Government Policy and Youth Employment
Niall O’Higgins
Department of Economics and Statistics
University of Salerno
nohiggins@unisa.it
Paper prepared for the World Youth Summit to be held in Alexandria, Egypt, 7-11,
2002.
1) Introduction
This paper deals with a number of issues concerned with the role of
government in promoting youth employment. For the most part the emphasis is on
so-called Active Labour Market Policies or ALMPs. As interpreted here, these are
policies introduced by governments to directly promote employment of young
people. As interpreted here, in essence the policies are categorised as operating in
three ways:
 supply-side, that is, policies which change the characteristics of young people
themselves, thus making them more likely to find work. An example here
would be educational policies or programmes;
 demand-side, policies that encourage employers to hire young people without
changing their characteristics, for example through targeted wage subsidies;
and
 job-matching – this is largely the responsibility of employment services, but
also a number of other institutions have a valuable role to play here in
facilitating the meeting between the supply and demand sides of the youth
labour market.
Of course, more often than not, policies cover elements acting on two and sometimes
all three of these categories. However, the categorization helps in clarifying the
discussion in identifying elements of ‘good’ policies.
Throughout, examples of good and, sometimes, less good practice are
identified and discussed. However, the main aim is to discuss the types of ALMP that
governments can introduce and some of the principles which make for better policies.
This section continues with a discussion of the nature of the youth labour market
problem. Section 2 goes on to discuss the types of labour market policies which can
be and are introduced. Section 3 discusses some principles which may be identified in
making youth labour market policies more effective. Finally section 4 raises some
‘critical areas’ for discussion at the Summit.
Who are the Youth?
The conventional international definition of youth includes those age between
15 and 24 years old. The sense of this definition is that it runs from the earliest
acceptable school leaving age to the age at which most people will have completely
third level education. In practice of course, the definition adopted in different
countries varies for the purposes of defining youth policy. In some countries, entry
into the labour market can occur before 15 years. On the other hand, in many
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countries, the transition between education and the labour market may not be
completed until the late twenties or early thirties. For the purposes of the summit, a
broader definition of young people has been adopted which includes those up to the
age of 35. In what follows data is generally given for young people aged 15 to 24 as in
the standard international definition.
What is the problem?
Youth unemployment
“Youth are an asset, not a problem.”1 Indeed, however, young people often
face serious difficulties in effecting the transition from school to work. The simplest
and most widely used indicator of the extent of the problem is the youth
unemployment rate. The ILO currently estimates that there are 66 million young
unemployed people in the world today2. In industrialised countries, young people
typically face unemployment rates which are twice as high as those of adults. In
developing and transition countries the ratio is often much higher.
Figure 1 shows youth (15-24) unemployment rates and figure 2, the ratio of
youth (15-24) to adult unemployment (25-54) for a selection of countries. The key
conclusions that can be drawn from the figures are that:
 Being a young person is not helpful in finding work – in a little under half the
countries reported here, at least one in five young people looking for work
cannot find it. If one lives in Zimbabwe or South Africa, beautiful countries as
they are, the chances of finding work are closer to fifty-fifty: one in two young
people who wish to work are unable to find it.
 The chances of finding work for young people are much lower than for adults.
In the vast majority of countries reported here, the chances of finding work are
at least twice as high for adults as they are for young people. The notable
exceptions are Germany and Austria, of which more later.
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Not all unemployment is equal. The negative consequences of unemployment
are largely linked to extended and repeated unemployment spells rather than to
unemployment per se. Short spells of unemployment are more or less a natural
consequence of the process of job search and young people are, naturally,
disproportionately represented amongst new labour market entrants. For this reason
alone, one would expect young people to face higher unemployment rates than
adults. Indeed, this argument has been used in the past to suggest that youth
unemployment, even if high, does not constitute a serious problem. However, with
more extended periods of unemployment, the negative consequences of youth (and
adult) unemployment make themselves felt. Health problems, drug addiction, and
other forms of social anomie and social unrest are strongly linked to extended periods
of unemployment. Since young people are more adaptable but also more
impressionable than adults, the long-term scarring effects of long unemployment
spells are likely to be of even more consequence than for older workers. For the
OECD, evidence suggests that the incidence of long-term unemployment is not
significantly lower for young people than for adults (O’Higgins, 2001, Ryan, 2001).
Although a standard indicator in many European and American countries, in
developing countries, the long-term unemployment rate is less frequently reported.
However, to take one example, in Sri Lanka in 1997, the proportion of the
unemployed in long-term unemployment (i.e. unemployed for more than one year),
was 57% overall, with 31% for unemployed teenagers, but with 63% for unemployed
young adults (20-24). That is, whilst teenagers seem to face on the whole relatively
short spells of unemployment, the long-term unemployment rate for young adults
was greater than for the unemployed as a whole. Thus, contrary to commonly held
beliefs, there is evidence to suggest that unemployment for young people is not
typically much shorter (and therefore less serious in its consequences) than for adults.
Beyond the averages: Who is unemployed?
Another aspect of the youth ‘transition’ problem concerns the distribution of
the problem amongst different types of young people. Making the transition from
education to employment is not a problem for all young people, and difficulties tend
to be concentrated amongst specific groups, for example:

Women – figure 3 reports the ratio of the unemployment rates of young
women vis-à-vis young men. Thus, for example, in the Bahamas, young
women are twice as likely to be unemployed as young men. In general, it is
obvious from the figure that, in the overwhelming majority of countries,
young women have a harder time finding work then young men.
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Figure 3: Ratio of female to male youth unemployment rates
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Ethnic Minorities – although less often highlighted, the plight of ethnic
minorities is, if anything, worse than that of women. Although numbers are
less frequently collected in a systematic way, the picture is very obvious across
the world. Whether one is talking of Native Australians in their own country,
Afro-Americans in their adopted one, or the countryless population of Roma
in Central and Eastern Europe the picture remains uncomfortably similar. Such
young people typically face unemployment rates which are two or three times
as high as the rate for majority youths3.

Disabled – again, numbers reporting the situation of young people are less
common, but if one looks at the evidence that does exist, it is fairly clear that
disabled young people face a relatively tough time in finding employment.

Education and Skills Despite the commonly held view that, in developing
countries, the problem of youth unemployment concerns principally educated
young people, there is a growing body of evidence to refute, or at least
moderate, this claim4. In industrialised countries, there is no dispute that those
with low levels of education and skills bear the brunt of youth unemployment.
In developing countries, where, more often than not, there is little or no social
safety net, a substantial portion of young people simply cannot afford to be
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unemployed and must scrape a living as best they can. That this is not an
inherent characteristic of countries going through the process of development
is amply illustrated by Italy, one of the G7+1 countries. Here too,
unemployment amongst young people with relatively high levels of education,
is substantial – traditionally outweighing (in terms of unemployment rates)
the unemployment of those with fewer qualifications obtained in the formal
education system. Not coincidentally, in Italy, there is little or no income
support available for first time job seekers. This is not an argument against the
importance of youth unemployment as a problem. Rather, there is a need to
widen one’s perspective to look at the decent work deficit as a whole rather
than youth unemployment in isolation.
Beyond Unemployment: Indecent Work
As implied above and as sustained by ILO, the effective transition from school
to Decent Work involves more than just the avoidance of substantial levels of youth
unemployment. Decent work is about obtaining and maintaining productive and
satisfying employment; decent working conditions; and, income security. Particularly
in countries where there is not an adequate social safety net, youth unemployment
greatly underestimates the size of the problem which is compounded by substantial
levels of informal sector work as well as by underemployment. In some countries, the
problem may also be partially hidden by the existence of substantial numbers of
young discouraged workers who, finding it impossible to obtain decent work,
effectively withdraw from the labour market and thus are not counted in the official
statistics. Although difficult to measure, it is important to recognise that informal
sector employment as well as underemployment also contribute significantly to the
decent work deficit for young people5. In general, it is precisely those groups which
have greatest difficulties in finding any sort of job who populate the margins finding
poor quality work in the informal sector or who comprise the bulk of discouraged
workers6.
2) What can Governments Do?
There are many areas in which governments can intervene in order to promote
decent work for young people. First and foremost, is to use macroeconomic policies
to promote economic and employment growth. The creation of employment should
be one of, if not the, principal priority underpinning government decisions across a
broad range of macroeconomic policies. In this paper, however, the discussion takes
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this as read7 as concentrates on Active Labour Market Policies albeit broadly
understood as those policies which directly promote the integration of young people
into decent work. Three basic categories of policy are identified; policies which operate
on the supply side, on the demand side and policies which fulfil a matching function
on the labour market respectively. Of course, many programmes include elements of
two or all three of these functions promoting the supply and demand for young
labour as well as fulfilling a job-matching function. Perhaps the most obvious
examples of this are to be found in work based training programmes which typically
involve human capital enhancement through training (supply-side), an element of
wage subsidy to encourage the hiring of young people as well as job-matching
through the selection and placement of appropriate candidates by Public Employment
Services (PES). Nevertheless, the distinction is useful for expository purposes as well as
to identify the elements of programmes which are important in promoting successful
outcomes.
Supply Side: Enhancing Human Capital
Education and Training
Education and training can and do play a key role in promoting more and
better work for young people. Indeed, the importance of improving education and
training systems lies at the heart of the set of recommendations put forward by the
UN/WB/ILO High level Panel on Youth Employment (UN/WB/ILO, 2001). On the
one hand, basic literacy is a fundamental condition for the exploitation of many of
the gains to be had from new (or indeed many of the more traditional) technologies.
On the other, thought needs to be given to ways of making the skills provided by
secondary level education and training systems more responsive to labour market
needs. Whilst the overall level of youth unemployment reflects the level of economic
activity, much can be done to influence the relative level of youth to adult
unemployment and thus to facilitate the entry of young people into productive work.
The German system provides the example par excellence. As shown in figure 2 above,
in Germany, the ratio of youth to adult unemployment rates is of the order of oneto-one, in contrast to most other countries where the youth unemployment rate
stands at between two five times the adult rate. However, in recent years problems
have begun to emerge even there, particularly as regards the fate of young people
once they leave the dual system and also as regards the system’s adaptability in times
of rapidly changing occupational and industrial structures. Moreover, there are many
questions as to the transferability of the German type system to other countries with
differing institutional bases. Many countries have introduced some form of dual
system without, however, achieving the extraordinary performance of the German
youth labour market. Notwithstanding this, the German system remains a useful
example of what can be achieved and how to achieve it.
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In any event, the key issues concerned with education and training systems as
preparations for work regard, first the provision of universal basic education to ensure
a high level of literacy amongst the population and second, the need to adapt, and
make adaptable, education and training systems so that they correspond, and respond,
better to the needs of the labour market.
International experience suggests that links between educational systems and
the labour market need to be developed and strengthened. The German case provides
one very clear example of how this is possible. Recently in Australia, steps have been
taken in this direction with the introduction of the Modern Australian Apprenticeship
system in 1998. A similar point may be made with regard to labour market based
programmes organised for unemployed young people once they have entered the
labour market. The overwhelming international experience shows that an important
element in these programmes is that they involve both (preferably off-the-job)
training and work experience elements. There are several examples of this type of
programme amongst these the Job Placement and Employment Training Programme
(JPET) in Australia and the Youth Pre-employment Training Programme (YPTP) in
Hong Kong are two positive examples illustrated in the boxes below 8.
Box 1: Australia - Job Placement, Employment and Training (JPET) Program
This initiative involves $74.4 million over four years, and targets young people at
risk of homelessness and other disadvantaged persons9.
JPET seeks to overcome major barriers to successful transition outcomes with
assistance with:
- securing appropriate housing,
- addressing drug and alcohol abuse,
- addressing sexual abuse or violence and behavioural problems.
- developing relevant life skill,
- attaining educational qualifications,
- gaining work experience and skills,
- addressing issues relating to dysfunctional family backgrounds, and
- obtaining appropriate structures and reducing barriers associated with refuge
background, such as torture and trauma.
This is a popular initiative with young people, and a relatively cost effective
programme, yet there are strict age restrictions (15 to 21 years) and only 138
projects nationally, thus limiting its geographical availability.
Source: Kenyon (2002)
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Box 2: Hong Kong – The Youth Pre-Employment Training Programme
The YPTP consists of three parts: training courses, workplace attachment and onthe-job training. It allows young school leavers aged 15 to 19 to have the chance to
be trained and to obtain work experience before entering the employment market.
Four modules are offered: Module A – leadership, self-discipline and team building
training; Module B – job search and interpersonal skills training; Module C –
computer application training; and Module D – job-specific skill training. Within the
training period, professional social workers support and counsel those in need. The
first stage of YPTP was completed in March 2000. It had organized 951 training
programmes and had 22,132 entrants. Afterwards, a survey was carried out to
investigate the employment situation of the graduates by the Labour Department.
Among 7,700 graduates who were job seekers, 3,900 successfully secured a job. The
success rate was 50.6%.
Given this positive feedback, the Financial Committee of the Legislative Council
granted another HK$24,600,000 for two YPTPs for 2000/01 and 2001/02. It is
expected that 24,000 students will join these programmes. In order to gain more
employment opportunities, an extra three-month on-the-job training arrangement
was included in the Second YPTP. Students could then gain practical working
experience in order to increase their competitive edge. The 2001/02 YPTP
commenced in September 2001. In May 2001, the YPTP Office in the Labour
Department commissioned the Social Policy Research Centre of the PolyU to evaluate
the operations and cost-effectiveness of the YPTP and to suggest ways for
improvement.
The research found that the general public, including employers, young people,
parents and secondary school teachers, accepted and welcomed the function and the
role of YPTP in general because it did lower the youth unemployment rate and
enhanced the employability of participants. This programme was of most benefit to
school drop-outs who had been unable continue with their studies.
Source: Cheng (2001)
Guidance and Counselling
Much of the recent work in the area of policies to promote youth
employment has emphasised the importance of guidance and counselling, both
before and after young people enter the labour market10. In many countries the
information available to young people does not allow them to make realistic choices
concerning the options available to them. Indeed, in recent times, Active Labour
Market Policies have increasingly included a preliminary phase of orientation and
