Youth Employment in Asia and the Pacific: Analytical
Framework and Policy Recommendations
Niall O’Higgins
Professor of Political Economy
Department of Economics and Statistics
Universita’ di Salerno
Italy
nohiggins@unisa.it
February 2002
Prepared for ILO/Japan Tripartite Regional Meeting on Youth Employment
in Asia and the Pacific
Bangkok, 27 February – 1 March 2002
This is a working paper written to serve as a basis for discussion at the ILO/Japan Tripartite
Regional Meeting on Youth Employment in Asia and the Pacific. The views and opinions
expressed in this paper are those of the author and do not constitute an endorsement by the
International Labour Organization. The paper has not been edited and should not be cited or
distributed without consent from the author and the ILO. Please send comments and suggestions to
ILO BAO/EASMAT at E-mail: teerasak@ilo.org.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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Table of Contents
PART I: ANALYTICAL FRAMEWORK……………………………………………………………….1
WHO ARE THE YOUTH? …………………………………………………………………………………. 1
WHAT IS THE PROBLEM? ……………………………………………………………………………..… 1
POLICIES TO PROMOTE DECENT WORK FOR YOUTH……………………………………..……….. 2
TABLE 1 – BASIC ECONOMIC INDICATORS……………………………………..………………...… 16
TABLE 2 – YOUTH AND ADULT UNEMPLOYMENT RATES……………………………………….. 17
TABLE 3: HYPOTHETICAL EXAMPLE OF POST-PROGRAMME OUTCOMES……………………. 17
ENDNOTES……………………………………..……….……………………………………..………….. 18
PART II: COUNTRY STUDIES……………………………………………………………………..… 19
AUSTRALIA……………………………………..……….………………………………………..……… 21
HONG KONG……………………………………..……….……………………………………….……… 57
INDONESIA……………………………………..……….…………………………………………...…… 64
JAPAN……………………………………..……….…………………………………………………..… 80
PAPUA NEW GUINEA……………………………………..……….………………………………….… 99
SOLOMON ISLANDS……………………………………..……….………………………………….… 121
SRI LANKA……………………………………..……….…………………………………………..…… 149
THAILAND……………………………………..……….……………………………………………...… 171
VIET NAM……………………………………..……….……………………………………………….... 194
PART III: CONCLUSIONS AND POLICY RECOMMENDATIONS…………………………………… 222
REFERENCES……………………………………………………………………………………….… 225
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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Part I: Analytical Framework
Youth is a time of transition – first and foremost transition between childhood and
adulthood. In this paper and in the studies on which it is based, the concern is with the transition
from school to Decent Work or rather with the difficulties which may arise in this transition. The
study also looks at what governments the social partners and civil society can and are doing about
it.
Of course, the countries under study vary much in terms of their levels of economic and
social development, their institutional structures, as well as simply in size. Table 1 provides some
basic economic and demographic information on the different countries considered here. Obviously
such differences have implications for the types of policy which are advisable or indeed feasible;
however, many of the recommendations developed are broadly applicable. An attempt is also made
to distinguish between which types of policy are appropriate in which context.
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 for
example. Furthermore, in several countries looked at here, there is no minimum school leaving age,
and in others school leaving and consequent early entry of young people to the labour market often
occurs before the age of 15. This in itself may be considered a problem, the widespread use of child
labour and indeed this has implications for the long-term development of the young people
involved. While recognising this, the conventional definition is adopted here as far as possible.
What is the problem?
“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 today. 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. Table 2 reports the youth and
adult unemployment rates for the nine countries covered by this study. Here, the ratio varies from
between 2.3 (Japan) to around 5 (Hong Kong). That is, young people are between two and a half
and five times as likely to be unemployed as adults.
The effective transition from school to Decent Work, however, 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
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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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 people2.
Even if one limits one’s attention to the unemployment rate, it should be added that not all
unemployment is equal. In particular, 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 Asia and the Pacific, 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.
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: women, those with low levels of skill and/or education, ethnic minorities and the disabled.
Policies to promote decent work for youth
UN/WB/ILO recommendations
In July 2000, an initiative on youth employment was launched by the UN Secretary-General
Kofi Annan. This involved the establishment of an interagency network on Youth Employment
under the joint auspices of the UN, the World Bank and the ILO. A high level panel was charged
with the task of providing a set of policy recommendations on promoting youth employment. These
recommendations were presented to Mr. Annan in September 2001 and comprise 12 specific policy
recommendations as well as suggestions as to how the recommendations might be implemented.
In general, four major themes or areas were identified to provide the foci for action. The
four “E’s”, as one might call them, are:
-
Employability
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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-
Equal opportunities
Entrepreneurship
Employment Creation
Employability
This element concerns first and foremost the skills with which young people enter the labour
market and consequently the accessibility and, above all, quality of the education and training
systems through which they pass. Two major levels may be identified here – basic literacy and
more specific job related skills. Basic literacy arising from widespread access to basic levels of
education is a fundamental prerequisite for facilitating the entry of young people into Decent Work.
This is all the more so with the advent of the ICT revolution and the myriad possibilities which this
revolution opens up particularly to the young. Possibilities, however, which can only be exploited
under certain conditions, the first of which is a basic level of literacy. As the most recent World
Employment Report notes, the question of basic literacy “cannot be leapfrogged,” (ILO, 2001, p.
201). More generally, it is regularly observed that all too often young people enter the labour
market without the appropriate skills to obtain and retain good, productive jobs. The high level
panel suggests the establishment by national governments of clear objectives and targets for
improving education, training and other employability strengthening measures so as to promote
Decent Work and Social Justice for the young.
Equal Opportunities
It is very clear that the opportunities open to young women and young men are not the same.
As was observed above, in many countries, young women face unemployment rates which are well
above those of young men. Furthermore, labour market disadvantage for young women makes itself
felt in a much broader way than is indicated by an examination of unemployment rates alone.
Levels of literacy and education in general are lower for women in the countries under study here.
Also, the likelihood of low quality employment and underemployment is higher. Again the
establishment of targets by national governments in terms of the reduction in disparities particularly
as regards access to education and training is advocated.
Entrepreneurship
Education and training for employment is fine so long as there are sufficient jobs to go
around. Whilst, in the long run, better education and training systems promote economic, and
therefore employment, growth, in the short run education and training do not themselves provide
jobs. As the high level panel put it, “there are too few employers and hence too few job
opportunities in the world,” (UN/WB/ILO, 2001, p. 4). On the one hand governments need to
rethink the legal and institutional framework which all too often prevent or impede the
establishment and growth of new businesses. The ILO’s Recommendation on SMEs 3 provides a
checklist of the sort of measures which may be introduced by governments in order to facilitate the
process. At the same time training in the skills required to run one’s own business and other forms
of support to new business start up can to do much to encourage young people to take their destiny
into their own hands rather than await the arrival of job opportunities created by others.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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Employment Creation
It is now firmly established4 that the level of youth unemployment is above all determined
by the level of economic activity in a country. Supply side measures are clearly not of themselves
sufficient to create employment. Promotion of small business start-ups is one step in the direction of
promoting the creation of new jobs, however, more generally, attention needs to be paid to
macroeconomic policies designed to promote economic and employment growth. Job creation
needs to be a central concern of public policy. Youth employment policy should be integrated into
a comprehensive employment strategy and supported by strengthening the linkages between
employment and other macroeconomic, social and development policies.
Active Labour Market Policies
In this section, the specific question of Active Labour Market Policy (ALMP) is treated.
The interpretation of ALMP here is quite broad including, for example, issues regarding education
and training systems in as far as these influence labour market outcomes. Furthermore, the analysis
is broken down into a number of categories which are clearly overlapping. Specifically, 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
young people to be hired 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 High level Panel on Youth Employment. 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 put in to secondary level education in order to make the skills obtained in the 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. In Germany, the ratio of
youth to adult unemployment rates is of the order of one-to-one, in contrast to most of the countries
under study here where the youth unemployment rate stands at between around two and a half and
five times the adult rate (as already observed. However, in recent years problems have begun to
emerge also there particularly as regards the fate of young people once they leave the dual system
and also as regards its adaptability in times of rapidly changing occupational and industrial
structures. Moreover, there are many questions as to the transferability of the German type system
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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to other countries with differing institutional bases. Many countries in the region have indeed
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.
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.
The relative importance of the two issues, basic literacy and appropriate preparation for the
labour market varies widely across the countries under study. In almost all countries, however, the
level of education of the population has been steadily increasing since the 1970s at least. The
exception to this is Australia where educational participation reached a peak in the early 1990s and
has since declined very slightly. Although given the relatively high level of participation reached,
this does not present too much cause for concern. More important is the low level of literacy
observable in the pacific islands, specifically Papua New Guinea (PNG) and the Solomon Islands
where the literacy rate stands at around 45% and 30% respectively. Although matters are gradually
improving, it is clear that the provision of universal basic education must be a priority in these
countries. In the Solomon Islands, still only 41% of 5-14 year olds are enrolled in education whilst
in PNG, although the enrolment rate is somewhat, higher, 80% of eligible males and 67% of
eligible females are enrolled in primary education, very few students continue onto secondary and
almost none to tertiary level education. Moreover, as the above figures indicate, there is a
substantial gender imbalance in school attendance; an imbalance which becomes extreme at the
tertiary level education in which young men are more than three times as likely to participate as
young women. The introduction of compulsory education in these countries would obviously mark
a step in the right direction, but such could only be effective if adequate provision at the level of
basic educational infrastructure.
In most countries, major advances have been made in increasing participation in primary
education over the last two or three decades although concerns still remain that participation in
secondary and above-all tertiary education is relatively low with respect to other countries with
comparable per capita income levels. In Indonesia, for example, the percentage of those with less
than primary level education has fallen from 60.0% in rural and 29.1% in urban areas in 1971, to
9.3% and 3.5% in rural and urban areas respectively in 2000. Also notable here is the decrease in
the gender disparity. In 1971, 59.8% of females had less than primary education compared to 46.2%
of males. In 2000, the difference had all but disappeared with the figures standing at 7.2% for
females and 6.0% for males. Thailand too has seen a similar reduction in gender disparities in
educational participation. Concerns remain, however, regarding the relatively low levels of
participation in the higher educational strata. In Sri Lanka for example, overall enrolment in tertiary
education increased from 2.7% to 5.1% of the relevant population between 1980 and 1995,
however, the average enrolment rate for comparable lower-middle income countries was 22% in
1997.
Of more direct concern vis-à-vis the school-to-work transition, is the (in)appropriateness and
(in)adequacy of Vocational Education and Training (VET) systems as a preparation for the labour
market. In Sri Lanka, thirteen different ministries are involved in the provisions of VET. Here the
major problem, apart from the general lack of co-ordination and complementarity between the
different programmes is their lack of responsiveness to labour market conditions. All too often,
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
5
courses tend to be driven by supply rather than labour market demands. Furthermore, although
participation of young women on such programmes is comparable to that of young men, young
women tend to be channelled almost exclusively into traditionally female dominated areas such as
secretarial courses.
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 in the region
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
which are developed in the relevant country studies.
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 market5. 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,
ALMPs have increasingly included a preliminary phase of orientation and guidance in which young
people are made aware of the effectively available 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 the richer countries
in the region such as Australia and Japan, both within the educational system and also on the labour
market through Public Employment Services, this is not true in all of the others. One major obstacle
in several of the countries under study here 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. This is particularly true in the pacific
islands but has also been identified as a problem in somewhat more prosperous countries such as
Indonesia, Sri Lanka and Viet Nam.
Demand side: Creating Job Opportunities
Public Works and Direct Job Creation Programmes
In many countries in the region public works programmes were introduced on a fairly wide
scale in the wake of the 1997 economic crisis. In essence, these types of programmes serve the
purpose of providing income support to the unemployed in countries where there is not an
established unemployment insurance or income support system as is the case in most of the
countries considered here. 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.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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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, including, such as they are, evaluations of policies in
Asia6, is that public works are not an effective means to integrate the unemployed into employment
Other more prosaic problems have also arisen in the implementation of public works
programmes in the region. For example, in PNG, where such programmes could play a very useful
role in promoting the development of local infrastructure in rural areas, their use has been impeded
by a lack of resources and simply the non-payment of wages of participants which has
understandably discouraged subsequent involvement in such programmes.
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 nonvoluntary approach is likely to be less useful in promoting long-term prospects. Participants will be
less 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 long-term decent work of young people.
Wage Subsidies
Wage subsidies, or more generally financial incentives to firms 7, 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.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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In Australia, since 1994, the wages of young people relative to adults has fallen by 20%. At the
same time, the youth unemployment situation has worsened significantly particularly in
comparison to adults. This certainly does not support the view that the problem lies with the high
relative wages demanded by, or paid to, the young and that therefore wage subsidies mare likely to
have a significant impact.8 On the other hand, there is some evidence to suggest that in Thailand, at
least, the relatively high level of the minimum wage with respect to the average wage has damaged
the employment prospects of teenagers. Although one might further note that such damage is far
outweighed by the influence of aggregate economic and labour market conditions.9
Numerous examples of wage subsidies or policies that include an element of wage subsidy
are discussed in the country studies. As regards young people, this very often involves a training
component and indeed, as noted above, 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. As noted above, 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, and particularly but not only, the Pacific Islands, 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.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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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 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 self-employment. 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 self-employment 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.
In the region, programmes to promote self-employment are widespread. Amongst others one
might mention the TKPMP in Indonesia or the Employment Fund in Vet Nam which provides
credit for business start-ups. Also in Hong Kong, the YTPT also contains an element of
entrepreneurship training. In Sri Lanka the emphasis in this sphere is on micro-credit programmes
for the more educated and in particular, graduates of tertiary education. Several observations are
worth making here. One is the need to examine the areas where businesses are encouraged to
develop, particularly when it comes to thinking I terms of business development rather than just
business start-ups. In Sri Lanka, for example, one problem emerging is the lack of expansion
possibilities offered by the type of product or service offered. Very often, micro-businesses supply a
limited niche market with little or no possibility for expansion. The New Enterprise Incentive
Scheme in Australia, provides an example of a relatively successful programme aimed at
unemployed people over 18 including the three main necessary elements; training, financial support
as well as (ongoing) business advice. The programme also includes the provision that businesses
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
9
should not be in direct competition with existing enterprises unless the additional demand for
product or service can be shown. Certainly one major element in the success of this programme lies
in the wide variety of support services available once businesses are started up.
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 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 previously referred to 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. With the exception
of Australia and Japan, in the countries under study, this function is largely underdeveloped. In Viet
Nam, 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 the Pacific Islands, such centres essentially do not exist. In any event, in most countries,
jobs are mostly filled through informal contacts of relatives and friends or through direct
recruitment by firms. In these and other countries, the problems are 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 so long as the system works efficiently. The large numbers
of unsuccessful young job seekers however suggests that this is not the case. Clearly, there is room
for an increase in the active role played by the PES. One way in which this may be accomplished,
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
10
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. In the less wealthy countries of the region 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.
Private Employment Services
ILO Convention 181 (1997) on Private Employment Agencies recognises the growing role
of the private sector in providing job placement services and establishes basic rules to govern their
operation. For the most part, such agencies play a complementary role to the PES, providing their
services to job seekers not normally covered by the public agencies. Thus, these tend to concentrate
on placing high-skilled professionals and such like. In Indonesia, private agencies are involved also
in the hiring of casual workers. Here problems have arisen because it is not always obvious to the
employees who is actually responsible for the contract of employment and when disputes arise,
such as on dismissal, employees find that they cannot take action against the company for whom
they work. The ILO Convention is specific on this point identifying the recruiting company as the
employer. In any event, private sector involvement in the job matching function remains relatively
underdeveloped in the region.
Evaluating 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. As already noted, this is something
that is entirely lacking or largely inadequate in most of the countries considered here. 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 evaluation 10) 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 the region.
Also of crucial importance in the improvement of the design of programmes is the postprogramme 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 evaluation seeks to compare the experiences of participants on programmes
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
11
with what would have happened in the absence of the programme 11. 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 people12 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 3 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 post-programme
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.
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.
The Social Partners
The country case studies included here are notable in the relative lack of information on the
involvement of the Social Partners. Workers’ and Employers’ organisations are in a position to play
a critical role in the design and implementation of labour market policies for young people. First
ion developing the all important school-labour market links
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 firm-based 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
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
12
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.
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.
Active labour market policy
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
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
13
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.
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.13 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
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
14
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, and who does, 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 firm itself. This is because
firms which provide general training run the risk that their employees may be “poached” by nontraining 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.14 In Germany, the State contributes
principally by supporting the vocational training centres providing off-the-job training to
apprentices.15 Employers provide on-the-job training while apprentices contribute by accepting a
relatively low allowance during training.16 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 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.17 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.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
15
A Word on What follows
The text below continues in Part II with summaries of the main findings of country papers
prepared in Australia, Hong Kong, Indonesia, Japan, PNG, Solomon Islands, Sri Lanka, Thailand
and Viet Nam. Full texts of these studies are available on the ILO-EASMAT website. Part III then
brings together the discussion providing some conclusions concerning the lessons learnt and some
general policy recommendations.
Table 1 – Basic Economic indicators
GDP p.c.
(USD ppp)
1999
HD ranking
(2001)
Average
FDI 1999 (US$
annual real
million)
GDP growth
rate 1995-2000
Population
2000
(million)
Australia
24,574
2
Hong Kong
22,090
24
3.5
23.1
6.80
Indonesia
2,857
102
1.9
-2.7
210.49
Japan
24,898
9
Papua New
Guinea
2,367
122
0.7
0.3
4.40
Solomon
Islands
900 (est. 2000)
147*
-0.4
0.0
0.46
Sri Lanka
3,279
81
5.1
0.2
19.36
Thailand
6,132
66
1.7
6.2
62.41
Viet Nam
1,860
101
7.4
1.6
77.69
18.97
126.69
Sources: GDP, HD ranking – UN (2001), Solomon Islands - CIA factbook.
Average annual real GDP growth rate 1995-2000 – Author’s calculations from ADB (2001).
FDI – ADB (2001)
Population – ADB (2001) except Australia, Japan (1999) from OECD (2001a).
Note:
Solomon Islands’ HD ranking is an equivalent ranking from UNDP. The Islands are not included in
the formal ranking.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
16
Table 2 – Youth and adult unemployment rates
Teenager (15-19)
Unemployment
Rate
Australia (1999)
Hong Kong (2000)
Young Adult (20Adult
24)
Unemployment Rate
Unemployment
Rate
15.0
25.5
6.2
-
5.0
Indonesia (2000)
19.9
6.1
Japan
9.2
4.0
Papua New Guinea (1990)
17.5
11.2
n.a.
Solomon Islands (1999)
56.9
40.0
n.a
Sri Lanka (1997)
33.3
29.1
10.5
Thailand (1998)
7.4
2.4
Viet Nam (1999)
4.5
2.1 (25-34)
Source – Hong Kong, Indonesia, PNG, Solomon Islands & Sri Lanka - Country Case studies; Australia &
Japan - ADB (2001); Thailand - ILO (2002).
Note: For adult unemployment rates, the use of italics implies the use of the aggregate unemployment rate
(including young people) rather than the adult unemployment rate per se.
Table 3: 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
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
17
Endnotes
1
UN/WB/ILO (2001).
Although there are internationally accepted definitions of both informal sector employment (ILO, 1993) and (timerelated) underemployment (ILO, 1998) application of these definitions is not always straightforward requiring, as it
does, a well-developed labour market information system.
3
ILO Recommendation 189 (1998) on Job Creation in Small and Medium-Sized Enterprises.
4
See, for example, ILO (1999), O’Higgins (1997, 2001), Ryan (2001).
5
See, for example, Fay (1996).
6
See, for example, Betcherman et al. (2000). Often, as the case with the cited study, conclusions are largely based on
evaluations carried out in other parts of the world. This in no small part is due to the almost total absence of systematic
control-group based evaluations of ALMP in the region. This point will be returned to below in the discussion of the
evaluation of the effectiveness of youth employment policy.
7
This may also include, for example, tax incentives for firms to take on specific groups and so on.
8
The lack of relationship between the labour market situation of young people and the wages of the young relative to
adults has been noted more generally in the OECD as a whole (e.g. O’Higgins, 2001, Ryan, 2001).
9
Arya (2002). 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.
10
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).
11
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).
12
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. Discussion of this goes beyond the scope of this paper.
For more details see the above-cited works on evaluation.
13
See, for example, Booth (1991), Tan et al. (1992) and Green et al. (1996).
14
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.
15
The State also provides subsidies to support talented, disadvantaged and disabled apprentices (Gasskov, 1994).
16
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.
17
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).
2
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
18
Part II: Country Studies
1) Australia
2) Hong Kong
3) Indonesia
4) Japan
5) Papua new Guinea
6) Solomon Islands
7) Sri Lanka
8) Thailand
9) Viet Nam
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
19
Australia
Australia’s economic growth for nine years to mid 2000 has been described by the OECD as
‘remarkable’ (OECD, 2001b, quoted in Curtain, 2001). There has been nine years of continuous
growth, representing the longest period of economic expansion since the 1960s. According to a
joint publication in January 2001 by the country’s key organisations representing the social
partners1, ‘Australia is enjoying a sustained period of prosperity and affluence. Most of the
country’s economic fundamentals are positive – low inflation, consistent economic growth, strong
export growth, high labour productivity, sustainable fiscal policy and solid returns for investors’.
(Boston Consulting Group, 2001).
Accompanying this economic growth has been significant job creation with corresponding
reductions in the national unemployment level, and rises in labour force participation. In the last
five years alone, the total number of jobs grew by over 800,000 or 10%. The unemployment level
dropped to a national low of 6.1% in October 2000, the lowest figure since 1990.
The last twelve months has seen a slowing of national economic growth, with negative
impacts on job creation and employment levels. Unemployment rose to 7.1% in September 2001,
only to fall back to 6.7% in December 2001. The long-term prospects are still uncertain given the
events of September 11, but most commentators are expecting a further slowing of economic
growth and unemployment levels to climb over 7%.
Despite the overall economic and job growth of the last decade, the reality of persistently
high levels of youth unemployment remains a major national challenge. Job growth in recent years
has overwhelmingly benefited adults aged 25 years and over, with only 1% more 15-24 year olds in
employment in 2000 than in 1995. (The Prime Minister’s Youth Pathways Action Plan Taskforce,
2001).
The unemployment rate for teenagers is three times greater than the national overall figure.
For young adults (20-24 years) the unemployment rate is double that of older age groups.
According to the Australian Bureau of Statistics the national unemployment rate in October 2001
for persons seeking full time employment was 24.1% and 11.3% for 15-19 years and 20-24 years
respectively. This involved a total of 161,400 unemployed young people. An additional 96,100
were seeking part time employment.
Young People in Australia
Table 1 below reports the number and proportion of 15 to 24 year olds in the Australian
population since 1976 and youth population projections through to 2026. In 1999, there were
approximately 2.7 million 15 to 24 year olds, representing 14.2% of total population. This figure is
well down from the peak proportion of 18% in 1979. As illustrated by Table 1, the proportion of
young people is projected to decline to 13.5% in 2006 and 12.3% by 2026.
In 1996, there were approximately 72,000 indigenous young people (Australian Bureau of
Statistics (ABS), 1997). This represented 2.7% of all young people, compared to 2.1% in 1996. Of
more significance is the fact that the proportion of indigenous population under 25 years old was
60% in 2000, compared to only 21% for total population – this represents an area of major
challenge for the future labour market.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
20
More than 420,000 young people – or almost one in six were born overseas (ABS, 1997). In
1996, 43% of Australia’s youth population born overseas were from Asian countries and 25% from
European countries. This is a reversal from ten years earlier (1986) where the equivalent
proportions were 19% and 52% respectively (Prime Minister’s Youth Pathways Action Plan
Taskforce, 2001).
Australian young people are strongly urban in terms of location – 66% are living in major
urban centres, due largely to the greater availability of work and education opportunities (ABS,
1997).
In 1997, 66% of young people were living with their parents (ABS, 4110.0), a proportion
that has increased from 61% in 1982. This trend of greater dependency on parents reflects the
increased educational participation rates and deferral of partnering, child bearing and home
purchasing. Just under 50% of 20 to 24 year olds have established separate households. One fifth
of 20-24 year olds are living with a partner. 12% of 20-24 year olds (150,000) have dependant
children, of which 45,000 (nearly all female) were sole parents (ABS, 1997).
Numbers of homeless young people appear to be increasing in Australia. One study
estimates 15,000 – 19,000 homeless youth in 1991, growing to 37,000 homeless young people aged
12 to 24 on a typical night in 1998 (MacKenzie & Chamberlain, 1998).
Over the past 20 years, there has been a substantial decline in the proportion of young
people who leave school early in Australia2. Now only approximately 10% of young people leave
school before age 16. This group is concentrated among those with low levels of achievement in
literacy and numeracy, males, indigenous students and young people from rural locations. In 1980,
only one third of Australians completed 12 years of education. Now 70% of young Australian
complete, providing Australia with one of the highest school participation rates amongst OECD
countries (OECD, 2000). However, as table 2 below shows, education participation peaked in 1993
and has slightly declined since that time.
Finally, the stressful nature of the transition from school to work and its health implications
needs to be noted. The Boston Consulting Group (2001) captured its impact well with this
statement, ‘the transition from school to work is a turbulent and uncertain period for most young
people, even if many of them start on the right track. It may involve several steps forth and back
between education and work. Living through this transition is a stressful time for many young
people. Young Australians aged 18-24 years have the highest prevalence of mental health disorder
of any age group. Over a quarter of young people (27%) report suffering from some form of mental
health disorder such as anxiety (involving feelings of tension, distress or nervousness), affective
(mood) or substance abuse disorders’.
Overall labour market trends
(a)
Employment 3
Table 3 below provides a summary of the employment situation in Australia in 1991 and
2001. The year 2000/2001 has seen a slowing in employment growth which characterised the last
five years. During this 12 month period, total employment increased by only 57,000 jobs (0.6%),
significantly down on the creation of 300,000 jobs (3.4%) experienced in 1999/2000. This period,
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
21
2000/01 has also seen a reversal in the strong growth in full-time employment 4 evident in previous
years. In fact, during 2000/2001, full-time employment opportunities actually declined by 67,300
jobs (1.0%). However, part-time employment grew by 124,700 jobs (5.2%), substantially higher
than its trend growth of 3.8% per annum over the last decade. The increase in part-time
employment reflects re-structuring within Australia’s economy, and in particular the growth of
service industries, the deregulation of the workplace and introduction of new technologies. The
part time employment growth does reflect a growing and persistent underemployment issue in
Australia given that 30% of part time workers are seeking more employment hours (The Boston
Consulting Group, 2001).
Male employment stabilised around 5.1 million during 2000/2001 with male part-time
employment increasing by 67,600, while male full-time employment fell by 66,700.
Female
employment on the other hand grew by 56,500 to 4.0 million, due entirely to growth in part-time
employment. Female workers account for the majority of part-time opportunities (71%).
The overall labour force participation rate in October 2001 was 63.8%, with the male and
female rates being 72.6% and 55.3% respectively. Lower employment growth in 2000/2001
resulted primarily from a reversal of growth in two key industry sectors, namely the construction
and manufacturing sectors. These two sectors account for 20% of the workforce. Both sectors
grew strongly in 1999/2000 (9.1% and 7.7% respectively) but recorded significant job falls in
2000/2001 (-7.1% and –2.6% respectively). In addition, significant declines in employment within
the wholesale trade and agriculture sectors occurred (-6.7% and -4.9% respectively).
Despite the weakening economic and employment environment, two service industry
sectors have enjoyed strong job gains in the last year - property and business services (6.3%) and
health and community services (5.7%).
(b)
Unemployment
In October 2000, the unemployment rate fell to 6.1%, its lowest level since March 1990.
However, as employment growth slowed, unemployment began to rise reaching 7.1% in September
2001. While the figure has drifted down to 6.7% in October 2001, market expectations of
unemployment over 7% are being forecast in the near future. Table 4 below summarises
unemployed persons by age.
Currently there are 696,000 people unemployed with 532,500 seeking full time
employment, down considerably from a peak of 940,500 in 1992-93. This still represents
approximately 4.7 unemployed people for every registered job vacancy. Although there was an
increase in employment position in 2000/2001, this growth was not sufficient to cope with both an
increasing number of people of working age (averaging 16,500 per month in 2000/2001) and a
rising female participation rate. In the decade 1991-2001, the female proportion of total
employment has increased by 42% to 44%.
The proportion of long-term unemployment (the proportion of persons unemployed for 12
months or more) has fallen in 2000/2001 from 26.2% to 22.9% of total unemployed. This represents
152,000 persons, down from 336,000. However, these ABS figures conceal much higher levels of
long-term joblessness. People whose period of unemployment is interrupted by a short time
through casual work, training or illness are no longer officially regarded as long-term unemployed.
Unemployment benefit statistics which include such people are perhaps a more reliable guide, and
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
22
reveal a more concerning trend – they show that the number of people receiving unemployment
benefits for over one year has hardly fallen in the last five years, and involved 385,000 in
September 2000 (Boston Consulting Group, 2001).
(c)
Indigenous labour market
In February 2000, there were an estimated 134,600 Indigenous Australians aged 15 and over
the labour force – 110,900 in employment, and 23,700 unemployed. Indigenous Australians
experience unemployment at almost three times the rate of other Australians. The indigenous
unemployment rate was 17.6% (compared to 7.3% for non-indigenous Australians). This figure
would be approximately 40% if participation in a government job creation/training scheme –
Community Development Employment Projects (CDEP) was included. The indigenous labour
force participation rate was 31.6% (compared to 63.7% for non-indigenous).
Australia’s indigenous population is much more dispersed around Australia than other
Australians. Approximately 20% live in remote areas where labour markets are practically non
existent. Only 1% of other Australians live in such remote areas. Nearly 28% of indigenous jobs
are directly in the public sector, compared to less than 18% for the labour force generally. In
addition, a significant proportion of indigenous people work in community organisations.
Estimates suggest that up to 70% of all indigenous jobs are reliant to some extent on public funding.
Labour market growth is not in this sector, but the private sector. Finally, nearly 25% of all
indigenous jobs are in the labouring and other unskilled areas, compared to 8.7% for the total
workforce.
The Youth labour Market
Young people are clearly the most disadvantaged group within the Australian labour market.
Young people aged 15 to 24 years are experiencing two and a half times the level of unemployment
recorded for adults aged 25 to 54 (Dearns, 2001). In addition, part time and casual work
opportunities dominate employment options highlighting the major unemployment status of young
people. Tables 5 and 6 depict the education and labour force activities for teenagers (15-19 years
old) and young adults (20-24 years old) in May 1999 respectively.
The recent Prime Minister’s Youth Pathways Action Plan Taskforce (2001) stated clearly
the changing nature of the youth labour market – ‘A generation ago, most young people left school
by 15 or 16, and were fairly readily absorbed into full-time positions in the labour force, where
they learned work related skills on the job. This is no longer the typical pattern. More common
now is prolonged participation in formal education combined with part-time work before looking
for full-time work over an extended period of time.’
Information from the Australian Bureau of Statistics reveals a number of interesting trends
and characteristics about the Australian youth labour market, namely 
While Australia achieves well in terms of its proportion of tertiary graduates in the adult
population (ranking sixth out of 28 OECD countries), Australia ranks low in terms of secondary
school completion (17th out of 28 OECD countries with 57% of its adult population aged 25 to
54 with upper secondary school education). In the opinion of the Dusseldorp Skills Forum ‘it is
this gap between the education ‘haves’ and ’have nots’ that is not only undermining Australia’s
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
23
ability to compete in a global knowledge economy. It is also likely to further increase income
inequality …’ DSF estimates that at least 14% of 19 year olds in 2000 have not attained a
minimum level of education necessary to compete in today’s demanding labour market (Curtain,
2001).
There is an obvious correlation between level of school completion and further education
and employment achievement as illustrated by these examples:
-
-






over two thirds of 1999 Year 12 leavers went onto higher education, TAFE or other forms of
further education. In contrast, only 39% and 43% of Year 11 and 10 leavers followed a
similar path;
a third of early secondary school leavers do not appear to have made a successful transition
to further study or full time work compared with nearly a fifth of Year 12 students;
the difference in the unemployment rate for men aged 25 to 64 years with less than upper
secondary education is double that of those who have completed the highest level of
secondary school (Curtain, 2001).
The OECD Economic Survey of Australia for 2000 noted that ‘many school leavers remain
at considerable risk of being locked into marginal labour market activities that may not lead to
better skills and employment prospects. More needs to be done to reduce the incidence of early
school leaving’ (OECD, 2000b).
One of main reasons for the difficulties experienced by young people in their school to work
transition is the lack of full time jobs for this age group. There has been a constant decline over
the last 30 years in full time employment opportunities for young people.
In August 1970, 575,000 fifteen to nineteen year olds were in full time employment. By May
1989 this number had fallen to 454,000 (32% of age group) and by 1999 dropped to 217,000
(16% of age group). In terms of 20 to 24 year olds, the numbers in full-time employment fell
from 868,000 in May 1989 (66% of age group) to 693,000 in May 1999 (52% of age group)
(ABS, 6227.0). In fact, between May 1995 and mid 2001, the number of full time jobs held by
non-students 20-24 years fell by 94,300 – a 13.3% decrease. At the same time full time jobs for
adults aged 25 years and over grew by 9.5%.
The rapid job creation of the last five years in Australia has had minimum impact on youth
employment opportunities with less than 1% more 15 to 24 year olds in employment in 2000
than in 1995;
In 1998, Australia recorded the second highest proportion of 15 to 19 year olds among OECD
countries being unemployed. The comparative analysis by OECD of youth unemployment is
depicted in Table 7;
Unemployment rates for early school leavers are significantly higher than for any other group of
young people. Furthermore, the jobs taken by early school leavers (other than those who have
an apprenticeship) are typically low skilled and provide relatively few training opportunities;
Australia’s labour market is certainly not as ‘youth friendly’ as many other countries. As
mentioned, youth unemployment rates are two and a half times higher than adult unemployment
rates.
Part-time employment is a significant experience for many Australian young people and
growing in dominance. In October 2001, young males and young females represented 12% and
17% of part-time workers respectively. Between 1989 and 1999, the number of 15 to 19 year
olds working part time increased from 272,000 (19% of the age group) to 406,000 (31% of the
age group). Among 20 to 24 year olds, the numbers undertaking part-time employment grew
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
24







from 147,000 (11% of the age group) to 284,000 (21% of the age group). In fact, Australia
ranks third behind France and Sweden (in OECD rankings) in terms of the proportion of young
adults in part time work (Curtain, 2001). With 30% of part time workers wanting more
employment hours, Australia has a significant underemployment issue;
Part-time employment is also used as a source of short-term jobs by young people while
participating in education, or as a stepping stone to full-time employment. A large number of
part-time jobs are held by students. Australia compared to other OECD countries has a
relatively high proportion of young people who combine studying with part-time work (OECD,
2000);
Compared to teenagers, young adults (20-24 years old) are in a less precarious employment
situation – unemployment rates are lower, and for those employed, jobs are not as concentrated
in such a limited range of industry sectors, nor in such low skilled occupations. Nevertheless,
unemployment rates are still double the rate of other adults, and the duration of employment
does average over ten months. Part-time employment is still very common;
There are distinct gender differences in the workforce. Young women are more likely to be
employed part-time, while young men are more likely to be in the labour force and to be
unemployed. The industry sectors in which young women and men work and the occupations
they hold also differ significantly;
There have also been two significant trends in the late 1990s. First, a shift towards a great
concentration of young people in small businesses which tend to provide less training than
larger firms. Secondly, young people are more likely than in the past to hold low skilled
positions (Vandenlteuvel and Wooden, 1999);
Youth employment is heavily concentrated in the retail trade sector (31% of youth employment
in February 2000). This concentration is even greater for 15 to 19 year olds, especially young
women. Young people are also heavily represented in tourism, accommodation, cafes and
restaurant industries. Related to this concentration is the fact that young people work in
relatively low skill and low paid occupations, in casual and part time employment and in small
businesses. Such forms and locations of employment are often associated with lower levels of
on the job training;
The only industries in which the number of jobs held by young people are growing faster than
for the rest of the workforce are in the areas that employ relatively few young people –
agriculture, forestry and fishing, communication services and education. Even in the hospitality
and retail industries in which youth employment is concentrated, the rate of job growth is faster
among those aged 25 years and older. Overall public sector employment of young people has
also declined. Table 8 illustrates the industry sector changes for young people, and provides
comparison with workers aged 25 years and older;
The proportion of teenagers who are not in full-time employment, full-time education or parttime educations and employment increases dramatically between age 17 (11%) and 18 (21%).
This indicates that the period immediately after leaving Year 12 is critically important in
determining young people’s transition to full employment. In the words of the Prime Minister’s
Youth Pathways Action Plan Taskforce ‘a good early start – in the sense of being in full-time
education, training or employment – seemed to be particularly important for female school
leavers … (there is) the need for tracking the experiences of school leavers and early
intervention to assist those at risk in the transition process. Relative to the Nordic countries in
particular, Australia lacks a comprehensive and integrated policy and programmatic approach
to the construction of safety nets for young people at risk in the transition to work’.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
25

