Presentation in Lisbon
Promoting Youth Employment IMVF December 13, 2012
Outline I. Context: Africa’s Economic Outlook II. Stylized facts: What is the employment situation of young Africans? III. Looking forward: What can be done to promote youth employment?
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I. Africa’s Economic Outlook
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Africa’s Growth performance 2001-2013
Annual Real GDP Growth (%)
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7 6 5 4
3 2 1 0
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Africa
Sub-Saharan Africa
North Africa
Libya 14.8% Niger 8.6%
Côte d’Ivoire 7.1% Liberia 8%
10 Fast-growing economies in 2012/13
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Ghana 8%
Ethiopia 7.3% Rwanda 7.3%
Angola 7.7% Zambia 7.1%
Mozambique 7.7%
Drivers of Growth
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Internal
External
Domestic consumer demand
Commodity prices, export volumes
Macroeconomic policies and management
Prices of agricultural export
Growth sectors: Mining, agriculture, services, construction and manufacturing
External financial flows (ODA, FDI, Remittances)
Africa’s young population is growing and jobs are not keeping up 1.000 900 200
800 700
150
600 500
100
400 300
50
200 100 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0
Youth Population 7
Youth Employment
GDP (right axis)
GDP, Billion (2005 PPP int. $)
Young (15-24) People, Million
250
II. The employment situation of young Africans
Unemployment is only one of many bad labour market situations for young people Youth time use by Country Income Group (2010) 100%
Unemployed Discouraged
40%
Inactive
25% NEET
60%
Student
5% 10% 10% 5%
10% 5%
1%
3%
5% 8%
28 %
41% Working
80%
9%
24 %
7% Part-time
10%
Self-employed Unpaid workers
10%
9%
Employee
Part-time Underemployed
11%
Unemployed
48%
20%
34% Students
Discouraged 48%
34%
0%
LIC Source: Authors' calculations based on Gallup World Poll (2010)
MIC
Out of LF
Student
Many youth in work are poor Food insecurity by employment status 57%
60%
52% 47%
50%
52%
49% 43%
43% 40%
36%
35%
35%
37%
37%
34% 27%
30% 21% 20% 10%
LICs Source: Authors' calculations based on Gallup World Poll (2010)
50%
MICs
34% 26%
III. What can be done to promote youth employment?
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Demand for labour is the biggest challenge 100% Source: AEO Country Survey; 37 countries
90% 80% 70% 60% 50% 40%
89%
30% 47%
20% 10%
46%
40% 16%
0%
Aggregate labour demand
Skills mismatches
Labour market Attitudes of Labour market information employers and regulation. youth 12
Recommendations for Job Creation • Improve access to finance
– Invest in good screening and targeting – Combine funding with training and mentoring
• Infrastructure • Social Protection – For informal entrepreneurs and workers – Take the burden of severance pay
• Provide incentives to hire and train young people. But be careful to avoid displacement 13
Recommendations for Education • Link education systems to employment needs • A stronger focus on relevant skills is of particular importance for education and training in rural areas. • Provide opportunities to young people that have obtained skills in informal training to certify them.
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The way forward The youth employment challenge in Africa is primarily one of insufficient demand for labour. 1. Demand for labour is the biggest problem ďƒ promote job creation in the private sector: help firms grow and connect to markets 2. Make education more comprehensive and link it better to the need for skills in the market 3. The rural and informal sectors are opportunities. Build on them!