By Dr. Gyan Pathak
Youth (age group 15-24) are almost five times more likely to be unemployed than adults across the Asia and the Pacific, and when they secure a work it is often in the informal economy with low wages and poor working conditions. After the COVID-19 pandemic, they are now facing additional labour market barriers with long-term repercussion for their earnings and life chances.
An ADB brief on “Youth Employment Support in Asia and the Pacific: What Works” says that youth employment is a complex socioeconomic challenge that defies simple analysis or solutions. Understanding the complexities can help shift the emphasis of the policies, programs, and investments that are needed.
As youth employment remained stubbornly weak after the 2008 global financial crisis, a key consensus emerged that the root causes of problems faced by youth exist on both the supply and demand side of the labour market. It is not only about young people having inadequate or irrelevant skills and competencies to be employable, but also about the scarcity of quality jobs for youth.
The study finds five key issues that underpin the complexity of the youth employment challenge – Youth’s Structural Disadvantage, the Dual Demand-Supply-Side Challenge, Youth Vulnerability to Shocks, Youth in the Life Cycle, and Youth and the Future of Work.
Compared with adults, young people face persistent disadvantage in the labour market. Youth unemployment rates tend to be much higher than adults (25 and above age group). In Asia and the Pacific, 13.8 per cent of young people were unemployed in 2019, compared with 3 per cent of adults.
Many young people in the region cannot afford to be unemployed. Youth labour participation in the region is higher than in other parts of the world. A majority of young people are locked in informal employment, working in precarious situation, under poor conditions, and for low pay. Prior to the COVID-19 pandemic, 84 per cent of the regions youth compared with 69 per cent of adult had no access to social protection. The data is important since the region houses about 55 per cent of the world’s youths.
Moreover, extreme or moderate working poverty, ie living on less than $3.20 a day) affected one in four young workers, a rate notably higher than the 18 per cent for adults. Further, rates of youth not earning or learning have remained persistently high. In 2019, there were more than 160 million young people, ie around a quarter of region’s youth population, not in employment, education, or training (NEET) and this rate has been on the rise since 2012. In South Asia, the NEET rate was highest at 30 per cent. It is obviously a great concern for India since it is the largest and most populated country in South Asia.
ADB and ILO had said in their report in 2020 that for some young people, age combines with other vulnerabilities – including gender, sexual orientation, disability, migrant status, and remote or rural locations – to compound disadvantage. For instance, young women make up nearly three quarters of NEET in Asia and the Pacific, with many having responsibilities at home for care and/or subsistence production work.
The difficulties youth face in securing quality jobs are caused by constraints on both sides of the labour market. The employment challenge is not only about getting young people into quality jobs (the supply side). It is also about whether sufficient quality jobs are available (the demand side).
On supply side, young people are not being well prepared for the world of work. In South Asia, over half (54 per cent) of the youth population are projected to leave education without the 21st century skills required to be employable across 2020-30. Moreover, this subregion is expected to have the largest youth labour force in the world until 2040. It indicates disconnect between educational systems and labour market as well as lack of enabling support structures, such as affordable childcare. Several countries are facing significant talent shortages. The problems can be particularly acute when there is a gap in perceptions of employability between stakeholders in the education system and employers
Apart from possessing inadequate or irrelevant skills to be employable, young people are further disadvantaged by a lack of job experience and social capital and by limited information during job search. There can also be a mismatch between the aspirations of youth on the one hand and the positions offered by employers on the other, which can lead to anxiety, frustration, and labour market detachment. Even where young people possess appropriate skills and competencies, there may not be sufficient jobs available for them. Lack of quality job in the region is a major challenge.
While government policies and programmes are focused on supply side such as skills, the demand for youth labour has emerged as the primary constraint. Demand side barriers, such as jobless growth, affect all jobseekers and workers, but may affect youth disproportionately. Insufficient creation of entry-level jobs, restrictive employment regulations, and negative employer perceptions toward youth are key constraints to hiring young workers. Further, reduced access to credit, markets, and networks affects young entrepreneurs.
Young people are more vulnerable than adults to economic crises for four main reasons. Firms reduce hiring and are more likely to lay off recent hires. Young are more likely to work in informal and temporary employment with less access to protection and support when a crisis strikes. And young entrepreneurs have less access to finance, resources, information, and networks needed to bolster their resilience during crisis. Poor start have long-term repercussions on earnings, job quality, occupational progression, and well-being. Such start during crisis results in lifelong scarring effects. COVID-19 has worsened their precarious situation, an analysis of which shows that youth-adult recovery gap is widening.
The experience of young people is further complicated by their labour force entry during a complex stage of life transition linked with economic and social inclusion and personal growth. Their complex development needs require urgent support.
The future of work is fast changing by “mega trends” and the young people’s prospects in the labour market are being affected. These trends are highlighted in demographics, Industry 4.0, and climate change. All these three are changing fast and therefore we need comprehensive and integrated solutions. (IPA Service)