Average earnings of young adults have fallen by about 20% relative to mature workers since
1984, and yet the numbers in full-time work have continued to fall despite better education and
their lower wage attraction. This suggests the impact of other factors, namely:
- structured changes reducing the number of entry level jobs for inexperienced workers;
- employers’ concern about young people’s relative employability and lack of experience;
 The tremendous advance in school retention rates has stalled since the mid 1990’s and has
begun to decline. Australia is one of the few OECD countries in which school retention
declined during the 1990’s and is occurring at a ‘time when education and training is becoming
a lifelong, ongoing process and when, in terms of employment, value is being placed on the
development of personal and intellectual skills – the so-called “soft skills” like clear thinking,
problem solving and relationship building’ (Dusseldorp Skills Forum, 2001);
 Two groups of young people continue to face disadvantage in the labour market, namely
indigenous youth and non-English Speaking Background (NESB) immigrant young people.
Their unemployment rates are very high, as are their rates of part-time employment. Table 9,
based on the 1996 Census data, clearly shows that the percentage of indigenous young adults
(20-24 year olds) who are in the labour force and who are employed is much lower than for non
indigenous young adults. In addition, the unemployment rate for young indigenous adults is
twice that of non indigenous youth, with an unemployment rate of 31% for indigenous young
men and 25% for indigenous young women.
Vandenlteuvel and Wooden (1999) explain the differences between indigenous and non
indigenous by a range of factors. Compared with non indigenous adults, indigenous young
people are less likely to have completed secondary school, hold post secondary qualifications,
live in major urban centres and view formal education and employment as culturally relevant. In
addition, they are more likely to suffer from poor health and to have been arrested.
Table 9 also shows that the labour market disadvantage is also more pronounced for young
indigenous women. For example, in August 1996, only 49% of indigenous young women were
in the labour market compared to 76% of non indigenous young women and 74% of indigenous
males. This difference is partly explained by the higher child bearing experienced by
indigenous young women and the consequential withdrawal from the labour market. In addition,
there is a much lower participation rate by women in Community Development Employment
Project (CDEP) scheme than men.
It is worth noting that school retention for indigenous youth is well below that of other
Australian youth. In 1998, only 83% of indigenous students remained in schooling to Year 10,
compared to just under 100% for non indigenous students. Only 32% of indigenous students
remain at school to Year 12 compared to around 73% of non indigenous students (The Prime
Ministers Youth Pathways Action Plan Taskforce).
 Similarly, there is a much lower labour market participation rate and higher unemployment rate
for immigrant young from Non English Speaking Backgrounds (NESB) compared to other
young adults. Table 10 below shows that the employment to population ratio is lowest for
NESB immigrant young adults and highest for Australian born young adults. Labour force
participation follows a similar pattern. As with indigenous young adults, the differences are
bigger for females – only one in two NESB young female adults were in the labour force,
compared with over three in four young women either born in Australia or from an English
Speaking Background (ESB).
Finally, any insight into the Australian youth labour market would not be complete without
reference to the Dusseldorp Skills Forum5, and their concept of ‘at risk’ to identify those young
men and women who are more vulnerable than others in finding and sustaining stable employment.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
26
The Dusseldorp Skills Forum has developed a national reputation for its study of the transition
process young Australians undertake from full time education to full time work. They have
captured well the complexity of this process – ‘moving from education to work for many young
people is not a single step of leaving the educational system and entering the world of work. The
transition process can extend for some time with neither an obvious starting point nor a clearly
defined end. For many, it involves several steps forth and back between education and work.
Young people may be engaged in job search and waiting times, involuntary unemployment or in
chosen time off for leisure, travel or other activities. The complexity of what is happening,
therefore, cannot be captured in a single statistic such as the youth unemployment rate. Indeed,
over-reliance on this measure has hampered a deeper understanding of the difficulties experienced
by young people’ (Curtain, 2001).
The Dusseldorp Skills Forum uses the concept of the ‘at risk’ group to define those young
people who are:




not studying and
in part time work, or
who are actively looking for work (the unemployed), or
those not in work and not considered as actively seeking work (not in the labour force).
According to the analysis of data by Dusseldorp Skills Forum up to a quarter of young
people aged 18 to 24 years maybe ‘at risk’ in the labour market. Unfortunately these figures have
remained relatively constant over a decade and show little sign of improvement despite the
country’s improved economic position. The proportion of 15 to 19 year olds considered ‘at risk’ in
May 2001 was 15.1% - the average rate for the last 14 years has been 15.4% (Curtain, 2001). Table
11 below illustrates this. Table 12 shows that a similar consistency is observable in the proportion
of young adults (20-24 years) who are ‘at risk’. In terms of other OECD countries, in 1999,
Australia ranked 14th out of 19 for ‘at risk’ teenagers (moving from low to high) and 12th out of 19
for ‘at risk’ young adults.
The work of the Dusseldorp Skills Forum on the ‘at risk’ youth issue further highlights the
key challenges of the Australian youth labour market, namely –
 persistency of labour market disadvantage compared to other age groups;
 lack of youth full time job creation;
 continuance of significant underemployment through the dominance of part time employment;
and
 failure to maintain the momentum with increasing school retention levels.
National Youth Policy
At the national level, no National Youth Policy exists. However there are a range of
national statements and strategies in existence that provide key elements of a national agenda and
framework for action for young people, namely:




The Commonwealth/State agreed National Goals for Schooling in the Twenty-first century
The Vocational Education and Training in Schools Framework
The Prime Minister’s Community and Business Partnership
The Stronger Families and Communities Strategy.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
27
Of great significance was the release in July 2001 of the statement of the Prime Minister’s
Youth Pathways Action Plan Taskforce entitled Footprints to the Future. The then Minister for
Education, Training and Youth Affairs, Dr David Kemp, stated that the report set out a policy
framework for supporting young Australians through school, and from school to further education,
training, work and active citizenship. At the launch of the Report he stated – ‘all young people
deserve our support and “Footprints to the Future” is a well researched and an excellent blueprint
as to how best to assist young people in making the step to adulthood. The Government is now
responding in an effective and positive way to the recommendations contained in this important
Report’ (media release, 10 July 2001).
Footprints to the Future focuses on five connected principles/directions, namely –





a national commitment to all young people;
education and training as the foundations for effective transitions;
the development of a youth career and transition support system;
enhancement of focussed local partnerships; and,
bringing about change in the way we support young people and respond to diversity.
At the heart of the recommendations of the Prime Minister’s Youth Pathways Action Plan
Taskforce report is the concept of a National Commitment to All Young People, to be implemented
through partnership with state and territory governments, community and business. In the words of
the Report, this commitment would ‘set out the things that we should be providing for our young
people. It would aim to support them in transition to independence’.
In practical terms, this National Commitment would undertake to provide all young people
with the opportunity to –







‘complete 12 years of schooling (or equivalent vocational training);
undertake vocational education and training programs and structured workplace learning while
at school and beyond;
acquire employment and life skills which enable them to be dependant, confident and active
members of the community;
have access to a professional career and transition support system;
if they leave school before completing 12 years of schooling, return to affordable and relevant
training programs in a range of community settings;
have available in their local community a range of support, which offers them early intervention
with problems, crisis assistance and suitable long term help; and
take part in local cultural, recreational, sporting and community service activities’.
Many of the issues and recommendations identified by the Taskforce build on the vision set
out in another significant national youth policy document The Adelaide Declaration on National
Goals for Schooling in the Twenty-First Century, which was formulated by the Ministerial Council
on Education, Employment, Training and Youth Affairs in 1999 (Kenyon, 2001, Appendix 2).
The National Commitment Statement6 notes the need for:
 ‘cultural and paradigm shifts in community institutions and systems;
 Commonwealth, State, Territory and local governments to work together;
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
28





integrated supported networks which create opportunities and respond to the diversity of
challenges faced by young people;
focussed and collaborative partnerships at the local level involving schools, industry, business,
government and non-government agencies, communities, young people and their families;
the development of learning pathways for each young person, transition follow-up mechanisms
and transition indicators;
the development of a comprehensive career and transition support system and the development
of employability and life skill learning programs; and
appropriate income support, health care and housing foundations’.
Active Labour Market Policies
Supply-Side: Enhancing Human Capital
Education and Training
Australian national and state Ministers at their Ministerial Council on Education,
Employment, Training and Youth Affairs (MCEETYA) in April 1999 made an historic
commitment about improving Australian schooling within a framework of national collaboration.
Their Adelaide Declaration on National Goals for Schooling in the Twenty-first Century document
(see Kenyon, 2001, Appendix 2) sees schooling as a foundation on which the future of the nation
needs building. The document expands on three key goals.
As part of the Adelaide Declaration, Ministers agreed to the following six areas of schooling
for initial outcomes reporting:
 literacy
 numeracy
 student participation, retention and completion
 vocational education and training in schoolings
 science
 information technology
and noted the need to develop performance indicators for:
 civics and citizen education
 enterprise education
Since April 1999, this document has been a foundation starting point for national and state
efforts, and provided a basis for the National Guarantee for all Young People (July 2001), (see
Kenyon, 2001, Appendix 1.)
Besides renewed focus on providing relevant schooling experiences for young people to
cope and succeed with a changing world and labour market circumstances, there have also been
significant efforts in the post school transition fields to better support young people in the
movement to employment. Today a host of programs exist to assist specific target groups
(especially those young people most at risk) plus provide a combination of assistance measures to
unemployed young people including:

individual skills audit and training needs analysis
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
29








literacy and numeracy improvement
living skills training
vocational training
work experience
job information
job search training
job placement
post placement support
Vocational Education and Training (VET) and Structured Workplace Learning
In 2000 Australian Education Ministers agreed on a national definition of VET –
‘Vocational Education in Schools assists all young people to secure their own futures by enhancing
their transition to a broad range of post-school options and pathways. It engages students in work
related learning built on strategic partnerships between schools, business, industry and the wider
community’ (Ministerial Council on Education, Employment, Training and Youth Affairs
(MCEETYA), 2000).
VET through a variety of school programs enables students to engage in on and off the job
learning in order to obtain a nationally recognised qualification within the Australian Qualification
Framework, as well as gain credit for a senior secondary education certificate. In most cases,
students undertake Structured Workplace Learning within a business. Students learn practical
workplace skills that industry and employers have decided are important for a specific job or career.
The skills students learn are assessed by Registered Training Organisation. Implementation of VET
across Australia shows incredible diversity of opportunity, but is in accordance with a set of
nationally agreed principles, namely –








adhere to Australian Recognition Framework requirements,
based on national industry and/or enterprise competency standards,
contribute to qualifications defined by the Australian Qualifications Framework as part of the
senior certification of education and provide multiple pathways to training, education or work,
ensure dual outcomes, being study towards senior secondary certificate with VET qualifications
defined by the Australian Qualification Framework,
take into account national and regional/local skill shortages, industry needs and student demand,
appropriate accreditation and recognition procedures are developed that enable training
packages to be delivered,
provide for the needs of the equity target groups, and
develop regional and community partnerships.
The growth in participation in VET in schools and Structured Workplace Learning has been
remarkable. Over 167,000 young people participated in a VET in Schools program in 2000, up
from 26,000 in 1995. Approximately 50,000 businesses Australia-wide provided Structured
Workplace Learning opportunities.
Australian Ministers of Education made a commitment in 1999 to increase the proportion of
students undertaking VET in schools, to reach 40% of senior students by 2004. Further, the
Ministers expressed commitment to increasing the average numbers of hours enrolled in VET
programs from an estimated annual average of 120 hours in 1998 to 150 hours by 2004, and
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
30
increase the amount of time in workplace learning. Such a move will increase the relevance of
schooling for many young people, as well as equip them more effectively for the world of work.
The Prime Minister’s Youth Pathways Action Plan Taskforce stated its belief that
recognised structured vocational education and training in schools was a critical component of
learning, and should be accessible by all students regardless of whether they were going on to fulltime job or further study. The Taskforce stated that efforts should be directed towards –
 ‘clearly establishing during compulsory school years the place of vocational learning;
 increasing the skill base of more young Australians to improve their capacity to move directly
from school to employment or further education and training;
 improving pathways by establishing arrangements for VET assessments to contribute directly to
tertiary entrance scores;
 raising the status of VET in schools and building linkages between these programmes and
further education and training courses;
 enabling more students to undertake these programmes and increasing the depth of students’
participation in VET studies; and
 strengthening and supporting employer involvement in the compulsory years and in VET in
Schools programs’.
Apprenticeships
There has been significant take up of apprenticeships and traineeships over the last five
years. Table 17 below shows that during the early 1990’s, there was a 23% decline in
apprenticeships from 1990 to 1995, while the number of trainees remained static. However, this
position has changed dramatically following the introduction of the modern Australian
Apprenticeship and Trainee System from 1 January 1998. This new system includes both
apprenticeships and traineeships under an agreed national framework for training. By June 2000
there were 275,630 new apprentices and trainees in training. The fastest growth has been in service
industries where traditional apprenticeships were not common in the past. Currently there are 500
occupations where New Apprenticeships are possible.
The main differences to the former apprenticeship/trainee system are that there is no
eligibility restriction by age, wider choice about training provider and more flexible training
packages.
Three national government programs exist to encourage take up of apprenticeships –
 New Apprenticeships Incentive Program – offers a range of incentives to both apprentices and
employers, including support for employers employing apprentices with disabilities and
indigenous job seekers;
 New Apprenticeships Access Program – assists disadvantaged young people into
apprenticeships, particularly those who have left school. Each year a minimum of 2,500 places
are available for this target group
 New Apprenticeships Centres – these centres are responsible for:
- providing information about New Apprenticeships to employers, New Apprentices and other
interested people;
- marketing and promotion of New Apprenticeships;
- administering New Apprenticeship Support Services including processing payments for
Commonwealth incentives;
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
31
-
working with State and Territory Training Authorities; and
establishing relationships with Job Network members and other organisations who can assist
people obtain New Apprenticeships.
Two successful apprenticeship initiatives over the last five years have been the
establishment of Group Training Companies and school based apprenticeship opportunities. Group
Training Companies are not for profit community companies that provide a system whereby
apprentices and trainees are indentured/registered to a Group Training Company and placed with
host employers on a rotational basis to provide workplace training experience. This has been a
most successful initiative to expand the employment of young people in small to medium
enterprises. The national government has a number of programs to assist the expansion of the
group training arrangement, namely:



Group Training New Apprenticeships Targeted Initiatives Programme
Commonwealth Loan Guarantee Programme
Group Training Special Incentive Payment
The second initiative worth highlighting is school based apprenticeships which provide the
opportunity for students to be involved in a two year course that includes one day a week on the job
training and 15 weeks per year paid work experience. School based apprenticeships have certainly
helped improve relevance and retention within the education system, and particularly providing an
enthusiastic option within indigenous communities. There are now over 7,000 school-based
apprenticeships in operation. With declining full time work opportunities for young people, the
creation of the apprenticeship type arrangements is obviously a very important vehicle for young
people to access employment with career prospects.
Income Support Measures
Over the last 30 years there have been significant developments and changes in government
income support for young people in training and education. The Tertiary Education Assistance
Scheme was introduced in 1973 to help tertiary students. AusStudy was introduced in 1987 and
broadened the eligibility. Prior to July 1998, young people may have been eligible for income
support under a variety of schemes depending on their main activity – options included
AUSTUDY, Youth Training Allowance, Sickness Allowance and Family Allowance. This system
was criticised for its inflexibility and complex nature, requiring recipients to change schemes when
changing their main activity.
In July 1998, the national government introduced a common allowance, namely the Youth
Allowance. Young people under 18 years of age are now required to participate in full time
education or training in order to be eligible. Mutual Obligation7 requires recipients of income
support over 18 and not studying to commit to activity agreements that increase their chances of
gaining employment.
Activities permissible under Mutual Obligation are:
 part time paid work
 part time study in an approved training or education course
 Work for the Dole program
 Community Development Employment Projects
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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









voluntary work
Green Corps
approved literacy and numeracy training
New Apprenticeships
Job Search Training
Advanced English for Migrants Program
Intensive Assistance
Job Pathways Program
Job Placement, Employment and Training Program
career counselling
As illustrated by Table 14, since the introduction of Youth Allowance, there has been a
decline in the number of young job seekers receiving income support, while the number of full time
students has increased significantly.
Guidance and Counselling
There has been increasing commitment in Australia to improving the quality of information
and counselling support to help young people make appropriate job and training choices. The
following are examples of the diversity of initiatives now operating:






Enterprise and Career Education Foundation (ECEF) – ECEF was established by the national
government in January 2001 to help young people make the right choices about their futures and
to achieve a successful transition from school to further education, training and employment.
ECEF promotes linkages between school, businesses and the community, to help students get
vocational enterprise and career education, knowledge and experience before they leave school.
The Youth Employment Link – one central source of information in the State of Victoria through
a comprehensive, interactive and fun medium to help young people make career choices
(www.yel.vic.gov.au).
Getaccess – an interactive website for West Australia youth seeking career, employment and
training related information and services. Their site is fun, easy to navigate and contains many
‘side trips’.
Rural Youth Information Service (RYIS) – RYIS aims to provide young people aged 15-25
years living in rural and remote areas of Australia with information, advice, referral and followup assistance on employment, education and training opportunities, income support,
accommodation and health. Although RYIS assists all young people, priority is given by RYIS
workers to young people who are:
o unemployed, and/or
o facing ongoing difficulties in gaining employment and achieving employment goals.
Unfortunately RYIS is located in only 21 rural sites.
Career and Transition Advisors – the national government announced in December 2001 a $3.6
million program to pilot 30 career and transition advisors in 2002 to work with schools, local
communities, young people and their families.
School Leaver Program – an initiative of the Western Australian Departments of Training and
Education, which surveys and follows up on school leavers in the state six months after leaving
school, and provides advice and support to those who are experiencing difficulty accessing
suitable training and/or employment opportunities.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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School to Work Transition Support
There is increasing concern about the dramatic increase in the proportion of young people
between 17 and 18 who are neither in full-time education, full-time employment or part-time
employment and part-time education. Improving the transition from school to employment and/or
education has become an increasingly important priority, especially for those most at risk. The
following best practice examples illustrate this growing focus.
Best Practice Example
The national government will commit $4.8 million in the 2002-2003 period through the
development of a Mentor Marketplace. This Marketplace will increase young people‘s access to
mentoring, which is a proven method of assisting young people to stay connected to the education,
training and employment systems.
Best Practice Example
The Links to Learning Community Grants Program of the New South Wales government assists
young people aged 12 to 24 years who have left school early or are at risk of leaving school early,
and provides them with a range of opportunities to remain in or re-enter mainstream education and
training.
The programme funds community organisations and local governments to undertake innovative and
creative activities in the informal learning settings and to link participants back to education and
training. The community based approach for implementation of projects means that organisations
develop local strategies to best meet the needs of local young people.
www.det.nsw.gov.au/eas/acomm/index
Best Practice Example
Promoting Self-reliance for Indigenous People is a national government initiative beginning in
July 2002. It aims at supporting senior secondary indigenous students complete Year 12 and go on
to higher education or vocational education and training. The funding will support 1,600 students
through partnerships involving communities, industry and education providers. A further 2,300
students will gain access to vocational learning opportunities through local businesses and
committees.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
34
Best Practice Example
The Jobs Pathway Program (JPP) is a national government youth transition program which assists
up to 70,000 young people annually from over 1,600 secondary schools around Australia. It began
as a $2 million pilot program in 1995 and has grown to a $13 million program involving 74
organisations who deliver projects across Australia. JPP began as a program providing linkage to
employment for Year 11 and 12 school leavers. Since then it has expanded to include all school
leavers, and has evolved into the most established school to work transition initiative in the country.
The program combines a preventative approach to school leaving with post school support.
Delivery includes a wide range of options including personal support, brokerage and the
development of alternative school curricula. Specific services include:
 an assessment of individual needs
 assistance with job search preparation
 career counselling
 referral to vocational and training programs
Unfortunately it has age and eligibility restrictions.
www.dest.gov.au
Demand-Side: Creating Job Opportunities
Job Creation and Public Works
Work for the Dole (WfD) – introduced in 1997 for approximately 10,000 young people.
WfD aims to develop work habits, generic work skills and work experience to job seekers through
projects of benefit to the local community. It is compulsory for 18 to 19 year olds receiving income
support three months after completing Year 12, and for other 18 to 24 year olds receiving income
support for six months. The initiative is the best example of a program based on the principle of
Mutual Obligation – that it is fair and just that people be asked to contribute to the community in
return for the community’s support.
WfD has dramatically increased since 1997 ($105 million for 2000/01 enabled 50,000
participants) making it one of the largest funded government programs for unemployed youth.
There have been a range of reviews of the program with the following three limitations often
quoted:
o it does not have employment outcomes as its chief objective
o projects are not required to provide recognised training, specific skills development,
or structured pathways to other forms of assistance, and
o projects are not tailored to individual needs or participant career aspirations (Dearns,
2001)
Green Corps – provides young people aged between 17 and 20 years with the opportunity to
volunteer to work on environmental and heritage conservation projects. Project activities include
landcare, habitat protection and restoration, and flora and fauna survey work. Projects are
community based, of six months duration and primarily located in regional and remote locations of
Australia. The national government has committed $90 million over four years to Green Corps, and
this will support 6,800 young people. Green Corps is the only national government funded program
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
35
that incorporates training and work placement. It provides a training wage and accredited training.
Green Corps is an excellent example of a government funded initiative delivered through a non
government organisation, namely the Australian Trust for Conservation Volunteers. Green Corps
has restrictive age and eligibility criteria.
Community Development Employment Projects – administered by the Aboriginal and Torres
Strait Islander Commission, this scheme provides opportunities for part-time work paid at the
equivalent of unemployment allowances to residents of indigenous communities in remote
locations;
Wage Subsidies
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
persons8.
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 program, yet there
are strict age restrictions (15 to 21 years) and only 138 projects nationally, thus limiting its
geographical availability;
Intensive Assistance – provides individually tailored assistance for up to two years to
eligible job seekers who are more disadvantaged in the labour market, to prepare for, and obtain,
suitable employment. It is one of a few mainstream labour market programs that provide
subsidised and integrated work placement and training as a stepping stone to permanent
employment. National government provides support for approximately 300,000 job seekers to start
in Intensive Assistance.
Indigenous Employment Program – includes two programs –
o Wage Assistance -a wage subsidy paid to employers over 26 weeks providing on
going employment,
o Structured Training and Employment Projects (STEP), where employers who
provide at least 5 jobs, generally with accredited training and a minimum period of
12 months receive assistance.
Youth and the Information Economy
The Information sector is increasingly being seen as a growth sector for employment
creation, especially youth job creation. The findings of Australia’s most comprehensive survey of
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
36
the demand for IT skills in Australia (IT and T skills Taskforce) estimated that employers will be
seeking thousands of additional IT staff over the next year. The national government has introduced
the Building on IT Strengths (BITS) Programme. BITS aims to build on the strength and
competitiveness of the Australian information industries sector. In particular the program seeks to:
 foster linkages and networking between participants in the information industries sector; and
 facilitate the availability and use of leading-edge network technologies by the information
industries sector.
Promoting Self Employment
Since the early 1980’s, Australia has had at the national and state levels a number of
initiatives which have assisted unemployed people to explore and enter the self employment option.
Some current initiatives worth highlighting are:
New Enterprise Incentive Scheme (NEIS) - provides support and training for eligible job
seekers who wish to pursue the option of self employment. Assistance through NEIS includes:
- training in small business management, business skills and business plan development,
- an allowance for up to one year,
- business advice and mentor support during the first year of business operation.
To be eligible for funding, proposed business idea must:
- be new and not yet operating on a full time basis;
- be independent and be reputable;
- be assessed as commercially viable;
- not compete directly with existing businesses, unless it can be demonstrated that there is an
unsatisfied demand for the product or service, or the goods or services will be provided in a
new way.
One restriction on youth related to NEIS is a minimum age of 18 is required. In the twelve
months up to the end of March 2001, a total of 627 young people (out of 6,717 entrants)
participated in this program. Overall, 87.9% had a positive outcome. This is higher than for overall
population –85.1%. The NEIS Program has always experienced higher outcomes compared to
other types of labour market assistance. This is due in part to the careful selection of viable business
ideas by NEIS providers prior to the commencement of assistance, as well as the enterprising
characteristics of the job seekers involved.
Self Employment Development Scheme - a national program that allows job seekers to
undertake approved activities to develop self employment opportunities for three months. People
may use it for business ideas that do not meet NEIS eligibility, e.g. for a franchise or taking over an
existing business.
Indigenous Small Business Fund – aims to foster the development of businesses owned and
run by indigenous people and promote indigenous employment opportunities.
Aboriginal Enterprise Development Officer Program – a state of New South Wales initiative
to:
o assist the establishment and retention of viable locally designed Aboriginal and
Torres Strait Islander businesses,
o to encourage an entrepreneurial culture within Aboriginal communities.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
37
Aboriginal Economic and Employment Development Officer Program – a Western
Australian state program which aims to promote and assist the involvement of indigenous
communities and organisations in developing locally based enterprise, employment and training
initiatives.
BusinessWorks – a Western Australian program that provides training, support and access to
finance for young people wishing to establish their own business.
You’re the Boss – an informative tool in Western Australia to assist qualified tradespeople to
set up their own sub-contracting business or other forms of self employment.
The Youth Desk of the Department of Industries and Business in the Northern Territory
provides young people interested in self employment with access to a variety of business services
and information. This contact point operates the following comprehensive range of programs:
 Getting Started seminars – covers topics like business structures, market research, taxation,
business planning and finance,
 Business Consultations – free consultations are provided to any young person exploring self
employment or already in business,
 Workshops – free practical business workshops are available to any young person in business or
thinking about going into business,
 Operation Livewire – a Youth Business competition that offers a young person (18-28 years)
interested in business, a mentor and the means to develop a comprehensive business plan,
 Youth in Business Network Group – a group which meets regularly to discuss a variety of
business topics.
 Getting Started Business Assistance Scheme – a grant program available for 18to 24 year olds
wishing to start a new business operation – provides up to $5,000,
 School/University Visitation Program – provides students information about business and the
self employment option,
 Youth Business Award – cash prizes are provided for Year 11 and 12 students operating a part
time business as part of a Small Business Management Unit, and
 Young Australian of the Year Award – recognises the achievements of young Territorians, and
provides the opportunity to compete in the national Award Program.
(www.nt/gov.au/dib/business)
Supporting Small Business Development
It has long been recognised in Australia that maximum job creation occurs within the small
and medium business sector, with 60%-80% of new job creation emerging from business expansion
(as opposed to business creation). Both national and state governments have consistently attempted
to both create a conducive environment for business growth (especially through reform of
government red tape and business taxes) and to implement practical support programmes. State
governments have agencies devoted to the establishment and growth of small business, and
championing their cause. For example, in Western Australia, the Small Business Development
Corporation exists with the following goals:
 pursuit of opportunity;
 removal of barriers and impediments to business growth;
 improvement of business skills in the small business sector;
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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


fostering an enterprise culture;
promoting the value and success of small business; and
facilitation of regional small business development.
The national government administers two programs which have supported the growth of
existing small business, namely:

Small Business Enterprise Culture Program (SBECP) – over $2 million each year is provided to
enhance the business skills of small business owners and managers and demonstrate the
contribution that such skills can make to business vitality and growth. Another key element of
SBECP is assistance to women in business;
 Business Incubator Program – Business Incubators are designed to assist new and growing
businesses to become established through shared workshop facilities. Incubators provide
premises, advice seminars, shared facilities and support. During 2000/01, $5 million was
provided for the establishment of new incubator facilities.
Two community based business support programs are worth highlighting as best practice examples.
Best Practice Example
Business Enterprise Centres (BEC) were created in Western Australia in the 1980’s through the
Department of Employment and Training. Now numbering 35, these centres operate in city and
country communities, providing a range of services to both establish and grow businesses. These
services include:
 free practical business assistance,
 referral to specialist advisors,
 assistance through the maze of government departments and regulations,
 business workshops,
 business information, and
 problem solving.
A management committee with representatives from business, private sector organisations and local
government, support a facilitator/manager to implement the above services.
All BECs would support business initiatives involving youth and unemployed people.
www.sbdc.com.au
Best Practice Example
The Business Retention and Expansion program was introduced into Australia in 1996 by the
Bank of I.D.E.A.S. Based on the USA model, this strategy supports through a defined process and
set of tools, a community organised business visitation program. The purpose of the visitation
program is to ascertain from local businesses their perceptions and ideas about what can happen
locally to help existing businesses do better, expand and create more local jobs. A host of rural and
urban communities have utilised this community and economic development strategy.
www.bankofideas.com.au
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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Community Initiatives
Since the early 1970s when unemployment became a significant issue in Australia, local
communities and regions have always been actively involved in mounting local initiatives to
increase the net number, quality and variety of job opportunities. A host of community and
regional economic and employment development agencies and committees exist.
Over the last five years, national government has become increasingly aware of the
importance of building communities (including their job creation capacity) from the ‘inside out’ as
opposed to the traditional ‘top down – outside in’. Senator Vanstone, Minister responsible for the
Department of Family and Community Services expressed this sentiment well – ‘we recognise that
governments, alone, can never hope to fix every social problem. The days of governments telling
communities what’s good for them are over. After all, the best ideas usually come from the ‘bottom
up’ rather than the ‘top down’.’
Today a range of national programs exist to foster such initiatives including Area
Consultative Committees (ACC); 56 regionally based organisations responsible for acting as a
catalyst for local initiative in terms of job creation and economic development. Funded by the
national government, these ACCs administer the Regional Assistance Programme) (RAP) funding.
This funding provides support for local based projects that can generate sustainable employment,
stimulate local economic development and build the skill base of the region. A total of $30 million
is available.
In addition to ACCs and RAP grants, the national government has supported community
based employment and economic development through a range of other initiatives including:

The Regional Solutions Programme- a $90 million program over four years which aims to help
regional communities to build their own capacity to identify and implement development
opportunities. It assists communities to move beyond planning by providing assistance to
implement community initiatives, including community infrastructure. Regional Solutions is a
flexible program aimed at finding local solutions to local problems. Grants of between $1,000
and $500,000 are available;
 The Stronger Families, Stronger Communities - - a $240 million initiative over four years.
Includes a ‘Local Solutions to Local Problems’ fund to assist 500 local projects over four years
($15.4 million) and ‘Potential Leadership in Local Community’ to help 400 communities over
four years ($37.1 million). This latter initiative has a strong focus on young people;
 Dairy Regional Assistance Program - $15 million in 2000/01 to assist regional communities to
ameliorate the negative impacts of dairy industry deregulation, and explore new community
employment initiatives.
Matching Demand and Supply: Job Brokerage and Placement
Since the mid 1940’s, Australia has had a history of providing a national government run job
placement agency, namely the Commonwealth Employment Agency (CES). In May 1998, this one
agency approach was modified, with the introduction of a competitive national tendering system for
this service, and the creation of the Job Network. The Employment Services Tender (involving up
to $1.7 billion over a 19 month period) was the largest single human services tender ever
undertaken in Australia. About 200 community, private and government organisations now
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
40
constitute the Job Network and have tendered successfully to provide job placement and intensive
counselling services across the country. Collectively they now provide approximately 2000 physical
office sites across the country. Church based agencies are the biggest provider. They target
particularly the long-term unemployed.
The Job Network provides a combination of government funded services including several
of the programmes mentioned above as well as the following:
 Job Matching – delivers labour exchange services to job seekers including canvassing for jobs
and matching and placing suitable unemployed people to these jobs, as well as preparing
resumes for job seekers. The Australian Job Search database collected 769,000 job notifications
for the year ending March 2001.
 Job Search Training – provides training for three weeks in job search techniques (e.g., resume
preparation, interview techniques and presentation skills) to give job seekers the skills and
confidence to seek and obtain employment. To be eligible, a job seeker must be registered as
unemployed for three months or more.
 Return to Work – provides assistance to people seeking to re-enter the workforce after an
absence of two years or more due to their roles as unpaid care givers of children or people with
disabilities.
 Community Support Program – helps disadvantaged job seekers access counselling, stable
accommodation, alcohol or drug rehabilitation and other activities addressing significant needs.
Young people not on income support or in full time education or training are eligible. Referral
to the program is for up to two years. $45 million has been provided over four years. Nearly all
contracts for its operation are held by community based organisations.
The Effectiveness of Youth Employment Policy
Information from the Department of Employment, Workplace Relations and Small Business
shows that in the year to end March 2001, commencement by job seekers in the various types of
labour market assistance included:
 318,000 in Job Matching
 305,700 in Intensive Assistance
 71,900 in Job Search Training
 6,300 in NEIS
 6,400 in the two programs of the Indigenous Employment Program
 49,700 in Work for the Dole
 3,300 in Return to Work
 16,900 in the Community Support Program
The Department quotes the level of positive outcomes9 for the program as:
 70.7% for Job matching
 43% for Intensive Assistance
 52% for Job Search Training
 85% for NEIS
 34% for Work for the Dole
 57% for Indigenous Employment Program – STEP
 68% for Indigenous Employment Program – Wage Assistance
 47% for Return to Work
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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Table 15 summarises the positive outcome rates for these programs for teenagers and young adults.
The Department for Employment, Workplace Relations and Small Business undertook an
evaluation of the Job Network in 2000. Along with indigenous Australians and people with
disabilities, this evaluation suggested that young people are not participating proportionally as well
as others in the Job Network. Young people are also not participating proportionally in Intensive
Assistance.
Areas for Improvement
The 2001 OECD Economic Survey of Australia makes a simple but powerful comment –
‘despite the encouraging growth in structured education, scope remains to improve school to work
transition’ (quoted in Curtain, 2001). During 2001, there were a number of major reports released
in Australia that analysed and commented on issues/barriers affecting the participation of young
men and women in the labour market, and commented on areas for improvement among current
labour market support programs. Areas identified for improvement included:

School relevance
The 2000 OECD Economic Survey of Australia recommended reform of the curriculum to make
senior secondary school more relevant and useful to potential school leavers. The constraining
nature of the school curriculum and dissatisfaction with the school environment are commonly
cited as causes for school leaving (Dearns 2001, Dwyer et al 1998). Dearns (2001) challenges
schools to be more relevant to all students including those disenfranchised by mainstream
school – ‘a special need is to reinforce the responsibility of education systems to provide
accessible and supportive opportunities for disengaged students to return to formal learning at
a later stage in life. Interestingly, the National Goals for Schooling in the Twenty-first Century
… makes no reference to this as a formal goal of Australian education systems’.
 Lack of option visibility
Many young people appear unaware of the opportunities available to them. There is a need for
better resources in helping young people identify and negotiate the complexity of the labour
market system and its options. The loss of Youth Access Centres with the demise of the old
Commonwealth Employment Service eliminated that ‘one stop shop’ facility. There is a need to
recreate the ‘one stop shop’ concept which integrates information, resources and guidance
relating to employment, education, training and welfare services and options.
 Age and eligibility restrictions
Given that young people travel different transition journeys, there is no guarantee that programs
will be available at points in a young person’s life when they require them most. For example:
- Job Pathways Project (JPP) is restricted to 15 to 19 year olds
- Job Placement, Employment and Training (JPET) is restricted to 15 to 21 year olds
- Reconnect is restricted to 15 to 18 year olds
- Green Corps is restricted to 16 to 20 year olds
- Work for the Dole is restricted to those 18 and above
- New Employment and Incentive Scheme is restricted to those 18 and above
In addition, there are restrictions enabling the linking of participants in different program
combinations. Some examples include:
- participation in JPET prevents accessing other JPET, JPP, Intensive Assistance and
Reconnect
- participation in NEIS/SED prevents accessing Job Search Training and Intensive Assistance
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
42
- participation in Green Corps prevents accessing JPET
- participating in WfD prevents accessing Intensive Assistance
Restrictions on program participation need examination.
 Gender equality
There is certainly a greater understanding of the needs of those most ‘at risk’ in terms of issues
related to age, race, ethnicity, location and disability. An awareness of the reality that young
women continue to experience high levels of unemployment, and higher participation rates in
casual, part-time and low skilled work areas is not reflected in resource allocation and creative
programming options. ‘The National Commitment to All Young People’ has no specific gender
reference. The Prime Minister’s Youth Pathways Action Plan Taskforce made no specific
gender focussed recommendations.
 Lack of opportunities for subsidised work places
Wage and training subsidy programs have always been a significant strategy in Australia’s
employment programs. However, the current government has scaled back their importance.
Apart from the Intensive Assistance Program there are few mainstream labour market initiatives
that now provide subsidised integrated work placement and training. However, one evaluation
(ACOSS, 2000) claims that less than 20% of Intensive Assistance clients were receiving job
specific skills training or opportunities for paid employment assistance. The Social Partnership
in their document ‘Pathways to Work’ were particularly critical of the levels of funding for
Intensive Assistance – ‘present funding levels for Intensive Assistance are not sufficient for Job
Network providers to offer systematic help (to long-term unemployed). A stronger financial
commitment to employment and training assistance appears to be required from the Federal
Government. While comparisons are difficult given the different institutional structures,
Australia lags behind most comparable OECD countries in its expenditure on employment
assistance for job seekers…’ (Boston Consulting Group, 2001).
Wage and training subsidy program options perhaps need re-considering in Australia.
Referring to the studies of Webster (1998), Martin (1998) and Department of Employment,
Workplace Relations and Small Business (2000), the Key Social Partners in their collaborative
document also advocate more focus on subsidised paid employment experiences – ‘there is a
strong body of evidence suggesting that well designed employment assistance schemes can
significantly improve employment prospects … the evaluation literature suggests that paid
employment experience in a Mainstream job is a particularly effective form of employment
assistance for long term unemployed people, whether on its own or combined with relevant
training’ (The Boston Consulting Group, 2001).
 Lack of coordination and linkage
A dominant theme in all the reports on the Australian labour market is the lack of collaboration
and integration between education, training and employment program providers. The
challenges include:
- operation of a highly segmented dual strategy approach to school to work transition with
education and employment sectors operating often unconnected programs. The recent focus
on combinations of school and work based learning (e.g., school based apprenticeships) are
helping in building better linkage;
- poor links between schools and TAFE - the 2000 OECD Economic Survey of Australia
encouraged TAFE and high schools to cooperate better with each other;
- lack of linkage between the wide variety of employment and training programs. Dearns
(2001) summarises it well – ‘paths are too often fractured and disjointed with the possibility
of programs being inaccessible, inappropriate or unavailable at the key transition points
when they might be needed’;
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
43
competitive environment between agencies encouraged by the government’s use of open
tendering for program contractors;
- poor linkage between government programmes at the local level. The Prime Minister’s
Youth Pathways Action Plan Taskforce (2001) encouraged the national government to look
at ways to improve the local coordination of a number of its own youth related programs,
including the examination of ‘tendering and contractual arrangements to ensure they
promote appropriate co-ordination in local communities’;
 Lack of support and navigation for individuals moving through the system
There is strong support for the creation of a system in which all young people up to 24 not in
full time work or full time education are provided with an individual pathway brokered or
negotiated to ensure integrated support.
The Prime Minister’s Youth Pathways Action Plan Taskforce (2001) recommends an even more
comprehensive support package beginning with age 13 –
- ‘a “flexible learning pathways plan” for every young person from Year 8 which would be
developed with parents, teachers, friends and others, and which would map out the student’s
preferred pathway through school and beyond …;
- access to professional career and transition support which makes available to young people
information that is accessible and well presented, backed by guidance and follow-up
services which integrate education, labour market and social support;
- the development of structured mentoring programs for young people;
- a clear allocation of responsibility for following up and supporting young people as them
move along the paths they have chosen and into the next stages of their lives;
- special additional assistance for young people with special needs who are likely to need
extra help to achieve their goals, and brokering services that would support those young
people who might need assistance in negotiating training, further education placements or
work experience opportunities in order to reach their desired outcome’.
An initial step in this process needs to be the implementation of a monitoring and follow-up
process of ex-students by secondary schools. OECD (OECD 2000b) has recommended this
innovation and sees one immediate benefit being to ‘refocus schools objectives, making it clear
that an important objective is to assist the student in making a successful transition to adult
working life’.
 Lack of monitoring of outcomes
Jack Dusseldorp of DSF summarises this concern well – ‘the absence of up to date outcomes
measures particularly at a regional and service delivery level is a key obstacle hindering better
coordination. Implementing a comprehensive and decentralised reporting system is a major test
of capability for all stakeholders involved in the school to work transition process. It is a
necessary step to showing that governments and service providers can improve service delivery
to meet more effectively the needs of the most vulnerable of Australia’s young people’ (Curtain,
2001).
The Prime Minister’s Youth Pathways Action Plan Taskforce (2001) recommends that Australia
develops a framework of transition goals and indicators. Specifically, the Taskforce
recommended that national, state and territory governments and other relevant stakeholder
groups –
- ‘develop clear and measurable goals and indicators for young person’s transitions to work,
further learning and independence that are appropriate for secondary schools, tertiary
education and training providers, and other agencies working with young people;
- ensure that reporting of transition outcomes for young people is incorporated into regular
reporting on performance by secondary schools, tertiary education and training providers,
-
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
44
and other agencies working with young people, and that such reporting be made available
to local communities, and funding providers, with the receipt of public funding contingent
on adequate reporting; and
- develop regular public reporting on young people’s transition outcomes at regional, state,
territory and national levels. Where feasible, reporting should be developed for a variety of
groups of young people, including those classified according to gender, location, social
background, educational background, language background other than English, indigenous
status, disability and being the subject of child protection or juvenile justice orders’.
 Commitment to Youth entrepreneurship
Despite the growth in programs supporting enterprise education and self employment, resource
allocation is a minor component of overall employment strategies. Education is very much
about preparing young people to work for someone else, with much of enterprise education
about learning how to operate within a small business. Exposure to the self employment option
requires greater attention and serious program support.
Finally in terms of specific changes to key national labour market programs it is worth noting
recommendation 23 of the Prime Minister’s Youth Pathways Action Plan Taskforce:
‘The Taskforce recommends that:
 the Commonwealth Government promote effective integration of Job Network services and
local youth support strategies including:
- more opportunities for young people to benefit from Intensive Assistance; and
- an increased awareness of the needs of young people by Job Network providers and of the
impact of breaching penalties.
 the Commonwealth Government work with State and Territory governments to develop:
- arrangements which allow a greater number of young people to access New Apprenticeship
preparation programmes with entry levels appropriate for young people without adequate
basic education competencies, as well as structural and industrial arrangements which
make part-time and school-based New Apprenticeships attractive to employers;
- New Apprenticeship placements in the government, private and community sectors for
disadvantaged young people; and
- a recognition of the importance of education outcomes for young people in New
Apprenticeships Access Programme.
 to ensure that young people with high support needs can access New Apprenticeships there
must be:
- adequate pre-placement preparation and post-placement support of young people;
- on-going mentoring;
- careful selection, training and support for host employers;
- a staged induction process developed in consultation with young people; and
- recognition and assessment of prior learning and a creative approach to structured
workplace learning.
 the Work for the Dole programme be enhanced so that it incorporates:
- adequate preparation of participants in their understanding of occupational health and
safety requirements;
- local programme development processes which consult with young people and community
groups in planning and delivering the programme; and
- clear articulation into traineeships, employment or accredited training’.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
45
Social Partnership
In Australia, renewed attention is being given to a general notion of partnerships that
promises an enhanced engagement of the broader community to help conceive, develop and deliver
government programs and services. It is recognised in Australia that the creation of positive
employment outcomes for young people does not lie with a single level of government, business,
unions or the non government sector. Positive employment outcomes will be maximised if all these
sectors, firstly collaborate in partnership, and secondly that this partnership becomes functional at
the community and regional levels.
The recent collaborative statement by all the key social partners ‘Pathways to Work’ made
two relevant recommendations to improve school to work transition, namely –
1.
‘Community partnerships should be developed and strengthened at the regional level
between industry, schools, health organisations and Job Network services, and other nongovernment agencies, to identify those who have left school early or are at risk of doing so,
and to support them in securing employment or further education and training’
2.
‘An agreed mechanism should be established to ensure that an identified body is
accountable for increasing the participation in work, training or education of school leavers
within each region’ (Boston Consulting Group, 2001)
In addition, the document reinforced the partnership principle with this recommendation:
‘Employers and unions should work together with community organisations at the industry,
enterprise and regional level to open up additional job and employment experience
opportunities for long-term unemployed people.’
The recent Prime Minister’s Youth Pathways Action Plan Taskforce has made three specific
recommendations about strengthening community partnerships, and focussing on local based
response –
Recommendation 5 – ‘the Commonwealth Government work with State, Territory and Local
Governments to resource a process for developing community partnerships which brings together
key local individuals, employers, community agencies, religious groups, government departments
and young people to address the following issues:
the provision of innovative education, training, leadership and employment opportunities
which respond to the particular needs of their local community;
the development of local programs that build the confidence and self esteem of young
people as they identify and promote their capacity and contribution to their
community;
the promotion of positive images of young people which celebrate their achievement and
counter negative stereotypes;
the establishment of policies, practices and protocols that promote prevention, early
identification and intervention approaches appropriate to the needs of local communities;
the creation of coherent local networks of support for all young people;
the sharing of information and the promotion of good practice, innovative responses, quality
assurances and standards in the delivery of programs to all young people’.
Recommendation 6 – ‘Government
promote the development of transition support networks in local communities by bringing
together key agencies committed to supporting young people and their families and enabling
them to:
 set up their own locally relevant objectives within agreed frameworks;
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
46

-
design their own young advisory and planning structures that would be empowered to
initiative local project development and delivery;
 design and operate their own local action structures, and
 pool the expertise and resources of local, State and Commonwealth bodies to support
local initiatives.
initiate demonstration projects to trial a range of models which respond to local youth
transition priorities;
encourage integrated service provision (at local level)’.
Recommendation 19 – ‘Governments ensure
community based networks are identified in each local government area to develop
localised approaches which identify and support young people not in education or
employment;
all young people living without adequate support are linked to a social service network with
an individual worker or agency assigned a key support responsibility;
appropriate, accessible and affordable services for young people with high needs are
available in all local communities;
local community based networks should assist young people with high support needs to
reconnect with peers, family and community; and
local support services commit to delivering an integrated response to young people which
offers holistic support across community and government jurisdiction’.
Recognising the limitations of government acting alone, the Australian national government
is basing its social policy within a framework it calls ‘The Social Coalition’. The current Australian
Prime Minister has described social coalition as ‘a partnership of individuals, families, business,
government, welfare and charitable organisations, each contributing their unique resources and
expertise to tackle disadvantage as its source’ (Department of Family and Community Services,
2001).
As a consequence, the government is increasingly seeking the involvement of the wider
community to conceive, develop and deliver government programs and services. The government
believes that this approach achieves ‘a balance between excessive involvement and regulation by
government, which may stifle community capacity and people’s ability for self reliance’ (DFACS,
2001). It believes this approach can provide:





‘opportunities for creative and diverse business and community sector input into the policy and
implementation process;
higher trust in government through an open collaborative approach to policy making. Higher
trust can create a more productive economy;
opportunities for great social networking and the creation of further partnership opportunities;
resource effectiveness by ensuring all the available resources and perspectives are brought to
bear on social policy issues; and
a broader strategic role for Government as a facilitator, connecting the community sector, the
business sector and individuals to worthwhile and often much needed local issues or projects’
(DFACS, 2001).
One prominent illustration of this philosophy in action is the creation of the Prime
Minister’s Community Business Partnership. This initiative has been initiated to promote a culture
of corporate and individual social responsibility in Australia. Chaired by the Prime Minister, with
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
47
the Minister for Family and Community Services as Deputy Chair, the Partnership is made up of
eleven prominent business and community leaders. It seeks to foster new partnerships between
government, business and community. The level of Trade Union participation is notable by its
absence in membership!
The government has also committed $10 million over four years for community business
partnerships to encourage employment initiatives for disadvantaged groups. The Prime Minister
has also instigated an annual Prime Minister’s Awards for Excellence in Community Business
Partnerships to showcase best practice.
At the regional level, the national government has created and supported the operation of 56
Area Consultative Committees. These committees comprise approximately 20 volunteer business
and community leaders, and exist to promote a social coalition between the national government,
business and local communities to build stronger communities and generate opportunities for jobs,
skills development, business success, regional economic growth and improved delivery of
government services. 43 of these committees are in rural and remote Australia. The current
Australian government see creating successful partnerships ‘as a major way of developing a more
productive, caring and creative society’ (DFACS, 2001).
Conclusions
Despite a decade of exceptional economic growth in Australia, youth unemployment
remains unacceptably high with significant numbers of young men and women failing to make the
transition from full time education to full time employment. The Australian youth labour market
has seen a decline in full time employment options and a corresponding growth in dependence on
part time work.
The concept of a simple and linear transition from school to work eludes Australia. Dearns
(2001) summarises the reality for many Australian youth – ‘it is not uncommon for young people to
combine full time and part time study with periods of full time, part time and casual work and
unemployment. Disproportionately high rates of youth unemployment, diminishing opportunities
for full time work, and the persistence of casual and part time work as the most ready employment
options, mean that transition from school to employment may be fractured, extended and
uncertain’.
The reality is that young people have more difficulty than any other age group in gaining
access to work. Young people are currently experiencing two and a half times the level of
unemployment of adults aged 25 to 54. This disproportionate ratio emphasises that economic
growth alone will not ensure positive employment for young people.
Policy and programme initiatives from all levels of government, and with increasing
involvement from social partners and non government organisations have lead to a wide range of
responses. However the key challenges remain. Besides the growth in New Apprenticeships over
the last three years, there have been little inroads into reducing the proportion of young people
suffering unemployment disadvantage. Of particular concern is the realisation that the Australian
labour market is not as ‘youth friendly’ as other countries with better coordinated and resourced
school to work arrangements.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
48
The Prime Minister’s Youth Pathways Action Plan Taskforce Report – Footprints to the
Future - has provided a clear analysis of the challenge, and it’s National Commitment to All Young
People, a framework for positive action. The next 12 months is critical for both national and state
governments, social partners and local communities. The blue print is available – deliberate action
and commitment, improved coordination and linkages and adequate resourcing is now required.
The foundation stones for creating positive employment options for young people in Australia are
now clearly recognised and articulated:
-
-
-
improved school retention mechanisms
better combinations of school and work based learning
stronger links between education, training and employment sectors
improved collaboration between agencies and services
greater attention to the needs of those most ‘at risk’, namely school leavers, young women,
indigenous youth, rural youth, young people with disabilities and young people from Non
English Speaking Backgrounds
greater focus on the quality and outcomes of school to work transition initiatives with
appropriate measurement, monitoring and reporting mechanisms
development of more effective and holistic local responses to the needs of young people
through building stronger local community responsibility and capacity and integrated local
service provision
more promotion of the self employment option
more effective tracking of individual young people over time to provide continuous support,
personal guidance, mentoring and brokering, especially for those most at risk, and
greater program and institutional flexibility.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
49
Table 1
NUMBER AND PROPORTION OF 15 TO 24 YEAR OLDS, AUSTRALIA, 19761999, AND PROJECTED TO 2036
1976
1986
1996
1999
2006
2016
2026
Number (‘000)
2,434
2,684
2,676
2,695
2,748
2,867
2,985
% of all persons
17.3
16.8
14.6
14.2
13.5
13.0
12.3
Source: Prime Minister’s Youth Pathways Action Plan Taskforce (2001)
Table 2
EDUCATION PARTICIPATION RATES, 15 – 24 YEAR OLDS
(% of population of same age)
1985
1990
1993
1995
1997
1999
Age 15
Age 16
Age 17
Age 18
Age 19
Age 20-24
97
100
99
99
98
97
89
93
97
95
95
91
64
77
85
84
84
81
49
60
68
65
65
64
40
49
57
55
54
53
23
27
31
32
33
33
(Source: Prime Minister’s Youth Pathways Action Plan Taskforce, 2001)
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
50
Table 3
EMPLOYMENT STATUS BY SELECTED CHARACTERISTICS
October 1991
October 2001
Total employed
(‘000)
Full-time
(‘000)
Part-time
(‘000)
Males
Females
All persons
4,432.9
3,212.1
7,645.0
4,037.0
1,926.2
5,963.2
Males
15-24
25-54
55 and over
(%)
58.0
10.6
41.3
6.2
Females
15-24
25-54
55 and over
Full-time
(‘000)
Part-time
(‘000)
396.0
1,285.8
1,681.8
Total
employed
(‘000)
5,147.0
4,057.6
9,204.6
4,407.0
2,232.2
6,639.2
740.1
1,825.4
2,565.5
(%)
67.7
10.5
50.5
6.7
(%)
23.5
10.8
8.4
4.3
(%)
55.9
9.4
39.5
7.0
(%)
66.4
8.2
50.5
7.6
(%)
28.8
12.4
10.9
5.5
58.0%
67.7%
23.5%
55.9%
66.4%
28.8%
42.0
9.7
29.6
2.8
32.3
7.8
22.7
1.8
76.5
16.3
54.0
6.1
44.1
8.8
31.1
4.1
33.6
5.8
25.2
2.6
71.2
16.6
46.5
8.1
58.0%
67.7%
23.5%
55.9%
33.6%
71.2%
Source: ABS (2001)
Table 4
Unemployed Persons – By Age and Whether Looking
for Full-time or Part-time Work, October 2001
Age
Percentage
15 to 19
20 to 24
25 to 34
35 to 44
45 to 54
55 to 59
60 to 61
17.3%
10.0%
6.3%
4.9%
4.7%
4.6%
4.4%
Overall Rate
6.7%
Source: ABS Labour Force 6203.0
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
51
Table 5
Education and Labour Force activities of 15-19 year olds, May 1999
Full-time
education
Part-time
education
Not in
Education
Total
Full-time employed
7,000
1 per cent
75,000
6 per cent
135,000
10 per cent
217,000
16 per cent
Part-time employed
325,000
25 per cent
10,000
1 per cent
71,000
5 per cent
406,000
31 per cent
Unemployed
76,000
6 per cent
4,000
--
62,000
5 per cent
142,000
11 per cent
Not in Labour force
505,000
38 per cent
2,000
--
49,000
4 per cent
556,000
42 per cent
TOTAL
914,000
91,000
317,000
69 percent
7 per cent
24 per cent
Source: ABS, Transition from Education to Work, Australia May 1999 (6227.0)
Table 6
1,321,000
100 per cent
Education and Labour Force activities of 20-24 year olds, May 1999
Full-time
education
Part-time
education
Not in
Education
Total
Full-time employed
9,000
1 per cent
113,000
9 per cent
571,000
43 per cent
693,000
52 per cent
Part-time employed
130,000
10 per cent
25,000
2 per cent
128,000
10 per cent
284,000
21 per cent
Unemployed
17,000
1 per cent
6,000
--
95,000
7 per cent
118,000
9 per cent
Not in Labour force
114,000
9 per cent
8,000
1 per cent
110,000
8 per cent
233,000
18 per cent
TOTAL
270,000
152,000
905,000
20 percent
11 per cent
68 per cent
Source: ABS, Transition from Education to Work, Australia May 1999 (6227.0)
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
1,327,000
100 per cent
52
Table 7
Youth Unemployment 1998
Australian
OECD
Average
Australia’s
ranking
15-19 year olds
unemployment to population ratio
non-student unemployed as % of all 15-17 year olds
% of unemployed out of work for 6 months or more
10%
6%
42%
6%
4%
42%
2/25
4/16
12/21
20-24 year olds
unemployment to population ratio
% of unemployed out of work for 6 months or more
10%
45%
9%
48%
9/25
13/21
Source: OECD (2001), quoted in Prime Minister’s Youth Pathways Action Plan Taskforce, 2001
Table 8
Employment by industry and age, February 1995 and 2000
Industry
15 – 24 years
Agriculture, forestry and fishing
Mining
Manufacturing
Electricity, gas and water supply
Construction
Wholesale trade
Retail trade
Accommodation, cafes and restaurants
Transport and storage
Communication services
Finance and insurance
Property and business services
Government admin and defence
Education
Health and community services
Cultural and recreational services
Personal and other services
Employment
2000
(‘000s)
66
6
168
5
118
74
522
153
43
24
48
156
28
47
85
54
69
Change since
1995
(%)
18
-45
-23
-58
0
-33
10
15
-2
30
-21
22
-33
11
-11
13
5
Employment
2000
(‘000s)
378
76
952
54
576
405
816
287
355
158
295
826
320
526
751
174
293
Change since
1995
(%)
6
3
5
-25
20
5
13
16
2
17
20
31
1
8
21
20
19
Total
1666
1
7239
12
Aged 25 years and older
Source: ABS, Labour Force Australia (February), 6203.0
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
53
Table 9
Labour Market Characteristics of Indigenous and Non Indigenous Young
Adults, August 1996
Males
Females
Non Indigenous
Non Indigenous
Indigenous
Indigenous
% of population employed
51.5
72.2
36.9
67.2
Labour force participation
(%)
74.2
85.1
49.0
76.3
Part time employment as %
of total employment
34.6
21.2
43.6
34.7
Unemployment rate (%)
30.6
15.2
24.7
12.0
Source: Vandenlteuvel and Wooden, 1999
Table 10
Labour Market Characteristics of Australian born and immigrant young adults
(August 1998)
% of population
employed
Labour
force
participation (%)
Part
time
employment as %
of
total
employment
Unemployment
rate
Males
Australian
born
ESB
immigrants
NESB
immigrants
Females
Australian
born
ESB
immigrants
NESB
immigrants
78.4
76.8
54.2
71.7
68.4
40.3
89.4
86.7
66.5
79.6
78.6
50.4
18.9
20.1
33.1
33.0
42.5
45.5
12.3
11.4
18.5
9.9
13.0
20.0
Source: Vandenlteuvel and Wooden, 1999
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
54
Table 11
Proportion of 15 to 19 year olds not in full time education or full time
employment May 1988 – May 2001
Percent
14.5
12.3
13.9
16.5
17.1
16.7
17.0
15.9
16.5
15.4
15.8
14.5
14.4
15.1
May 1988
May 1989
May 1990
May 1991
May 1992
May 1993
May 1994
May 1995
May 1996
May 1997
May 1998
May 1999
May 2000
May 2001
Source: Curtain, 2001, based on ABS Labour Force Figures for specified
years
Table 12
Proportion of 20 to 24 year olds not in full time education or full time
employment May 1989– May 2001
May 1989
May 1990
May 1991
May 1992
May 1993
May 1994
May 1995
May 1996
May 1997
May 1998
May 1999
May 2000
May 2001
Males %
14.4
16.5
22.0
24.8
25.1
24.5
21.0
20.5
24.2
23.5
21.7
19.5
21.4
Females %
32.4
31.6
34.8
36.9
38.1
35.9
35.6
34.6
37.6
34.1
35.2
30.8
32.0
Source: Curtain, 2001, based on ABS Labour Force Figures
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
55
Table 13
Apprentices and Trainees in Australia 1985 to 1995
Apprentices
Trainees
Total
1985
129,000
0
129,000
1990
161,000
12,000
173,000
1995
123,000
12,000
135,000
Source: Prime Minister’s Youth Pathways Action Plan Taskforce, 2001
Table 14
July 1997
July 1998
July 1999
May 2000
Full-time students and job seekers (15 to 24 years)
receiving income support
Jobseekers
%
Full-time studies
%
Total
127,000
106,000
94,000
86,000
68%
71%
71%
78%
397,000
366,000
402,000
391,000
32%
29%
23%
22%
271,000
261,000
308,000
304,000
Source: Prime Minister’s Youth Pathways Action Plan Taskforce, 2001
Table 15
Positive Outcomes for Young People in Labour Market Assistance Program
in the year to 31 March 2001
Program
Job Matching
Intensive Assistance
Job Search Training
NEIS
WfD
15-20 years
74.8%
48.4%
57.9%
87.9% for 24 years or less
40.3%
21 to 24 years
73.0%
47.1%
59.6%
36.8%
Source: Department of Employment, Workplace Relations and Small Business, March 2001
Endnotes
1
Group included Australian Council of Trade Unions, Business Council of Australia, Australian Council of Social
Service and Committee for Economic Development of Australia.
2
Compulsory school attendance ends at age 15 in all states of Australia, except Tasmania where it ends at age 16.
3
Employment in Australia is defined to include any paid work of one hour or more per week, while the terms
‘unemployment’ is restricted to those without work who are actively seeking and available to start work during the
reference period. Together, these groups determine the size of the labour force.
4
Full-time workers are defined by the Australian Bureau of Statistics as employed persons who work 35 hours or more
in a week (in all jobs).
5
The Dusseldorp Skills Forum is a private national think tank that focuses on the learning and work circumstances of
young Australians.
6
The statement is reproduced in full in Kenyon (2001, appendix 1).
7
Mutual obligation is based on the principle that people should contribute to the community in return for government
assistance.
8
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.
9
A positive outcome is defined as achievement of employment and/or education training option, three months after
leaving assistance.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
56
Hong Kong
Young People in Hong Kong
Hong Kong is one of the most influential metropoli in Asia. Starting from 1970s, its economy
has rapidly increased and has gained great achievements. The living standard of the people and the
whole social structure have been dramatically changed. Nowadays, Hong Kong has becomes a
newly developed industrial and commercial city. The youth problems in Hong Kong have new
trends and characteristics. The reasons behind and the situations of youth problems are becoming
more complicated.
Certain characteristics of Hong Kong are worth noting. First, the youth population is
decreasing, especially in the age groups of the 15 to 19 years’ old. This coincides with the trend of
low birth rate in developed areas. Second, the school age of young people in Hong Kong is
increasing. Third, as a result of a rising school-leaving age, the employment age of youth has risen.
As a result, the percentage of young people amongst the active working population is decreasing.
On the other hand, the employment rate of young women (especially after marriage or postnatal) is
increasing. Finally, being a special administrative region of China, the connection between young
people in Hong Kong and Mainland China is becoming closer. Every year, a large number of Hong
Kong students go to the Mainland China to visit, exchange and being trained/educated. On the
whole, their knowledge of the Mainland and their sense of belongings have been increased.
In Hong Kong, there is no official definition for youth age. Social welfare organizations
would refer to those aged between 10 and 24 “youth”. In this study, unless it is specified, we refer
“youth” to those who age are in this range.
Demographic characteristics
1.
2.
3.
In Mid 2000, there were a total of 1,339,600 young people aged between 10 and 24 in Hong
Kong, constituting 19.8% of the total population. The relative size of the youth population had
shown a continuous trend of decrease since the 1980s.
In terms of nationality, most local young people were British with right of abode in Hong
Kong only. On the other hand, the proportion of young local residents born outside Hong
Kong and the Mainland China had shown signs of increase.
The percentage of the youth population which never married had also increased.
Family Background And Dynamics
1.
2.
Studies have found that most young people considered their family life to be a happy one.
In terms of parental control, most young people did not in general feel that their parents were
too harsh on them. On the other hand, more young people preferred to talk to their mother than
to their father.
Mental Health
1.
By employing different scoring methods, studies have found that a significant portion of the
local youth population could be classified as psychologically at risk. Moreover, when faced
with stressful life events, only about half of the young people would seek help from other. For
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
57
2.
3.
those who would, parents, friends, and classmates remained to be the more popular choices.
Although there was no exact estimation, the number of young drug abusers in Hong Kong
should be quite small. However, it is expected to be increasing. Peer influence and curiosity
remained to be the main reasons for young people taking drugs.
The suicide rates of the youth population had shown a significant increase in the past decade.
Education
1.
The percentage of the youth population studying full-time in school or educational institution
had continued to rise over the last 15 years. Furthermore, more and more young people were
receiving tertiary or higher education.
Non-attendance and School Dropouts
1.
Contrary to what some might think, the number of suspected school dropouts had been on the
decline both at Primary and Junior Secondary level over the past decade. Most school dropouts
had experienced problems at school before dropping out.
Economic Characteristics
1.
2.
3.
4.
Because of increasing educational opportunities in both secondary and tertiary levels, the
labour force participation rate had in general decreased among the young. Since 1999, the
number of young people joining the labour force has increasing, particularly the “Form Five
School leavers” – (around age 16).
Overall speaking, more working youth were working in the area of wholesale, retail, and
import/export trades, restaurants & hotels. In terms of sex difference, there were more working
youth males in the construction industry, and more working youth females in the community,
social, and personal services.
When choosing a job, most young people would consider the salary/benefits, their interests,
and the career prospects offered. Besides, studies have also found that more young people
would like to go into the commercial/sales sector.
In terms of spending and saving, studies have found that apart from the basic, necessary
expenditures, most young people spent their money in entertainment and hobbies, as well as
clothes.
Employment Opportunities and Labour Market
1.
2.
Economic growth - Hong Kong economy experienced frustration in recent years. However, in
2000, the Gross Domestic Product (GDP) recorded the highest growth rate since 1987, with a
marked rise of 10.5 per cent in real terms. Strong and broad-based upturns were registered on
both the external and domestic fronts. The General labour market conditions was improved
last-year, both unemployment and underemployment rates showed a slight drop and a mild rise
in labour earnings. Starting from early 2001, the situation has a downturn. Economic slump is
all over the world. After the “911 incident”, we expect that the economy of Hong Kong in
2001 and 2002 will drop drastically. Exports, overseas trade, tourism and exported services
will be poorer than those in last year. Depression will last. Trade, in whatever format, will be
at a loss.
Employment in Major Occupations:
As a result of the economic restructuring, the proportion of production workers in the
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
58
employed population has been decreasing whereas a large proportion of the employed
population has taken up skill-intensive or non-manual jobs. In 2000, managers and
administrators, professionals and associate professionals accounted for 29.5 per cent of the
total number of employed persons. Clerks, service workers and shop sales workers altogether
took up 32.2 per cent; while craft and related workers, plant and machine operators and
assemblers only accounted for 18.8 per cent.
3. Structural Change - Generally speaking, Hong Kong’s economy is undergoing a structural
changes. Occupation becomes professional, technological and intellectual. On the other hand,
exports decrease, property market goes down, and all trades face their own problem. Cutting
salary and terminating employment will become a common trend. The propensity of people to
consume decreases. Depression continues. Thus, unemployment rate is expected to be around
6% in 2002. Research findings identify four high-risk groups: Elderly (aged 65 or more);
middle-aged women (aged 40 or more); new immigrants and youth aged between 15 to 191.
Youth Unemployment
In 2000, the problem of youth unemployment was serious, especially for those aged 15 to 19.
The high unemployment rate has been the focus for public concern. The labour market in Hong
Kong an excess of labour supply; the number of young workers who are willing and able to work is
significantly larger than the number of jobs opportunities available. Furthermore, often the
qualifications of job-finders are incompatible with job requirements. Employers are looking for
well-educated and skilled personnel. Young school leavers, without skills, professional qualification
and working experience, face career future fraught with difficulties.
“Unemployed youth”, in this section, refers to those youngsters aged from 15 to 19. In the
employment market, the number of these youngsters are over ten thousand. These youngsters are
mostly performing poorly in the existing educational system and their academic results make them
unable to continue to study. On the other hand, their interpersonal skill is also poor, and they do not
have any motivation or interest to develop a technical skill. At the same time, the nine-years’
compulsory education could not provide them with any training for securing an appropriate job.
Currently, secondary schools in Hong Kong seldom provided student with a systematic and
effective careers advisory service. In sum, when these youngsters enter the labour market, their
nightmare begins.
In the “Quarterly Report on General Household Survey” for January to March in 2000 issued
by the Census and Statistics Department, the youth unemployment rate was 25.5%. It is 4.6 times
of the total unemployment rate, which is 5.5%. These unemployed youth face the problem of long
period of unemployment, without the chance or motivation to continue education. Many research
findings reflect that the blow of long period of unemployment to a youth will be as hard as that to
an adult. For the young people, unemployment will have a very negative effect regarding their
perception towards life, career path, family, society, government and their own future.
There are many reasons that account for youth unemployment. Some are social whilst others
are personal. The economic downturn in 1997 speeded up the entire structural economic change in
Hong Kong. Jobs become technical and professional. This hit unskilled labour and the
“grassroots” hard. As young people are without qualifications and working experience, the
problem they face is even more difficult. In this era of “intellectual” economic development, these
aged 15 to 19 who are without special skills, available jobs, if they find them are limited to lowYouth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
59
skilled, low pay work without prospects. Under such circumstances, many young people find
themselves in the dead end of “uncertainty” and “working without a sense of achievement”.
During the period when the economy in Hong Kong was good, it absorbed a lot of youngsters
into the working force every year. Firms provided on-the-job training, so that these youngsters
could have a chance to work and study at the same time. The Vocational Training Council and
Construction Industry Training Authority organized a number of short-term or long-term skillacquiring programmes, and the “apprenticeship scheme” etc. These programmes were tailor-made
for school leavers and had trained a lot of secondary school drop-outs for the industrial and
commercial sectors. In 1980s and 1990s, youth unemployment was not a problem. “Being an
apprentice” was a common and acceptable career path for those did not excel academically in
school. However, with the poor economic environment, all industries cut back their employees.
This, together with the industry and commerce moving to the north, have turned youth
unemployment into a serious social problem in Hong Kong.
Youth Policy in Hong Kong
Hong Kong has youth services, hundreds of youth work organizations and has thousands of
professional social workers working with young people; but it seems that Hong Kong has never had
an overall comprehensive youth policy. Since the first development of children and youth centre
service in the 1950’s, there has been a lack of a focal point and direction for the evolvement of a
policy on social welfare services for youth. At present, social services rendered to young people in
Hong Kong are carried out by a number of governmental departments and non-governmental
organizations, each with its own philosophy, objectives and priorities. Despite the fact that Hong
Kong Government has occasionally, since the late 60’s, published policy papers or programme
plans on the development of youth, none of these have been regarded as social welfare policy for
youth by the youth work profession, nor has it been the intention of the government to treat these as
centralized governmental policies for youth. After almost thirty years of service provision, it is quite
clear that there is still an absence of a centralized governmental policy for young people in Hong
Kong.
Policy for youth, youth services and youth are three sets of interrelated domains. National and
societal expectation and demands on youth form the basis upon which the government perceives the
needs and problems of its younger generation. In turn, this becomes a platform on which the
objectives and contents of certain “youth policies” are formulated. Once these “policies” are
formulated, youth service programmes will then be implemented with courses of actions to
accomplish the objectives laid down in the “policies”. In Hong Kong, the interplay among these
three domains is significant, yet ambiguous. It is ambiguous because of the many confusing
“factors” that surround them. It is significant because an explanation on the relationship and
interplay among them is indeed the key to unveil the nature of the entire issue in the local context,
and that answers the question of why Hong Kong fails to formulate its own youth policy even after
its returning to China in 1997 and has become a Special Administrative Region of China for almost
five years.
The following accounts for the reasons why both the colonial government before 1997 and the
current SAR government fail to development a comprehensive centralized Youth Policy:
1.
Whether it was the colonial period or present ruling of the HKSAR, the Government does not
have a clear and convincing “Youth Development Prospective”. The first priority of the policy
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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2.
3.
4.
5.
6.
makers is to prevent youth from committing crimes and to help the juvenile delinquents, and
thus developing youth becomes secondary.
At present, the Hong Kong Government believes that services provided for youth, including
education, welfare, medical services and employment are sufficient. Moreover, it is believed
that services provided by different departments would be more flexible and more responsive to
different needs of the youth. Therefore, a centralized department for youth policy is
unnecessary.
The Hong Kong Government also worries about the burden of resources. If centralizing youth
policy, other community groups and functional groups would also ask for an independent
policy for themselves, fighting for more welfare. Probably, there would be “Elderly Policy”,
“Women Policy”, “Family Policy”, “Rehabilitation Policy”, “Labour Policy”, etc. If it were,
the Government would need a lot of resources to support them and the Government could not
afford to do so.
The role and the ruling concepts of the Government. Main findings of related research studies
revealed that the formulation of any policies or plans for youth development in Hong Kong in
the past three decades basically followed an incremental approach, within the Government’s
positive non-interventionist paradigm. The Government has never played a distinct and active
role in the process of developing youth in Hong Kong.
At present, youth services are largely provided by non-government organizations and
voluntary institutions. As these organizations and institutions are using government grants,
they somehow have to adhere to government policies. The NGOs in Hong Kong seldom act as
an active advocate, forcing the Government to formulate youth policies.
Comparing with other important agenda, concerning political and economic issues and
livelihood, “youth development” could never be the priority under the Government agenda.
Although Hong Kong does not have a centralized youth policy, the development of youth
welfare services in Hong Kong is superb. In the past 30 years, Hong Kong has enforced numerous
youth welfare services. Mostly are organized, provided and evaluated by professional social
workers. These services could be categorized into therapeutic, remedial and developmental aspects.
At present, Hong Kong has 122 youth centres, 64 integrated youth work teams, 25 outreaching
teams, 467 school social workers, several tens uniform groups and other numerous youth service
organizations2. Every year, they organize different kinds of activity to enhance the physical and
mental health of the youth, to train youth leaders, to prevent them from committing crimes and to
counsel the youth in need. Starting from 1970s, the Hong Kong Government has issued a number
of “White Paper on Social Welfare Policy” and “Programme Plan on Youth Development”.
Although these are scattered and disseminated social welfare policies for youth for different
periods, their implementation did speed up the development of youth services directly. Therefore,
we can say that “The Youth Policy” in Hong Kong is distinctive. It has the function of youth
welfare policies in a country and its development coincides with the historical, political and
economical development of Hong Kong.
Active Labour Market Policy
Facing the problem of youth unemployment, the Government has introduced the Youth Preemployment Training Programme (YPTP). In 1998, the HKSAR was aware of the problem of
school leavers aged 15 to 19 in this poor economic environment. The Government thus requested
the Vocational Training Council, Construction Industry Training Authority and the government
“Night Schools” to increase their intake to allow F. 5 graduates to further their study, and granted
funds to the youth work organization to organize activities to allow these youngsters to learn and
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
61
develop their potentials before starting to work. However, the effect was minimal. Since June
1999, youth unemployment has been getting worse. As a result, the YPTP was been launched by
the labour Department as a means to tackle this problem.
The YPTP consists of three parts: training courses, workplace attachment and on-the-job
training. It allows young school leavers aged 15 to 19 to have the chance to be trained and to
practice before entering the employment market. Four modules are offered to trained the
youngsters and these are: 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
will 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 have the motivation for work, 3,900 successfully secured a job. The
successful rate was 50.6%.
Given this positive feedback, the Financial Committee of the Legislative Council grants
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. As there was no independent, all-rounded and systematic
evaluation on the YPTP, the Office of the YPTP of the Labour Department, in May 2001,
commissioned the Social Policy Research Centre of the PolyU to evaluate the operations and costeffectiveness of the YPTP and to suggest ways for improvement.
The research found that the general public, including employers, youth, 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 the participants. This
programme is mainly beneficial to school drop-outs who, because of various reasons, could not
continue with their study.
The YPTP has successfully centralized and connected the following:
1.
2.
3.
4.
5.
Traditional counselling for unattached youth brought about by their physical and mental
growth (Module 1 and 2): allowing youngsters to have self-understanding, communication
skills, interpersonal relationship, job-finding techniques, and thus re-establishing their
relationships with friends, family and work place;
For those who could not receive tertiary education in local or overseas universities, having
gone through the programme, their employability is being strengthened (Module 3 and 4);
It provides appropriate training for youngsters aged 15 to 19 enhancing their personal
qualifications, working motivation and interests;
It provides relatively stable and reliable labour force with potentials for development for the
employers;
On-the-job training experiences that help to integrate theory and practice in a contextual
manner.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
62
Conclusions and Lessons Learnt
The following recommendations are based on the findings from the evaluation study on the
YPTP and on current situation of youth unemployment in Hong Kong: 1.
extend and improve the YPTP both as the effective remedial measure and as an option that
increase the opportunity for the school leavers in Hong Kong;
2.
Together with SWD, VTC, CITA, ERB, NGOs, the Labour Department should take the lead in
forming a committee to coordinate government and non-government efforts and resources so
that these can more effectively deal with the youth employment problem;
3.
In the long run, there should be a youth policy in Hong Kong. The yet-to-be devised youth
policy should address the youth unemployment problem. When the youth policy makes its
appearance in Hong Kong, corresponding measures to deal with youth unemployment in the
realms of education, family and labour will emerge. In the light of these, youth unemployment
can be properly managed.
Endnotes
1
Policy Watch, Centre for Social Policy Studies, Vo.2, Department of Applied Social Sciences, Hong Kong
Polytechnic University, September, 1999.
2
Information provided by the Hong Kong Council of Social Services, Children and Youth Division, October, 2001.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
63
Indonesia
Young People in Indonesia
In 2000, teenagers (15-19) constituted 10 percent of Indonesian population, whilst young
adults (20-24) comprised 8.8 percent (Table 1). 47.1 percent live in urban areas, their Labour Force
Participation Rate is 51.8 percent and their unemployment rate is around 19.9 percent (table 2). The
proportion of the young in urban areas has increased rapidly, more than doubling since 1971 when
the figure stood at 21.5 per cent. Over the last 30 years Indonesian young people have also been
increasing as a proportion of the population. By 2000, around one-fifth of the population were in
the youth age-group.
In the last three decades there has been a notable decrease in the percentage of young people
without any education. The figure fell from 8.3 percent in the year 1971 to 0.5 percent in the year
2000 in urban areas and from 24.2 percent to 1.6 percent in the rural areas. In urban areas the
decreasing proportion applies also to those with “Less than Primary” and “Primary School”
education, while in rural areas applies only to those with “Less than Primary” education. Also, there
has been an increase in the percentage of those who attained higher education, that is junior high
school and above in urban areas, and primary school and above in rural areas (Table 3). When
broken down by gender, youth educational attainment figures show a tremendous fall in both males
and females in the lowest educational level. However, it is notable the gap between them has also
narrowed (table 4).
Employment
Labour Force Participation Rates
Figures 1-3 summarize the Indonesian youth labour force participation rates, broken down
by area and gender. In general, the labour force participation rate of young people has been
increasing over the last 30 years, both in urban and rural areas. Over the entire period, more than 40
percent of rural youth of all age groups participated actively in the economy (figure 1), as did urban
young adults (20-24) with urban teenagers having a participation rate of 30 percent (figure 2). The
difference between the labour force participation rates of rural and urban teenagers, is attributable to
the lower educational participation of rural teenagers.
Gender differences are also evident. Figure 3 shows that young men formed around 60-70
percent of the youth labour force during 1971 - 2000, while only around 30 to 40 percent was
female. But, the gap has been narrowing over time as a result of increasing female participation.
Employment to Population Ratio
Figure 4 reports employment-population ratios for young people. It shows that around 50-60
percent of young men were employed during the period, whilst the corresponding figure was of the
order of 30% for young women. The gap has fallen slightly over time, and more markedly in the
last five years.
The youth employment to population ratio by type of area, as observed in Figure 5, shows a
relatively stable position for the last twenty years. The ratio for rural young people is 50 percent,
remaining above that of urban youth by 10-20 percentage points.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
64
Formal vs. Informal sectors
According to the definition of the Indonesian Central Agency of Statistics, employment in
the informal sector covers three kinds of workers, namely the own-account workers, the self
employed helped by family workers, and the family workers. While its counterpart, that is
employment in the formal sector consists of two kinds of workers, the employer and the employee.
Using this albeit imperfect definition, the proportion of young people working in the informal
sector has been consistently greater than those working in the formal sector over the last 30 years
although the gap between the two has tended to fall over time (figure 6). Indeed, compared to
adults, the gap has closed faster over time. For older workers there is very little difference between
the proportions in 1971 and 2000 (figure 7).
Employment by Sector
Most young people work in agriculture, although the proportion has fallen over time from
52.5% in 1985 to 41.9% in 2000 reflecting the changing industrial structure of the economy.
Similarly, industrial employment has been growing over time and constitutes the second largest
employer of the young. Employment in trade has been rapidly increasing almost reaching industrial
employment by 2000 (table 5). Broadly speaking these trends are similar to those in adult
employment shown in table 6.
Unemployment
Figure 8 shows youth unemployment rates over time. It is evident that there is an increasing
trend over the last twenty years, both for urban and rural areas. There was also around a 10
percentage point difference between the rates for urban and rural areas but the gap has tended to
narrow in the last five years with a fall in the urban rate. The situation has been explored by
Manning (1998), who detected a high Indonesian young people unemployment rate in urban areas
particularly amongst upper secondary graduates in the 1990s.
Unemployment by Gender
The unemployment rate of young men and women was very similar over the period 1971 –
1985. Starting in 1990, however, the rates began to move apart with young women facing a greater
likelihood of unemployment than young men. By 2000, the two rates seem to have converged once
more (figure 9). This confirms Manning’s (1998) findings that youth unemployment rates rose in
the mid 1990s, especially among females and tertiary graduates. This finding along with increasing
labour force participation rates confirms an autonomous trend towards greater labour force
participation even in the presence of more limited labour market opportunities for young women.
Unemployment by Level of Education
Unemployment rates among young people with higher levels of education remain
substantial and have tended to increase over time. The youth (15-24 years) unemployment rates
among junior high school graduates range from 9.8 percent in 1985 to 18.2 percent in 2000 (table
8). For high school and college/university graduates the rates range from 31.1 to 33.9 percent and
20.5 to 35.8 percent respectively. The figures tend to show high unemployment rate for the
educated youth. However, these tend to fall somewhat when one looks at the 25-29 age-group.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
65
Further, as O’Higgins (2001) has pointed out, even if there are high unemployment rates
concentrated among the highly educated, some observations could be identified:
1. The Labour Force Participation Rate tends to increase the higher is the level of education. The
competition among them is surely tight.
2. Educational levels of the Indonesian population have been rapidly increasing over the past 30
years, for urban and rural areas .
3. Although the unemployment rates seem to be higher among more educated youth, actually, its
absolute total number is still smaller than those with lower education.
Underemployment
It appears that very often youth’s intention to actively participate in the economy has been
blocked by constraints such as the availability of jobs matching with their qualifications. Those who
do not have much choice and are forced to accept any available jobs might end up with other
problems. The Indonesian data used in this study suggest that amongst the employed, more than 30
percent were found to be working less than 35 hours per-week. This study employs the 35 hours
cut-off to define underemployment. In 1985, more than 60 percent teenage youth (15-19 years)
were found working less than 35 hours per-week and the rate has been decreasing in the last two
decades and reached 45.7 percent in the year of 2000.
The higher the level of schooling the lower tends to be the proportion of youth
underemployment. Those who have never gone to school constitute the highest proportion of
underemployment in each year of observation except in 1985. Over the years there has been a
decrease in the proportion of young being underemployed with higher and middle level education
(table 9).
National Youth Policy (NYP)
The Directorate of Youth Affairs, a part of the Directorate General of Out-of-School
Education, Youth and Sports, of the Ministry of Education and Culture (1999), has elaborated
government policy on youth affairs at 3 levels: National Policy; Policy of the Ministry; and, Policy
of Related Technical Departments or Institutions. National policies are derived from the State
Policy Guidelines which are then expressed as policies of the Ministry. When there was a State
Minister taking care of youth and sports, the policies at the Ministry level was hold by this
Ministry. Policies at this level include :
a. Widening youth opportunity for education and skill development
b. Improving youth capability, role and participation in nation’s development of social,
economic, politic, culture and national resilience
c. Improving youth potential in pioneering and leadership skill
d. Improving the quality of youth institutions and organizations
e. Improving the general condition to enable young people to develop their lives in their
communities and country
The government’s policy on youth also includes policies for related ministries and
institutions. Those ministries and institutions which are involved in addressing youth matters are :
1. Ministry of National Education, includes :
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
66
a. Always encourage the youth to keep faith in God Almighty
b. Improving disciplines and strengthen their personality
2. Ministry of Social Affairs
a. Improving the quality of Karang Taruna and empowering it to the extend they could
optimally contribute to the national development
b. Improving the implementation of inter-sector program coordination
3. Ministry of Agriculture
Improving the quality of young fishermen and farmers in the field of horticulture
4. Ministry of Labour
a. Dealing with youth unemployment
b. Continuing the government policy on link and match program
5. Ministry of Cooperatives and Small Business Development
Improving, developing and empowering youth institutions and business cooperation
6. Ministry of Industry and Trade
a. Improving youth participation in industrialization and trading process
b. Widening youth perspectives on problems and development of trade and industry
c. Creating and motivating sense of business among youth
7. Ministry of Religious Affairs
a. Encouraging unity, togetherness and national perspectives among followers of
religions
b. Encouraging the awareness of God Almighty presence in every efforts and activities
towards national development
8. Ministry of Health
a. Improving youth participation in the field of humanity, especially youth health
b. Continuing and developing programs to overcome health problems among young
people
9. Ministry of Transmigration and Resettlement
a. Developing youth potential, including knowledge, skills and self sufficient
behaviour, in transmigration areas in order to empower transmigration community
10. Ministry of Justice
a. Improving youth (and children) treatment and service in the correction institutions
b. Developing youth (and children) outside the rehabilitation centres
11. The National Centre for Boys and Girls Scout Movement (Kwartir Nasional Gerakan
Pramuka)
a. Improving and developing the quality and quantity of the tutors, members, structure
and infrastructure, and the Pramuka activities
b. Encouraging youth and the Pramuka participation in poverty alleviation and natural
disaster aid activities.
Active Labour Market Policies
In Indonesia there has not been any national, integrated and specifically designed policy on
combating youth unemployment. Of course there have been many general unemployment-related
policies nationally and regionally, but few specifically designed for young people and it seems
those policies are scattered and sporadically developed. However, since the young constitute a large
proportion of the unemployed one may suppose that they are the object if not the target of many
ALMPs.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
67
Supply Side : Enhancing Human Capital
Education and Training
As mentioned above, young people joining the labour force often suffer from limitations
such as low levels of education as well as limited training and work experience. Moreover,
population growth is rapid which only adds to the problems faced in absorbing young people into
Decent Work. The Ministry of National Education has long been acting as the institution that is
responsible for people’s formal and informal education. In line with its mission, the Ministry
coordinates all national education and training-related policies but, so far, with only a minor
emphasis on countering unemployment. There is some training for young people concerned with
the development of entrepreneurship to increase young people’s self-sufficiency. Also, there are
apprenticeship programs conducted by this Ministry in collaboration with private companies and
student exchange programs that are joint collaborations with overseas educational institutions. The
relatively low educational budget is another issue which also contributes to the difficult situation in
Indonesia.
The other institution with responsibilities in dealing with unemployment is the Ministry of
Manpower. This Ministry has some programmes directed at alleviating unemployment in general,
but not specifically for the young people. Programmes conducted by the Ministry of Manpower
include those providing guidance and counselling for job seekers and job placement. These
activities are done through their regional or representatives office in the provinces.
TKPMP
The most common and continuous type of programme provided by the government in
conjunction with unemployment alleviation are those related to training. A variety of training
programmes have been developed to help overcome the problem of unemployment. One such
programme, specifically designed for young people, is the TKPMP (Tenaga Kerja Pemuda Mandiri
dan Profesional = Professional and Self Sufficient Young Manpower), carried out together by the
Ministry of Manpower and Universities. The training emphasises the promotion of selfemployment, how people may become self-sufficient, how to establish a productive business and so
on. There are also training programmes held by some non-government-organizations that work
under supervision of the Ministry of Manpower.
University participation in the implementation of the TKPMP programmes shows a
promising development. In 1994/1995 fiscal year there were 10 universities in 9 provinces involved
in the programmes. The number increased to 23 universities in 22 provinces during the 1995/1996
fiscal year. There were 347 university graduates trained during the 1994/95 fiscal year and 66.9
percent of them (232 persons) successfully started new business which employed 883 workers or 4
workers per new enterprise (Minister of Manpower 1996). Further information on the sector that
had absorbed more TKPMP alumni reveals that most of the TKPMP participants (34.5 percent)
were involved in trade activities while 23 percent of them stayed with agriculture activities
(Minister of Manpower 1996). The name of the TKPMP alumni’s university along with data on the
number of persons starting a business and the average capital assigned is presented below (Table
10).
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
68
Demand Side : Creating Job Opportunities
How to create job opportunities has long been among the policies carried out by the
Ministry of Manpower. During the economic crisis, the government received some aid, especially
from international donors, to overcome widespread unemployment. Under the Social Safety Net
Programs there were sub-programs targeted to those who were laid off when firms downsized.
Those unemployed, mostly young, people were given the possibility of being employed on public
works projects such as renovating bridges, sewers and religious facilities in return for a wage.
Village and community representatives were appointed as the coordinators of these activities and
reported the results to the project management unit. Since this kind of activities were considered as
rescue programs they was carried out for a few months in specific villages, in order to give other
villages opportunities to have the same programmes, and were not intended to provide permanent
work for the people.
Another effort in creating job opportunities has been carried out through the TKPMP
program as mentioned above. After finishing the structured training organized by the universities,
graduates would be encouraged to set up their own business. By that time they were expected to be
able to utilize their acquaintance with companies, banks/ financial institutions and other facilities
introduced to them when they were trained.
Some private firms have programmes, which are not directly related to government policies
on alleviating unemployment but have provided useful work experience for young people,
especially new graduates and advanced university students. The programmes include on-the-job
training, and internship. Some other enterprises have programmes, called Bapak Angkat (Adopted
Parent), to support and look after small enterprises and cooperatives, which are jointly carried out
by the Ministry of Industry and Trade and the State Ministry of Cooperatives and Small and
Medium Enterprise. Having been supported for a time by some big companies these small
enterprises and cooperatives were expected to be able to maintain their business and, hence, their
employees accordingly.
Matching Demand and Supply: Job Brokerage and Placement
Public Employment Services
A tracer research on General and Vocational High School Graduates was conducted by the
Ministry of Manpower in 1999. The results reveal that there are three main difficulties the high
school graduates were facing when they were looking for work, those are : competition among job
seekers (41.4 percent), unmatched education (16.6 percent), and their limited skills (12.8 percent).
Furthermore, the research found that the main source of information on the availability of
employment ranges from relatives (47 percent), employee of the company (20 percent), and the
company itself (14.9 percent). To get the application letter the applicant goes to the company by
him/herself (67.7 percent) or through relatives (16.6 percent). These findings were confirmed by a
recent study by Matondang (2001) who conducted some focus group discussions amongst the
young and reports that the way young people obtain work was through family networks, the
employee of the company and the newspaper. The use of government job brokerage facilities to
match job seekers with employment opportunities seems to be very unpopular. Those who
registered to the government job brokerage facility, which is the regional office of the Ministry of
Manpower, feel that the registering to the government office is only for fulfilling the employer
requirement on such procedure when recruiting. It looks as if the officer in charge of job brokerage
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
69
is the one who has to actively approach both the job seekers and the company in order to be able to
match their needs.
Private Employment Services
There are also private employment services to carry recruitment tasks for companies. The
recruitment or placement company charges the employing company a fee and on top of that these
employment services sometimes have the rights to deduct a certain percentage of the employee’s
wages. It turns out that these kinds of practices mostly apply to casual workers and prospective
employees sometimes are not aware that they are not directly hired by the employing company.
Later on, in some cases, when their contracts were terminated, employees would believe that the
company where they used to work had treated them unfairly. Employees were often not clearly
informed about the agreement between the employing company and the recruitment company. The
desperate job seekers would not even understand and did not inquire into terms of the agreement
used to secure their job. Here, the recruitment company saw an opportunity to make use of these
disadvantaged people. After several months working at a company, employees might be dismissed
without any power to fight for their fate. Sometimes they filed complaints to the employing
company but, it is the recruiting firm, not the employing which has responsibility for this problem.
Conclusion: Lessons Learnt
Concerning youth employment, issues emerging in this study are: the Indonesian youth
labour force participation rate is increasing, work in the informal sector predominates, principally in
the agricultural sector.
Since the supply of the labour exceeds available employment opportunities, unemployment
is perhaps unavoidable and has increased over time, especially in urban areas both for male and
female young people. The unemployment rate amongst young people with higher levels of
education remains high and has tended to increase. The nation has also been exposed to an
underemployment problem for a long time.
Specific policies on youth employment have not been developed systematically by the
government. The principal existing institution that deals with youth matters is the Directorate
General of Out-of-School Education and Sport in the Ministry of National Education. With only
limited authority and a small budget it is difficult if not impossible for this institution to carry out its
programmes effectively. The national policy and program, which has been developed since the
earlier State Ministry of Youth Affairs seems to be too ambitious to achieve at present. Also, other
related ministries that report having programmes for young people seem to be carrying on
independently without any awareness of or co-ordination with the national programme. National
coordination is needed to put those youth programs in appropriate place in each institution dealing
with young people matters.
The small portion of the national education budget and the implementation of the Regional
Autonomy law have lead to the delegation of some of the central government’s tasks in conjunction
with the youth matters. It is envisaged that regional governments will develop their own training
schemes.
Learning from national and international experience, the government needs to attach more
specific attention to youth employment problems in order to avoid further negative social
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
70
consequences. A national institution, at a higher level than a directorate general, which could
coordinate and consolidate all the existing programs on youth, should be one way positive step in
the right direction.
Indonesian Youth as Percentage of Total Population, 1971 – 2000
Table 1.
Total Number
of 15-19
Population
11,325,493
13,530,231
15,283,235
16,566,970
18,926,983
20,279,390
20,316,329
Period
1971
1976
1980
1985
1990
1995
2000
15-19 years as
Percentage of Total
Population
9.6
10.7
10.4
10.1
10.6
10.4
10.0
Total Number
20-24 years as
of 20-24
Percentage of Total
Population
Population
8,031,271
6.8
9,882,024
7.8
13,000,959
8.9
14,287,657
8.7
16,128,362
9.0
17,150,776
8.8
17,952,239
8.8
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976, 1985,
1995 Intercensal Population Survey, and 2000 National workforce Survey.
Table 2.
Youth (15-24) and Adult ( > 25) Labour Force Participation Rate, and
Unemployment Rate, 1971 – 2000
Period of
study
1971
1976
1980
1985
1990
1995
2000
Youth (15-24 years)
Labour Force
Unemployment
Participation
Rate
Rate
46.8
11.9
60.6
4.8
46.3
3.5
46.3
6.9
49.9
8.6
53.8
20.0
51.8
19.9
Adult (> 25 years)
Labour Force
Unemployment
Participation
Rate
Rate
63.7
7.1
73.8
0.7
63.4
1.0
69.2
0.8
69.0
1.2
70.1
2.9
73.7
2.5
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976, 1985,
1995 Intercensal Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
71
Table 3.
Percentage Distribution of Youth Population (15 –24 years) by Educational
Attainment and Region, 1971 – 2000
1971
Ru Ur
No schooling
24.2 8.2
Less than Primary School 35.7 20.8
Primary School
31.8 35.8
Junior High School
6.4 22.8
Senior High School
1.8 11.4
College and University
0.0 0.9
Educational attainment
1976
1980
1985
1990
1995
2000
Ru Ur Ru Ur Ru Ur Ru Ur Ru Ur Ru Ur
18.8 7.7 -* -* 7.7 2.4 4.9 1.4 2.5 0.7 1.6 0.5
52.1 39.2 30.7 15.8 29.2 13.5 19.8 7.9 14.3 5.3 7.7 3.1
23.1 24.2 39.9 30.0 42.3 31.3 46.1 28.1 48.3 26.6 44.5 22.1
3.5 13.2 26.1 36.6 15.0 31.1 19.9 34.1 24.3 35.0 33.1 37.9
2.5 15.2 2.9 16.2 5.6 21.0 9.0 27.3 10.3 30.3 12.6 34.3
0.0 0.6 0.3 1.4 0.2 0.6 0.3 1.3 0.4 2.1 0.5 2.3
* = The Central Body of Statistics publication of the 1980 Population Census does not contain the data for the
category.
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976, 1985, 1995 Intercensal
Population Survey, and 2000 National workforce Survey.
Table 4.
Percentage of Youth Population (15 –24 years) by Educational Attainment and
Gender, 1971 - 2000
1971
1976
1980
1985
1990
1995
2000
M F M F M F M F M F M F M F
No schooling
14.1 26.8 12.9 23.5 -* -* 3.9 8.0 2.4 4.7 1.3 2.2 0.9 1.2
Less than Primary School 32.1 32.9 50.5 49.9 22.7 30.7 20.8 27.2 13.7 17.0 10.2 10.9 5.1 5.9
Primary School
35.8 29.7 25.5 19.9 36.7 38.0 39.4 38.2 38.7 40.3 37.9 40.7 32.9 34.9
Junior High School
12.6 7.6 5.9 3.4 32.1 25.6 23.2 17.4 27.3 22.9 30.1 27.4 36.5 34.2
Senior High School
5.1 2.7 5.0 3.1 7.9 5.0 12.4 8.8 17.3 5.0 19.5 17.7 23.4 22.2
College and University
0.3 0.1 0.1 0.1 0.6 0.6 0.3 0.3 0.6 0.6 1.0 1.2 1.1 1.5
Educational attainment
* = The Central Body of Statistics’ publication of the 1980 Population Census does not contain the data for the
category.
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976, 1985, 1995
Intercensal Population Survey, and 2000 National workforce Survey.
Table 5.
Percentage of Youth (15-24 years) Employment by Field of Work, 1985 – 2000
Field of Work
Agriculture
Industry / handicraft
Construction / Building
Trading
Transportation, Storage and Communication
Finance, Insurance, Rentals, Establishment services
Community, Social & Individual services
Others (Mining , Electricity, gas and water)
1985
52.5
13.4
3.5
12.4
3.2
0.4
13.8
0.8
1990
46.4
18.8
3.9
11.8
3.2
0.9
13.9
1.2
1995
44.7
17.5
4.9
14.4
3.1
0.5
12.9
1.8
2000
41.9
20.3
4.3
19.4
4.4
0.8
8.3
0.7
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976, 1985,
1995 Intercensal Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
72
Table 6.
Percentage Distribution of Adult (>25 years) Employment by Field of Work,
1985 – 2000
Field of Work
1985
1990
1995
2000
Agriculture
54.5
Industry / handicraft
8.1
Construction / Building
3.4
Trading
15.9
Transportation, Storage and Communication
3.2
Finance, Insurance, Rentals, Establishment services 0.4
Community, Social & Individual services
13.6
Others (Mining , Electricity, Gas and Water)
0.8
50.4
10.0
3.6
17.0
3.8
0.6
13.4
1.2
47.9
8.9
4.4
17.2
3.9
0.7
14.9
2.0
45.3
13.0
3.9
20.6
5.1
1.0
10.7
0.6
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976, 1985,
1995 Intercensal Population Survey, and 2000 National workforce Survey.
Table 7.
Percentage of Youth (15-24 years) Unemployment Rate by Level of Schooling,
1985 – 2000
Education
No Schooling
Less than Primary School
Primary School
Junior High School
Senior High School
College and University
1985
1990
1995
2000
1.2
1.9
3.3
9.8
31.1
20.5
2.2
2.5
3.1
7.8
27.3
31.4
7.6
9.6
16.6
33.6
40.8
3.9
7.4
12.4
18.2
33.9
35.8
Source: Indonesia Central Agency of Statistics: 1990 Population Census; 1985, 1995 Intercensal
Population Survey, and 2000 National workforce Survey.
Table 8.
Percentage of Youth (25-29 years) Unemployment Rate by Level of Schooling,
1985 – 2000
Categories
No Schooling
Less than Primary School
Primary School
Junior High School
Senior High School
College and University
Total per-age group
1985
1990
1995
2000
0.5
0.9
1.1
4.3
7.0
11.3
2.2
0.8
0.8
0.9
3.3
7.8
17.2
3.3
2.3
2.8
5.5
12.3
23.1
7.1
0.4
1.8
2.4
8.6
12.4
20.9
7.6
Source: Indonesia Central Agency of Statistics: 1990 Population Census; 1985, 1995 Intercensal
Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
73
Table 9.
Time-related Youth (15-24) Underemployment as Percentage of Total
Employed by Educational Attainment, 1985 – 2000
Education
No Schooling
Less than Primary School
Primary School
Junior High School
Senior High School
College and University
1985
57.4
44.9
53.3
60.9
43.2
41.1
1990
42.5
38.6
35.6
28.3
27.9
35.8
1995
48.8
46.1
43.7
27.8
30.6
2000
58.6
44.7
43.2
39.0
24.6
19.7
Source: Indonesia Central Agency of Statistics: 1990 Population Census; 1985, 1995
Intercensal Population Survey, and 2000 National workforce Survey.
Table 10.
TKPMP Alumni With Business by University and Average Capital, 1994/95
Name of University
University of
Indonesia
Andalas University
(West Sumatra)
Sriwijaya univ.
(south Sumatra)
Padjadjaran Univ.
(West Java)
Diponegoro Univ.
(Central Java)
Gajah Mada Univ.
(Yogyakarta)
Hasanuddin Univ.
(South Sulawesi)
Total
TKPMP Have Business
33
Average Capital (Rp. 000)
N.A.
29
5,657
44
3,969
21
9,237
18
12,965
42
2,391
45
3,760
232
6,330
Source : Minister of Manpower 1996.
Notes : N.A. = Not available
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
74
Figure 1:
Rural Labour Force Participation Rate by Age group, 1971 - 2000
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
20-24
15-19
15-24
1971
1976
1980
1985 1990
1995
2000
year
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Figure 2:
Urban Labour Force Participation Rate by Age group, 1971 - 2000
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
20-24
15-19
15-24
1971 1976 1980 1985 1990 1995 2000
year
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
75
Figure 3:
Youth (15-24 year) Labour Force Participation Rate by Gender, 1971 - 2000
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Male
Female
1971 1976 1980 1985 1990 1995 2000
year
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Figure 4:
Youth (15-24 years) Employment to Population Ratio by Gender, 1971 – 2000
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Male
Female
1971 1976 1980 1985 1990 1995 2000
years
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
76
Figure 5:
Youth (15-24 years) Employment to Population Ratio by Region, 1971 - 2000
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
Rural
Urban
1971 1976 1980 1985 1990 1995 2000
years
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Figure 6:
Youth (15-24 years) Employment by Status, 1971 - 2000
90.00
80.00
70.00
60.00
50.00
40.00
30.00
Informal
Formal
20.00
10.00
0.00
1971
1985
1990
year
1995
2000
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
77
Figure 7:
Percentage of Adult (over 25 years) Employment by Status, 1971 - 1995
80.00
70.00
60.00
50.00
40.00
Informal
30.00
Formal
20.00
10.00
0.00
1971
1976
1980 1985
year
1990
1995
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Figure 8:
Youth (15-24 years) Unemployment Rate by Region, 1971 - 2000
30.00
25.00
20.00
Urban
15.00
Rural
10.00
5.00
0.00
1971
1976
1980
1985
1990
1995
2000
year
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976, 1985,
1995 Intercensal Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
78
Figure 9:
Youth (15-24 years) Unemployment Rates by Gender, 1971 - 2000
30.00
25.00
20.00
Female
Male
15.00
10.00
5.00
0.00
1971
1976
1980
1985
1990
1995
2000
year
Source: Indonesia Central Agency of Statistics: 1971, 1980, 1990 Population Census; 1976,
1985, 1995 Intercensal Population Survey, and 2000 National workforce Survey.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
79
Japan
The total population in Japan was 83.2 million in 1950. By 1990, the population had reached
123.6 million, an increase of 149% in four decades. In 2000, the total population was 127.4 million
and the proportion of the young aged 15-24 constituted 12.2 % of the population. This represented a
significant fall over the period, from 20.6% in 1950, 19.0% in 1970 and 15.2% in 1990. At the same
time, the population under the age of one who were born in 1999 numbered just 1.17 million, which
was the lowest post-war figure. The total fertility rate (TFR) for 1999 decreased to 1.34. Because of
this, it is expected that the population will begin to decline early in this century, and will continue to
do so throughout this 21st century.
The socio-economic effects caused by a decline in the number of children extend to various
areas: a decline in labour force, possible impedance of economic growth, an increasing financial
burden on the working generation, and a decrease in their net income. Also, other social effects
caused by this trend to fewer children include a predicted diversification of family structure, and
with it concerns about the provision of basic services to the public.
Nominal GDP per capita in Japan was drastically improved during the fifty years following
World War II. In 1955, it was only about 10 % of that of the U.S.. Now, GDP per capita, adjusted
for purchasing power parity, is 24,900 US dollars, which brings Japan into the group of top income
countries. However, Japan is suffering its worst long-term economic downturn in the post-war era.
Positive intervention policies, for example, the buying of support of dollars by the government in
response to the yen appreciation depression influenced by the Plaza Accord in the late 1980s,
caused a large increase in the supply of money. This prompted speculative trading of stocks and
lands, which turned into the boom known as 'the bubble economy' in the early 1990s. Since 1993,
when the "bubble economy" burst, Japan has been experiencing a long recession.
The Japanese economy has experienced a rapid change from the boom to the recession,
within a relatively short period from the late 1980s to the early 1990s. Furthermore, reforms of the
post-war economic structure in organized and controlled ways under the guidance of the
government have been required in various areas.
Table 1 illustrates the effects of the recession in terms of unemployment rates by age.
Unemployment rates as a whole have been rising continuously since 1993. From the table one may
observe that the unemployment rate of teenagers (15-19) has consistently been around three times
as high, and that of young adults (20-24) twice as high, as the overall figure.
As of 2000, the labour force was about 67.7 million and the labour force participation rate
was 62.4%. Within them the number of employees was 53.6 million whilst 3.2 million were
unemployed. The trends since 1965 show that the labour force population, the employed and
employees have been increasing year by year. The labour force participation rate has been steady at
around 60%, while the ratio of employees to the total number of employed persons has been
increasing. The number of employees has largely increased while the numbers of those selfemployed or employed in family businesses have decreased.
Emerging factors that have presented new difficulties to economic society and education in
recent years are globalization and the shift to an information-oriented society. Today, with rapid
globalization and increased mutual dependency beyond national borders, competition and friction in
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
80
the world economy continue to intensify. The speed and density of the flow of human resources,
materials, and information in this global society are increasing. Concerted efforts to deal with
global problems such as protecting the environment are becoming ever more important.
In this age of globalization, Japanese must coexist economically and socially with other
countries in order to develop and mature further, and it is therefore important to develop globalminded personnel who can share a rich life both materially and spiritually with people of other
nations. Recent developments in information technology have been amazing, and the shift to an
information-oriented society has advanced in a variety of areas, from business and research to
education, culture and entertainment. The spread of personal computers and cellular phones for
home use has been explosive, while businesses enjoy improvements in management efficiency
through the use of e-mail and the introduction of Electric Commerce. Appropriate measures are
required to adjust promptly to this highly sophisticated information society, such as specialist
training, the improvement of the environment for study and research through the active use of
multimedia, and the development of students' information literacy.
Young People in Japan
Labour Force Participation
Looking at the trends in labour force participation rate by sex and age, especially among the
young (15-29 years old), the group of those aged 15 to 19 shows a large decline, from 36.3% for
men and 35.8% for women in 1965 to 17.4% and 18.5% respectively in 1980, and 18.4% and
16.6% respectively in 2000. This is because the ratio of students proceeding to upper secondary
schools and tertiary education increased during this period. As for young adult females, the ratio
has been increasing since the late 1970s and 1980s (for those aged 20-24 from 66.2% in 1975 to
75.1% in 1990, and for those aged 25-29 from 42.6% to 61.4 % respectively), presumably due to
several factors such as the rising average age of marriage and childbirth, and longer employment.
The proportion of young people aged 15-24 in the overall labour force has declined to
18.1% in 1985 from 21.5% in 1970, with an increasing proportion of students proceeding to higher
education. Although with “the second baby boom” generation (those born in 1974 at the peak)
growing, the figure had changed to increase slightly or be stable during late 1980s and early 1990s.
Then the figure has again decreased with the decline in the youth population, to 14.9% in 2000.
Employment
The unemployment situation remains serious for young people, and the proportion of high
school students graduating this March who have found jobs shows a significant drop, according to
surveys by the Ministry of Education and the Ministry of Labour. Of about 297,000 young job
seekers graduating in March 1999, about 267,000 had succeeded in their job-hunting by the end of
that month, a success rate of 89.9 percent. This is three percent down from the same period in 1998
(92.9%), a record low since the ministry started the survey in 1976, and the first time that the failure
rate exceeded 10 percent.
In Japan, the process of job-seeking begins around one year before graduation. The ratio of
job vacancies to job seekers among high school students due to graduate in March 2000 was 0.62 as
of the end of July 1999 (i.e. 9 months prior to graduation)1. The number of student job seekers due
to graduate in March 2000 totalled 264,000, 6.1 percent down from the same period in 1998.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
81
However, the number of job vacancies was 166,000, a more drop of 40.4 percent over the same
period. At 0.62, the rate was the lowest since the collection of such statistics began in 1984. The
situation was particularly serious in local regions such as in Hokkaido and southern Kyushu where
the rate was 0.22 and 0.21, respectively.
The Ministry of Labour has suggested several reasons for the low job vacancy rate for high
school graduates: the deteriorating employment situation, which has made it easier for enterprises to
employ university graduates and two-year college graduates instead of high school graduates, and
the general reluctance of firms to hire new employees while the future of the economy is uncertain.
Another line of reasoning attributes the low rate to changes in the industrial structure, which
have limited job opportunities for high school graduates to certain service sectors and
manufacturing. According to the School Basic Surveys released by the Ministry of Education, the
proportion of those finding employment among high school graduates has been declining over the
years, standing at only 20.2 percent in March 1998.
Job placements in schools
Now that there are only six vacancies for every 10 young job seekers, high schools can no
longer play the relevant role of job placement coordinators. In rural areas, the deficiency in the
absolute number of job vacancies is a serious problem, while in large cities attractive vacancies are
becoming scarcer. As a result, job-seeking high school students tend to choose part-time or nonregular employment and thus may be creating a new social problem.
Those responsible for giving students vocational guidance at each school then help students
select the most appropriate jobs. Every year, the Ministry of Education conducts a survey to find
out how many high-school students have been promised employment upon graduation. About
690,000 high-school students graduated in March 1999. Of the 139,000 who wanted to find work,
62.7 percent had been promised employment by October 1998 (6 months prior to graduation). By
course of study, the rate was highest for those in specialist courses, 74.9 percent for those in
industrial courses, 64.3 percent for those in the commercial courses and 60.9 percent for those in
agricultural courses. The figure was 55.7 percent for those in the general course.
University Graduates
The Ministry of Education's Basic Survey on Schools found that the rate of university
graduates who found employment in 1999 was 65.6 percent, the lowest figure registered since
1951. Of 529,000 graduates from four-year universities, 347,000 found employment. This rate for
males was 66.2 percent and 64.5 percent for females. The Ministry attributes this decline in the rate
of graduate employment to the growing number of graduates going on to graduate school and to the
fact that more companies are cutting back on the number of graduates they are employing straight
out of university and college.
The unemployment situation remains serious, and the proportion of university students
graduating this March who have found jobs shows a significant drop, according to surveys by the
Ministry of Education and the Ministry of Labour. The 1999 survey of 5,300 students about to
graduate from national, public and private universities, two-year colleges, and colleges of
technology, revealed that as of March 31, 92 percent of job-seeking four-year university students
had found jobs. New graduates without jobs stood at an estimated 29,000. For junior college female
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
82
graduates, the rate of employed was 88.4 percent. By gender, the figures for four-year university
graduates were 93.2 percent for males and 89.2 percent for females.
The figures above are for graduates who wanted to find work, but, perhaps as a reflection of
the serious employment situation, the proportion of these is declining. Of all four-year university
students due to graduate in March 1999, only 68.3 percent took action to find jobs while still at
university. For junior college female graduates, the percentage of those wanting to find a job stood
at 71.3 percent, five percent down from the previous year. In terms of gender, the figures for fouryear university graduates dropped by 4.6 percent to 66.1 percent for males and dropped by 3.3
percent to 73.4 percent for females. Analyzing the situation, the Ministry of Education conjectures
that “an increasing number of students, faced with the harsh reality, might have put off getting jobs
by spending another year on campus or going on to graduate schools.”
A survey conducted by Nikkeiren (Japan Federation of Employers' Associations) on the
starting salaries of new graduates in the spring 1998 found that the starting salary for college
graduates in clerical jobs averaged ¥201,300. This was a small increase of 0.5 percent over the
previous year. The change from 1997 represented the lowest growth rate since 1966. The average
starting salary for college graduates in technical jobs was ¥202,173 (up 0.5 percent over the year
before). That for college of technology graduates in technical jobs was ¥177,309(up 0.6 percent),
and that for junior college graduates in clerical jobs was ¥169,743 (up 0.5 percent). Thus the survey
showed that for the fourth straight year, the growth rate was below one for graduates at all levels of
education.
The survey also found that 34.6 percent of the companies polled had frozen their starting
salaries. The figure was 30.2 percent the year before. Only 61.5 percent of firms raised their starting
salaries, down from 57.7 percent the preceding year. Both the placement rate and the starting salary
growth rates for new college graduates clearly indicate that the recession has considerably affected
the labour market for new school graduates.
Job Turnover
The Ministry of Labour has estimated from employment insurance data that about 70
percent of the junior high-school graduates in 1995 who found employment in private enterprises
upon graduation have since left their first job within three years. The figure is about 50 percent for
high-school graduates for the same year; and 30 percent for graduates of two-year colleges and
four-year universities. This may be partly because of the differences in youth attitudes and the
maturity based on age and experiences, but probably more because of the differences of current
employment conditions and future promotion prospects dependent on the educational level.
The figures include a considerable number of people who left their jobs voluntarily. Since
large companies have kept their recruitment of new graduates to a minimum, increasing numbers of
graduates have had to find employment in small or medium-sized companies where turnover rates
are traditionally high. Many had failed to get job offers from the companies they wanted to work
for, or had failed to get the particular job they wanted. At the same time, the number of young
people who do not get jobs and remain unemployed has been increasing.
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Unemployment
The fact that the employment situation has deteriorated among young people can be seen in
the Labour Force Survey which has recorded a soaring unemployment rate among the young in
Japan. The seasonally-adjusted unemployment rate in November 2001 was a record high 5.5
percent. In particular, the rate for those 24 years old and younger has increased. Of approximately
3.50 million unemployed people in November 2001, 600,000 were aged 15 to 24. The number of
unemployed people aged between 25 and 34 totalled 810,000. Thus, nearly half of those
unemployed in July were under the age of 35.
While the annual average unemployment rate in 2000 as previously shown in table 1 for the
population aged between 15 and 19 stood at 12.1% and for those aged 20-24 stood at 8.6%, it was
6.2% for the 25 to 29 age group, 3.4% for the 35 to 39 age group. The rate for young males is
conspicuously high; for males between 15 and 19 the unemployment rate was 14.1%, for aged 2024 9.6% respectively.
Underemployment
“Freeters”
The standard definition of underemployment refers to those working less than a specified
number of hours and who are available for additional employment. According to this definition,
part-time working house wives have been most mentioned. However now, young part-time workers
are of policy concerns. This is because the number of high school and university graduates in the
spring of 2000 who neither went on to further education nor became employed on a regular basis
was approximately 324,000. The number started to increase in 1993 following the collapse of the
bubble economy and 9.2 percent of all graduates joined that category. Nearly half of those who took
a job after graduation left their job within three years. Reflecting the increasing number of
graduates who are not gainfully engaged, Japan's “freeters” have been drawing attention as a social
phenomenon.
People who are not employed as regular employees and make their living as non-regular
employees have come to be known in Japan as “freeters.” The word “freeter” has been concocted
by combining the English word “free” with the German word for worker, “arbeiter.” The term first
came up in the late 1980s during the period of the bubble economy. Although the term is not
precisely defined, the White Paper on Labour defines “freeter” chiefly as men and unmarried
women aged between 15 and 34 who work on a part-time basis or in side jobs (“arubaito”)
continuously for less than five years.
The Ministry of Labour estimated that the number of “freeters” in 1997 totalled 1.51
million, roughly twice as many as in 1987. Another definition, however, also includes dispatched
workers. By that definition, the number is estimated at 3.4 million. Behind the growing number of
“freeters” lies the traditional recruitment practice, which efficiently located new graduates in the job
market during the period of high economic growth, but which is no longer suited to the current
situation. So far, new graduates have been hired en masse each April and this has partially checked
the increase in unemployment among youth people. Now this practice seems to be declining, and
“freeters” seem to be one by-product accompanying the collapse of the old and stable system of
allocating the supply of young labour.
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On the demand side, however, the increased number of “freeters” seems likely to be
attributable in some measure to the overall reduction in employment due to the recession and to the
increased number of middle-aged and elderly workers, as well as a greater tendency for firms to
hire workers with experience as needed throughout the year. Consequently, even if young people
wish to have a regular job, they are often obliged to work part-time or in side jobs (arubaito).
On the supply side, higher levels of education seem to have come with a change in attitude
towards work. Many graduates are not attracted by prospects of full-time regular employment
immediately after graduation from high school or university. However, an acute problem for the
“freeters” is that they fail to acquire proper vocational skills so long as they remain employed on
such a basis.
Against this backdrop, the Japan Institute of Labour (JIL 2000) conducted an intensive
interview study in 1999 with 97 men and women under 35 years old who were neither housewives,
students, nor regular employees. Each interview lasted one hour. The results found that the average
number of working days per week of “freeters” was 4.9, and that their monthly income averaged
¥139,000. As for their educational level, 47.4 percent were high school graduates, 13.4 percent
were university graduates, and 11.3 percent had dropped out of a technical school or a two-year
college. Their average age was 22.7, and 63.8 percent of them lived with their parent(s). Together
with these survey results, JIL pointed out that there are three types of “freeters:” the “moratorium
types” who have no immediate future vision; the “freeters with a dream” are those who are anxious
to work in show business or in other professional areas; and the “dead-end freeters” who are
obliged to stay in such employment because they have failed to get regular work.
According to another survey also conducted by the JIL, the "Work style Survey of Young
People", targeting 1,000 respondents, 2001, one in three people between the ages 18 and 29 have
worked as part-time freelance workers at some point in their lives. According to the survey, despite
the high percentage (38%) of respondents who said that they became freelance workers as a strategy
for finding the type of job they really wanted to do, only 12.5% became full-time workers after
finding the job they wanted. Of the other reasons for working part-time, 26% of the respondents
chose to work to "pay for tuition or basic necessities," and 22% said that they began working for
"no single reason." Sixty-three percent of the respondents had considered working full-time. Fiftyfour percent of these respondents said that they had thought about applying to work full-time
because "full-time work provides better conditions and benefits," while another 41% said that they
have reached an age at which they "would feel more secure" if they had full-time work. Sixty-three
percent of the respondents (75% of males, 47% of females) had succeeded in finding full-time
employment. The survey found that the more effort the respondents put in from an early stage, the
better the chances were of their finding such work.
Active Labour Market Policy
Supply-Side: Enhancing Human Capital
Education and Training
The main framework of the Japanese educational system in the post War period is a 6-3-3-4
single system. According to the system all schools are under the control of the Ministry of
Education, Culture, Sports, Science and Technology. Children aged three to five years old can be
enrolled in kindergarten; one to three years are required for completion. Children must attend
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elementary school and lower secondary school or special education schools for nine years from
ages 6 to 15. Then, upper Secondary Schools consist of three different courses: full-time, part-time,
and correspondence. Course duration is three years for full-time, and three or more years for either
part-time or correspondence courses. There are two different types of educational content in upper
secondary schools: general education and specialized education. General courses mainly provide a
general education in response to the needs of students who want to go on to higher education or
want to enter the work force, but have yet to select a specific job. Specialized courses concentrate
on vocational and other relevant subject areas for students who have a specific occupation in mind
as their future career. These are offered in fields such as agriculture, industry, commerce, fishery,
homemaking, nursing, information and welfare, and so on among these specialized courses.
Higher Education includes universities, junior colleges and colleges of technology.
Specialist courses at special training colleges are also recognized as this level. For enrolment,
students are required to achieve an academic level equivalent to upper secondary school graduation
or above. 4 years are required for graduation, and graduates receive a bachelor's degree.
Universities may establish graduate schools (postgraduate course) in which university graduates or
equivalent may enrol. Graduate schools consist of a master's degree course (standard course
duration is 2 years) and doctoral course (5 years), and confer a master and doctor degree
respectively on students who complete each course. Students who want to proceed to junior college
require the same qualifications as university applicants, although graduation takes 2 or 3 years.
Junior college graduates are qualified for university enrolment. Technical colleges differ from
universities and junior colleges in that they require an academic level equivalent to lower secondary
school graduation for enrolment. Graduation takes 5 years, and the aim is to educate students to
become practical engineers. Graduates of college of technology are qualified for university
enrolment.
Vocational Training
In addition to the schools mentioned above, there are other educational institutions called
'Special Training Schools' and 'Miscellaneous Schools'. These schools provide vocational or
technical education in a practical manner and in accordance with students' various needs. Special
training schools are divided into three courses: advanced course, specialized course and general
course. The advanced course requires an academic level equivalent to lower secondary school
graduation and the specialized course requires a certificate of upper secondary school graduation.
Schools with the specialized courses are so-called 'special training colleges'. The general course has
no academic requirements for enrolment.
In addition, there are other systems for vocational training and the development of
vocational ability. These are supervised by the Ministry of Health, Labour, and Welfare under the
provisions of the Vocational Ability Development Promotion Law. With the aim of developing
vocational abilities in young people who have not yet started work, those who have left work or
changed jobs, and those who want to adapt to technological innovations in their workplaces, as of
2000 there were 240 human resources development centres (established by prefectures) targeted at
lower secondary school graduates, and 33 polytechnic colleges for vocational ability development
(most of them established by the government, i.e., the Employment Promotion Corporation).
There are also governmental schools under the control of government agencies or national
statutory corporations. These schools provide relevant education to future administrative officers
and offer opportunities to develop the abilities required for their administrative duties. There are
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approximately 70 institutions which primarily target upper secondary school graduates, including
the National Defence Academy, the National Defence Medical College, the College of Fishery, the
Meteorological College, the Civil Aviation College, the National Tax College, the Construction
College and the Polytechnic University.
The development of School-Work partnerships for traditional Japanese-style "employment"
did not lie in the direction of strengthening the continuous nature of "education" in school and
within the company, but rather presumed an educational cut-off on the part of both sides. This being
so, study or hands-on experiential learning arranged in liaison with companies hardly developed at
all outside specialized high schools. Within these specialized high schools, practical training and
study concerned with work as adopted hitherto was continued, and efforts were made to provide
large numbers of opportunities for work preparation and for hands-on experiential study. Within
specialist high schools too, including the traditional industrial craft studies, a significant number of
projects developed in close collaboration with local communities, all hoping to invigorate local
industries in a wide variety of areas. For example, in agricultural courses, about 35% to 45% of
overall study time was taken up by specialized study, and about half of this time was allocated to
practical training. In industrial courses too, practical skill development courses, including hands-on
training and industrial drafting, took up about half of the time allocated to specialist study, and
considerable effort was devoted to providing manufacturing experience, including out-of-school
activities.
That said, looking at specialist courses as a whole, the links between in-school practical
lessons and out-of-school practical skill training were not always sufficiently strong, moreover,
there is evidence of a widening gap in terms of responses by schools to modern scientific and
technological development and multi-disciplinary industrial developments. If we look now at onsite practical training in the context of liaison with schools, the implementation ratio is 42.7% for
agricultural courses, 11.4% for technology courses, and 19.2% for commercial courses (Ministry of
Education 1996 survey). It is clear therefore that, with variations from school to school, even in the
case of specialized courses, links between local society and companies are insufficient, and that the
opportunities offered to students to study the attitudes to work of employees are not necessarily
adequate.
Against this background, in 1996 the Ministry of Education initiated a "Liaison Promotion
Project between Specialized High Schools and the World of Industry", and designated practical
implementation research districts. In these districts, the aim is to establish and strengthen links
between specialist high schools and the world of industry by such means as on-site practical
training for students, the introduction of outside lecturers, and practical training for school staff.
From the industry side as well, within the context of industry activities aimed at making a
contribution to society, there have been various attempts to try and promote school/industry joint
education, for example, on-site practical training induction programs, study visits to factories and
offices, work experience, "children's visits" and so on. However, many problems are still unsolved,
including problems of working conditions and safety, travel and accommodation fees, credit
recognition for industry-based practical training, securing agreement from firms for visits and
training, and the establishment of a permanent "Collaboration Committee".
In 1996, the Ministry of Labour presented its draft Sixth Basic Plan for Vocational Ability
Development for the 5-year-period of 1996 to 2000 to the Central Vocational Ability Development
Council, which approved the plan. In the Basic Plan draft, the Ministry set forth, in view of changes
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in the labour supply-demand structure, its priorities for vocational ability development. These are
support for an individual's ability development, consolidation of an ability evaluation system in
order to respond adequately to the conversion of the industrial structure, as well as expanding new
fields resulting from sophisticated information telecommunications and ongoing deregulation.
Among the areas to be addressed in the Plan, one of the priority issues for vocational ability
development is "consolidation and substantiation of the vocational education system." The Lifelong
Ability Development Centre is opened in 1997 as a facility to offer vocational education for whitecollar workers. This centre analyses the realities of white-collar jobs and develop, implement and
spread "model" vocational training programs. In addition, the Plan strengthens measures to deal
with matters involving white-collar workers by expansion and substantiation of the Business Career
System (the vocational ability acquisition system) and promotion of career analysis and
counselling.
Meanwhile, there are four areas of vocational ability development for working individuals.
Under the Plan, the Ministry promote “individual-based vocational ability development" as follows.
First, help will be provided to individual workers enabling them to make up an "ability development
plan" by provision of information and consultative services. Second, help is given to companies to
improve their systems for voluntary vocational ability development through vacations, paid time off
for education, during working hours and by providing expenses for vocational ability development
programs.
The Plan also proposes that the government offer support for smaller-sized venture
businesses. According to the sixth basic plan for vocational ability development, it is required to
make active use of "the Project for Fostering People at Small- and Medium-sized Firms" and
support measures stipulated in "the Law for Securing Labour Force in Small- and Medium-sized
Enterprises".
Guidance and Counselling
The Working Party established to consider the job seeking behaviour of high school students
was recently released in 2001. The research committee had been established by the Ministry of
Education, Culture, Sports, Science and Technology. The report concludes that job vacancies
formerly filled by high school graduates are now being filled by university graduates. This reflects a
general downward trend in the demand for high school graduates. Recognizing the seriousness of
the situation, the report cites as major problems (1) the immaturity of the students in their thinking
about occupations and the working life; (2) the absence of systematic and continuous guidance
through internships and other programs which high schools should provide for students during their
schooling; and (3) the declining effectiveness of conventional job placement practices in Japan's
high schools.
Three practices of placement of high school graduate in particular were questioned: the
prearranged linking of certain schools with certain employers in the labour market; the way in
which internal selections occurred for specified employers within the high school, and the “one-onone system.” The first is a practice whereby a company makes its job vacancies known to specified
high schools, and only students of those schools are able to apply. In line with this practice, each
high school carries out its own internal selection process to decide which of the students wishing to
apply to a certain company should actually be recommended. High schools have also adopted the
one-on-one system that restricts each student to applying to a single company. This series of
practices used to play a role in the swift and smooth transition of students from school to
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workplace. These employment practices, however, have also been seen as a factor hindering
students from forming their own views about particular kinds of jobs and from making their own
career decisions.
The report makes proposals concerning relaxation of the rigid practices. It recommends that
students at any high school should be allowed to apply for any job vacancy. In addition, each
student should be allowed to apply to a maximum of three companies simultaneously through his or
her school. It also proposes that in order to encourage high school students to develop their own
ideas about occupations and working life, new measures should be taken to promote vocational
education from primary school; a “career advisor” system should be set up by utilizing teachers
with specialized training or former businessmen; and to encourage internship programs that enable
students to experience for themselves the realities of various vocations.
This idea is based on the revision of “National Curriculum Standard” in 1999. It was
mentioned as background to the revision that there was a tendency for school education to
emphasize volumes of knowledge. Now, however, the school education looks at itself from the
children's standpoint and places a high value on the development of children's intellectual interests
and inquiring minds. Thus, the school education positively conducts its activities by emphasizing
the importance of motivating children to learn by themselves and helping them develop abilities to
learn, reason, judge, express themselves accurately, discover and solve problems, acquire basic
creativity and act independently in response to social changes. Additionally, children are
encouraged to use their knowledge and skills comprehensively in daily life in order to successfully
relate their knowledge acquired at school with the actual life. This requires the promotion of such
educational activities as hands-on learning activities, problem-solving activities and activities to
teach how to research and how to learn.
Particularly, the upper secondary education is asked to aim at helping students appreciate the
meaning of their own life, develop mind and ability to choose career and deepen understanding of
the society. New standard ask, that depending upon students' interests, the upper secondary
education provides them opportunities to learn the basics in the specialties of their choices and that
it encourages them to further develop individualities and independence.
Demand side: Creating job opportunities
Job Creation and Public Works
Emergency Employment measures introduced in 1999 have included the immediate creation
of jobs by promoting job creation in growth industries. The government selected 15 recently
established or growing sectors - the medical and welfare, life and culture, information and
telecommunications, new manufacturing technology, transportation, environment, business support,
marine, biotechnology, urban environment, civilian aircraft and space, new energy sources and
energy-saving, human resources, internationalization and housing . The government is also giving
incentive grants to employers who speed up their plans to hire rather middle-aged or elderly people
who have involuntarily left their former jobs, and to employers who are offering on-the-job
training.
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Subsidising Wage Employment
In response to the record high joblessness among new graduates, the Ministry of Labour has
initiated countermeasures which include (1) the extension of eligibility for short-term, free
employment vocational training programs for high school students, as well as allowing private
firms (in addition to vocational colleges and private job training institutes) to conduct such training
programs, and (2) subsidizing the vocational training provided by firms that have hired recent
university graduates without jobs.
Where the scheme for allowing private firms to conduct job training is concerned, the
government provides subsidies of about ¥60,000 per month per person as training costs, and jobseekers can in principle receive the training free. The training period to be covered by this scheme
is three to six months, and the expected number of trainees will be 6,000, six times as many as in
the previous year. The program is now available not only for university and two-year college
graduates but also to graduates of high school and college of technology. It is aimed at those who
have registered at a Public Employment Security Office but have not found a job. The graduates
can choose where to receive training from among the firms seeking new employees. The subsidy to
defray the training costs of firms which have recently taken on jobless graduates will be financed by
expanding the scope of the “Grants for Life Time Development of Vocational Abilities” which used
to be granted to firms obliged to transfer their middle-aged or elderly employees to different
sections or to conduct training to help their employees keep up with technological innovation.
Firms that begin a training program of up to six months by the end of September are eligible for
subsidies to cover two-thirds of the training costs (three-quarters for small and medium-sized firms)
up to a maximum benefit of ¥300,000.
Youth and the Information Society
Consistent and systematic ICT education through all stages of school education will require
sufficient improvement of related subjects and active use of computers in virtually every subject.
Elementary schools will employ computers for children's learning activities in the "Period for
Integrated Study" and other classes. Lower secondary school will require students to learn the
information basics including basic computer skills in industrial art and homemaking class. Upper
secondary school will establish a new required subject area of "Information Study".
Promoting Self-Employment and Small Business Development
Entrepreneurship in growth sectors such as ICT is encouraged for young women and men,
particularly in the field of engineering at university. Many national universities established a centre
for bearing this motivation and attitudes to students, called such as “Venture Business Laboratory”,
and other centres for liaison with industry since middle of 1990s.
The Japan Chamber of Commerce and Industry, the Central Federation of Societies of
Commerce and Industry of Japan and the National Federation of Small Business Associations have
established 'Inquiry Offices' at their national and local branches to deal with individual labour
disputes. This is in response to the introduction by the government in October of a law for solving
labour disputes with the aim of dealing with the increase in number of labour disputes between
individual workers and firms and mandating the establishment of a free labour grievance mediation
setup.
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Through these Inquiry Offices, the organizations provide advice on how to prevent or solve
problems that arise between Small and medium sized enterprises and their employees, including
those associated with wage payment, work hours, work regulations, retirement benefits, and
pension benefits. The Help Windows also refer people to lawyers and relevant government
ministries or agencies for problems that cannot be solved at the Offices. While courts exist to solve
labour problems, most SMEs choose not to take their cases to the courts, because the costs and time
associated with the judicial system tend to be prohibitive.
Community Development through Local Initiatives
It is envisaged under the Emergency Employment Measures that the national government
and local public bodies will take a number of measures to create temporary employment and job
opportunities. These include a scheme to provide special grants for emergency regional
employment which will provide funds for educational and cultural, welfare, environmental,
recycling and other public works projects which local bodies entrust to private companies and nonprofit organizations (NPOs). Information on laws and ordinances, budgets and account settlements,
government newsletters, and white papers are to be digitalized in the interest of disclosure, with the
project to be entrusted to private companies to generate more jobs. To deal with the decline in the
number of children, measures will be taken on the local level (city, town and village) that include
the establishment or improvement of nurseries, which will simultaneously create more jobs. Finally,
the measures call for establishing “NPO Human Resources Job Placement Offices” to register those
who wish to participate in the voluntary activities of NPOs and to provide information on these
people to NPOs looking for staff members.
Matching Demand and Supply: Job Brokerage and Placement
Within high schools, in the area of job placement assistance, screening and internal school
selection are carried out in the same way as for those wishing to proceed to higher education, with
the result that schools substitute for companies in terms of the selection process. Because schools
enable the candidates required by companies to apply in a suitable manner, the final selection
process by the company can be carried out in a short time with relatively little competition. The
point that is worth stressing here is that schools are consciously aware of the selection criteria of
companies, and that "academic achievement", representing the internal value criteria of schools, are
cleverly intertwined with these at the time of selection and job placement guidance.
There have been good circumstances for low achievers until the collapse of bubble
economy. The existence of a labour shortage during several decades meant that even graduates with
low academic achievement were able to find employment through the partnerships among school,
employers and public employment services. It is clear from this that as the basis for interfacing
between the positions and sets of value criteria held respectively by schools and companies a
"partnership" is formed, moreover that both sides share a negative viewpoint regarding the
effectiveness of vocational education in schools. Be that view as it may, it is a fact that between the
school and the company, in terms of the "actual results" or the "reality" of the interfacing concerned
with the employment of students, a "quasi-contractual" relationship of trust is formed.
However, after the collapse of bubble economy, in case of general high school students who
wanted to get a job, labour market condition became worse and school’s support became more
weakened, thus the prospects of finding employment within and through high school have seriously
obscured.
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The legal basis for involvement by official government agencies in the transition to work is
the Employment Security Law. With regard to adjusting the supply and demand of labour, this law
defines the fundamental function of introducing employment opportunities to job seekers through
Public Employment Security Offices, and as a supplementary function, also makes provision for
such services as a free employment placement service for schools, a partially paid employment
service, and the dispatching of workers for specific purposes.
The government office in charge of labour matters, in liaison with the government office in
charge of education, gets involved in considerable detail in employment matters affecting new high
school graduates, including setting up meetings and selection schedules for job-seekers and
employers. With regard to the specific division of responsibilities for the administrative work
involved in job placement, the nature of the interface between the educational institution and the
Public Employment Security Office differs according to the educational level. In the case of pupils
who leave to find work after completing lower secondary school, the final stage of compulsory
education, the Public Employment Security Office has a central role. In the case of universities,
junior colleges and special training colleges, the educational institution undertakes job placement
almost completely autonomously. High schools occupy an intermediate position, and with a view to
deciding on the distribution of duties, very detailed liaison is carried out as set out above.
Historically speaking, during the early period of high economic growth in the 1960s, Public
Employment Security Offices all over the country, using their nationwide network, looked to local
regions as a source of supply to satisfy labour demand in the towns. Specifically, the government
administration developed a large-scale employment introduction program whereby they arranged
for new lower secondary school leavers to travel to large cities in groups for job placement. A
system was established under which the offices in large cities would receive notification of job
vacancies and send details of these through the nationwide network to local offices for them to pass
on to lower secondary schools. This was the period when government-subsidized "group
employment trains" were formed to take new employees to assignments, e.g. 1,000 kilometres away
from their home. Later, high school leavers became the main source of labour supply, but the shape
of the large-scale employment introduction service continued. Moreover, from the later part of the
1970s on, along with efforts to raise the level of regional and local economies, the administration's
policies changed to ones of encouraging high school graduates to find jobs in local areas, aiming to
get those who had come to universities in the large cities to go back to their home towns for work
through such devices as "U-turn employment fairs".
Employment activities of students in higher education institutions and recruitment
behaviours of companies for new graduates have been liberated since 1998 in order for students to
be able to have more chances to select jobs more effectively and for employers to be able to have
more opportunities to show information in a flexible schedule. In fact, demands have been always
higher for university graduates in post-war Japan so that companies have competed fiercely to
secure able graduates as early as possible. Until the year 1997, higher education institutions had had
“a gentlemen's agreement” with employers to fix a nation-wide uniform schedule for employment
activities and recruitment behaviours the government supervised companies' compliance with the
so-called employment agreement. This compliance had often been violated and always been a
controversial problem. During the economic bubble period, many companies refused to comply
with the gentlemen's agreement and gave employment commitments to students even one year or
more early before they graduated. The agreement was eventually abolished in 1997. Companies and
universities each have agreed more broadly that employment commitments should be made for
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students on or after October 1 as of a half year before their graduation, and that institutions and
companies mutually respect each other's agreement. At the same time, they are seeking to establish
new employment practices. Internship mentioned in a previous section, has emerged as one of such
new practices.
Employment security offices' validation of job offers and regulations on offers through
classified advertisements, which are seen for upper secondary school graduates, do not exist for
graduates of institutes of higher education.
Employment activities vary depending on companies and prospective graduates. In the most
universal manner, companies provide students with employment information through job
magazines issued by the private media. Such magazines are usually mailed to students selected by
institutions or their departments. On the other hand, companies supply employment information
frequently through universities' employment guidance divisions, professors and other higher
education organizations. This practice is a traditional one for natural science and engineering
students.
In this case, information supply destinations are limited to certain categories of universities
or departments meeting specialized job requirements. Companies also use job magazines and
newspaper advertisements to supply information to an unlimited range of universities or
departments and take advantage of their employees to contact students at universities from which
these employees graduated. In a recent change, companies have begun to adopt measures to more
widely disseminate employment information. For example, they make employment information
available on the Internet so that anyone can get information and job application forms. Some
companies require students to file job applications without specifying their universities, in a bid to
give priority to personal capabilities and interests in making employment decisions. Companies are
increasingly trying to collect able personnel from a wider range of students by preventing
universities or departments from selecting students before job application. Employment activities
for graduates from special training and junior colleges are similar to those for university graduates.
Saitama Prefecture launched its own job search website2 (in June 2000, in advance of a jobsearch website which is to be jointly managed by the government and the private sector (see the
March 2001 issue of the Japan Labour Bulletin). The website maintains a permanent display of
2,000 to 4,000 job vacancies which the prefecture collected, together with some 20,000 vacancies
released by five personnel-dispatching and job-placement agencies which have contracts with
Saitama Prefecture.
Private Employment Services
In line with the ratification of ILO Convention 181 covering private employment services,
including employment agencies and temporary staffing agencies, and the changes in the social and
economic situation, employment security laws for staffing service and employment security were
revised with consideration given to the protection of workers in order to adequately deal with the
structural reform of Japanese economy and strengthen the function of making adjustments of the
labour supply and demand relationship. These laws have been in effect since December 1999.
In 1999 the Employment Security Law and Worker Dispatching Law were revised as part of
a general relaxation of labour market regulations. Revisions to the Employment Security Law
opened the way for fee-charging job placement businesses to supply employees to private
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
93
enterprise. They also relaxed restrictions on the types of jobs which could be filled by such firms.
Revisions to the Worker Dispatching Law abolished general restrictions on types of work which
dispatched employees could undertake with the adoption of a “negative list” system by which only
listed activities were prohibited. The revised laws allow private job- placement companies to be
involved in all areas except construction and port cargo services. Meanwhile, the rules protecting
workers eligible for job placement are strengthened. Agents will be penalized if they violate the
confidentiality of workers' personal information. Furthermore, guidelines for collecting and
preserving personal information on workers are clearly detailed.
Accordingly, an increasing number of private enterprises are entering the job placement and
temporary worker dispatching businesses. Incidentally, these types of firms require permits from
the Minister of Labour. According to the Ministry of Labour, from December 1, 1999 (when the
laws came into effect) to June 1, 2000, 293 enterprises offered fee-charging job placement services
(an increase of 34% compared to the same period in the previous year) and 898 enterprises were
dispatching employees to other firms (an increase of 23%). As of June 1, 2000, the number of
private fee-charging job placement businesses totalled 3,930, an increase of 8.1 percent from the
end of November 1999, just before the relevant law was revised. Newcomers included, for instance,
a company providing job information which joined the business in order to widen its activities to
include the offering of future job placements via the Internet. A major private preparatory school
did so with an eye to introducing and dispatching school teachers to private junior high schools and
high schools.
The number of enterprises engaged in worker dispatching services as of June 1, 2000
totalled 17,277, an increase of 5.5 percent from the end of November 1999. A company managing
dormitories for other companies' employees has created a new affiliate engaged in personnel
dispatching services, and plans to dispatch more than 200 domestic helpers per year. A department
store is setting up a smaller company from which shop assistants will be dispatched to related
companies and associated businesses. Some firms have started to engage both in job placement and
in the dispatch of workers.
According to the Special Survey of the Labour Force Survey conducted in February by the
Management and Coordination Agency, only 2.8 percent of unemployed people rely on private job
placement agencies when looking for work. That compares with 40.1 percent who rely on Public
Employment Security Offices. On the other hand, some 900,000 workers were dispatched in fiscal
1998, 4.7 percent more than the previous year. Thus, although the private sector still plays a minor
role in the market, as employment patterns become more varied in the future, rapid expansion of
private job placement firms is expected. Moreover, since workers can now be dispatched to any
category of job, it is almost certain that their numbers and significance will increase in the near
future.
At Recruit's site (www.career2.recruitnavi.com), some 5,500 vacancies can be investigated
in terms of job category, job experience and knowledge required, location, and other attributes. The
same website provides a “job information mailing service” for people who have registered with the
website and specified a list of desirable vacancies beforehand. Some 270,000 people were enrolled
at the end of March 2001. Since simply publishing information about job vacancies and job seekers
on the Internet is not identical to making a job placement as defined by the law, such publishing
does not require any legal procedures or permission. However, receiving information about job
vacancies and job seekers, and arranging for employment agreements between firms looking for
workers and job seekers is defined as making a “job placement” and is subject to legal restrictions.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
94
Until recently, job placement agencies have been required to provide job seekers in writing with
information such as working conditions, the scope of duties, etc. Now they are able to provide such
information in an e-mail format. The revision of the law also scrapped regulations concerning the
minimum floor space of job placement agencies in cases where such agencies use the Internet to
allocate jobs. The Ministry of Health, Labour and Welfare is hoping that the revision of the law will
encourage placement agencies that use the Internet.
Quite a few websites now provide information about switching jobs. In March 2001, NEC's
“Biglobe” comprehensive website (www.biglobe.ne.jp), expanded its job information pages to
include information on vacancies, personnel introductions, dispatching, and opportunities for
studying abroad. The site includes more than 60,000 pieces of information obtained from Recruit
and 13 other associated companies.
It is becoming common to look for jobs on the Internet. Some regulations for implementing
the Employment Security Law were revised, and came into effect on April 1, 2001. They were
relaxed for firms that used the Internet for job placements. Until the early 1990s, university students
generally obtained information about employment and careers from magazines which specialized in
such information. By completing and sending a questionnaire included in a magazine, designated
firms would send them a company brochure. From the mid-1990s, these magazines began to set up
homepages, and then initiated a range of recruitment activities through the Internet.
According to a survey conducted in June 2000 by Recruit Co., Ltd. a major distributor of job
information, two-thirds of university students used e-mail every day to enhance their own
employment prospects, and roughly half of them browsed websites every day. Students also use
Internet bulletin boards to exchange information and opinions on how particular companies conduct
their interviews, how and when they start to give informal assurances of employment to prospective
graduates, and so on. Some keep diaries on their own homepages, describing their job-hunting
activities. In such ways, young job seekers find out about the real intentions of the firms they
consider for employment.
Youth employment and the social partners
Employers’ Organizations
In 1995, the Japan Federation of Employers' Associations issued a report, "The New Age of
Japanese Management", in which they suggested the active adoption of fixed-term employment
contracts. Employers’ organizations and related economic circles have suggested in their policy
reports, entitled "From School to Combination of Schools" (1995) and "Recommendation for
Combination of Learning, Working and Playing" (1996) by the Japan Committee for Economic
Development and others that the trammels imposed on the children's education by schools and
teachers should be freed through more active cooperation between schools and local communities
as well as the industry, and that "study", "work" and "leisure" should be organically combined with
each other. Along with this, there has come the recognition that a social dialog between various
social walks is necessary, cantering on the methods to realize this. The era has come when dialog
and partner
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
95
Trade Unions
As the proposal by General Labour concerning education and nurturing of talented
personnel, there is the summary "In Order to Sustain Brilliance in Life in the 21st Century: Vision
of "Work" and Study" prepared in 1996 by the Rengo Comprehensive Life Development Research,
a think-tank in Rengo. It is worth noting is that discussions were carried out by this think tank with
the participation of the staff members of the Japan Teachers Union, an affiliated organization in
Rengo, and that the proposals concerning education which were not ideologically critical of the
government and economic circles were made by labour circles and from those in the educational
system. In these discussions, the following objectives were declared: (1) Emphasize the basics and
rudiments, and social features: Securing the civil minimum (2) Learning should take place at each
student's own pace: Shifting from lateral diversity to vertical flexibility (3) Overcoming stages of
education: Shifting from the distinction of stages of education to the division of functions (4)
Ensuring the opportunity for lifelong study: Surviving in this knowledge-based society.
It was pointed out that it efforts should be made to carry out the reform based on social
partnerships between trade unions and economic circles, between schools and local communities,
and between teachers and administrative agencies of Ministry of Education and to have a dialog
between them (Ichikawa et al., 1996).
The Effectiveness of Youth Employment Policy: Lessons Learnt
It depends on more or less fundamental economic and social conditions whether youth
employment policies have direct effects in terms of improving employment outcomes. Japan’s
government are now targeting both the structural adjustment in every policy sphere – mainly in
order to respond the challenges of privatization trends – and the recovery of economy from long
lasting recession. This means that policy measures could be adopted by public body are seriously
limited and that in spite of many policy initiatives as mentioned above, effectiveness may be
difficult to grasp by analyzing statistical data analysis of employment condition up to the present.
At the time of economic recovery, labour demands for youth graduates would be improved
particularly faster than other labour demand. Because of the shrinking youth population, the
relatively low wage of young workers, and the common conceptions of investing more on youth in
general, new school graduates employment are expected to be recovered soon, except high school
graduates who is gradually becoming into minority positions.
With the many revisions of employment and related laws and regulations, various channels
for placement, such as those using ICT technology and mass-media, public and private employment
services focused on youngsters are emerging. Although some concerns on the digital-divide are
often discussed, the media-literacy of Japanese youth is becoming richer and richer.
For involuntary part-time workers, various policy measures are needed, such as those
promoting occupational careers. On the contrary, for voluntary ‘freeters’, medium- or long-term
measures are required. Building the internship and other work experiences into school and colleges
are one of challenges of cultural innovation. Thus, even though the internship has gained a great
popularity in universities and colleges, there are still remaining questions whether the program
become a ingredient and integral part of the school curriculum. The depth of experiences,
partnership between school and employer, and the integration of work experience programs among
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
96
primary, secondary and higher education institutions. Therefore community based intermediary
organizations may play a very crucial role toward next development of this kind of measures.
In order to support youngster’s smooth transition to working life in Japan through the
medium of a partnership of the parties involved, an accurate grasp of the real situation is
indispensable. Many kinds of statistical surveys are undertaken every year and the "transitions" of
high school graduates, before and after graduation, are clarified in great deal. However, this
process embraces a number of problems. Specifically, the statistical surveys are limited to grasping
the diversity of individual movements and linking these to the social background or to individual
experiences with a view to analyzing and suggesting policy-level issues.
In many developed countries, statistical follow-up surveys on "transition from school to
work" have developed on the basis of equality-driven policy initiatives aimed at clarifying and
reforming social inequality in the area of educational opportunity. Through the medium of a fresh
analysis from this viewpoint, evidence-based research concerning education has been accumulated.
Especially in recent years, with European integration as the key, interest has been rising in followup statistical surveys of this kind.
In Japan too, structural changes can be seen in the career patterns of young people following
the period of high economic growth, and as can be deduced from current surveys, there is a
possibility that appropriate guidance concerned with education and employment has not been given
to many. Moreover, the size of this stratum is expected to increase. In particular, there is a need for
policies, which aim not merely to provide a ‘safety-net’ to ensure that those who follow unusual
career paths are not disadvantaged, but to prevent young people from being excluded from society
in the first place (‘inclusiveness’). However, the reality is that the government bodies in charge of
education and labour respectively are only interested in grasping the situation from their respective
viewpoints.
On an international level too, there are common concerns about the issues of transition. An
international statistical survey, which will focus on and follow individual careers in terms of "the
transition of young people from school to work" is currently being prepared. It is a reasonable
assumption that this will have very great significance at policy level.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
97
Table 1:
Unemployment rate by age and by sex
65
and
older
(%)
age
total
1519
20-24
2529
30-34
35-39
40-54
55-59
60-64
1970
1.2
2.7
1.8
1.1
1.0
0.8
0.9
2.2
2.1
0.6
1975
2.0
4.8
3.1
2.1
1.3
1.5
1.5
3.2
3.2
1.8
1980
2.0
5.5
3.6
2.0
1.7
1.3
1.3
3.1
4.6
2.2
1985
2.6
8.9
3.8
2.4
2.0
1.9
1.6
3.9
7.0
2.1
1990
2.0
7.4
3.7
2.0
1.6
1.3
1.2
2.3
5.1
1.4
1995
3.1
8.9
5.5
3.7
2.3
1.8
1.9
2.7
7.5
2.2
1996
1997
1998
1999
2000
3.4
3.4
4.2
4.8
4.9
10.3
10.3
12.0
15.1
14.1
6.1
6.2
7.3
9.3
9.6
4.0
3.9
4.9
5.6
5.8
2.5
2.7
3.1
3.8
4.2
2.1
2.1
2.8
3.1
3.0
2.0
2.1
2.5
3.2
3.3
2.7
2.6
3.6
4.4
4.5
8.5
8.3
10.0
10.2
10.4
2.1
2.0
2.6
2.9
3.2
1970
1.0
1.3
2.1
1.4
1.0
0.9
0.5
0.0
0.0
0.0
1975
1.7
2.4
2.7
2.7
2.0
1.8
1.2
1.6
1.1
0.0
1980
2.0
2.7
3.3
3.6
2.4
1.9
1.3
1.3
1.0
0.0
1985
2.7
5.6
4.5
4.8
3.1
2.2
1.9
2.2
1.7
0.9
1990
2.2
5.7
3.7
3.7
2.5
2.1
1.5
1.4
1.4
0.0
1995
3.2
7.5
5.8
5.2
4.7
3.0
2.1
1.7
2.6
0.6
1996
1997
1998
1999
2000
3.3
3.4
4.0
4.5
4.5
9.1
7.6
9.1
9.5
9.8
6.2
6.1
6.9
7.9
7.5
5.5
6.3
6.7
7.1
6.7
4.6
4.4
5.6
5.8
6.0
3.0
2.9
3.7
4.2
4.1
2.0
2.1
2.6
3.1
3.1
2.1
2.0
2.8
3.0
3.1
2.6
2.5
3.1
3.8
4.5
0.6
0.6
0.6
0.5
1.1
male
Female
Source: Management and Co-ordination Agency "Labour force Survey"
Note: Before 1973 Data of Okinawa not included.
Endnotes
1
2
The job vacancy rate stood at 3.08 for students graduating in March 1992, when the economy was booming.
www.shigoto.pref.saitama.jp
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
98
Papua New Guinea
Papua New Guinea is a paradox. By world standards it is rich in natural resources while its
population of around 5.2 million is still reasonably small relative to its land area and potential
wealth. Despite high rates of economic growth and public spending in the early 1990s, it has some
of the lowest social indicators in the world while conditions continue to deteriorate. In recent years
the economy has actually contracted (Table 1). Even these figures do not reflect the true condition
of the majority of the population. In 1996, when average GDP per capita was around $US 1200, it
was estimated that 80 per cent of the population earned less than $US 350 per annum (HamidianRad, 1997: 47). It is probable that the disparities are even greater today.
Papua New Guinea was largely isolated from the world until World War Two, and even
today has a poorly developed road network. It is often said that the first wheels seen by most of its
people were on aeroplanes. The nation is characterised by extreme cultural diversity, with more
than 800 separate language groups, and high levels of circulation between rural and urban areas. In
1990 some 15 per cent of the Papua New Guinea’s population lived in urban areas 1. This includes
the two major areas of Port Moresby and Lae, and the provincial capitals, but large agglomerations
of rural villages are excluded. The physical distinction between rural and urban areas is blurred to
some extent, in that some urban dwellers, especially squatters may grow much of their food in
garden plots within the town boundary and/or live in villages for some of the year (Baxter, 2001: 2).
Even so, there are marked differences in social indicators between rural and urban areas. For
example, in 1996 GDP per capita income in the National Capital District was 3-20 times higher
than in any of the provinces, and the UNDP Human Development Index was from 30-60 per cent
higher (Baxter, 2001: 14).
Economic progress has been hampered by the mountainous landscape, the isolation of many
communities, and the persistence of conservative traditional customs and social orders. The real
cause of underdevelopment, however, is the economic model adopted, which is based on a
relatively small urban-based modern sector supported by the export of raw materials, while most of
the rural population remains peripheral to the modern economy and receives little benefit.
The shortage of wage employment opportunities, which affects all age and gender groups
not just school leavers and youth, is symptomatic of rapid population growth and a stagnating
economy, exacerbated by political and social instability. The situation is much the same in Papua
New Guinea’s smaller Melanesian neighbours, Vanuatu and Solomon Islands. In all three countries
around 80 per cent of the population depend mainly on subsistence agriculture, there is little
manufacturing or commercial development and the major sources of formal employment is the
government sector and enterprises providing services to government and government employees.
It is against this background that the problem of youth unemployment in Papua New Guinea
must be viewed. It is not an isolated problem that affects one specific group in society, but part of a
Melanesia-wide socio-economic crisis that has disadvantaged almost everyone in the countries
concerned. This has important implications for strategies to combat youth unemployment in Papua
New Guinea. Limited economic development and socio-economic infrastructure make it costly and
difficult to generate appropriate jobs and opportunities for youth in the modern sector. The
institutional structure for delivery of special assistance to youth is poorly developed, while the
juxtaposition of the traditional and modern sectors makes it difficult for young people to find and
remain in wage employment. In particular, social structures that accord low status to young people,
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
99
the reluctance of young people to remain in villages when modernisation is largely confined to
urban areas, and very high crime levels, especially in urban areas, discourage enterprise.
There is a general paucity of data on employment in Papua New Guinea, especially data
disaggregated by age and gender. As Papua New Guinea does not carry out economic surveys much
of the information on employment is derived from censuses, which generally lack detail. Moreover,
processing of the 2000 census data was still underway when this paper was written, and data on
employment are not expected to be available until late 2002. Many of the statistics quoted in this
paper are therefore based on the 1990 census, plus a few statistics collected by other government
departments or by independent researchers. It is now recognised that the 1990 census was a
substantial, non-systematic, under-count, and the overall average annual population growth rate was
actually 2.7 per cent per annum in the period 1980-2000, rather than around 2.3 per cent, as
assumed prior 2000. Estimates of youth unemployment based on 1990 data are therefore underestimates.
Employment opportunities and labour markets
Employment and labour force
Overall, close to three million Papua New Guinea citizens are of working age, while only
around 270,000 are employed in formal wage labour. Those without formal employment depend on
subsistence and the traditional safety net provided by Papua New Guinea social structure. There is
therefore strong competition for any wage jobs that do become available. This, plus the extent to
which labour market regulatory markets are copied from Australia without regard to local
conditions and needs, are the key features of the labour market (Hess and Imbun, forthcoming: 13).
In 1996 the government set its major development objectives as improved private sector
development, improved delivery of public services, increased employment opportunities, increased
rural production and improved access to services and income earning opportunities. At that time
most investment was in capital intensive industries, there was undue emphasis on developing
natural resources and a failure to recognise the importance of human resource development (Tautea,
1997: 177-8). This remains true in 2001.
It is estimated that around 40,000 students leave the education system each year, plus at
least 10,000, who did not get into the education system at all, reach working age and begin looking
for work. In contrast, the absorptive capacity of the economy is currently only about 5,000 per year,
most of the 45,000 young people who are not absorbed immediately do not have any qualifications
(Tautea, 1997: 185). Moreover, as absolute population size increases, the number in each age cohort
also increases. Papua New Guinea’s population is currently increasing by about 130,000 people
each year, virtually all of them infants, since immigration is negligible. This means that in 16 or 17
years time the annual number seeking to enter the labour force will be close to 130,000, even if the
population growth rate has declined by then (McMurray, 2001).
In contrast to the steady population growth rate, the rate of real growth in GDP has
deteriorated since the mid 1990s. Moreover, since most of the growth that occurred in the early
1990s was in mining and petroleum with much of the benefit going to overseas, it did little to
increase overall employment opportunities, and contributed almost nothing to expanding youth
employment.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
100
Papua New Guinea’s manufacturing sector is small, comprising mainly food processing,
beverages, tobacco and timber processing for small local markets and contributing in total less than
10 per cent of GDP. It has stagnated over the past two decades, becoming heavily dependent on
tariffs and other protective measures. Agriculture, which provides the livelihoods of around 85 per
cent of the population and which must be expected to absorb most of the labour force in the near
future, suffers from low productivity and high domestic costs (Hamidian-Rad, 1997: 55).
Occupation, status and industry
Table 2 shows the distribution of all formal wage-labour by sector, and compares changes
between 1982 and 1999. It can be seen that the largest single sector is agriculture, while
retail/wholesale, manufacturing and construction are relatively small. The leading national income
earner, mining, generates very little employment. Although it remained the largest employer of
wage labour, agriculture employed fewer workers in 1999 than in 1982 and 1992, even though, as
noted above, this is the sector that must absorb most of the labour force. The sector that showed the
greatest relative increase was education (7.2 per cent to 11.5 per cent). Although this reflects an
expansion in the number of primary school places, it has been paralleled by an absolute increase in
the number of school age children, while there has been comparatively little expansion in other
sectors of the economy.
Table 3 shows the distribution of the privately employed (i.e. non-Public Service) wagelabour force by sector. In 1995, 37 per cent were employed in agricultural enterprises, with the
remainder, only around 100,000 people, in the type of industrial and commercial activities that
usually generate most employment opportunities.
Table 4 shows the population aged 10-24 years by principal activity in 1990. The table
indicates that substantial numbers were entering the labour force before age 15 years, 11 per cent to
engage in monetary activities. By far the most common monetary activity for these age groups, and,
indeed for all ages, was food related, including growing cash crops. Table 3 also shows that from 510 per cent in each age group left school only to become unemployed. As discussed in Section
below, the real rate of unemployment is likely to be a substantially higher.
Formal and informal sectors; wage employment and self-employment
There are no reliable data on informal sector activity in Papua New Guinea. However, there
has been little development of legitimate informal sector activities, and at times they have been
actively discouraged. For example, street vendors are aggressively dispersed by authorities in Port
Moresby, ‘which destroys legitimate income earning opportunities for unskilled youths who
otherwise turn to crime’ (Pitt, 2001: 130). The promotion and development of formal rather than
informal employment has its origins in the colonial-founded education system’s perception that the
objective of every student should be employment in the formal sector, and anything else is second
best. Primary schooling is seen as preparation for secondary school, which, in turn, is seen as
preparation for employment in the modern sector, or even preparation for tertiary education. In
addition, the conditions that regulate formal employment, inherited from the Australian
administration and similar to those operating in Australia, are so favourable that formal sector
employment is generally much more attractive than informal sector employment.
This plus the huge negative impact of crime, have been major factors inhibiting the
development of both in formal activity and self-employment. Other factors are small markets, since
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
101
so few people are involved in wage work, cultural factors and a poorly developed ‘entrepreneurial
culture’. Traditional values play a much more significant role in economic life in Pacific countries
than in most other regions of the world (Hooper, 2000: 3). The core of Papua New Guinea culture is
a system of obligation and reciprocity that often requires decisions and behaviour that appear to be
the opposite of economic rationality. For example, profits may be dispersed rather than reinvested,
stock may be given away, loans may not be paid and employees and business associates tend to be
selected on the basis of kin rather than qualifications.
Hess and Imbun (2001: 11) make the interesting comment that in traditional Papua New
Guinea society women were largely responsible for economic activities such as food production,
while men tended to focus on political activities. Although women may have tended to develop a
more ‘economic way of thinking’, modern formal sector activities are overwhelmingly maledominated, and men now hold the economic power, although the inclination of many remains more
political than economic. Paradoxically, although it might be assumed that women would take the
lead in informal sector activities, their participation has been inhibited by their greater vulnerability
to crime. Even so, the most widespread informal sector activities are street and market place selling
of food, largely by women.
Unemployment
As evident from the preceding discussion, unemployment, including hidden unemployment,
is a major problem in Papua New Guinea. The 1990 census counted a total working age population
of 2,535,000. Of these, only 134,000 reported themselves as unemployed, yielding a gross
unemployment rate for people of working age of only 5.3 per cent. Similarly, the gross
unemployment rates for each age group derived from Table 3 range from 5-10 per cent. The real
unemployment rate is more difficult to determine, however.
If the labour force is assumed to be those engaged in subsistence and monetary activity, the
unemployment rate for the population as a whole in 1990 can be estimated as 8.3 per cent.
However, this relatively low figure also masks the real situation. It is evident from the high levels
of circulatory migration from rural to urban areas that substantial numbers of those engaged in
subsistence (24 per cent of all people of working age) would prefer to participate in the monetary
economy, or at least supplement their subsistence activity with wages. While they are absent from
their villages in search of wage work they are effectively numbered among the unemployed. It is
also likely that many of those reporting as house workers (11 per cent of all people of working age)
would also prefer to participate in the monetary economy if they could. If this is so, the true rate of
unemployment could be much higher
Although there are clearly large numbers of Papua New Guinea nationals without work,
there is still a heavy reliance on expatriates to fill managerial and technical positions. Although
numbers fluctuate, during the 1990s there were around 8,000, expatriate workers in Papua New
Guinea (McGavin, 1997: 73). Of these 42 per cent were professional and 34.4 per cent were
administrators or managers (Tautea, 1997: 183). Reliance on expatriates is necessary because of
low education levels in the Papua New Guinea national workforce, with 64 per cent not having
completed primary education, and only 5 per cent had completed secondary or higher education, as
discussed in more detail in Section 4.1.1.
Closer analysis of the data in Table 4 shows that the unemployment rates for young people
could also be very high. If the labour force is defined as those engaged in monetary activity, plus
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
102
those engaged in subsistence and the unemployed, the overall unemployment rate for ages 10-24 is
15 per cent (18 per cent for ages 10-14 years, 17.4 per cent for ages 15-19 years and 11.2 per cent
for ages 20-24 years). Subsistence accounted for 53 per cent of all employment of those aged 10-14
years, 42 per cent for those aged 15-19 years and 34 per cent for those aged 20-24 years. This
suggests that the subsistence sector absorbs surplus youth labour to some extent, but that young
people tend to move out of this sector if other employment becomes available. Hence, many young
subsistence workers could also be effectively classified as hidden unemployed.
Since it is unlikely that many of those aged 10-19 years in 1990 were married, it can be
assumed that most of those reporting as house workers were also hidden unemployed. This is also
true of many those in the category ‘other’, (15 per cent of those aged 10-14 years, 8 per cent of 1519 years and 6 per cent of 20-24 years). Only about 2,000 in each age group were sick or disabled
while the balance were likely to be hidden unemployed. Overall, it seems likely that in 1990 more
than 20 per cent of young people were leaving school (or never attending school) only to become
unemployed.
Tables 6a and 6b show economic activity according to level of education in 1990. Generally
the pattern is as expected, with the least educated engaging in activities requiring least skills. The
majority of those with only primary education (up to Grade 6) or lower secondary education
(Grades 7 to 10) are engaged in food related activities. The majority of those with post secondary
education are employed in wage jobs. It is interesting, however, that although it is generally
believed that most of the unemployed have no education, 2.3 per cent of those with a degree and 4
per cent of those with a diploma or certificate were classified as unemployed. If those engaged in
subsistence and ‘other’ activities are added to this, unemployment amongst the most educated group
in the labour force approaches 10 per cent. It is also notable that 12.6 per cent of those who had
completed secondary education were unemployed. Given the shortage of skilled labour in Papua
New Guinea, there is clearly a need for job brokerage services.
Underemployment
Underemployment is a concept that needs be considered in the specific context of the
Pacific. In traditional Pacific village society the concepts of unemployment and underemployment
do not exist (Hooper, 2000: 6). Resources are shared and the family and community provide a
safety net for those who cannot provide for themselves. While many Papua New Guinea workers
can be considered underemployed in that they work irregularly and/or short hours, it must be
recognised that not only is underemployment inevitable in most Pacific contexts, but also it may not
always be undesirable. For example, the labour requirements of subsistence agriculture are
seasonal, especially the contribution of men, which tends to be confined to clearing and preparing
land for planting. This has a positive aspect in that many of those classified as subsistence workers
are able to leave their villages for months at a time to go in search of supplementary wage work in
urban areas.
Underemployment in the public sector as a consequence of overstaffing has been perceived
as a major problem by donors, because it contributes to high costs and inefficiency. While this is
true from a Western perspective, overstaffing and underemployment is consistent with the Pacific
social objective of sharing resources. Restructuring programmes implemented during the 1990s
targeting inefficient staff structures have helped to reduce public sector underemployment, but even
the relatively small changes made so far have brought hardship. It is not uncommon to find families
of 10 or more dependent on a single wage earner, and if this person is made redundant, many
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people are affected. This is a typical example of collision between Western economic objectives
and traditional Pacific social mechanisms. While in the long run the Western approach may bring
the greatest increase in productivity, and eventual benefit for all, Western economic strategies need
to be modified to ensure they are appropriate for the Pacific contest.
It is virtually impossible to measure the extent of underemployment in the Papua New
Guinea economy as a whole, and it is questionable whether such an exercise would be worthwhile.
The elimination of unemployment should not be considered as a priority but rather as a very longterm objective that can be achieved only when there are sufficient employment opportunities for all
who need them. At present levels of development there is simply not enough work to go round. If it
is considered necessary to implement programmes of restructuring, resource-sharing mechanisms
such as job sharing could be introduced so that the remaining employment opportunities are shared
as widely as possible. In general, the negative concept of underemployment should be abandoned,
while strategies should be couched in terms of multi-tasking, in which formal and informal
employment are supplemented with income generation. This would foster a more pro-active
approach to seeking income generation opportunities, including developing small businesses.
National Youth Policy
The most recent National Youth Policy of Papua New Guinea was approved in January,
1997 and, at the time of writing was still in operation. This 29-page document, prepared by the
National Youth Service of the Department of Home Affairs, identifies the problem of youth
unemployment and formulates objectives and strategies in general terms (Papua New Guinea
National Youth Service, 1996). It emphasises the need for special policies for vulnerable groups
and the social consequences of youth unemployment. The approach is sound and generally
consistent with the recommendations of the UN/World Bank/ILO High Level Panel of the Youth
Employment Network (United Nations/World Bank/ILO Youth Employment Network, 2001). The
main function of this document, however, is to propose objectives and mechanisms, while the
strategies are presented in general terms only. Moreover, the target population of 10 to 34 years is
somewhat wider than the usual definition of youth (15-24 years) and could serve to diffuse efforts
and reduce their effectiveness.
The policy has five primary objectives and proposed strategies to achieve them, as follows:
 Objective 1: Training: Facilitate and support training, education and rehabilitation to improve
the quality of life of young people.
Strategy: Support local and provincial trainers in government, NGO, church and community
organisations engaged in youth development programmes by providing training materials,
assisting with skills training and education courses and encouraging enrolment in distance
education, courses at tertiary institutions and courses to develop livelihood skills.
 Objective 2: Youth Enterprise: Encourage and provide avenues for young men and women to
enter the workforce
Strategy: ‘The National Youth Commission will enable registered groups of young men and
women to have easy access to capital assistance so as to enter the workforce either by
working for wages, being self-employed, running a business or maintaining and improving
subsistence practices’…’providing technical and managerial support and linkages to
appropriate agencies in sustaining funded projects’… ‘provide avenues for motivation and
competition’.
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 Objective Three: Communication and Information Networks To improve and strengthen the
communication network to enhance the self-organisation capabilities of young people and link
them to local, provincial, national and international organisations of young people.
Strategies: Publish quarterly bulletin for wide distribution, circulate information on youth
activities overseas, disseminate information on PNG youth to international agencies,
acquisition of computers by the National Youth Commission to process this information and
maintain a database on youth groups and facilitate annual, biennial or triennial provincial,
regional and national youth congresses.
 Objective Four: Social Services: To promote and encourage young people to have respect for
the social, spiritual and cultural heritage of their communities through active participation in
community service activities
Strategies: Provide funding for Community Service Projects identified by Local Level
Governments which promote the involvement of people between the ages of 12 and 35 years
in cultural and community development.
 Objective Five: Development Administration: To improve and strengthen the National Youth
Commission to enable it to efficiently and effectively address the changing needs of youth at the
local level.
Strategies: Ensure representation of young men and women in Local Level Governments
and Provincial Authorities and support and serve Provincial Youth Federations and the
National Youth; commit to a regular review and evaluation process of the National Youth
Commission, and support staff development, professional training and attendance at national
and international training courses.
Implementation
One strength of the National Youth Policy is that it is based on partnerships with a number
of government agencies, NGOs and donor agencies. Those represented at the 1994 Consultative
Youth Policy Review Workshop to formulate the policy included:
-
-
National Government Departments: Religion, Home Affairs and Youth; Agriculture and
Livestock; Education, Police, Attorney-General’s Department, National Capital District
Commission; and National Youth Commission.
Provincial Departments: Manus; Southern Highlands; Gulf; Central; East Sepik; Western; and
East New Britain.
NGOs and Churches: National Volunteer Service; Lae Seventh Day Adventist Mission;
Lutheran Church;
Pacific Youth Council representatives from Morobe, East Sepik, East New Britain, Central,
Southern Highlands, Western Province, Western Highlands and National Capital District
However, a progress report on activities presented to the Second General Assembly of the
Pacific Youth Council in December 2000 repeats the objectives and strategies of the policy, but
does not detail any specific achievements in generating employment opportunities for youth
(National Youth Commission of Papua New Guinea, 2000). The two major reasons why little has
been achieved are non-release of Government funding for youth activities and economic stagnation.
The National Youth Policy states that increased employment opportunities for youth will derive
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from the 1994 Government development strategies of developing a vibrant private sector, achieving
sound macro-economic performance, moving towards an industrial-based economy and increasing
opportunities for rural production (Papua New Guinea National Youth Service (1996: 2-3). Since
none of these strategies has been implemented, the essential basis for success of the National Youth
Policy has not yet been created.
An important concern in the implementation of this and other social strategies in Papua New
Guinea, as well as Pacific countries elsewhere, is that policies are made at the government level but
non-government organisations (NGOs) are expected to deliver most of the necessary services.
Ineffective mechanisms to manage the interaction between government and NGOs is a main cause
of failure of social programmes. The National Non-Government Organisations Policy, released in
the mid 1990s (Government of Papua New Guinea, n.d.) attempted to address this problem by
emphasising the need for more co-operation between government and NGOs and better coordination of NGO activities, but the problem remains.
Active labour market policies
Supply side: Enhancing Human Capital
Human resource development is a long-term strategy. The issue of improving human capital
needs to be addressed very carefully in Papua New Guinea. On the one hand, the labour force is
poorly educated and there is a reliance on expatriates to provide a substantial part of the skilled
labour force. On the other hand, it is important to avoid overemphasising formal education, since
the vast majority of young workers will need to be absorbed into unskilled employment. The
education system therefore needs to be reshaped so it is better adapted to the varying needs of the
labour force, rather than focusing only on the acquisition of formal literacy. In particular the school
system needs to ‘cultivate and understanding of how access to market goods and services is
achieved and of the possibilities for access to market products through rural productive activities
and the possibilities for quality of life improvements in village settings (McGavin, 1998: 92).
Education and training
A major limitation of the current labour force is that the national literacy rate is only around
45 per cent. Figures for the period 1989-1992 indicated a primary school enrolment rate of 66 per
cent and a secondary school enrolment rate of only 12 per cent, while less than 2 per cent progress
to vocational, technical or tertiary education (Papua New Guinea National Youth Service, 1996:
10). This was largely due to insufficient capacity in schools. Although enrolment in secondary
education has improved, in the mid 1990s still only one in every six 13-16 year olds was enrolled in
secondary school. Upper secondary education is especially costly because of a low teacher student
ratio of 1:8, employment of expatriates at two or three times the local salary rate and a national
scholarship scheme that covers costs for students living away from home (Tautea, 1997: 182). Law
and order problems generally restrict participation of women in teaching.
A significant feature of education is gender inequality. Whereas 50 per cent of males aged
15 years and over in 1990 were literate, the figure was only 40 per cent for females (Papua New
Guinea National Youth Service, 1996: 7). In the mid 1990s, 80 per cent of males eligible for
primary school were enrolled, but only 67 per cent of eligible females. In secondary school females
achieved only 85 per cent of the male rate, and at tertiary level only about 30 per cent. This is
reflected in low levels of labour force participation and earnings. Estimates of female labour force
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participation range from 40-60 per cent, with only around 16 per cent of total earnings going to
women. This is largely because almost 50 per cent of economically active women are employed in
the subsistence sector, and only two per cent in the formal employment (Hess and Imbun,
forthcoming: 17).
Table 5 shows an improvement in educational attainment between 1980 and 1990, as
measured by the percentages with no schooling in various labour force categories. It is notable,
however, that in 1990 there were around 50 per cent or more males with no education in every
category, and the figure was around 60 per cent or more for females. (Tautea, 1997: 185).
One reason for relatively low participation in education, especially for females, is school
fees. In order to increase enrolments, Papua New Guinea abolished school fees across the board in
early 1993. Although this led to some increase in enrolments, the net effect was regressive and
increased overall costs. The highest fees had been charged at the high quality urban schools whose
patrons could afford to pay for them, while many schools in poorer areas simply could not afford
not to charge fees, so continued the practice. It is arguable that in Papua New Guinea small fees, or
in-kind contributions, would perhaps help people to value education more (Economic Insights,
1994: 68)
In 1997 16 per cent of public expenditure was on education, eight per cent on infrastructure
and 9 per cent on health. UNDP (2000: 40) points out that the funds expended on services per
capita were greater than expended by other countries at similar stages of development, but social
indicators for Papua New Guinea were relatively low compared with those countries. For example,
in 1989 Papua New Guinea spent 6.2 per cent of GDP on education, compared with around 3 per
cent in Thailand and Philippines. Primary and secondary school costs were two to three times the
average of neighbouring countries, and tertiary costs nearly seven times as high. (Economic
Insights, 1994: 65-67). Gannicott and McGavin estimated private and social rates of return on
investment in various levels of education in Papua New Guinea using data from 1979 and 1986.
They found that, despite much higher costs, private returns based on fees actually paid rather than
the full cost were no better or worse than for other developing countries. The social rate of return on
tertiary education, which reflects the full cost, was much worse, from 1-8 per cent compared with
13 per cent for all developing countries at that time (Economic Insights, 1994:65, Table 4.2).
There is nothing to indicate that education has become more efficient since these data were
collected. Hess and Imbun (forthcoming: 16) comment that successive governments have failed to
find funds to keep teachers in front of classes. Absenteeism is widespread and resignations common
because of low salaries and delayed or non-payment. While there is a need to progressively increase
the percentages attending secondary school, this may not necessarily contribute to more
employment opportunities for youth in the short term. During the 1990s there was an expansion in
primary education, the level at which the rate of return was estimated to be highest. The priority,
however, should be training in practical skills to facilitate labour absorption into the rural and
informal sectors. This could be achieved in primary schools or by non-formal education for those
who have already left school.
Although there is a shortage of highly qualified workers and an on-going reliance on
expatriates, it is questionable whether at this point in time it is cost effective for Papua New Guinea
to offer tertiary education. No fees are charged at tertiary institutions in Papua New Guinea, and
one third of the public education budget is spent on 2 per cent of students who attend them. Among
the factors keeping the costs very high are the practice of providing accommodation for students,
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which is mostly funded by national scholarships, high overheads and unit costs, and salaries and
conditions based on an Australian rather than a local model. The very low social rate of return for
university education suggests that it may be more cost effective to send students to universities
abroad, which have the added advantage of higher academic standards.
Guidance and counselling
Formal guidance and counselling facilities are extremely limited in Papua New Guinea.
Most of the available counselling services are provided by NGOs, especially churches, and by
schools or tertiary institutions, and reach only the young people affiliated with these organisations.
In the absence of a pool of jobs, these services are of only limited value unless coupled with
employment generation schemes. Even when NGOs do have funding to support employment
generation, their activities are inevitably small scale and make only a small impact on the overall
picture. Courses in personal development, such as the leadership training courses offered by the
Secretariat of the Pacific Community, help to develop appropriate attitudes and encourage
enterprise, but again their impact is necessarily very limited. In the absence of very substantial
funding to support the creation of employment, there is little these organisations can do to help
young people find work.
An important consideration is the impact of family dynamics on youth employment. In
Papua New Guinea, as elsewhere in the Pacific, communication between parents and adolescents
tends to be constrained. Young people are low on the social hierarchy, with many obligations to
relatives and wantoks2, and parental expectations tend to be high. Most parents assume their
children will repay the costs of child-rearing as soon as they reach working age. This system of
obligation acts as a disincentive to work, for both young and old alike, even though it is an essential
social safety net in times of crisis. Many businesses have failed because obligations to family and
wantoks have prevented sound business practices.
There is need for community education to create a more supportive environment for young
workers. Unless there is a change in community attitudes, efforts to create employment
opportunities for young people tend to be undermined by social obligations. An essential
prerequisite to the expansion of wage employment in communities is a change in family and
community values and attitudes to those consistent with Western production practices as opposed to
Papua New Guinea’s communal mode of production and communal social structure. Education
should emphasise non-cognitive aspects of learning aimed at changing the values of society and
developing work ethics (Tautea, 1997: 186).
Demand side: Creating job opportunities
As discussed above, the development of the small business and informal sectors has been
inhibited by a number of factors, including the focussing investment on the mining sector, the
fostering of a high cost and inappropriate education system that is not accessible to all, and, in
recent years, extremely high levels of crime. In addition, wage regulations derived from Australia
has made labour very expensive, while government regulations inherited from Australia discourage
informal activities such as street vending
Job creation and public works
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The most pressing need for Papua New Guinea is to minimise the capital intensive
development policies of the past and promote labour intensive development with substitution of
labour for capital. This is particularly relevant to rural areas, where there are opportunities to
promote labour intensive activities, both agricultural and non-agricultural. This type of work could
present ideal opportunities for the employment of young people at relatively low cost, and could
help to stem the flow of rural to urban migration.
There are a number of examples of labour intensive public works, road construction and
rural house construction using local materials and unskilled labour (Tautea, 1997: 185). Several
preconditions are necessary for this type of job creation to succeed, however. First, there needs to
be more flexibility in labour regulation (Hamidian-Rad, 1997: 63). Current award conditions
prevent such activity on a large scale and are unsuited to the needs of villages, where people may
wish to work only a few hours per day. Second, there is a need to ensure that workers are paid and
paid regularly. As noted above, the inability of both central and provincial governments to pay
public service salaries regularly, especially in remote areas, has led to absenteeism and resignations
of public servants, including teachers, and closure of essential services such as schools and health
aid posts. For example, during the drought of 1998 it was estimated that one third of health aid
posts were closed because staff had not been paid.
The other essential precondition is a revised perception of public works. Obviously roads
constructed using manual labour are unlikely to compare with those constructed entirely with heavy
machinery. However, it is possible to make greater use of manual labour and less use of machinery
to build roads and other public works, as is done in China. For example, bulldozers could be used to
cut a road, then it could be levelled and drained by village road gangs.
Subsidising wage employment
McGavin (1998: 75-76) argues that the best strategy for improving skills quickly is on-thejob training. This could include a variety of schemes in which employees accept low wages during
a training period. The National Training Council (NTC) and the Minimum Wage Board
Determination enables ‘training-wage’ job offers in the urban formal sector which would
effectively split training costs between employees and employers. In 1999, however, there were
only 1,227 registered apprentices, around half in the mechanical trades and the balance in building,
electrical and other trades, which are all overwhelmingly male domains. The total for the period
1958 to 1999 was only 14,128 (unpublished statistics on Apprentices in Training, Apprenticeship
Board of Papua New Guinea). Moreover, as Hess and Imbun (forthcoming: 28) point out, there are
no data on performance after trainees have completed their apprenticeships, and anecdotal evidence
from employers suggest that many leave their trades.
As this approach to human resource development obviously has considerable potential in
Papua New Guinea, there is a need for further research to examine the scope for on-the-job training
and the problems and limitations of the present schemes. It is likely that the failure to retain
tradesmen can be attributed to the problems discussed above, viz. social and cultural factors that
discourage wage earners and make it difficult to establish enterprises. Again, this points to the need
for an enabling environment.
Job prospects for youth in the information economy
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109
A major component of the UN/World Bank/ILO strategy is the creation of youth
employment opportunities in the information economy. In Papua New Guinea, as elsewhere in the
Pacific, local conditions currently limit opportunities to implement this strategy. The financial
implications of developing the information economy to the point where it becomes a major
employer of young people are very considerable. At present the IT market is confined to urban
areas, with little prospect of expanding in the foreseeable future because of poor
telecommunications infrastructure and very high communication costs. Most rural villages are
without electricity, while buildings tend to be rudimentary structures made from traditional
materials. Since most have earth floors and little or no furniture, they are generally unsuitable for
housing computers. There is no prospect of introducing IT to the majority of villages for many
years to come.
Although electricity is generally available in urban areas, Internet communication in Papua
New Guinea, as in most of the Pacific, tends to be slow and unreliable because of constraints on
communication bandwidths. An essential pre-requisite for the development of significant
employment opportunities in the IT industry is a dramatic expansion of electrification, coupled with
an upgrade and expansion of communications infrastructure. Papua New Guinea has abundant
potential capacity to generate both hydro and solar electricity but there has been little development.
Electrification would not only assist the IT industry but also contribute to richer and healthier
lifestyles in rural areas. For example, it would facilitate the development of cottage industry, and
also enable the use of electricity for household cooking, refrigeration and water pumping. This
would bring substantial positive benefits for health as well as for employment generation.
Promoting self-employment
The promotion of self-employment depends on two types of strategy. First, strategies to
create an enabling environment. In the present economic and social climate in Papua New Guinea
there is little that can be done to promote self-employment. Crime is a major factor inhibiting the
development of employment opportunities in Papua New Guinea. Fear of crime has become a
major barrier to economic growth. It disheartens local entrepreneurs, deters serious foreign
investors, increases the cost of doing legitimate business, and diminishes the quality of life,
especially in urban areas. It also damages the productive capital and increases the security costs of
legitimate businesses, and reduces the competitiveness and productivity of domestic investments
(Hamidian-Rad, 1997: 58). Violent crime, including murder, assault and rape as well as larceny are
endemic in urban areas, and less but still considerable in rural areas. Crime prevents shift work
because of the danger of venturing out at night (Chand and Levantis, 1998: 33) and severely limits
the development of tourism, potentially a very substantial source of employment for labour of all
types, including youth.
Crime and social structure act to discourage enterprise, and little expansion of legitimate
self-employment can be expected until their effects have been curtailed. In Papua New Guinea, as
elsewhere, people, especially women, are ready to capitalise on earning opportunities when there is
an enabling environment. For example, there is a long tradition of market and street selling of
produce and handicrafts in urban areas, but this type of enterprise has actually contracted in
response to a worsening security situation and regulations to prevent street selling in certain areas.
Comparable data on crime for other Pacific countries were not available at the time of
writing. However, within the Pacific region, Papua New Guinea is widely acknowledged as having
the highest overall crime rate, both by Papua New Guineans and by other Pacific islanders.
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Although Fiji and Solomon Islands have experienced high crime rates during recent political
disturbances, they lack the well-established organised crime gangs of Papua New Guinea.
The second type of strategy involves the implementation of measures to directly assist the
private sector to overcome the constraints it faces. These include provision of development finance,
small business advisory services, strengthening entrepreneurial programs and enterprise support
services, training and development and contracting out some public services to the private sector
(McMaster, 1993: 277).
Contracting out public works could provide more jobs and self-employment, as well as
possibly greater efficiency. Government services that lend themselves to privatisation include
government printing, cleaning and building maintenance, maintenance of government vehicles and
alterations and extensions to government buildings. Municipal activities that are particularly
suitable for providing employment opportunities for young people include waste collection, street
cleaning and grass cutting (McMaster, 1993: 283).
Donors can play a major role in promoting self-employment by providing national level
advice on sector development and appropriate policy, providing development finance, providing
small business advisory services and entrepreneurial development programmes, assisting with the
development of small industry estates, providing training in business management, and assisting
with technology acquisition.
Although donors may be eager to support private sector development and increase their
assistance for this activity, a continuing area of difficulty in most Pacific countries, not only Papua
New Guinea, is the requirement that assistance must be channelled through government. Donors
often prefer to deal directly with NGOs and other groups, as they perceive that channelling funds
through government may mean that they will be used to meet government rather than donor
priorities (McMaster, 1993: 289). On the other hand, the countries argue that donors often do not
fully understand the issues, while centralised control of funds is essential to enable governments to
monitor the effectiveness of assistance and allocate scarce resources within the country (SPC, 2001:
7). Projects to promote self-employment, which involve the provision of face-to-face training and
advisory services and funding for small enterprises are particularly vulnerable to loss of direction
and effectiveness because the mechanism for delivery of funds is not the one envisaged in the
original project. Careful negotiation is therefore needed to ensure that the mechanisms for
delivering assistance are optimised.
Supporting small enterprises
There is considerable scope for the development of cottage industries in rural Papua New
Guinea. Papua New Guinea has craftsman to rival any in the world, especially in wood-carving,
furniture making and pottery. Proper organisation of marketing outlets could stimulate cottage
industries and encourage young people to learn traditional craft skills. Extending electricity into
rural areas would also help to encourage cottage industries. There is also an enormous need for
business advisory and support services that include assistance with business planning and
management, record keeping and financial management and general advice.
Papua New Guinea’s leading donors are currently funding a number of diverse education
and employment related projects which directly or indirectly include support for small enterprise
among their objectives. These include:
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ADB’s Employment-Oriented Skills Development Project
($US 20 million, $US 19 million from PNG and other donors)
Objective: provide short-term technical, job skills and entrepreneurial training to promote
employment and enterprise
AusAID’s National Trade Testing and Certification Project
($AU 18 million, equivalent to around $USD 9 million)
Objective: to improve trade qualifications to promote self-employment and small enterprise.
AusAID’s Community Equity in Education Programme
($AU 10 million, equivalent to around $USD 5 million)
Objective: increase community awareness of need for equity in formal and non-formal
education and gender equity in education
NZODA’s Fresh Produce Development Company
($NZ 200,000, equivalent to around $US 90,000)
Objective: promote agricultural enterprise by providing a commercial market
NZODA’s Gender and Development Projects
($NZ 150,000, equivalent to around $US 60,000)
Objective: Capacity building and business skills training for women
NZODA’s Small Capital Assistance Fund
($NZ 230,000, equivalent to around $US 105,000)
Objective: Cash grants for low cost village income generation projects
World Bank’s Education Development Project
($US 47 million, including non-Bank funding)
Objective: strengthen secondary education and increase access to business studies
Courses.
(ADB, 2001; AusAID, 2001; NZODA, 2001; World Bank, 2001)
It is important for donors to remember that programs need to reach those most in need.
There is a well-established tendency for most donor-funded development projects to focus on the
more accessible provinces, including the National Capital District, Eastern, Southern and Western
Highlands, Enga, Madang, Morobe, Simbu and East New Britain. Although these provinces have
large populations and a need for assistance to develop enterprise, they are also those that are most
modernised and therefore easiest to work in, and hence most attractive to donors. Other provinces
with lower levels of development should not be neglected.
Community development through local initiatives
In the 1980s it was observed that when youth return to the villages because of economic
recession in towns, the need is not for a youth programme, but a rural development programme to
reduce the effects of poverty which endanger the whole community, young and old (O’Collins,
1986: 41). This remains very true today. Programmes that benefit only youth are unlikely to
succeed in Papua New Guinea because of the social structure and community expectations. More
sustainable employment opportunities will be generated by focusing on the whole community rather
than on youth alone, especially true in more traditional rural areas. An added incentive is that it
policies that promote rural development generate more jobs per kina that do policies that promote
urban jobs (McGavin, 1998: 83). Reasonable, non-exploitive employment opportunities for young
workers, including young women, are more likely to develop and encounter fewer obstacles when
the objective is community development to increase rural productivity and rural earnings for
everyone, not just young people.
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Considerable assistance is needed to fund developments and change attitudes. Baxter (2001:
78-83) recommends that strategies to develop communities should focus on reducing poverty,
developing and improving access to domestic and international markets, attracting international
buyers to Papua New Guinea, removing biases against rural areas in the allocation of resources, and
developing roads and ports.
Supporting private sector development
It is evident from the preceding discussion that specific strategies are needed to support the
development of the private sector. Most important are strategies to reduce business costs. A
comparison of business costs in 1992 showed that PNG was more than three times as high in labour
costs as Indonesia, Philippines or Thailand, and more than twice as high as Dominican Republic,
Jamaica and Colombia, with electricity costs at least twice as high as any of these countries, despite
its rich natural potential for electricity generation. Rents were also around three times as high as the
Asian countries mentioned, and shipping freight costs higher, although the margin was smaller.
Papua New Guinea’s only advantage was slightly lower telephone costs than Indonesia or
Philippines (Economic Insights, 1994: 44).
The development of better transport and communications, as well as increased security,
would encourage businesses to locate outside the main urban areas, where living and operating
costs are lower. This would also help to stem migration of labour. Strategies are also needed to
address the costs of labour, although this is an extremely complex area. As discussed above, the
wage structure was originally set at an artificially high level by the use of Australian awards and
conditions, while high living costs in urban areas and on-going inflation have led to pressure to
increase rather than reduce the wage level, and rural urban disparities encourage migration. On the
other hand, private sector development would be greatly assisted if low or variable wages could be
paid outside the main urban areas. Although it will not be easy to find solutions which promotes
private sector development while maintaining incentives, expansion of employment opportunities
for young people depend on solutions of this sort.
It also may be possible to assist private sector development with taxation and other
incentives. Since such a small proportion of the labour force are wage earners, Papua New Guinea
has a narrow tax base, and the burden of taxation falls largely on workers and enterprises in the
formal sector. Again, this is a difficult area, as widening of the national tax base is essential to assist
development, while the desire to avoid taxation encourages illegal and informal activity. Delayed or
progressive imposition of taxation to allow enterprises time to become profitable, however, and
perhaps specific taxation incentives to encourage hiring of young workers, could help to promote
private sector development.
Matching Demand and Supply: Job Brokerage and Placement
The main mechanisms for job placement in formal employment in Papua New Guinea are
personal contacts or job advertisements. Even recruitment into the Public Service usually depends
on having personal contacts within a particular department. Cultural factors also intrude on
recruitment, as there tends to be a preference in both the public and private sector for employing
wantoks, from whom loyalty can be expected. Although a few private sector recruitment agencies
also exist, they are responsible for relatively few placements because few job seekers can afford to
pay the required fees.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
113
The Department of Labour and Employment’s Work Permit Scheme and Training and
Localisation Programme were established with the objective of limiting the employment of foreign
personnel and ensuring that Papua New Guinea nationals were trained to take over jobs held by
expatriates. In practice, however, there is still active recruitment of foreign workers, especially for
senior management positions (Hess and Imbun, forthcoming: 23).
The lack of wage earning opportunities in rural areas has contributed to substantial
unregulated movements of labour. In the past this was mostly short-term circulation between rural
and urban areas, but in the past two decades there has been increasing settlement in urban areas.
Rural to rural movements still tend to be very infrequent except during times of crisis, such as
during the 1997-1998 drought. Whereas urban populations have trebled in the last 30 years, from
less than 200,000 to more than 650,000, because of this massive influx of labour, the total number
of urban jobs has remained virtually static (Chand and Levantis, 1998: 36). The number of
regulated jobs in the urban private sector was only 95,000 in 1971, and actually fewer, 90,000, in
1992 (Levantis and Fane, 1998: 48).
While there is surplus rural labour in some provinces, such as the Highlands provinces, there
is surplus land relative to population size in others (McGavin, 1998: 82) Although there is
considerable movement from rural to urban areas, there is not much rural to rural movement. Social
factors such as tribalism hamper rural to rural movement to some extent, but there is considerable
scope to increase rural productivity and address supply-side labour constraints by movements of
rural labour. One approach could be to employ young people in teams of contract agricultural
workers, since young people have more flexibility to leave their own tribal lands and might be more
acceptable to other tribes than would be their elder relatives.
Measuring the effectiveness of policies for youth
The most obvious and readily measurable aspect of the effectiveness of youth policies is the
percentage of school leavers and workers in each age group who find wage employment. However,
truly effective youth policies will also generate a substantial amount of less measurable economic
activity, including informal activity and income generation.
As discussed in the introduction to this paper, reliable data even on formal employment in
Papua New Guinea are scarce and often difficult to obtain. Even public sector employment figures
are not collected systematically, and there is a tendency for reports to correspond with policy
objectives rather than reality (Hess and Imbun, forthcoming: 16). At present much of the data on
employment are derived from censuses, which occur only on a 10 year cycle and provide detailed
information only about the ‘main’ economic activity of respondents. Since it is likely that the
majority of Papua New Guinea nationals derive their income from several sources, such data are of
limited value.
If youth employment generation strategies are to be monitored, it is essential that data
collection is improved. There is also a need for employment data to be disaggregated by gender,
since females tend to be disadvantaged in the labour market and so need special monitoring.
A first step could be the introduction of regular Household Income and Expenditure Surveys
(HIES). These surveys are most appropriate to the Pacific context because they capture information
on income from all sources, not merely formal employment or ‘main’ economic activity. They also
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
114
provide data to enable the measurement of poverty and improvements in living standards over time.
In designing such surveys it would be important to remember that Papua New Guinea is very
diverse, and substantial sample sizes are necessary to ensure data are representative even at the
provincial level.
Labour market surveys would also be of value to measure growth in wage employment.
There is also a need for surveys of informal employment, especially in urban areas. Also useful
would be tracer studies of school leavers, although these tend to be costly and difficult to
implement. One simple relatively cost-effective strategy might be to offer samples of school leavers
(ideally those who have participated in employment preparation programmes) a small financial
incentive, e.g. K5 (about $US 1.50), to report back to their old school at six monthly intervals and
describe their experiences on the labour market.
Conclusions - Best practices and lessons learned
Examples of best practice in labour standards and employment promotion for workers of
any age in Papua New Guinea are scarce. Hess and Imbun (2001: 41) cite the maritime industry as
one of very few in which there has been successful industrial relations and human resource
development. In the 1970s a programme of work reform resulted in a system of registered
employment, national awards and worker training as part of the job classification system. They
note the irony that this has been achieved in an industry that has a world-wide reputation for
tempestuous industrial relations, but observe that there is little prospect of this success being
replicated elsewhere, because a similar understanding between employers and employees does not
appear to exist in any other industry. Although it is possible for the industrial relations system to
create an environment within Papua New Guinea industries that enables decent work and labour
standards, social protection and social dialogue, this can occur only where there is willingness to
cooperate and provide adequate resources.
As regards best practice in promoting self-employment of young people, it is instructive to
examine the experiences of several trainee social workers. Although their reports are now around 20
years old, they pay special attention to the impact of social and cultural factors on projects. Raulla
(1981) described his experience of helping a Port Moresby gang of youths involved in illicit
activities to form a legitimate business group. A previous attempt to establish a youth centre had
been short lived, and it was necessary for Raulla to spend time establishing good personal relations
before he could work with the group. The leaders of the gang stated in a letter ‘we are thieves and
rascals because we are unemployed and school dropouts. Being thieves is a way of survival’ (letter
to Post Courier, 26 October 1979, cited in Raulla, 1981: 68). Eventually they obtained a substantial
grant (K21,000 – at that time the kina was about the same value as $US) to purchase sporting
equipment and build a theatre, and another grant to help them establish self-help projects (K30,000,
equivalent to $US30,000). These grants brought considerable relief to the community in that the
involvement of the group in criminal activity was substantially diminished, and an enabling
environment was created to foster self-help activities.
Another example of a youth leader creating an enabling environment for rural enterprise and
helping to establish a piggery, chicken house and duck and fish pond is described in Maladina
(1981). This project succeeded because it involved the whole community, including the 37 young
people who were the target group. Ilip (1981: 38) also mentioned the importance of including adults
from the community in a fishing project for young people ‘to bridge the generation gap and create a
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
115
situation where adults could actively pass on useful skills. This would lead to a better understanding
of young people’s needs’.
Youth projects such as these appear to be those most likely to succeed in Papua New
Guinea. The key to their success, however, is the on-going involvement and commitment of a
highly motivated youth worker, and sufficient funding. It is almost inevitable that such projects
encounter difficulties at some stage, and this is usually the point at which they fail unless there is a
competent mentor available to advise on how to overcome them.
The single most important consideration for growth in wage employment is productivity
growth (McGavin, 1997: 66). In a climate of generally poor or erratic economic performance and
poor productivity performance strategies focussing only on human resources development and job
creation for young people can achieve very little.
Papua New Guinea’s most pressing need at present is the creation of an enabling
environment within which specific strategies to promote youth employment can operate. The
creation of an enabling environment means working with the whole community to restore law and
order, extend electrification throughout both urban and rural areas, promote more supportive
community attitudes to young people, and promote community development in rural areas. These
developments would foster job opportunities not just for youth, but for the entire community. In the
long run they would be of much greater benefit to the country than is the present strategy of
focussing on developing export-oriented industries. Although the export-oriented industries
generate revenue, it is evident that the benefits have not been spread throughout the community.
Much of the profit returns to overseas investors, while the balance tends to polarise among a few
Papua New Guinea nationals. Profits accrued within Papua New Guinea tend not to stimulate the
local market proportionally because they are often channelled into more secure investments
overseas, such as the Australian property market. In addition, many of those landholders in the
vicinity of mining and logging operations who have profited from land rents have actually been
disadvantaged, because environmental damage has removed their subsistence livelihoods.
Despite the poor performance of the formal education sector as demonstrated by low
enrolment ratios, especially in secondary schools, it would be a mistake to concentrate too much
effort on expanding formal education. Education is relatively expensive in PNG, and not very cost
effective. Moreover, formal education produces expectations of formal employment that are likely
to remain unsatisfied. This creates a perception that unemployed school leavers are under-achievers,
which, in turn, promotes crime. Better returns would be achieved by expanding non-formal
education in work skills. This could take the form of classes offered at primary schools outside
normal school hours, and ideally would be made available to everyone in the community, not just
young people. The main social partners for youth employment must be the community as a whole.
Because of the nature of Papua New Guinea society, strategies that target only young people are
unlikely to succeed.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
116
Table 1:
Recent Economic Indicators
1996
GDP (US$ billion)
5.2
GDP per capita (US$)
1,186
Real GDP Growth (% change in YOY)#
7.8
Current account balance (%GDP)
189
Inflation (%change in YOY)
11.6
1997
4.9
1,167
-3.9
-192
3.9
1998
3.8
824
-3.8
-29
13.6
1999
3.6
776
3.3
97
14.9
2000 *
3.9
823
0.7
278
15.6
2001 *
4.0
814
1.2
-33
9.8
# Although AusAID (2001) uses positive growth estimates for 2000 and 2001 derived from the Papua New Guinea
National Budget Papers, other commentators such as Duncan (2001: 11) and Baxter (2001: 39) estimate negative
growth of around –1.8 per cent for 2000 and –2.0 per cent for 2001.
Source: AusAID, (September 2001).
Distribution of the wage labour force by sector, 1982 – 1999
1982
%
1992
%
1999
Retail
6,000
2.7
5,692
2.4
7,978
Wholesale
15,343
6.8
14,328
6.0 14,577
Manufacturing
17,700
7.8
17,795
7.4 23,156
Construction
15,000
6.6
10,732
4.5 10,606
Transport
11,128
4.9
10,755
4.5 10,172
Agriculture
47,500 21.0
52,479 21.9 43,050
Finance
9,800
4.3
11,370
4.8 16,457
Mining
8,742
3.9
5,680
2.4 10,068
Public utilities
2,511
1.1
2,336
1.0
2.209
Communications
4,176
1.8
3,476
1.5
5,031
Community and business service
4,104
1.8
4,293
1.8
6.213
Amusement & hotels
6,958
3.1
7,268
3.0 10,519
Education
16,209
7.2
21,283
8.9 30,000
Health
7,936
3.5
10,019
4.2 10,741
Central Government
23,838 10.5
25,305 10.6 23,602
Public authorities & other
29,020 12.8
36,542 15.3 36,180
Table 2:
TOTAL
225,965
100.
0
239,351
100.
0
260,56
1
%
3.1
5.6
8.9
4.1
3.9
16.5
6.3
3.9
0.8
1.9
2.4
4.0
11.5
4.1
9.1
13.9
100.
0
Source: Derived from Curtin (unpublished), cited in Hess and Imbun, (forthcoming: 15, Table 1)
Table 3:
Privately employed workforce by sector, 1995
Number
Per cent
Retail
6,777
4.0
Wholesale
13,069
7.7
Manufacturing
21,797
12.8
Building and construction
19,614
11.5
Transport
12,536
7.4
Finance and business
11,912
7.0
Other
21,405
12.5
Agriculture
63,148
37.1
Total
170,258
100.00
Source: McGavin, 1997: 72
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
117
Table 4a:
Economic activity of citizen population aged 10-24, 1990
Monetary Activities
Age Wage job Business
Self
group
Employed
10-14
1,774
404
3,602
15-19
17,833
1,658
9,054
20-24
44,763
2,290
9,739
Table 4b:
Age
group
10-14
15-19
20-24
Non-Monetary Activities
Food Subsist- Student Unem- House- Other
related ence
ployed work
41,108 53,680 232,340 22,080 22,508 57,026
86,450 84,833 95,366 42,240 36,959 21,784
93,099 77,882 13,234 28,749 46,595 10,841
TOTAL
434,522
396,177
327,192
Economic activity of citizen population aged 10-24, 1990 (per cent)
Monetary Activities
Non-Monetary Activities
Wage job Business
Self
Food Subsist- Student Unem- House- Other TOTAL
Employed related ence
ployed work
0.4
0.1
0.8
9.5
12.4
53.5
5.1
5.2 13.1
100
4.5
0.4
2.3
21.8
21.4
24.1
10.7
9.3
5.5
100
13.7
0.7
3.0
28.5
23.8
4.0
8.8
14.2
3.3
100
Source: National Statistical Office, 1994: 256.
Table 5:
Percentages with no schooling in various labour force categories
Subsistence agriculture
Cash cropping
Total labour force
Population over 10 years
1980
83.3
76.6
67.0
60.4
Males
1990
69.7
59.7
53.1
46.7
1980
86.6
85.0
81.2
72.8
Females
1990
78.6
68.4
68.3
58.5
Source: National Statistical Office, 1994: 252
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
118
Table 6a:
Economic activity by level of education, 1990 (number)
Monetary activity
Highest
Grade
Complete
d
None
Grade 1
Grade 2
Grade 3
Grade 4
Grade 5
Grade 6
Grade 7
Grade 8
Grade 9
Grade 10
Grade 11
Grade 12
Degree
Dip/Cert.
Not
Stated
TOTAL
Table 6b:
Wage
job
Non-monetary activity
Busine
ss
Self
Emplo
yed
Food
related
Subsistence
Student
Unemployed
Housework
Other
TOTAL
54,162
2,190
4,303
5,426
5,501
4,250
48,218
2,969
11,806
5,128
44,834
740
7,940
6,568
35,288
1,440
5,419
192
391
477
468
410
3,892
176
708
257
1,231
27
183
113
562
74
33,965
781
1,634
2,079
1,993
1,677
14,982
740
2,184
776
3,403
59
473
304
1,648
384
430,777
8,437
16,984
18,775
18,757
14,321
123,655
4,325
12,201
3,287
12,555
168
600
124
4,238
2,750
439,328
7,187
13,546
13,304
13,200
10,059
79,577
2,737
7,243
1,944
6,786
72
330
106
2,346
2,577
9,989
34,858
47,091
50,844
52,812
48,655
34,782
18,675
17,242
13,810
11,255
1,541
4,022
125
1,393
375
46,314
1,689
3,290
4,050
4,067
3,930
42,754
1,899
6,504
2,112
13,070
139
830
191
2,040
733
160,507
3,555
7,210
8,017
7,945
6,689
56,556
2,266
7,190
2,154
8,028
135
792
373
2,426
1,724
144,739
2,469
4,015
3,740
3,325
2,350
14,198
672
1,585
588
2,302
58
373
441
1,282
1,527
1,325,200
61,358
98,464
106,712
108,068
92,341
418,614
34,459
66,663
30,056
103,464
2,939
15,543
8,345
51,223
11,584
240,763
14,580
67,082
671,954
600,342
347,469
133,612
275,567
183,664
2,535,033
Economic activity by level of education, 1990 (per cent)
Monetary activity
Highest
Grade
Complete
d
None
Grade 1
Grade 2
Grade 3
Grade 4
Grade 5
Grade 6
Grade 7
Grade 8
Grade 9
Grade 10
Grade 11
Grade 12
Degree
Dip/Cert.
Not
Stated
Wage
job
4.1
3.6
4.4
5.1
5.1
4.6
11.5
8.6
17.7
17.1
43.3
25.2
51.1
78.7
68.9
12.4
Non-monetary activity
Business
Self
Employed
Food
related
Subsistence
Student
Unemployed
Housework
Other
TOTAL
0.4
0.3
0.4
0.4
0.4
0.4
0.9
0.5
1.1
0.9
1.2
0.9
1.2
1.4
1.1
0.6
2.6
1.3
1.7
1.9
1.8
1.8
3.6
2.1
3.3
2.6
3.3
2.0
3.0
3.6
3.2
3.3
32.5
13.8
17.2
17.6
17.4
15.5
29.5
12.6
18.3
10.9
12.1
5.7
3.9
1.5
8.3
23.7
33.2
11.7
13.8
12.5
12.2
10.9
19.0
7.9
10.9
6.5
6.6
2.4
2.1
1.3
4.6
22.2
0.8
56.8
47.8
47.6
48.9
52.7
8.3
54.2
25.9
45.9
10.9
52.4
25.9
1.5
2.7
3.2
3.5
2.8
3.3
3.8
3.8
4.3
10.2
5.5
9.8
7.0
12.6
4.7
5.3
2.3
4.0
6.3
12.1
5.8
7.3
7.5
7.4
7.2
13.5
6.6
10.8
7.2
7.8
4.6
5.1
4.5
4.7
14.9
10.9
4.0
4.1
3.5
3.1
2.5
3.4
2.0
2.4
2.0
2.2
2.0
2.4
5.3
2.5
13.2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Note: ‘Degree’ means a university degree from one of Papua New Guinea’s six universities or from overseas; Dip/Cert.
means a post-secondary non-degree qualification, such as a diploma of nursing or a trade certificate.
Source: National Statistical Office, 1994, Table 18
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
119
Endnotes
1
2
That is, settlements with urban functions and comprising 2000 or more residents.
Kin or close friend to whom a person is mutually obligated.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
120
Solomon Islands
The Solomon Islands form an archipelago that is located in the Southwest Pacific and
comprises about 922 islands stretching over some 1,667km in a South East direction between Papua
New Guinea and the Republic of Vanuatu and North East Australia. The typical terrain range from
ruggedly mountainous islands to low lying atolls spreading over 8,000 square kilometres of sea. It
is tropically hot and humid and prone to tropical cyclones. The total landmass is 28,369 square
kilometres with six large islands making up the majority of the landmass. The islands are Choiseul,
New Georgia, Isabel, Guadalcanal, Malaita and Makira. The capital, Honiara is located on the
island of Guadalcanal. The geographic layout of the islands in the country is scattered in nature and
thus increases the challenges faced in development of infrastructure, transportation,
communications network and rural development in general.
The population of Solomon Islands is 409,042 with an annual growth rate of 2.8%. 41.5%
[170,000] of the population is under 15 years and the majority of the population is under 25 years.
Solomon Islands has a total of 131,231 young people from 14-29 years. The total labour force for
14 years and over in Solomon Islands is 249,168 of which 53% are young people aged between 14
and 29. The majority of people, around 80% live in rural areas.
The Solomon Islands are historically a Melanesian society with traditional social structure
and customs based on strong family ties and kinship system. However, the scattered nature of the
islands also reflects the diverse ethnic cultures and traditions that exist. 93% of the population are
Melanesians, 4% Polynesians and the remaining 3% comprise other ethnic groups. About 87
languages are spoken throughout the country. Pidgin is the lingua franca and English is the official
language.
The scatteredness of people in the islands and the diversity of culture, let alone diverse
languages, pose greater challenges for youth development. The basis of livelihood for the majority
of people, including the young people is mainly on subsistence farming in the rural areas. The
inevitably option for job creating opportunities therefore, is in the informal sector through selfemployment and enterprising initiatives.
The economy of Solomon Islands is dualistic, comprising a large rural subsistence sector
and an urban monetary sector. The subsistence agricultural sector provides the main source of
livelihood for about 80% of the population. Prior to 1997, the commercial sector was predominantly
based on primary commodity mainly round logs, fish, palm oil and copra. Gold mining started in
1997 and exploration for other minerals is continuing. Nominal Gross Domestic Product grew in
Solomon Islands through the mid-1990s, levelling out at close to US 400 million in 1998. Since the
second half of 1998 and during the first half of 1999, the Solomon Islands economy was also slowly
recovering from the adverse effects of the Asian financial crisis. The introduction of the economic
and public sector reforms by the former government resulted in some signs of positive
developments. Thus there was growing optimism at the beginning of 1999 for a strong economic
performance. However, the onset of the ethnic social crisis not only threatened this optimism but
also prolonged further into 2000 leaving the economy deteriorated to an alarmingly low level.
Table 1 provides some figures on selected indicators of the economic situation of the
country over time. It is noted that the economy contracted further in 2000 after a decline of 0.5% in
1999. The economy had already been badly affected by the effects of the Asian financial crisis
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
121
when the social unrest erupted and worsened the situation. Table 2 presents the wage employment
situation over sometimes. Table 3 reports the employment situation of young people in comparison
with the overall employment sector in the country.
Some features of the present social environment are:1








High national population growth
The low literacy rate of 30%
Inadequate education opportunities and relevance of such opportunities to young Solomon
Islanders which showed that: 2
- “Education is not compulsory, contributing to low enrolments in schools (41% for age group
5-14 years)
- Gross enrolment in secondary schools is 24% of those in transition from primary school
- The bottlenecked selection process in the education system pushes out more school-aged
children without necessary skills to successfully make a living
- The inadequate opportunity for Solomon Islanders to re-enter the education system and
progress to tertiary education
- The inability of the education system to meet the learning and development needs of society
- Quality of education needs to be improved with a balance in terms of gender enrolment in
the formal education sector
- Misallocation of public funds within the education sector
- Weak linkages and coordination between technical and vocational training and the formal
education system”
Standard of health services
The bulk of the population is rural based {80%}
A lot of displaced people a s a result of the social unrest
High rural-urban migration
Changing lifestyle of the population
In 1999 and 2000 the Solomon Islands experienced unprecedented ethnic tension resulting
in an armed conflict between two militia groups from two Provinces, Malaita and Guadalcanal. The
two-year ethnic conflict has caused serious economic, social and political disruptions.3 The conflict
resulted in loss of lives and properties as well as negating the progress made by the structural
reform programme implemented by the government in 1997. The strife has used up resources that
would otherwise have gone to improving the delivery of basic services to the rest of the country’s
population. Sadly, the event impacted adversely on the weak and vulnerable, mainly children and
women.
The crisis seriously damaged the Solomon Islands economy. The export of palm oil ceased
in June 1999 with the closure of the company. The Gold Ridge Mine and Solomon Taiyo, the major
fishing company, suspended operations in June and July 2000, the latter finally pulled out in early
2001. The central economy was shaken and most social institutions, including sports, recreation and
cultural outlets were abandoned or severely limited. Around 8000 workers or nearly 15% of the
total workforce in the formal sector have either lost their jobs through redundancies or were sent on
indefinite unpaid leave by the end of 2000. Since May 2000, inflation has been on an upward
movement.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
122
Employment Opportunities and the Labour Market
Youth Labour Force
The Labour Act of Solomon Islands generally permits employment of persons between 12
and 17 years with certain restrictions in terms of types of industry and work environment without
the prior approval of the Minister. Only persons from the age of 18 years are employable without
legal restrictions. In practice however, the lower limit to work in Solomon Islands which had been
15 years which, was changed in to 1986 14 years, since most children are out of school by then.
According to the 1999 Population and Housing Census, the total labour force for 14 years and over
in Solomon Islands is 85,124 representing 21% of the total population of which 49% are young
people aged between 14 and 29 years. The total working age population according to the above
definition is 56% of the total population and of which 57% are in the youth age group of 14 – 29
years. Table 4 shows the youth labour force in comparison with the total labour force in the
country.
Although there has been steady growth in formal employment in recent years, it has failed to
keep pace with the increase in the available labour. Annual population growth of 3.5%, recently
dropping to 2.8%, was the principal cause of the mismatch between growth in employment and the
labour supply. Those most affected by this situation are the young people. According to a Central
Bank estimate, about 7,500 young people enter the workforce each year. However, the maximum
annual increase in employment since 1982 has only been by 3,800 persons. While most of those
who cannot find employment in the formal sector can earn a living in the subsistence sector, these
figures suggest a high level of hidden unemployment and underemployment.4 Young people
predominate amongst the unemployed throughout the Islands. Also notable, more youth males than
females. The situation has further deteriorated as effects of the ethnic tension in 1998, 1999 and
2000 take their tolls resulting in more young people becoming unemployed.
Occupation
With the declining economy, worsened by the adverse impacts of the ethnic tension which,
saw both large and small businesses closing down, the future in terms of employment opportunities
and the labour market is very bleak for people of all working ages. Table 5 shows employment by
occupation, sex and youth age groups. The youth age group 14-24 years is used in the table. Most
of the young people (both males and females) in paid work are employed in the skilled agricultural
and fisheries sector. The operations of big agricultural and fishery companies such as the Solomon
Islands Plantation Limited (SIPL) and the Solomon Taiyo Limited (STL) had largely contributed to
this high employment of young people. The STL and SIPL closed down in 2000 closed down as a
result of the social unrest, leaving a lot of these workers without jobs. The STL that normally
employed around 3,000 workers was replaced by Soltai Company, which now employs only a total
of 604 workers.
Table 6 shows unpaid work by main activity. The total people in the same youth age group
14-29 years in this unpaid category is alarming compared with the total in paid work, 48,842 and
24,933 young people respectively Table 7 shows the sector of paid work. Location of occupations
are mostly centred in the urban areas especially the capital, Honiara. However, occupations
generated by primary industries such as forestry, agriculture and mining are mostly located in the
Provinces.
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Activity Status
According to the 1999 Census, a total of 57,472 persons were in paid work, 39,761 males
and 17,711 females. From then until now these figures have fallen as a result of the closure the big
employing companies such as the SIPL and STL. Table 8 shows the 1999 activity status in paid
work, in unpaid work and by five-year youth age group. Out of the total of 127,974 males in both
paid and unpaid work, 52% are young males in the age group 14-29 years. The total female in both
activity statuses is 121,194 of whom 53% are young females.
Employment Status
Table 9 indicates the employment status of young people. Although the total waged labour
are more than the other categories of employment status, it will have been reduced by more than
10,000 with the closure of a number of logging companies.
Industry
The total population in all industries was 57,472 in 1999. Waged and contract labour
accounted for almost 80% of the total for both males and females. Table 5 shows activity in paid
work by employment status by industry. The 1999 Census statistics covered both the formal and
informal sector and this records the agriculture, hunting and forestry as the sector providing the
most employment. Similarly, by occupation, the skilled agricultural and fishery workers represent
26% of employment. Services, shops and market sales are also a significant employing industry.
With the opening of gold ridge mining in 1998 and the rapid upsurge of forestry operations, these
primary industries have become an important employing sector, although a lot of less profitable and
unsustainable harvesting was done to the forest.
Employment prospects from other upcoming industries such as oil palm plantation in
Vangunu in the Western Province are good and should positively contribute to overall economy.
However, the recent insurgence in the country had greatly reduced those prospects. The large scale
of employment previously provided by these companies cannot be replaced in the short to medium
term.
Informal Sector Employment
Informal employment is the residual of the formal employment. It is mainly characterised by
the large percentage of the population (about 83% of the working age population and 54% of the
total labour force) that are semi-subsistence producers who operate in both traditional exchange and
cash sector and are mostly rural-based. Informal employment in the urban setting is mostly seen in
small enterprise activities and domestic service providers. They operate mainly in cash economy
but with no regular cash payment and do not necessarily contribute to the NPF.
The nation’s market economy is almost totally cantered in Honiara, which is one reason why
it draws young people. A result of the ethnic unrest saw the labour force further outstripping the
formal sector jobs as big employing companies closed down. This situation only reinforces the
need to sustain and develop the semi-subsistence and the informal sector as the main source of
employment for young people.5 Figure 1 indicates the importance of the informal sector to the
majority of the population.
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Informal Sector in the Rural Areas
The rural informal sector predominantly involves semi-subsistence agriculture and fishing.
Table 10 shows the number of households by selected subsistence and marketed agricultural/marine
production and their production method. The total number of private households in the country is
63,404. Thus, these two groups of households undertaking subsistence and marketed production are
not mutually exclusive. However this still indicates that a large proportion of the population
especially in the rural areas is still operating subsistence for a living. The production method refers
only to the marketed production. Generally, simple and labour-intensive technology is used, such as
bush-knife, digging forks, axe, outboard motor, fibre canoes, and chainsaw. Subsistence and semisubsistence productions contributed 55.5 million to GNP in 1999. However, rural living is changing
as the population increases. Higher consumption and demand for commercial expansion are
stretching the limits of the semi-subsistence economy to absorb labour. New forms of enterprises
are needed to sustain rural livelihoods. More rural people are looking for opportunities to
supplement their current means of receiving cash. Such means, however, must fit around other
demands in their time for subsistence work and social obligations to kin and village.6
Women play a major role in the informal sector although the social and economic
significance of the sector is rarely recognised in conventional economic statistics. The informal
economy has grown in the last few years with more women marketing produce and cooked food or
raising pigs and chicken. More and more women are involved in the informal sector as a means to
get cash income, despite having had very little formal education or very low literacy level. The bulk
of these women are engaged in the agriculture sector – growing crops, fruit, market gardening,
horticulture and farming of animals for market production. According to the 1999 Census statistics,
more women are engaged in agriculture. The bulk of these women engaged in agriculture spend 1724 hours unpaid work compared to the bulk of men who spend 9-16 hours. The bulk of women
doing paid work in agriculture spend 9-16 hours while the bulk of men spend 8 or less hours of paid
work. More men than women, however, show more engagement in fishing and hunting sector in
both paid and unpaid work, the bulk of whom spending only 8-16 hours.
Other economic activities in rural areas include small-scale retailing, transport, house
building, local produce marketing, handicraft making. These activities are mainly family oriented
and engage unpaid family workers. They mostly fit into self-employed category, although mostly
on unpaid basis. Tribal and extended family help is traditionally a cultural obligation. Today,
however, this practice is fast eroding as the demand for cash income increases. Help and support
provided by community members outside the nuclear family is rewarded with small income. In
some rural communities, the rate of pay has gone up to as high as SBD 20.00 (US 4.00) per day.
This has put more pressure on households to work for more income. Family members who have
regular incomes are expected to support families in the rural villages by hiring such labour.
Informal Sector in Urban Areas
Urban areas are characterised by having diesel powered electricity and a water supply and
where central and provincial governments and administrations are located. Informal enterprises in
urban areas are largely small scale and mainly comprise farming and fishing, retailing, small-sized
manufacturing (mainly cooking, tailoring, carpentry and handicraft marketing), repairs and
domestic work. The latter mostly involve women who work as house girls, laundresses and men
who work as gardeners.7 The number of informal enterprises (including illegal activities) is
growing following the social unrest. As more formal enterprises scaled down their operations and
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some even closed down, a lot of local people are engaging in small informal income generating
activities.
The informal sector in towns is generally characterized by certain groups of people who are
involved in informal income generating activities and micro businesses. These groups include poor
and low-income urban households seeking multiple sources of income to sustain their livelihood. A
lot of primary and secondary school dropouts are employed in such activities. Another additional
group of people is the residents of provinces who frequent Honiara to sell their market goods. It is
the general tendency, however, that they stay on in Honiara after selling their goods and get
involved in small income generating activities to try and multiply incomes obtained from market
goods, before returning home. This is more evident at present than in the past as economic activities
in the Provinces experience a more rapid slow-down than in Honiara.
Women spend more time in semi-subsistence and small income generating activities in
efforts to earn small cash incomes. However, the majority of these women received no assistance
from financial institutions in starting their businesses and is largely unaware of services provided by
the government to assist them.8 Start up capital for most women are obtained from informal money
lending schemes, relatives, and friends or from small savings made.
Wage Employment and Self-Employment
Wage employment is found both in the formal and informal sector. According to the 1999
census statistics, the various employment status for persons in paid work include: self-employed,
waged labour, family help, contract labour, and other not stated. Waged labour accounts for 36% of
the total labour force. Total waged labour for the young (14-29) is 14,107, about 46% of the waged
labour. The self-employed on the other hand, account for 23% of the total labour force, 37% of
which are young (14-29). While waged employment is greater than self-employed at the time of the
national population census, as noted above, the sector was hard hit by the social unrest. A
preliminary survey conducted by the Central Bank towards the end of 2000 revealed that nearly
8,000 employees lost their jobs in 2000 through redundancies or by being sent home on unpaid
leave. While some of these laid off workers may have been re-absorbed into other wage
employment, the majority would by now be still out of work and/or absorbed into the informal
sector, especially in semi-subsistence production.
Unemployment
According to 1999 Census Statistics, the total number of unemployed persons is 27,652
representing 32% of the total labour force 14 years and over. Young people (14–29) comprise 60%
of the total unemployed. The Situation Analysis carried out in 1998 by UNICEF identified the
burden of unemployment borne by young people had been a result of a stagnant economy and an
over-extended education system which provides them with few skills for self-employment.9 Young
people with class 6 or Form 3 qualifications have very limited opportunities of finding paid
employment. Even university graduates today find more difficulties securing jobs. The aftermath of
the peak of the social unrest in 2000, left the economy at a standstill and as Dr. John Roughan of the
Solomon Islands Development Trust (SIDT) puts it – “No economy, no employment”
In the national context, youth unemployment in the country is characterized by certain
factors including the following –
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Urbanization - the nation’s market economy is almost totally cantered in Honiara, which
draws young people. When getting to Honiara and found no paid work, they become
unemployed urban youth (‘master liu’).
Over-stretching of 'wantok system' in town. Working people are now feeling the pinch of
the effects of over-crowded households due to unemployed persons, especially young
people lodging with their relatives in town, whom could no longer sustain them with their
small incomes. * Wantok literally means One Talk that refers to people who speak the same
language. Nowadays it is a reference to a system of social organization that offers
unparalleled opportunities for children to have a sense of belonging. Kinship systems and
institutions like customary land tenure do protect Solomon Islanders from absolute poverty
or destitution. However rapid destructive changes from unsustainable resource exploitation
and increase cash demands have put a lot of pressure on the system.
Erosion of cultural values – young people are fast adopting non-indigenous values imitated
from foreign cultures as a result of exposure to western media. Inter-island marriages also
created children whom are not closely attached to either of the parents’ cultural values.
Such young people are in some cases, creating ‘new’ values that are mostly of western
cultures.
School push-outs – the highly selective system of education in the country in a lot of student
drop out in Standard 6, Form 3, Form 5, Form 6 and Form 7 as well as the selection for
further education, which are mostly in scholarship funding.
Health Issues: Young people without employment are most vulnerable to getting involved in
unhealthy activities including: Alcoholism; Tobacco and drug abuse; Mental health; Sexual
activity and social change; STDs and the issue of the sex
Juvenile offenders – more young people get into mischievous and criminal activities
because of boredom and to try and make a living;
Armed conflict – The recent ethnic tension had seen an unprecedented situation where
young people were easily mobilised to join up in armed militia groups. Such mobilisation of
young people should be promoted for good cause and not for wrong reasons.
National Youth Policy
Established in 2000, the National Youth Policy provides a framework for the coordination &
strengthening of current youth programmes & activities. It is an important instrument for the cause
of youth empowerment to become an integral part of overall development. Incorporated are
guidelines for the purpose of developing programmes in the form of a National Plan of Action for
Youth Empowerment. To date a National Youth Plan of Action has still to be formulated. The
country also does not have a centralised Youth Employment Policy.
Key Issues
The key issues summarised under the policy include the following:
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High Population annual growth rate of 3.2 % during the last decade which has now dropped to
2.8 %. There is the continuing widening gap between the country's population and its declining
economy, and thus its ability to economically sustain its people. Employment growth has fallen
while the population growth remains stable
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Inadequate education system for young people; a system which is selective and also eliminatory
pushing out a lot of young people prematurely at all levels of the education system in a lot of
instances, without the basic skills for employment & self-employment
Lack of employment opportunities for young people; where about 7,500 young people enter the
workforce each year whilst there is a declining number of job opportunities due to the closure of
major industries, limited employment opportunities within the Public service and the lesser
prospects of private sector growth & expansion to absorb job-seekers. Recent figures have
indicated that there are more young people looking for work than those engaged in work.
Human sexuality; reproductive, sexual and mental health problems; teenage/unwanted
pregnancy, prostitution, suicide, STD/HIV/AIDs. These are some of the social consequences of
youth unemployment and idleness, which is on the increase.
Crime and juvenile delinquency
Drug & substance abuse; alcohol, tobacco, betel nut and homebrew and emerging abuse in
marijuana and cocaine
Lack of self-esteem and sense of hopelessness
Changing lifestyles[social problems]
Rural to urban migration: Young people constitute the majority of people who migrate to the
urban centres for various reasons, including the search for employment and the bright lights of
town life. The urban centre offers more services and facilities that are not available at the rural
areas and villages, which attract young people.
Recent social unrest: consequential effects
Strategies
The National Youth Policy has identified the following key strategy areas to be addressed
through the National Plan of Action for Youth Empowerment.
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Culture:
Education and skills[ Vocational] training
Employment:
Religious/spiritual/moral activities
Health development
Sports & recreation
Youth Entrepreneurship scheme
Law & order
Family issues
Environment
On employment, the policy speaks of equal opportunities for all young people to train and
enter employment of their choice. It also recognises the limited formal sector jobs and therefore
seeks to encourage the development of semi-subsistence and the informal sector as the main source
of employment for young people.
Special Policies for vulnerable groups
Whilst the Youth Policy is intended for all young women and men living within Solomon
Islands, specific focus is also made on the following priority target groups.
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Young people with disabilities
Rural youth
Young school leavers
Students
Alcohol and drug users
Young offenders
Unemployed Young women & men
Street children
Young Women
Implementation
The policy document calls for an integrated and collaborative approach by all government
agencies, non-governmental organisations and other groups in the implementation of the policy
objectives. The identified implementation mechanisms to ensure a collaborative approach to service
delivery include the following with roles and tasks:
 Department of Women, Youth & Sports as the lead Department to coordinate government
efforts & initiatives & to maintain regular consultation with all departments, churches,
NGOs, youth organisations and all other stakeholders in youth empowerment.
 National Youth Congress as the lead youth organisation. Currently it is defunct and will be
revitalised and strengthened to oversee the implementation of the policy and the
programmes of the National Youth Plan of Action once it has been formulated, in relation to
those of other organisations. The NYC is also to be a "mouth piece" for young people and
represent their views and opinions to government on issues of concern to them.
 Interdepartmental consultative committee of senior government officers is also
recommended to be established, with a primary task of coordinating cross- sector policies
and programmes on youth empowerment.
The policy has also outlined decentralised mechanisms at the provincial level for
consultation and participation by young men and women, which includes Provincial Youth
councils to be established by respective Provincial assemblies. The respective Provincial Area
councils are also expected to establish Community Youth Forums, which is close to the rural
youths within the communities and villages. To serve the needs of the Urban Youth, an Urban
Youth Council is recommended to be established under the Honiara City Council. A further
recommendation is for the establishment of an Inter-agency Consultative Conference for the
effective coordination and collaboration on policies and youth programmes of all stakeholders
including the youth organisations/groups.
At the government policy levels, the above recommended implementation mechanisms are
yet to be fully established, resourced or effected. Churches and other non-governmental
organisations however have always played a significant role in youth empowerment through their
respective structures.
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Action Plans & Youth Organisations
At Present, there is missing key medium through which the national youth policy could be
realised and that is a National Youth Plan of Action. It is an important accompanying document of
the youth policy that is yet to be developed. Plans to establish one were disrupted by the social
unrest. As stated above, youth organisations and youth programmes have been in existence for
decades mostly through their existing structures. For example, the Churches have for years had very
effective youth groups as an integral part of the church structures. On the part of the government
and other stakeholders, efforts to effect programmes for young people were hampered by the
continuous lack of adequate funds, clear policy directives and an integrated national plan of action.
The Youth Policy seeks to address youth issues in partnerships with all stakeholders
including:
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government agencies,
social partners- Education & health sectors ,
civil society,
donor agencies,
international organisations,
relevant NGOs,
other Stakeholders.
Active Labour Market Policies
Supply Side: Enhancing Human Capital
Education and Training
National educational policy has consistently been a priority area for successive
governments. Thus, indicates the importance based on developing human resource for own
individual development as well as for nation-building and national development. Solomon Islands
subscribes to various international conventions that promote quality education for all. However,
while for so long education and training policies aspire to strongly develop human resources,
adequate financial provision have never been provided by the national government. Furthermore,
there is a lack of coordination between the authorities responsible for human resource development
and those responsible for the labour market. The lack of a labour market information system also
human resource management more difficult.
A recent review of National Human Resource Planning suggests among other things the
following in relation to the labour market:
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“The national, provincial/state governments and employers must make the commitment to
develop human resources as a national investment, through the allocation of adequate resources
and time for quality learning;
Human resource development need to be integrated into other human resource management to
facilitate a commitment to quality productivity and output in the national economy;
National human resource development planning recognise the role of all stakeholders which
include individuals, industries in the private sector, the public sector, representatives of civil
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society, NGOs, training providers, policy makers, employer and employees associations and the
governments and development partners in the development of national human resources.
On the same note, the Education Strategy 2002-2005, states actions in relation to the labour
market including:

Conduct national skills survey; conduct latest opportunity list; consult with province on their
training needs; award scholarships in line with skill needs; employers to contribute up to 50%
of cost of in-service training.
The foregoing aims indicate the importance now placed in the national supply side of the
labour market that should strongly pursued to meet future challenges for young people.
Non-formal Education
With the declining trend in the formal employment opportunities, non-formal education,
vocational and community education has become essential for the entire economically active
population. Three major factors gave rise to this need – population growth pressure, high drop-out
rate from primary and secondary schools and the high unemployment rate. 10 Recent reviews of
education policies and strategies for both the formal and non-formal education, place more
emphasis on non-formal education and skills training. This is in line with economic policy changes
that emphasize private sector development, disrupted by the recent social unrest. However, in order
to develop this sector, a skilled workforce is required. This in turn requires that the education sector
increases its output, but again this needs the commitment of adequate resources. A Non-Formal
Education (NFE) policy is currently being finalised including vocational and community education.
Present NFE providers provide mainly skills training, on-the-job training, specialised
training such as for handicapped children, literacy training for adults. The organisations include:
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Don Bosco vocational School;
In-house training in the government departments, semi-government organisations, private
sector;
NGOs (SIDT-LASI, Red Cross Handicapped centre, Honey Association, etc);
Willies Electrical skills centre;
SICHE vocational training;
SITAG literacy programme
Commodity Export Marketing Authority (CEMA)
Rural Training Centres (RTCs)
Except for the RTCs and a few community educational programmes. Most NFE providers
are self-financed or assisted by sources outside the government. However, even the government
grants to the RTCs are very minimal. For example, figures from the 2001 education budget indicate
only 2% is allocated for NFE Division and 6% for RTCs.
Currently, there is lack of comprehensive data on NFE in the country. The availability of
such data is essential for formulation, implementation and evaluation of sound educational policies
in relation to the demand of the labour market. NFE providers have kept some basic records of their
training programme and outputs. However, consolidating these records so as to establish a wellYouth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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coordinated and comprehensive database for purposes of integrated planning in relation to
employment opportunities in the labour market, is needed.
Because the economic growth rate has not been able to keep pace with population growth
(although the latter has declined to 2.8% from 3.5%), it is foreseeable that a very large proportion of
the future labour force must continue to seek employment in the subsistence and semi-subsistence
sectors.11 This is where NFE is vital. To seek to be competitive in the global market, advanced
skills training, especially technological skills need to be developed.
However, all involved in this process, the employers, students, DEHRD, labour office, and
so on, have limited knowledge of the exact labour market situation especially in the absence of any
employment database and clear directions of the labour market.
In recent years, job
opportunities/vacancies are becoming fewer while school leavers each year continue to increase in
number. The absence of information on supply and demand for skills makes young people face
tough choices in what studies to undertake and what careers to pursue. Such information should be
able to assist them and their counsellors in making decisions regarding transitions from secondary
to post-secondary studies, training or the workforce and to take advantage of emerging labour
market opportunities.12
According to the government labour office, there has never been any needs analyses carried
out in terms of the appropriate training to meet the needs of the labour market. As a result, priority
areas for training to meet labour market demands are difficult to identify. 13 The current approach
makes no connection between supply and demand sides. For example, the DNP and DEHRD
training needs projection for 1999/2011 by sector and industry is only 423. The majority of the
training is for social and personnel services and the lowest for construction and mining. This
projection, however, is not determined by the labour market or vice versa but rather on the
economic growth of each sector. No clear correlation is established between labour market and the
national manpower training needs projections.14
There are other training and development modes in the country that are assisting in
developing human capital for the labour market. The review of National Human Resources
Development Planning acknowledges the importance of those other modes. Thus, it sets out as one
of the principles – “training and development to cover a wide range of modes, which include but
not restricted to full time on-campus learning, distance education, professional development
seminars and workshops, on the job instructional coaching, apprenticeship, research and structured
discovery learning in the environment”.15 The review also suggests other needs that ought to be
addressed in relation to the labour market. These include:
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“National human resource development planning needs to equally focus on academic formal
training and development to address high and middle level skills, as well as on national
professional development and vocational skill development needs of industry and the rural
population. The development of school leavers and continuous development of the existing
workforce is significant;
National Human resource development planning encourage the development of skills that are
appropriate to both the formal employment and informal employment sectors, by providing the
training and development opportunities to both sectors.
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Guidance and Counselling
Guidance and counselling in terms of employment opportunities can only be effective and
influential if there is comprehensive labour market information. It is essential for guidance and
counselling workers to have a wider and in-depth knowledge about job prospects and opportunities
in the labour market. While secondary schools have within their establishments guidance and
counselling units, and the DEHRD, a Selection and Guidance Division, their tasks have been made
difficult in the absence of labour market information. Limited information on employment
opportunities is available to the guidance counsellors to adequately counsel school leavers. Invited
counsellors from employing organizations also have limited knowledge of the overall labour market
and can only provide guidance regarding job vacancies in own organisations or individual sectors.
It thus makes it more difficult for young students to grasp an overview of the whole labour market
opportunities. Their knowledge of and exposure to the world of work remains limited.
Apart from limited LMI, the guidance counsellors are themselves inappropriately placed to
provide counselling. They are mostly non-qualified workers/teachers whose guidance is provided
only as far as employment vacancies are available and not beyond. The national career’s week
usually held at the end of each year provides the opportunity for job matching and placement
between employers and school leavers.
In terms of business guidance and counselling, it is important that counsellors are aware of
their roles and responsibilities in promoting youth enterprise. The commonwealth Youth
Programme summarised the role as follows: “Youth workers are faced with the challenge of
creating a climate and environment in which young people can learn to be enterprising. Young
people must be able to develop skills, in relative safety and take reasonable risks before venturing
out on their own into real enterprise”.16
Because young people are not a homogenous group, the counselling task requires skills and
sensitivity. In the case of Solomon Islands, cultures vary across the country and even within a
province. Barriers to enterprises can therefore, be peculiar to each province. Young people should
be assisted to identify these peculiar barriers and overcome them based on their individual skills,
experience, needs and capabilities.
Currently, assistance is offered in small business advisory scheme under the DCET, and
courses in SICHE and a few private and aid-funded Start Your Business courses. However, there is
very limited access for young people because of limited intake and fee barriers. Business guidance
and counselling for young people should consider a wide range of business possibilities rather than
the common or popular business whose markets are often limited. Such venturing into new business
possibilities could create new and more job opportunities for more young people.
Demand Side: Creating Job Opportunities
Job creation and public works
Successive government policies including the current one stipulate “creating more
employment opportunities to go in line with the increase in the population”.17 On the same note,
the National Youth Policy states as one of its key strategy areas, the “equal opportunity for all
young people to train and enter employment of their choice”. The policy recognizes the limited
opportunities in the formal sector and thus “reinforces the need to sustain and further develop the
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semi-subsistence and the informal sector as the main source of employment for young people. It
also promotes the possibility of expanding employment opportunities and practicing sustainable
development of resources in rural areas to encourage young people to actively participate in the
economy and as a means to curb the great influx of youth to the capital where there are already very
limited employment opportunities. However, the policy also re-emphasises that to take this
direction, young people must be given easier access to financial assistance to get started in any
business venture.18
Economic growth, although not in itself, is necessary for employment opportunities. Such
economic growth requires boosting by investments both from foreign sources and through domestic
savings. (An environment conducive to investment must be created to retain current investors as
well as attracting new ones to increase employment opportunities), [Central Bank Report, 2000,
p.10]. The effects of by the social unrest, however, have really worsened the economic situation of
the country with the GDP in real terms falling drastically as a result of falls in all sectors except
finance.
Job prospects for youth in the information economy
Being tagged along in the globalisation process, Solomon Islands has not fully realised the
positive implications of innovations in information and communication technology (ICT) on
employment relations let alone the job prospects in the ICT economy. Apart from the national post
and telecommunication organisations which employ close to 400 people, ICT is a relatively new
introduction in the country. This reflects the very few people engaged in this profession. 1999
statistics shows a total of 33 computing professionals and 57 computer associate professionals with
10 and 12 females respectively.
Recent studies in the Pacific including Solomon Islands emphasise the great potential that
export-oriented services including ICT-based industries have in creating more job opportunities in
the country. A recent study in April 2001 on human resource development planning in the country
highlighted the importance of technological environment and ICT availability and innovation that
could have implications for: the use of electronic learning (E-Learning) in distance education as an
option along with on-campus studies; improved communication; appropriate technology; on
employment relations; in production and implications on the need to train human resources; the
speed of changes and rate of obsolescence; and the need to invest human resources into research
and development in technology.19 The country needs to heed such findings and take appropriate
action to create job opportunities for young people in this industry. Such action could include
providing a conducive and market-friendly policy environment as well as sound economic
management that would encourage investors in the industry. Some good recommendations are
outlined by the Secretary-General’s High-Level Panel on Youth Employment. SICHE is taking a
right step in planning to undertake a needs assessment of the labour market to determine what
courses to offer in 2002 and onwards as part of its scaled-down operation resulting from overall
national financial constraints. The need for ICT is hoped to be gauged from the planned assessment.
Promoting Self-Employment
The originally church established Rural Training Centres (RTC) are an important avenue for
youth in rural areas to access training and skills for self-employment purposes. RTCs offer
vocational training geared towards life-skills learning and development and are assisted by the
national and provincial governments. However, financial assistance is insufficient to sustain the
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
134
centres. The RTCs were established to provide young people with appropriate skills to work and
develop their villages and based in rural areas in the provinces.
The SICHE in collaboration with the Labour Division of the MCET and ILO offers courses,
under its School of Industrial Development, in plumbing and allied trades, electrical, light
automotive, heavy plants and drafting survey. However, the current enrolment for each does not
reach the current capacity of the programme. There is need for more promotion of such programme
and encouragement to young people to take up such courses.
Various NGOs, companies and government departments also carry out on-the-job and inhouse skills training, which some employees utilise when they leave their waged jobs and become
self-employed. The National Youth Congress, the umbrella body for all youth organisations, is
subsidised by the national government. It too had been conducting skills development training
programmes that successfully produced 760 graduates between 1994 and 1996. Since 1994, about
90% of the total graduates each year successfully took up employment in either the formal or
informal employment sector. However, there is a need for evaluation exercises to be undertaken to
determine if such training programmes have helped young people to gain decent and productive
work. Other programmes carried out by the NYC included entrepreneurial training,
leadership/discipline training. There was also a plan to establish a National Youth Entrepreneur
Scheme. However, financial constraints of the government which, was worsened by the social
unrest, had completely halted all NYC programmes.
The newly established Don Bosco vocational school also specifically target young people
for skill development training with the aim to prepare them mainly for self-employment. Besides,
Don Bosco also aims to develop young people for self-confidence building. Currently, Don Bosco
is targeting urban youths as plans to expand into provinces are disrupted by the social unrest.
While such positive steps have been taken, more vigorous action and sustained political and
financial commitment to young people are needed. The 1999 statistics showing self-employed as
the second largest group by employment status is reflective of the importance it plays in relation to
the labour market, although considerable undercounting may be the case with women whose
occasional cash income activities are sometimes classified as household duties and not selfemployed.
Entrepreneurial training and micro-credit schemes to facilitate self-employment are also
required. The Commonwealth Youth has recently started a pilot credit programme for young people
in the urban capital of Honiara through the credit unions. The project also provides training and
monitoring for purposes of expansion over the next few years. 20 The Development Bank of
Solomon Islands (DBSI) provided a similar loan scheme for young leavers of RTCs few years’
back. However, such programmes are small and started on a pilot basis thus very few young people
can access these innovative actions. Lack of finance to sustain such schemes is also a problem as
returns from such funded projects are low due to lack of management and basic bookkeeping skills.
In turn, loan repayments to sustain the schemes are poor.
Problems faced by young people in sustainable development of the rural areas and selfemployment opportunities are common across all provinces and which reflect poor rural
infrastructure – lack of shipping and marketing opportunities and credit etc. While all provinces
generally experience similar problems, the bigger provinces record more waged employment
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
135
changes/growth than the small ones. This is reflective of the different scale of economic activities in
the provinces where, the bigger ones have more activities than the small ones.
The limited opportunities to earn cash in many rural areas often encourages people,
especially young people, to move to Honiara to find work. Their remittances are an important part
of rural cash incomes. The limited formal employment opportunities in rural areas further
underlines the importance of self-employment and food security. The concern for food security has
been largely evident during and after the social unrest when, displaced people and families,
especially of Malaita origin, could no longer find amicable resettlement in Malaita thus posing
concern for their livelihood in terms of subsistence food production. Increasing the productivity of
the semi-subsistence sector and expanding the range of non-farm activities therefore can increase
the demand for rural people’s labour and consequently raise their incomes. It is critical that this
process be sustainable and supportive of food production.
A study of Form 3 leavers undertaken by the DEHRD in 1988 found that young people
prefer to live in their rural communities but with opportunities to generate income. The study also
found that they expressed a preference for self-employment and that 35% of those studied have
chosen not to seek wage employment. Of those who preferred to live in town, 30% felt the standard
of living is higher and 30% felt that their parents expected them to find a job. However, in view of
the saturated formal sector and after the experience of the social unrest, there are even more limited
opportunities for self-employment especially in Honiara. Focus must therefore be directed on
sustainable rural development with the view to create more opportunities for self-employment. The
adoption of the Parliament accepted State government system might be a right step towards
addressing this issue, but without repeating the mistake of centring economic activities in provincial
urban capitals.
Supporting Small enterprises
The National Youth Policy promotes as one of its key strategy areas, initiative to set up a
Youth Entrepreneurship Scheme as well as related advisory services provided through various
Departments that should accompany such set up. Private firms currently undertake some short
entrepreneurial training courses with some funding from donor countries. SICHE also offers
certificate and diploma in business programmes, while other young people study these on tertiary
level in overseas educational institutions.
The policy also emphasises the need to review various forms of grants, whether from the
government or elsewhere, with a view to establish policies that enable young men and women to
have equal access to such funds to start small and medium scale enterprises both in rural and urban
areas. The policy signals the direction and priority the country intends to give to the development of
its young people. However, development of sub-policies, strategies and programmes such as
Enterprise-based Youth Employment policy have been found in other countries to have re-focussed
attention on specific opportunities and problems experienced by young women and men who enter
self-employment and wish to engage in small enterprises. The Solomon Islands has yet to develop
such specific policy, strategies and programmes let alone a national employment policy or Youth
Employment policy. This absence can also be attributed to the misdirected and uncoordinated
approach to addressing youth unemployment problems and the overall labour market issues in the
country.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
136
The current economic and institutional situation is far from being conducive to creating
better opportunities for self-employment through enterprising undertakings. Factors contributing to
difficulties include:

The general business environment that is frustrated by bureaucratic procedures; shortages of
skilled local people; poor access to credit, savings, or investment capital; and insufficient but
expensive infrastructure, especially transport. Successive governments have tried with little
success, to improve infrastructure to improve rural and urban economic linkages. The structural
reform started in 1997 aimed to strengthen the private sector was disrupted by the social unrest
during 1998-2000. More research is needed to better understand the environment in which the
informal and small enterprises operate and actions that ensure development programmes meet
the needs of the informal sector.21 (PHDR,p86)
 Access to resources especially land is not easy given the complexity of land tenure system
throughout the country. Land is often a source of dispute, which makes it difficult for quick
start of enterprises. Many informal enterprises in urban areas have insecure tenure.
Commercial/ formal sites are difficult to obtain so that many operate from homes or on
roadsides or vacant land against local regulations.
 Access to finance to start up or for operating capital constrains a lot of small and informal
business enterprises.
 The legal environment is very cumbersome for growth of small businesses and hinders
transition from informal to formal enterprises. Such legal elements include – licensing,
registration, premise regulations, labour law and taxes. Their administration is often confusing,
inconsistent, frustrating and not facilitative enough for business activities.
Community development through local initiatives
Past and present efforts of successive governments to decentralise development into
Provincial rural areas have been impaired by varying factors. Some of these have already been
stated and include - poor rural infrastructure mainly transport facilities; inaccessibility of credit
schemes; poor information about market demand; high cost of transportation means because of the
scatteredness of islands.
One such effort has been the Rural Constituency Development Fund (RCDF) given annually
by the government to members of Parliament for any needed development in each constituency.
While the mechanism to disburse funds through Constituency Committees, a lot of discrepancies do
take place as RCDF are entered into Parliament members’ personal bank accounts and in most
cases they have the sole discretion to disburse fund. To date it is a contentious issue, often said to
be mismanaged and benefiting only a few as well as the members themselves. The fund is
associated by many with corruption and buying vote, as members do not often adhere to
accountability for the fund.
A lot of rural youth groups are in existence in rural communities. Most are religious-based
groups, which carry out voluntary work for communities. Some are sports-based, music groups
which when need funds would do fundraising drives. However, activities of such groups are not
enterprise-oriented, thus, cash income needs for livelihood are not satisfied. In most cases, this
situation drives young people out of rural communities into urban communities. Some rural youth
have engaged themselves in eco-forestry and tree planting for future harvesting. These efforts need
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
137
to be encouraged and sustained to expand such enterprising undertakings as well as to keep youths
back and from migrating to urban towns where limited opportunities are available in sustainable
resource development.
Urban youth groups, like rural groups are mostly religious, sports and music-based and not
undertaking enterprise-oriented activities. The results of the social unrest leave even more limited
employment opportunities and young people are getting into law-breaking activities including shop
and house break-ins and more young females involving in commercial prostitution to support their
living in town.
Supporting Private Sector Development
Before the events of June 2000, the peak of the social unrest, the government’s reform
programme embarked on three years earlier, established strong ground for optimism after years of
uncertainty and little prospects.. The programme entailed three main elements: macroeconomic
stabilisation, public service restructure, and privatisation and reform of state-owned enterprises and
joint venture companies. The macro-economic setting envisaged include “tight monetary policy
designed to contain inflation under 10% while allowing for adequate credit expansion to the private
sector to boost economic activities in the country…”22. The result was the creation of a basis for
renewed domestic investment and more economic activity by the first quarter of 2000. The
Solomon Islands economy could have therefore recorded positive developments in 2000 had it not
been for the social unrest.
The 1997 ADB Economic Report on the Solomon Islands acknowledged that support
provided for village economy through self-employment and wage employment, together with
common aspiration to wage employment, justified adapting policies that generate wage
employment and cash-earning opportunities in general. However, it identified that the missing key
ingredient in the situation in Solomon Islands is a stable macro-economic environment. To date, the
"economic plight of the country looks gloomy and very precarious both for the immediate and
medium term while the peace process remains fragile. Economic revival can only be achieved with
a strong private sector led growth". The Government as a facilitator of private sector development
has to restore fiscal balance and most importantly, restoration of investor confidence by restoring
the security situation and regain public confidence in the rule of law23.
Crucial to the rehabilitation and rebuilding process is the return of law and order and a
redirection of infrastructure and industry support services to rural areas where prospects of private
investment generating wage employment are good. Such investment includes the approved Bina
Harbour development in Malaita and the international airport development in the Western Province.
The effective use of external grants and loans where donors see evidence of responsible economic
management is essential.
Other facilitative processes for private sector development as highlighted in the CBSI Report, 2000
include:

reliable power and water supply to lessen heavy costs on private business; reasonable
telecommunication charges; full cost-recovery tariff charges; a productive and health workforce
as a basic input in the growth process; access to quality and appropriate education; technology
promotion in especially agriculture research and extension for future productivity growth;
conducive institutional infrastructure encompassing legal framework within which the private
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
138
sector and micro-economic policy environment operates; clear trade, taxation and investment
policies and procedures and stamping out outrageous volume of tax remissions, simpler access
to land for private business such as the recent initiative of the provision of the Ranadi industrial
estate private businesses. To offset relatively high labour costs and other utility charges, the
government has provided cheap access to natural resources. Also attractive incentive packages
are established for foreign investments such as positioning and security of land, import duty
concessions on capital goods are some of these incentives. However, approval procedures are
vulnerable to corrupt practices. The government needs to address tax compliance problem and
its tariff structure to ensure effective protection in some industrial input.24
Credits to the private sector were available through the Development Bank of Solomon
Islands and commercial banks, loans from which can be guaranteed under the CBSI Finance
Scheme. However, over-borrowing by the Government has halted such credit access. Credit
Unions extend credit to the rural population, however, with the current poor economy, such avenues
are no longer accessible. Besides credit, support services are inadequate. The Industrial
Development Unit in the Ministry of Commerce promoting small to medium-scale industrial
development for Solomon Islanders under an aid-funded project is suspended due to shortage of
skilled staff and lack of Government funds. The project provided technical assistance, general
business training and credit-guarantees for loans of $5,000 or less to help establish mechanical
workshops, bakeries, furniture construction and fish processing. The project should be revived as it
serves as a model for the kind of support Government should provide in the informal sector. The
Government Department of Tourism has also been provided aid-funded funds for eco-tourism
activities in the rural areas. This too, is suspended due to shortage of funds.
Only a successful tackling of fiscal crisis but first in a secured business environment, can
private investment decisions and prospect for sustained economic growth in the immediate future,
be achieved. A stable environment in all spheres, political, social and economic can stimulate
economic development. Promoting (especially agriculture) technology, public investment in
physical and institutional infrastructure and human resources development is essential to creating a
productive, complementary relationship between public and private sectors.
Matching Demand and Supply: job brokerage and placement
Public Employment Services
While the Government has Departments responsible for youth and employment related
matters, their primary responsibilities seem generally to deal with legislative and policy aspects.
There is no institutional set up within these offices or anywhere in the public service for that matter,
to facilitate job brokerage for the public let alone young people leaving schools. Job vacancies in
the public service are published in the media by the Public Service office and are open for anyone
to apply. Recruitment is made through a selection process based on merits. However, like in many
other situations, practice of nepotism is difficult to totally escape. To specifically assist young
people, there needs to be some form of set up that would facilitate job matching with young
applicants for jobs. Again, a strong coordination needs to be established by all relevant government
departments and statutory bodies responsible for youth employment.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
139
Private Employment Services
Similar to the government situation, there is no coordinating body that deals with
employment and employment seekers in the private sector. Each private business publishes its own
job vacancies mostly in the media for anyone to apply. However, the private sector, especially the
private formal sector requirements for employees at present are slightly more competitive than the
public service in that it needs more skilled and experienced workers. The present less skilled youth
population is mostly unsuitable for decent and highly paid jobs in the private formal sector. The
private informal sector is presently where a lot of opportunities for employment lie although it is yet
to be given priority attention by the government to develop. Similar efforts by other countries
around the world to institutionalise facilitation of job matching with job seekers should be taken to
assist especially young people.
Conclusions and lessons Learnt
Labour market information
There is a total lack of any comprehensive information and statistics or databank on the
labour market in the country. Scanty and isolated information that are found in various writings are
not sufficient to provide a comprehensive account of labour market issues. Thus it does not provide
a basis on which human resources planning and development can be properly made in terms of the
labour market requirements for a skilled and educated workforce. Human resource development and
manpower planning are currently the responsibilities of the government. There are no coordinated
arrangements through which planning can be done with other actors in the labour market, especially
the private sector. This is partly due to the fact that the public sector has been dominant in national
economies and until recently, the biggest employing sector. In other words, there is no coordinated
approach to matching the supply and demand sides. Government responsibilities for employment
related matters come under various departments. For example, human resource development
presently comes under the Education Department, Manpower planning under the Department of
Development planning and employment comes under the Department of Commerce, Employment
and Trade. However, there is little coordination between these authorities, let alone with
stakeholders outside the government setup.
Information on job availability, career materials and any labour market services as well as
their rights is vital for use by young people. Making such crucial information available for young
people and especially for target groups or ‘at risk’ youth such as the young women, disabled and the
unemployed that are often on the fringes of labour force, is a helpful service.25
Education and training
Although it is important to have an educated population, with the rigidity of the labour
market, it is equally vital that the education system provides training in areas/sector most required
by the general economic development to enable creation of more job opportunities. At present, the
demand is high for skilled workers and the education system should be more responsive to the
demand to produce employable labour supply. This would avoid a having an educated workforce
that does not match the labour market demand and reduce the growing number of ‘educated
unemployed’. Through effective coordination, up-to-date and relevant labour market and businessrelated information can be produced and made available for planning and development needs. The
proposed plan by the Solomon Islands College of Higher Education to collaborate with other key
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
140
players in the labour market including the private sector, to carryout labour market needs
assessment is a step towards the right direction. This would then determine crucial training
programmes to be offered, as part of its scaled down exercise, to immediately meet the labour
demand.
The current constraints to addressing issues relating to youth unemployment cannot be fully
resolved until a number of wider issues especially in the national environment, are overcome or
addressed. Recommendations based on such issues are highlighted below. Although, more actions
are needed to promote youth employment, these recommendations are considered immediate
priorities for the country to pursue in the light of the its current ability and resource constraints.
They should also be translated into realistic action plans for implementation.
 Non-formal education interventions and skills development training must be strengthened and
expanded to accommodate more school levers, including disadvantaged young people.
 Improve coordination between all relevant authorities for better manpower development
planning especially in terms of the labour market.
 Provide adequate skills training for young people to meet the requirements of the labour market.
 Develop a pool of qualified guidance and counselling workers to provide relevant advice and
monitor for young people regarding employment
 Decentralise economic social and economic development to the rural areas in the Provinces to
create more employment opportunities out there. This should curtail most problems emanating
from urbanisation.
 Create a secured law and order situation and a conducive business environment for foreign
investment as well as for local enterprises and eliminate obstacles including rigid government
procedures that hinder vibrant economic activities.
 Support and expand the private and informal sectors where more employment opportunities are
in both urban and rural areas. The importance of sustainable development of the resources must
however, be promoted.
 Establish a National Youth Employment Policy under the auspices of the overall National
Youth Policy to specifically address youth employment.
 Encourage involvement of young people in small enterprises by establishing a enterprise-based
youth employment policy framework with emphasis on initial assistance to young people
particularly in terms of accessing start-up capital.
 National policies promoting ICT for access by young people to labour market information is
important to establish. Thus it is essential that a labour market and employment database be set
up.
 Expand vocational education and training that gears towards encouraging young people for selfemployment.
 Involve young people in the decision-making process in various levels of the community to
encourage them the sense of responsibility.
 Some public and private institutional set-ups should be done to assist young people in job
searching efforts. Such institutions should be adequately equipped in terms of labour market
information about employment opportunities.
 Establish effective implementation of legislation and policies to monitor acceptable labour
standards by providing adequate administrative and financial support and through awareness
programmes.
 A wider coverage of social protection through the SINPF should be done to cover informal
sector workers.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
141
 Effective dialogue between all stakeholders, on both national and international levels is
important for a concerted approach to addressing issues of youth employment.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
142
Table 1:
Economic
Indicator
Imports
Exports
Net External
Reserve
Direct
Investment
Real GDP
Selected Economic Indicators over five over time ($ millions)
1990
1995
1999
2000
53.2 (Unaudited
accounts)
12.6 (Unaudited
accounts)
42
73.0
532.4
77.9
724.0
352.6
51.1
255.0
159.8
26.2
4.6
-89.8
7.1
0.9
6.7
(0.5)
(14.3)
469.9
Note: Exchange rates US$1.00 = SI$5.00
Source: CBSI Annual Report 2000 & Economic Report on Solomon Islands, 1997
Table 2:
Wage Employment, by gender, over time
Year
Males
Females
Total
% Male
% Female
1987
1991
1995
1999
8,980
21,524
24,754
28,382
4,052
4,502
7,413
11,114
23,032
25,933
32,167
39,496
82.4
82.6
77.0
7i.8
17.6
17.4
23.0
28.2
Source: 1999 National Census & Economic report on Solomon Islands, 1997
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
143
Table3:
Population 14-29 years, by employed, unemployed, not active in paid work, by
province, sex
________________________________________________________________________________
Province
14-29year
Total Employed
in paid work M
Total Unemployed
Total not
(seeking paid work) Males Females active in Males
paid work
F
Females
____________________________________________________________________________________________________________
Solomon Islands 57,472
14 years & over
Solomon Islands
(14-29 years)
24,933
Choiseul
Western
Isabel
Central
Rennell-Bellona
Guadalcanal
Malaita
Makira-Ulawa
Temotu
Honiara Town
1,037
5,882
1,064
1,617
54
3,042
3,687
922
492
7,136
39,761
17,711
27,652
17,957
9,695
161,223
68,813
92,410
16,591
8,342
16,760
10,341
6,419
87,792
38,708
49,085
743
4,029
748
1,118
44
1,974
2,303
609
287
4,736
294
1,853
316
499
10
1,068
1,384
313
205
2,400
528
2,046
500
477
145
2,393
6,187
1,169
1,237
2,078
316
1,257
323
304
68
1,545
3,811
748
649
1,320
212
789
177
173
77
848
2,376
421
588
758
4,238
11,610
4,257
4,551
417
13,759
26,543
7,776
3,903
11,098
1,868
5,079
1,846
1,958
214
6,297
11,093
3,547
1,581
5,225
2,370
6,531
2,411
2,593
203
7,462
15,090
4,229
2,322
5,873
_____________________________________________________________________________
Source: 1999 Population Census, SIG
Table 4:
Youth Population 14 – 29 years in the labour force
Province
Population
14 years and
over in the
labour force
Females
Males
Youth
Population 14 –
29 years in the
labour force
Females
Males
Solomon Islands
Choiseul
Western
Isabel
Central
Rennell-Bellona
Guadalcanal
Malaita
Makira-Ulawa
Temotu
Honiara Town
85,124
3,585
16,623
3,498
4,503
492
10,719
19,524
4,326
3,596
18,258
27,406
1,189
5,414
1,005
1,314
322
3,456
6,475
1,346
1,394
5,643
57,718
2,,396
11,209
2,493
41,693
1,565
7,928
1,564
2,094
199
5,435
9,874
2,091
1,729
9,214
14,761
506
26,932
1,059
5,286
1,071
1,422
112
3,519
6,114
1,357
936
6,056
170
7,263
13,049
2,980
2,202
12,615
Source: 1999 Population and Housing census, SIG
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
144
Table 5:
Population 14 years and over active in paid work, by age group 14 – 24 and by
occupation
_____________________________________________________________________________________________________
Occupation
Total population
Age group and sex
14 years & over with
paid work
14 - 24
________________________________________________________________
Total
Males
Females
Total
M
F
___________________________________________________________________________________
All Occupations
57,472
39,761
17,711
13,721
8,763
4,958
1 Legislators, Senior
2,502
2,085
417
146
94
52
officials, managers
2 Professionals
6,514
4,052
2,462
911
410
501
3 Technician & Associate
3,044
2,510
534
428
314
107
Professionals
4 Clerks
2,301
1,155
1,146
589
229
360
5 Workers in Services,
7,826
4,902
2,924
2,211
1,304
907
Shops & Markets Sales
6 Skilled Agricultural &
15,220
9,626
5,594
3,877
2,466
1,411
Fishery Workers
7 Craft & Related
7,327
5,728
1,599
1,703
1,349
354
Trades Workers
8 Plant & Machine
5,783
5,262
521
1,730
1,439
291
Operators, Assemblers
9 Elementary
6,955
4,441
2,514
2,133
1,158
975
Occupations
____________________________________________________________________________________
Source: 1999 Population Census, SIG
Table 6:
Population 14 – 29 years in unpaid work, by main unpaid activities
Main unpaid activity
Total youth population
with unpaid work
Total
M
Unpaid activities
48,842
1 Agriculture
2 Fishing and hunting
3 Craft and related activities
4.Community work
5 Unpaid activity not stated
37,314
3,501
3,691
3,588
748
670
161
90
95
21
14
F
878
25
35
88
20
Age group and sex
15-19
20-24
M
F
M
F
4,448
821
817
699
116
6,229
136
234
490
141
5,255
816
1,164
733
112
7,988
105
166
486
147
25-29
M
4,866
728
908
600
78
F
6,980
709
277
397
113
Source: 1999 Population Census, SIG
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
145
Table 7:
Population 14-29 years in paid work, by sex
Age group
Total in
paid work
Male
Female
Solomon Islands
57,472
39,761
17,711
14
15-19
20-24
25-29
261
3,855
9,605
11,212
24,933
147
2,339
6,277
7,828
16,591
114
1,516
3,328
3,384
8,342
Total
Source: 1999 Population Census, SIG
Table 8:
Population by activity status in paid and unpaid work and age.
Youth age group
Activity status in paid and unpaid work_____________________
Unemployed
Not active
Paid work status__
(seeking paid work)
in paid work
not stated_______
Employed in
paid work
Solomon Islands
57,472
27,652
161,223
2,821
14
15-19
20-24
25-29
261
3,855
9,605
11,212
568
5,080
6,395
4,717
1,732
36,169
23,881
18,839
195
717
429
405
Source: 1999 Population Census, SIG
Table 9:
Population 14 – 29 years, by employment status & percentage of total labour
force in each status
________________________________________________________________________________ _________ __
Age Group
Not employed,
Employment Status for persons working for pay
____________________________________________ ___
but looking for
Total
Self
Waged
Family
Contract
Other
not
Employed
labour
help
labour
stated
work
________________________________________________________________________________________________
Both Sexes
14
15 – 19
20 – 24
25 – 29
261
3,855
9,605
11,212
% of total
population 14 years
and over
Males as %
of total
Females as %
of total
130
1,471
2,645
3,096
67
1,573
5,672
6,795
28
342
413
386
23
332
624
646
6
71
103
123
7
66
148
166
568
5,080
6,395
4,717
37
46
49
46
41
46
60
22
32
24
40
27
30
37
15
14
25
6
14
16
23
________________________________________________________________________________________________
Source: 1999 Population Census, SIG
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
146
Table 10:
Number of households, by Selected Subsistence and marketed products &
production method
Product
Subsistence
production
Coconut
Chillie
Rice
Fish
Shellfish
47,511
4,758
5,531
40,256
25,593
Marketed
production
27,018
1,378
1,657
15,787
4,759
Production Method
Commercial
10,508
473
1,087
N/A
N/A
Traditional
15,271
806
405
N/A
N/A
Source: 1999 Population Census, SIG
Figure 1:
Formal and Informal employment for 1986 and 2000
80%
70%
Formal
60%
50%
Informal
40%
30%
Not
economically
active
20%
10%
0%
1986
2000
Source: UNDP, Sustaining Livelihood, 1997
Endnotes
1
DEHRD: Human Resources Development Planning, 2001
ibid
3
(Report of Expert Group Meeting on the post-Conflict Situation,
2000).
4
UNDP, Sustainable Human Development Report on Solomon Islands, 1997
5
ibid
6
UNICEF, Sustaining Livelihood, 1997
7
UNICEF, Situation Analysis, 1999
8
ibid
9
UNICEF, Situational Analysis, 1998
10
DEHRD, Review of Non-Formal Education, 2001
11
Donald Kundu, DDP, SIG, 2001
12
ILO, Decent Work Deficit, 2001
13
John Fotewale, Commissioner of Labour, DCET, SIG, 20001
14
DEHRD, NFE Review, 2001
2
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
147
15
DEHRD, National Human Resource Development Planning, 2001
White S & Kenyon P, Enterprise- Based Youth Employment Policies, Strategies and Programme.
17
SIG, Labour Policy, 1998
18
SIG, National Youth Policy, 2000
19
DEHRD, Human Resource development Planning, 2001
20
UNICEF, Situational Analysis, 1999
21
UNDP, PHRD, 1999
22
CBSI Annual Report, 2000
23
CBSI Report
24
ibid
25
Youth Employment in SI- Terms of Reference
16
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
148
Sri Lanka
The Sri Lankan economy liberalized in 1977, began undertaking structural adjustment
programmes and moving in general towards a more market oriented stance. The policy shift seems
to have had a positive impact on several macro aggregates. GDP growth rates have averaged around
a healthy 5 per cent, unemployment rates have fallen in spite of rising participation and per capita
incomes have doubled over a decade. But the political and social environment has been turbulent
not just with the on-going civil war but one of the country’s worst youth insurrections in the 198789 period that crippled the economy and drove the nation to a near state of anarchy. In spite of
falling overall rates of unemployment, youth unemployment remained significantly high while
youth discontent and disillusionment rode high. Following the insurrection various remedies were
sort to ease the situation. The most important in the economic policy arena was the second wave of
liberalisation that commenced in 1989, which aimed inter alia to provide greater employment
opportunity to youth. The overall impact of this policy is argued to have been quite favourable in
many respects (Athukorale and Rajapathirane 2000).
As regards trends in the labour market as a whole, several observations are worth making.
First, participation rates especially among females have increased considerably, as job opportunities
opened up in the industrial sector and in foreign employment. Woman took up the bulk of the
incremental jobs in the 1980s. This stands in sharp contrast to the 1971-1981 period where only
12.5 per cent of the new jobs created absorbed women. However, the trend seems to have waned
slightly in the 1990s and female unemployment rates have been consistently twice that of men.
Second, there was an increased movement towards the manufacturing and service sectors. This
trend was more pronounced in the post liberalised period, when employment in agriculture fell from
45.3 per cent in 1981 to 37.3 per cent in 1996. This is in spite of the jobs created in the agricultural
sector following massive investments in infrastructure immediately after liberalization. Third, the
private sector has emerged as the key provider of employment. However, the government too has
been an important job provider especially for youth, the World Bank (1999:23) observes that in
1997, Sri Lanka had the highest number of public sector workers per thousand population in most
of Asia. Finally, unemployment rates fell dramatically from double-digit levels in the ‘eighties to
single digit levels in the late ‘nineties.
Young People in Sri Lanka
Sri Lanka’s youth comprised roughly 20 per cent (3.8 million) of the population in 19971, a
majority (75%) of which reside in rural areas. The ethnic composition of the youth population
corresponds closely to that of the population as a whole. About 74 per cent are Sinhalese, 12.7 per
cent are Sri Lankan Tamils, 5 per cent are Indian Tamils and 7.4 per cent are Muslims. Literacy
rates amongst youth in Sri Lanka are high for both sexes. