build up human capital, to make young people generally more employable
  2. skills training and apprenticeship programmes, which aim for young people to have the right skills and abilities for specific jobs
  3. behavioural change aspects, which are often woven into broader programmes, and aim to instil the right attitudes, values and performances of employability and responsibility
  4. entrepreneurship training and promotion (including access to credit), which aims to facilitate young people creating their own jobs.

Economically speaking, what these four approaches share is that they all work on what young people bring to labour markets – their knowledge, skills, behaviours, attitudes, and entrepreneurial self-help – instead of what labour markets bring them.

The problem is oversupply

What becomes clear from the studies around the world which we reviewed is that it is hardly necessarily a lack of skills or education – let alone idleness by choice – which renders so many young people marginalised and underemployed. Instead, what is normally missing is an opportunity to work; for instance, one study reported more than 3,500 young job seekers in Lusaka, Zambia, most of them university graduates, lining up in the heat for a job fair that offered a maximum of 200 jobs.

Most developing countries remain severely demand-constrained such that, no matter how skilled, ambitious, or well-behaved young people may be, they struggle to find employers or customers willing to pay them for a decent day’s work; and tragically, this is hardly a new insight.

That labour is chronically oversupplied, and this leads to a structural shortage of decent work, harks back to some of the earliest thinking in development economics. In the 1940s and 1950s, Arthur Lewis highlighted that poor countries were home to such a vast number of people seeking work that economic models should best assume an “unlimited supply of labour”.

The problem of oversupply, Lewis concluded, could only be overcome through sustained government intervention to create demand for labour. The contemporary trope of diagnosing a demographic “youth bulge” in Africa even implicitly recognises a problem of oversupply of young people’s labour-power into economies that do not or cannot demand it; yet most policy responses still focus on changing what young people bring to the market. They may help a few to “muddle through”, but not succeed at fixing the structural problem.

Overcoming the demand-side impasse

None of this means that education, skills training, behavioural change or enterprise facilitation doesn’t make sense, particularly in individual cases. But it does suggest that some resources currently directed towards skill-building or entrepreneurship might be used in better ways. What needs to be avoided are more labour supply-enhancing programmes that work primarily to keep young people busy and unrealistically optimistic, while opening young people to blame and further alienation when they fail.

Entrepreneurship programming may be the worst in this respect, with its false promise of individual self-help for “bootstrapping” young people over the demand-side impasse. Policymakers who are worried about discontented youth should bear in mind that Mohamed Bouazizi, whose self-immolation inspired the Arab Spring, was a struggling microentrepreneur.

Recognising that the problem often is inadequate demand for young people’s labour doesn’t obviate any easy solutions; and no, young people shouldn’t have to wait for the slow-moving type of structural transformation that, hopefully, one day will bring sufficient decent jobs to Africa and the Middle East.

But programmes that directly and immediately drive up demand for (skilled and unskilled) labour, such as India’s employment guarantee scheme – which generate incomes and improve public infrastructure –, hold immediate benefits and positive knock-on effects. What these programmes require is political grit and the determination to directly assist the poorer in society through the redistribution of resources.

Finally, as our report underscores, most young people are not atomistic agents who seek only individual advancement, or are idly waiting for help. Rather, for them work has multiple meanings, including recognition in the community, and therefore community-based work and collective local efforts could perhaps create context-specific and valued solutions beyond “self-help” and “muddling through”.

Image: Mass meeting on Jammie Plaza,University of Cape Town Upper Campus on 22 October 2015.Credit: Tony Carr

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