guidance in which young people are made aware of the effectively available
9
alternatives. In practice this has proven to be a relatively cost effective form of
intervention which often obviates the need for more expensive work oriented
training.
Although guidance and counselling functions are relatively developed in richer
countries, both within the educational system and also on the labour market through
Public Employment Services, this is not true in others. One major obstacle faced by
many countries is the basic lack of labour market information on which to base
guidance and counselling or indeed the more general job matching function fulfilled
by Public (and increasingly private) Employment Services.
Demand side: Creating Job Opportunities
Public Works and Direct Job Creation Programmes
In many countries facing crises, a major part of the response has consisted in
the introduction of substantial public works programmes. This was true in many
countries in Central and Eastern Europe following the collapse of GDP in the initial
years following transition to the market economy as well as in Asia in the wake of the
1997 economic crisis in that region. In essence, these types of programmes serve the
purpose of providing income support to the unemployed in countries where there is
no established unemployment insurance or income support. They are also intended to
maintain the labour market attachment of participants and to help mitigate some of
the detrimental consequences of long-term unemployment. Finally, they can be used
to produce goods of benefit to the community at large. For example, in Indonesia
public works programmes have been used to employ principally young people in
infrastructure development such as in the renovation of bridges and sewage systems as
well as in the construction of religious facilities.
What they do not do very effectively is promote the long-term employment
prospects of participants. These programmes are generally temporary or short-term in
nature, employing labour in relatively low skill work on specific projects. In some
cases, the longer term, employment promotion role can be enhanced by the
introduction of training elements. However, the overall finding of evaluation research
on this subject, is that public works are not an effective means to integrate the
unemployed into employment
Another aspect worth mentioning and which may enhance the usefulness of
public works is the importance of participation on a voluntary or self-selecting basis.
In this sense, one may compare two programmes in Sri Lanka, the almost coercive
approach of the Samurdhi programme and the self-selecting approach adopted within
the Maharashtrian Employment Guarantee Scheme. Apart from taking unwilling
workers away from other income-generating activities, the non-voluntary approach is
likely to be less useful in promoting long-term prospects. Participants will be less
10
motivated and productivity will tend to be lower making also the specific task at hand
more costly. Subsequently, potential employers will be aware that programme was not
necessarily voluntary, which may reflect badly on the employer’s view of their
potential productivity. In any event, such programmes are best seen as emergency
income generating measures or means to promote work attachment amongst the
long-term unemployed rather than as a means to promote the integration into longterm decent work of young people.
Wage Subsidies
Wage subsidies, or more generally financial incentives to firms11, have
sometimes been used to promote the employment of specific groups such as young
people. For example, in Japan, financial incentives were provided to firms to increase
employment in 15 growth industries as part of the emergency measures introduced in
1999. They suffer from some difficulties however. Care needs to be taken that the
workers employed would not have been taken on by recipients of the subsidy even
without the intervention (deadweight loss); that employers do not simply substitute
one group of workers (eligible for subsidy) for another whom are not eligible
(substitution effect); or, that the jobs created do not displace jobs in other firms
which do not receive the subsidy and are therefore less able to compete in the product
market with subsidy recipients (displacement effect). In each case, the key question is:
does the subsidy create new jobs which would not have existed in its absence? For
obvious reasons it is rather difficult to ensure this is so and such programmes have
often been criticised on the grounds that they are consequently a relatively costly way
of increasing overall employment with a low level of net job creation. However,
careful targeting of both direct recipients (firms) and the ultimate beneficiaries (new
employees) can mitigate this problem.
Of specific concern to youth employment promotion, one might raise the
further question of whether high relative wages of young people constitute a serious
impediment to their employment. It has been observed by many commentators, that
in OECD countries, the wages of young people and their unemployment rates have
very often moved in opposite directions. That is to say, rising youth unemployment
rates were accompanied in the 1980s and 1990s by falls in the relative wages of young
people. This is of course not rigorous proof, but equally it does not provide strong
evidence to support the view the problem lies with the high relative wages demanded
by, or paid to, the young and that therefore wage subsidies are likely to have a
significant impact.12 On the other hand, there is some evidence to suggest that in
some countries, relatively high levels of the minimum wage with respect to the
average wage has damaged the employment prospects particularly of teenagers.
Although one might further note that such damage is far outweighed by the
influence of aggregate economic and labour market conditions.13
11
In general, the combination of training and employment experience appears
to be the most productive basic remedial approach to the integration into work of
young people who do not manage the transition by themselves.
Youth and ICT
The ICT ‘revolution is opening up new potential areas for development and
employment. At the same time, taking advantage of these possibilities is by no means
automatic. The so-called ‘digital divide’ has already been the subject of much
discussion. The latest World Employment Report (ILO, 2001), for example, looks at
the implications of the new technologies for both the quantity and the quality of
employment. Young people are perhaps particularly well placed in terms of
temperament and abilities to take advantage of the new possibilities offered. Of
course, also they are advantaged in the sense that when their older counterparts were
at school, ICT was not so far developed and was much less likely to be available.
However, of course the introduction of computers to schools and school curricula has
taken place at varying rates in the region.
Certain conditions are required in order that the young, and indeed also older,
people can take advantage of the new potential offered. Much of course depends on
the more general state of development of the country. First, the question of literacy
cannot be side-stepped or ‘leapfrogged’ and this indeed is a first basic condition for
the development of widespread possibilities through ICT development. A second
fundamental requisite is the availability of basic infrastructure necessary for the
operation of computers and moreover computer networks. In some countries, the
lack of availability of electricity in rural areas presents a basic, but also substantial,
obstacle. ICT based development also of course requires an adequate telephone
network preferably at low cost.
Another important factor is the political environment. Governments need to
develop an ICT Policy and above-all develop a policy as regards the introduction of
ICT educational curricula. For example, Sri Lanka is in the relatively advantageous
starting position in that it may benefit to some extent from the good reputation
gained by its nearby neighbour India’s thriving ICT industry. However, here too,
exploitation of the possibilities offered is in its early stage and progress is hampered
above all by limited access to the new technology and by the concomitant scarcity of
ICT trained professionals. The government has established CINTEC which is charged
with developing guidelines for the promotion of ICT education in the country.
CINTEC has established a target for the expansion of the number of ICT professionals
tenfold from 2,500 to 25,000 over the next 4-5 years, however, as yet there are no
national standards or guidelines for ICT based education.
Although in many countries the importance of ICT development is formally
recognised. Translation of this recognition into practical action is often lagging
behind. One way forward towards the aim of extending ICT access and literacy may lie
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in public-private partnerships such as becoming common in OECD countries. This
indeed has been emphasised by the UN ICT task force as a key to ICT development in
developing countries (UN ICT Taskforce, 2001).
Apart from developing ICT in the education system, young people are perhaps
also ideally placed to take advantage of the opportunities offered by ICT technology
in the search for work. This question, and in particular, the use of the Internet by
Public Employment Services in fulfilling their function is discussed further below.
Self-employment and small business support
Particularly in circumstances where there are relatively few existing job
opportunities, attention fairly naturally turns to initiatives designed to promote selfemployment. As noted in the High Level Panel’s Recommendations action may be
taken at two levels. On the one hand measures may be introduced to facilitate the
establishment of new businesses by reforming the institutional and legislative
framework which often acts as an impediment to business start-ups. Indeed, this type
of action can also have a beneficial impact on the size of the informal sector. By
making it simply to operate legally, the incentives to operate in the unregulated
sector are reduced. Noteworthy in this respect is the recent law on Enterprises,
effective from 1 January 2000, in Viet Nam. This has simplified the procedures and
introduced preferential treatment for the establishment of small businesses. By May
2001, 21,234 new businesses and 220,000 ‘Business Households’ had been
established under this law. On average the new businesses employ 20 workers which
means that these alone (excluding business households) have, in principle, created
420,000 new jobs.
On the other hand, initiatives may be introduced to directly promote selfemployment for young people. The main lesson to be learned from experiences with
such initiatives is that a range of services are required to make them effective. Perhaps
the main areas of help regard access to credit and training in business skills, however, a
rather broader set of measures is likely to significantly improve the chances of success.
Not to be, but all too often, forgotten here is the question of ongoing business
support. As well as providing a general legislative framework in which SME’s may
develop and grow, there is a need to ensure that businesses started through
programmes providing credit and business training programmes do not fail as soon as
the initial support is removed.
Private Sector development
The need to provide the conditions to encourage the development of the
private sector lies at the heart of the UN/WB/ILO Recommendations. On the one
hand, aggregate economic conditions are by far and away the major cause of youth
unemployment and thus governments need to adopt macroeconomic policies which
13
encourage overall economic and employment growth. Necessarily this must largely
take place in the private sector. On the other, governments need to adopt policies to
make the creation of employment easier. Foremost amongst these are regulatory and
institutional impediments to start-ups and growth of small and medium size
enterprise. This does not of course mean encouraging private sector to the detriment
of the working conditions of the employed. In general, there is little evidence to
suggest that employment protection plays a negative role in the creation of new jobs.
Rather, there are many areas where regulations and bureaucracy can be simplified such
as ‘one-stop shops’ for business start-ups. The ILO Recommendation on job creation
in SMEs provides many such examples.
Matching Demand to Supply – Employment Services
Employment Services can and in many countries do play an essential role in
promoting the employment of young people. In most countries they are responsible
for the administration and implementation of ALMPs. Moreover, they can also play a
very important role in providing access to counselling, guidance and labour market
information.
Public Employment Services
In industrialised countries the job matching function fulfilled by public
employment services is becoming ever more important. Indeed, more and more,
ALMPs include an element of guidance, counselling and job search assistance. Thus,
PES, beyond administering financial unemployment assistance, is taking a more active
role in the promotion of employment through the implementation of ALMPs
themselves but also through the role of matching job seekers to jobs. In developing
countries this fiunction of PES is less well developed. In Viet Nam, for example, there
are 143 Employment service Centres which provide occupational guidance for some
200,000 workers per year. However, although there is a law requiring that, for
example, foreign enterprises recruit through the centres, research suggests that only
55% of jobs are filled in this manner. In many countries, the PES also organise job fairs
which bring together prospective employers and young potential employees.
However, although these no doubt play a useful informational role in terms of
informing young people about the available opportunities and vice versa with firms,
little actual recruitment actually takes place during these events.
In many countries, jobs are mostly filled through informal contacts of relatives
and friends or through direct recruitment by firms. Problems are often compounded
by the lack of an effective labour market information system which should form the
basis of job-matching function of the PES. This in itself is no bad thing as long as the
system of informal networks works efficiently. The large numbers of unsuccessful
young job seekers however suggests that in many countries, this is not the case.
14
Clearly, there is room for an increase in the active role played by the PES. One way in
which this may be accomplished, particularly suitable to young people, is through the
establishment of and access to Internet based job-seeking services. In Australia these
are already well established and in Japan they are in the process of being implemented.
Also in Slovenia, such services are well developed. In less wealthy countries where
access to computers and above all the Internet is problematic, employment centres
could, in principle, be a focal point for access to the Internet for job-seeking.
Essentially what is required is for the centres to be seen as a useful source of
information and access to jobs. The PES needs to make itself more attractive to young
people by providing useful services.
3) Improving the Effectiveness of Youth Labour Market Policies
LMI, Monitoring and Evaluation
A key element in the design and subsequent modification of youth (as indeed
for adult) employment policies is the monitoring and evaluation stage. This very
much relies on an established labour market information (LMI) collection system.
This is something that is often entirely lacking or at least inadequate. LMI is necessary
also at the planning stage. One needs to know with some precision the difficulties that
the target group or groups face on the labour market. Which of those amongst, for
example, the general category of ‘youth’ are most in need of assistance and so forth.
Once programmes are actually implemented, monitoring of the programmes
(sometimes referred to as process evaluation14) can be used to ensure that for
example, the programmes reach the designated target group, that programme costs
are kept within target limits, that a target proportion of the group complete
programmes, that a target proportion of participants find employment after the
programme and so on. Where these targets are not met, further consideration can be
given to why this is so and corrective action adopted. The central elements here are on
the one hand the establishment of targets. Targets which must be realistic and
realisable given the resources allocated to the programme. On the other hand, the
collection of information is necessary in order to allow such process evaluation to
take place. Both of these are very obvious albeit fundamental points, however,
experience shows that the importance of their role is clearly underestimated in the
implementation of youth labour market policies in many countries.
Also of crucial importance in the improvement of the design of programmes is
the post-programme evaluation of programme impact. This is even less frequently
undertaken involving as it does rather more resources. However, it is at least as
important as monitoring. It is with impact evaluation that one may gain an
understanding of what the effects of the programme actually are. Essentially, impact
15
evaluation seeks to compare the experiences of participants on programmes with what
would have happened in the absence of the programme15. This in itself is not an easy
an easy exercise and much ink and effort have been employed to develop and refine
the methodology. However, the crucial element is that the experiences of programme
participants are compared with a like group of people16 who act as a proxy for the
experiences of participants in the absence of the programme.
To make this point clear let me present a simple example. Suppose the
government of a country is considering whether to introduce a programme for the
educated or one for those without qualifications. Suppose also that there are two pilot
training programmes. One is aimed at people with at least a minimum level of
qualifications and the other is aimed at those with none. Column (1) of table 1 gives
the post-programme employment rates of participants on the two programmes.
Judged on this basis, Programme 1 is by far the more “effective”, with postprogramme employment rates at 80 per cent as opposed to 50 per cent achieved by
Programme 2. However, the picture changes if we compare the labour market
performance of participants on the two programmes with those of similar individuals
who did not participate. Column (2) gives the employment rates of two comparable
groups of young people who did not participate on either programme. Those with
some qualifications compare with Programme 1 participants and those without
qualifications compare with participants on Programme 2. Column (3) reports the
“effect” of the programme measured as column (1) minus column (2), i.e. the
improvement in the employment prospects of participants brought about as a result
of the programme. Using this criterion, it can be seen that Programme 2 is the more
successful. Participants’ chances of finding employment rose by 30 percentage points
against 10 percentage points for Programme 1 participants.
16
Table 1: Hypothetical example of post-programme outcomes
(1) Percentage of
programme
participants
in
employment
following
the
programme
(2)
Percentage
of
the
comparison
group who
are employed
(3) “Effect” of the
programme
on
employment rates
(in
percentage
points)
Programme 1: More
educated participants
80
70
+10
Programme 2: Less
educated participants
50
20
+30
There are a number of problems with selecting the comparison group, but the
important point here is that using gross outcomes (i.e. post-programme placement
rates) can lead to a highly misleading estimate of programme performance. Amongst
other things, employment rates will tend to rise during an economic boom and fall
during a recession, inducing variations in performance which have nothing to do with
the quality of the programme per se. Furthermore, using gross outcomes as a measure
of performance will tempt programme administrators to select participants according
to their employment prospects. They will tend to choose the most able rather than
those most in need of help. All too often, programmes tend to aid those already in a
position to help themselves at the expense of the most disadvantaged groups. It is
perhaps more desirable to concentrate on groups which have the most difficulty in
finding work. The use of gross outcomes as a measure of performance clearly
militates against this.
Linking School with the Labour Market
Perhaps the most obvious way to link education and work is to use a system
which divides vocational preparation between school-based general training and firmbased specific training as in the case of the dual system. This type of system has been
the most successful in easing the transition of young people between school and
work. However, the key to success is not only in the division of responsibility but also
in the fact that the general education and training provided in schools matches the
requirements of the world of work. Sako (1994) notes a number of reasons why the
education sector may not meet such requirements. Common problems include an
approach that may be too theoretical or academic; another problem is that the
curricula for vocational training may be outdated.
17
In Germany, the involvement of employers’ organizations and trade unions in
developing curricula for the dual apprenticeship system means that the requirements
of the world of work (both in individual terms and at the level of the firm) are borne
in mind. The qualifications gained are therefore more relevant to the needs of the
labour market. Of course, firms are not perfect judges of skill requirements and the
system may be characterized by a rather slow adjustment to unforeseen new
requirements. However, firms are likely to be able to assess their needs more
accurately than educational policy makers removed from the realities of the labour
market. The challenge of adapting education systems to rapid changes in the demand
for skills can be partly met by strengthening basic educational qualifications, and
giving young people the skills they need for constant adaptation to a changing work
environment.
Another way of linking the world of education with the world of work is
through placing trainees in public or private firms. Job placement may take several
forms and operate at different levels. Work experience may be offered to young
people as part of the school curriculum for less academically inclined students to
prepare them for entry into the world of work. Young people may thus gain a more
realistic idea of specific types of employment, and practical experience may provide a
welcome break from classroom instruction. Employers, on the other hand, gain access
to prospective employees and strengthen their formal and informal links with
educational establishments. In addition, young people on work placement produce
an output which has a certain value to employers.
At a higher level of education, links may be established through firms
sponsoring individuals in pursuit of higher qualifications. This is likely to be relevant
when there is a shortage of skilled workers. Corporate sponsorships of this type have
been offered in the United Kingdom to science and engineering undergraduates by
BP, Shell and IBM. Sponsorship may help maintain a supply of young people with the
right kind of qualifications and may also give industrial employers some influence
over specific subject studies.
Employer and trade union involvement may also take place in the schools
themselves. For example, representatives of trade unions or employers may give talks
about the nature of different jobs or occupations. Union representatives from a
particular trade may give students an idea of what an apprenticeship in that
occupation involves. Employers might enhance their company image by presenting
the work of the firm to students or by offering prizes for school projects. Needless to
say, such interventions should be an addition to, not a substitute for, high quality
employment and training opportunities.
Involving the Social Partners
18
Employers’ and workers’ organizations are involved in the design and
implementation of ALMP in many countries. However, the extent to which formal
involvement is actually translated into a real input into the policy-making process
varies enormously. Very often the social partners are included on a collaborative or
consultative basis with national labour market boards and/or public employment
services. Indeed, the collaboration of “representatives of employers and workers in the
organization and operation of the employment service and the development of
employment service policy” (italics added) is provided for in ILO Convention No. 88
(Art. 4) Concerning the Organization of the Employment Service.
Furthermore, the ILO’s Report on Youth to the 1986 International Labour
Conference stated that:
“Trade unions and employers’ organizations have a crucial role to play at
all levels where policy is made or action taken to create employment for
youth or to facilitate the transition from school through training to
employment. Workers’ and employers’ organizations not only contribute
with their experience but also take part in the creation of policies in whose
implementation those they represent have a major role to play.” (ILO, 1986,
p. 137).
Involving the social partners in the formulation and implementation of ALMP
is likely to increase the effectiveness of such policies. There are several reasons why this
may be so. First, the involvement of employers and workers implies a commitment
on their part to the success of policies and programmes. This joint commitment, in
itself, will tend to enhance the effectiveness of policy.
Second, a related point is that the quality of programmes is likely to be higher
if the social partners are involved. Numerous studies have demonstrated that
programmes which are more closely linked to private employers are likely to be more
effective. Employers may use programmes as a recruitment and/or screening device.
Also, the relevance of training is probably greater in the context of private employer
involvement. The skills acquired are likely to be closer to those required by the labour
market than those taught on programmes without such direct labour market links.
The involvement of workers’ organizations can help avoid some of the pitfalls
of work experience and training programmes. In promoting the training content
(and, through careful monitoring, ensuring the effective implementation) of
programmes, workers’ organizations can guard against the exploitation of programme
participants, at the same time helping to promote their long-term prospects of good
quality employment. They can also ensure that programme participants are not
substituted for other categories of worker.
In programmes to promote self-employment, the involvement of employers is
immediately relevant. They can provide advice and support, and might introduce the
self-employment option in schools or act as mentors. They can also sponsor business
competitions.
19
Guaranteeing training
An important role in guaranteeing training can be played by workers’ and
employers’ organizations in the context of education and training systems as a whole
and in employment and training programmes as part of ALMP. First of all, it has been
demonstrated by many authors that the presence of a trade union in the workplace
increases the probability that a firm will provide training for its workers. 17 Second,
workers’ and employers’ organizations have an important role in guaranteeing the
quality of training. A country where this takes place effectively is Germany. One of
the key aspects of the German system is the high information content of certificates
provided under the dual apprenticeship system. This is possible because of the
participation of workers’ and employers’ organizations in national committees which
regulate the content, quality and standardization of certification. As a result, a young
person who successfully completes an apprenticeship programme and gains the
corresponding qualification is able to demonstrate the possession of tangible skills by
virtue of the certificate. Potential employers will be aware of the skills acquired by the
individual during occupational training.
Third, workers’ and employers’ organizations can play a useful role in resolving
the financing problem. Who should finance training is one of the major stumbling
blocks to an effective training system. As is well known, there is a basic argument
going back to Becker (1964) that firms will not be prepared to finance general
training, i.e. training which is also useful to other firms, but will only finance training
which is useful to the specific firm itself. This is because firms which provide general
training run the risk that their employees may be “poached” by non-training firms
once they have qualified, thereby losing their investment in training. This “financing
problem” has been effectively resolved in the German system. Firms provide training
for employees which has both firm-specific and general elements. The tripartite form
of control contributes significantly to the feasibility of this financing system. First,
tripartite maintenance of the system has clarified the distribution of costs between the
contributing partners and arrived at an agreed division between the State, apprentices
and employers. This contrasts sharply with countries such as the United States where
apprentices pay the full cost of their training, which is likely to lead to a sub-optimal
level of training from a societal point of view.18 In Germany, the State contributes
principally by supporting the vocational training centres providing off-the-job
training to apprentices.19 Employers provide on-the-job training while apprentices
contribute by accepting a relatively low allowance during training. 20 Two key
elements of the financing system, the avoidance of “poaching” by non-training firms
and the low labour cost of apprentices to firms are made possible or at least strongly
encouraged by tripartite control of the system. On the one hand, poaching is made
more difficult for non-training firms because trade union influence on plant-level
Works Councils has led to the implementation of differential wage agreements for
20
workers trained internally or externally to the firm (Soskice, 1994). The higher wage
payable to externally recruited trained personnel provides an effective discouragement
to poaching by firms. On the other hand the relatively low apprentice allowance
encourages the provision of training by firms because the effective cost of in-plant
training is shared with the apprentices themselves.21 The role of trade unions is
fundamental in guaranteeing the quality of training and therefore making the low
allowance an acceptable solution for all, including the young people themselves.
Apprentices know that they will obtain good quality employment with a relatively
high level of remuneration once they are qualified.
Two alternative ways of dealing with poaching have been suggested. One is to
finance training through a payroll levy with exemptions for firms which provide
training. This may be administered at national level, although it may be better for
such levies to be administered at sectoral level given differing skill requirements in
different industries which will affect the cost of training. The second approach is for
employers’ organizations, through their control over resources which are of value to
firms, to introduce sanctions against firms not providing training.
Employers’ and workers’ organizations can also be directly involved in the
provision of training. This is particularly helpful in the case of small firms where it may
not be viable to make provision for training within the firm.
Finally, workers’ and employers’ organizations can play an important
promotional role in advocating measures aimed at improving the employment
prospects of young people. This includes appeals to the private sector to create or
increase the provision of training.
Targeting Disadvantaged Groups
Implicit (and occasionally explicit) in what has gone before is the notion that
governments should seek to target disadvantaged groups in the labour market. Often
they do. I have argued elsewhere that such targeting may be justified on the grounds
of both equity and efficiency22. Part of the argument lies in the way that policies are
commonly evaluated considered above. In any event, let us consider here one
example of such a policy: The ‘Joven’ programme in Chile which was subsequently
emulated in a number of other countries in that region.
Chile Joven:
Objectives

Chile Joven aimed to bring opportunities of social and economic integration
to young people coming from low income families. The programme did this
through training schemes that allowed these people to obtain the basic skills to
21

be employable
The programme was originally designed to last four years (1991-95). However,
after the 1993 employment crisis, the programme was extended for three more
years.
Target groups
The target for the first four years of the programme was to train 100,000 young
people with the following characteristics: (i) they had to be in the age range between
15 and 24 years (ii) they had to belong to low-income sectors of society (iii) they had
to be out of the education system and (iv) they had to be unemployed,
underemployed or inactive as well as willing to work.
Sub programmes
The programme included four sub programmes:




Training and work experience with a private company: This sub programme
offered a large variety of courses covering most economic sectors. The agencies
defined the content of the courses according to local market demand. The
courses had a theoretical part of 250 hours of lectures and 3 months of
traineeship in a company. The theoretical part of the course was centred on
technical aspects of the job and the work regulation and socialisation. The
purpose was to familiarise young people with methods of job search, to
stimulate their capacity to accomplish duties, to have initiative and to improve
their communication skills.
Training for self-employment: This sub programme aims to facilitate the
entrance in the labour market of young people willing to work in family firms
or in self-employment. The courses are designed to help young people to
obtain basic entrepreneurial and administrative skills. The theoretical courses
last 350 hours and afterwards there is a traineeship with a firm. The training
agency controls the traineeship and provides technical assistance.
Alternate apprenticeship: The courses offered had two alternating parts for the
whole programme. The first part comprised general training, technological
training and basic skills. The second one, offerd training inside the company as
an apprentice. The firms that offer apprenticeship contracts (for a minimum of
6 months and a maximum of 2 years) receive a subsidy for the total duration
of the apprenticeship.
Training of young people: This sub programme targeted low-income young
people with additional problems such as maladjustment and insecurity. It
aimed to improve the self-esteem and the development of habits compatible
22
with the working environment. The courses consisted of 420 hours of lectures
and a training programme in a simulated company or factory.
Financing

The programme was entirely financed by the government who, during the first
phase, received partial financial support from the Inter American Development
Bank. Trainees usually received no income on the scheme. However, some
firms voluntarily decide to pay them a small subsidy (enough to cover
transport costs and lunch).
Institutional Base




The Labour Ministry was responsible for the execution of the Programme. A
coordinating unit, the Programme Coordinating Unit (Unidad Coordinadora
del Programa), was created in order to ensure that the programme worked
efficiently. The UCP was in charge of the design, coordination, financial and
technical control and the strategic evaluation of the programme.
At local level, the UCP interacted with the Local Employment Offices (Oficinas
Municipales de Colocación, OMC). The OMCs promoted the programme and
gave advice to the participants about the courses offered. They acted as
intermediaries between participants, firms, qualified institutions. The efficiency
of the OMCs was due to the lack of qualified personnel and the low resources
provided in terms of equipment. In order to overcome this situation, the
programme trained the personnel of 58 OMCs also equipping them with
computers in order to improve data management.
The programme relied heavily on the private sector. All courses were executed
and designed by private training institutes (profit and non-profit) that
participated in the programme. These institutes made sure that a certain
number of firms receive a certain number of trainees. Collaboration with the
private sector is sometimes difficult due to cultural and logistic difficulties.
The Labour Ministry was directly responsible for the first three sub
programmes through SENCE. The Social Investment and Solidarity Fund
(FOSIS) administered the fourth one.
Numbers enrolled

Between 1991 and 1995, the estimated target population was 100,000 young
people. Quotas were assigned for 128,000 young people. However, the
number of young people effectively enrolled was 95,888. By December 1995,
the number of people that had finished courses was 67,000. Therefore, 52,3%
23
of the target group was covered.
Indicators of success
A variety of indicators were used to ‘evaluate’ the programme.

Company participation: In 1993-94, 55% of the participants who finished their
traineeship got a contract in the firm. Participation of the firms was positive
and active. 90.9% of the firms were willing to continue to enrol more
candidates. The majority of managers evaluated the programme as a very
positive experience. 46.1% of the managers thought that “the needs of the firms
were covered”, 35.4% said that “the programme contributes to training
purposes” and 31.7% stressed that “it contributed to give opportunities to
young people”.

Coverage: The programme enrolled more than 110,000 young people during
the first 5 years. This number is higher than the 100,000 target established at
the beginning. The programme covered all 13 regions of the country. This was
achieved through the allocation of 5,693 courses in more than 300 training
institutions.

Quality of the traineeships: The indicators on the quality of the traineeships,
such as whether the traineeship corresponded to what was agreed in the Letter
of Intention, show that in 91% of the cases that was the case. On the other
hand, in only 87.2% of the cases there was a close relation between the job
description and the work undertaken in practice.

Impact on the training institutions: A study undertaken by the Universidad
Pontificia de Comillas showed that the quality of the training given by the
training institutions was good in general terms and that the objectives in
terms of practical skills have been achieved. It says that a high percentage of the
participants have achieved about 75% of the objectives.

Social integration of the trainees: The programme achieved positive results
regarding the social integration of the trainees. Several surveys of firms show
that during the traineeship, the participants learned more in terms of
behaviour than in terms of technical skills. 46.1% of firms thought that the
programme fulfilled their needs; 34.4% thought that it contributed to training
activities and 31.7% thought that it offers opportunities to young people. Most
of the firms considered that the trainees were useful for their daily operation:
60.5% of the firms and 71% of the institutions valued their cooperation; 37% of
the firms and 29% of the institutions thought they were as “any other new
recruitment” and 1.6% of the firms and none of the institutions were not
confident with the idea of getting trainees. Most of the trainees interviewed
thought that the programme was very beneficial for their career. However,
some said that sometimes the traineeships were too long and the working
conditions not very good.
24

Economic impact: Between 1991 and 1995, Ps37 million were invested in Chile
Joven. From this amount, 72.8% was assigned to the training programmes
administered by SENCE:
-training and work experience with a company using 83.2% of the
SENCE budget
-training for self-employment using 12.2% of the SENCE budget.
-alternate apprenticeship using 4.6% of the SENCE budget.
·
27.2% of the investment in Chile Joven was used by FOSIS for training of
young people.
·
13% of the resources invested in Chile Joven was used for the administrative
expenses, reports and promotion activities and 87% was used to pay the
training agencies. The cost of a course like training and work experience in a
company was about Ps 4.3 million; the cost of a student about Ps 225,000
(498 US$) per course and Ps 1,128 (2.3 US$) per hour. Excluding dropouts, the
cost of a student per course rises to Ps 300,000 (664 US$), while the hourly
goes up to Ps 1,500 (3 US$).
·
An evaluation undertaken by SENCE in 1991 of the sub-programme training
and work experience in a company showed that, at the moment of the study,
57.8% of the participants were employed. However, there was an important
gender difference, men being more successful than women on finding a job
(65% versus 49%). The evaluation also shows an important increase of real
wages for those that were employed before undertaking the course. Again,
gender differences are important since the increase was 41% for men and only
14.4% for women.
·
an ILET study shows that the main objective of Chile Joven, that is, the access
of the young people to the labour market, was achieved. Around 55% of the
participants got a contract in the company where they undertook the
traineeship and about 3-4% decided to go back to study.
4) Critical Areas for Discussion
As throughout this short paper, the fact that promoting youth employment depends
on an enabling macroeconomic environment - that is to say, the first role of
government is in promoting employment intensive economic growth – has been
taken as given. Thus clearly one basic issue for discussion, not dealt with here, is how
exactly governments may go about achieving this. In what follows, five critical (and
overlapping) areas for discussion are developed which deal with more specific issues in
the formulation and implementation of policies to promote decent work for young
people.
25
1) Defining the Problem – In formulating a policy response to any ‘problem’ a first
step lies in clearly identifying what the problem is. For the author, the problem is lack
of decent work, not just lack of employment per se, therefore, the aim should be in
promoting quality job opportunities. It is not enough to raise employment levels
amongst young people. Indeed, this in itself may be counter productive. Rather, care
should be taken in defining what type of work one wishes to promote. Decent work is
about obtaining and maintaining productive and satisfying employment; decent
working conditions; and, income security. This has broad ranging implications taken
up with the subsequent issues.
A second related area is to whom should policy be directed? Whom should be
helped in the difficult task of finding decent work? Difficulties in access to
employment are not evenly spread amongst young people. It has been argued
elsewhere (O’Higgins, 2001) that policies targeted as specific groups may be justified
on the basis of both efficiency and equity grounds. This has many implications for the
design and implementation of policies.
Third, noted above as well as in the UN/WB/ILO High Level Panel’s
recommendations is the importance of establishing targets for policy as well as
mobilising the means necessary for the targets to be reached. Before one sets out on a
voyage it is generally advisable to have a clear idea of where one wants to arrive, where
one will pass through on the way, and by what means the voyage will be
accomplished. Many countries now establish targets of policy but often neglected is
ensuring that the means are provided by which the targets may be achieved. Above all,
this means making adequate resources available to dealing with youth questions. This
leads us to several important questions:
Which targets are feasible and how may these be reached? And, equally
important,
How can resources best be mobilised to achieve these targets?
2) Integration of Policy - There is a clear need to increase the integration of policies,
both horizontally and vertically. That is to say, youth employment policies should be
integrated into the more general employment creation strategy of countries. Youth
unemployment and more generally, difficulties for young people in making the
transition to Decent Work, is largely a question of prevailing economic and
employment conditions. Any strategy to promote youth employment needs to take
the wider context into consideration. At the same time, it is important that youth
employment policies are not, and are not seen to be, promoting youth employment
at the expense of other categories of job seeker.
26
Simultaneously, youth employment policy needs to be integrated with other
policies regarding youth. Above all this regards educational policies; however, there is
a need to look wider. The consequences of the failure to effectively integrate young
people into Decent Work manifests itself in many ways. In some countries, the
growth of youth unemployment has been associated with increasing levels of drug
addiction, to take just one example. All too often, the responsibilities for different
areas of youth policy lie with different agencies and institutions with little or no coordination between them. In this sense, an integrated youth policy can serve the
purpose of defining clearly areas of action, responsibilities of the different actors and
the means of co-ordinating these actions so as to achieve a common goal.
How integration can best be achieved is then a key question. One approach is to
opt for an overall Youth Policy under the control of a single government youth
ministry, however, the problem arises that promoting youth employment enters
several spheres, above all those normally covered by education end employment
ministries. Perhaps then a more flexible approach is in order with a youth taskforce
being set up with members taken from the different interested parties in government
ministries along with representatives of workers’ employers’ and young people
themselves?
3) Education and Training systems – Here there are two basic issues. First, access to
and the provision of basic levels of education and therefore literacy; a pre-requisite for
exploiting the benefits to be had in particular (but not only) from the newer
technologies. In many countries major advances been made in recent decades,
however, this remains a significant obstacle in some countries. Second, very often
there is a need to make Education and Training (and above all VET) systems more
responsive to the needs of young people and to the needs of the labour market.
How can problems of availability and access to education be resolved? And,
How can education systems be made more flexible and responsive to
developments in the world of work?
4) Public Employment Services – Often there is need to develop this area. Very often,
Job search is largely undertaken by young people without the aid of Public (or indeed
Private) Employment Services. In some cases this is due to their virtual non-existence
as is the case, for example, in the Pacific Islands. More often, although such services
exist, potential young clients largely ignore them. This also may be due to limited
territorial extension but may also be due to a limited view as to their function. In
many countries there is a need to make such services more active in providing the link
between young job seekers and potential employers; the Job-Matching Function.
These services have to demonstrate their usefulness in fulfilling an active and useful
role in helping the young find work. There are a number of ways in which this can be
achieved and much depends on the level of income and financial resources available to
27
the PES. For example, through the provision of basic information on the availability
of employment opportunities and perhaps access to basic services which may aid
young people in their search for work. This may simply mean a room in which access
to a telephone is provided for the purposes of contacting potential employers, but
might also, where circumstances permit, go beyond this and involving training by the
employment services in basic methods of job search, access to computer based services
such as the Internet to look for work and so forth. Clearly this requires resources and
the specific ways forward will vary according to the country, however, the basic idea
remains valid across a wide range of countries. One often hears arguments made
about the need to “activate the young unemployed”, here one is advocating the
Activation of the Employment Services.
How then can Activation of the Employment Services best be achieved?
5) Labour Market Information – A basic lesson to be learnt is the importance of the
availability of labour market information in promoting the employment of young
people. In many cases, labour market information systems are underdeveloped in the
region. They can and do play a useful role at many levels; from informing young
people about opportunities, to helping governments to design appropriate youth
employment policies.
How can LMI best and feasibly be collected?
What types of information are most needed?
How should information be disseminated and above all how can it most
usefully be provided to young people?
28
References
Auer, P. & Kruppe, T. – 1996 – “Monitoring of Labour Market Policy in EU Member
States,” in Schmid, G., O’Reilly, J. & Schömann, K. (ed.s), International
Handbook of Labour Market Policy and Evaluation, Edward Elgar, Cheltenham.
Baker, J. – 2000 – Evaluating the Impact of development Projects on Poverty, World
Bank,
Washington,
D.C..
(http://www.worldbank.org/poverty/library/impact.htm).
Fay, R.G. – 1996 - Enhancing the effectiveness of Active Labour market Policies:
Evidence from programme evaluations in OECD countries, Labour market and
Social Policy occasional papers no. 18, OECD, Paris.
Grubb, W.N. & Ryan, P. – 1999 – The Roles of Evaluation for Vocational Education
and Training: Plain Talk on the Field of Dreams, ILO, Geneva.
ILO – 1993 – Resolution Concerning Statistics of Employment in the Informal Sector,
adopted by the 15th International Conference of Labour Statisticians, ILO, Geneva.
(http://www.ilo.org/public/english/bureau/stat/res/infsec.htm)
ILO – 1998 - Resolution Concerning the Measurement of Underemployment and
Inadequate Employment Situations, adopted by the 16th International Conference
of
Labour
Statisticians,
Geneva,
ILO.
(http://www.ilo.org/public/english/bureau/stat/res/underemp.htm).
ILO – 2002 – Key Indicators of the Labour Market, 2001-2002, ILO, Geneva.
Kenyon, P. – 2001 – Country report, Australia: An Overview of the Labour Market
and Labour Market Policies, and an Outline of Best Practices and Lessons
Learned in Terms of Youth Employment, Paper prepared for ILO-EASMAT,
Bangkok.
Manning, C. & Junankar, P. N. – 1998 - “Choosy youth or unwanted youth? A
survey of unemployment”, in Bulletin of Indonesian Economic Studies
(Canberra), Vol. 34, No. 1, pp. 55-93.
O’Higgins, N. – 1997 – The Challenge of Youth Unemployment, Employment &
Training Papers no. 7, Employment and Training Department, ILO, Geneva.
(http://www.ilo.org/public/english/employment/strat/publ/etp7.htm)
O’Higgins, N. – 2001 – Youth Unemployment and Employment Policy: A Global
Perspective,ILO,Geneva.(http://www.ilo.org/public/english/support/publ/texte
m.htm#b485).
O’Higgins, N. – 2002 – ‘A Roving Minstrel I? Roma and the Labour Market In CEE,’
paper prepared for the AIEL Conference, Salerno, September, 2002.
29
O’Higgins, N., Pastore, F., Beleva, I. & Ivanov, A. – 2001 – "Targeting Youth
Employment Policy in Bulgaria", Economic and Business Review, vol. 3, n. 2,
pp. 113-135.
Ryan, P. – 2001 – “The School-to-Work Transition: A Cross-National Perspective,”
Journal
of
Economic
Literature,
Vol.
39,
no.
1.
(www.econ.cam.ac.uk/faculty/ryan/jelfinal.pdf).
UN/WB/ILO – 2001 – Recommendations of the High Level Panel on Youth
Employment, UN, New York.
UNDP – 2002 – Completing the ‘Human Rights’ Paradigm: The Roma and their
Human Development Opportunities, RBEC UNDP/ILO report on the situation
of the Roma minority in five countries of Central and Eastern Europe,
forthcoming Bratislava.
30
Endnotes
UN/WB/ILO (2001).
ILO (2002).
3 On Australia, see, for example, Kenyon (2002); on America, see any issue of BLS statistics; on Roma
see UNDP, 2002 and/or O’Higgins (2002).
4
See, for example, some of the evidence presented in O’Higgins (2001) and/or inter alia the paper by
Manning & Junankar (1998) cited therein.
5 Although there are internationally accepted definitions of both informal sector employment (ILO,
1993) and (time-related) underemployment (ILO, 1998) application of these definitions is not always
straightforward requiring, as it does, a well-developed labour market information system.
6 Again, consideration of this issue is relatively rare in the literature. See, for example, O’Higgins et al.
(2001) for an exception.
7
Underlying this argument, is the belief, long held by this author at least, that youth unemployment,
in as much as it reaches levels so as to constitute a problem, is largely attributable to insufficient
demand for labour as a whole. For relatively recent discussions of this point see, for example, O’Higgins
(!997, 2001). It is interesting to note that now also the European Commission and the OECD have
come around to this point of view.
8
I would add the caveat that, to my knowledge, neither of these policies have been subject to impact
evaluations such are discussed briefly later in this paper.
9 JPET participant group covers disadvantaged young people who are:
- students and homeless or at risk of homelessness;
- not in regular employment and homeless or at risk of homelessness;
- current or former wards of the state;
- refugees, who are not necessarily homeless, or
- ex-offenders, who are not necessarily homeless.
10 See, for example, Fay (1996).
11 This may also include, for example, tax incentives for firms to take on specific groups and so on.
12 The lack of relationship between the labour market situation of young people and the wages of the
young relative to adults has been noted by, for example O’Higgins, (2001) and Ryan (2001).
13 The question of the impact of minimum wages on youth employment in a variety of countries is
discussed in O’Higgins (2001, chapter 6). The general finding, based on both theoretical reasoning and
empirical investigation, is that raising the minimum wage may decrease youth employment but it may
also increase it. There is no a priori expectation as to the sign of the effect. However, other things being
equal, the higher the minimum wage is with respect to the overall average wage, the more likely it is
that increasing it will have negative employment consequences for the young and particularly
teenagers.
14 Auer & Kruppe define monitoring as the “regularly conducted observation of statistical indicators of
labour market policy input/output and performance (outcome) for the purpose of improving
programme implementation and even programme design,” (Auer & Kruppe, 1996, p. 901). O’Higgins
(2001, chapter 5) provides a somewhat more detailed discussion of monitoring and evaluation. For
extensive treatment of these questions with regard to VET, see also, Grubb & Ryan (1999).
15 Here I limit myself to a schematic overview. More details can be found in O’Higgins (2001, chapter
5) and/or Grubb & Ryan (1999). For a practical handbook on the implementation of impact
evaluation, see also, Baker (2000).
16 Typical examples are the programme participants before participation or other young people who do
not participate in the programme. More recently, attention has turned to experimental methods
involving the random selection of programme participants from a larger group of eligible persons.
1
2
31
Discussion of this goes beyond the scope of this paper. For more details see the above-cited works on
evaluation.
17 See, for example, Booth (1991), Tan et al. (1992) and Green et al. (1996).
18 Since capital markets are, in practice, imperfect it is unlikely that trainees will be either willing or able
to borrow enough to finance the socially optimum level of training.
19The State also provides subsidies to support talented, disadvantaged and disabled apprentices (Gasskov,
1994).
20 The training allowance varies widely from sector to sector. The allowance for an apprentice tailor is
only about 15 per cent of that of a scaffold builder (Gasskov, 1994). However as noted above, on
average the apprentice allowance is around one-third of the skilled worker’s wage.
21 Indeed, the net costs to firms in some cases may actually be negative. That is to say, the value of the
output produced by the apprentices may be greater than their cost to the firm. This is likely to occur in
occupations with relatively low skill requirements (Soskice, 1994).
22 O’Higgins (2001).
32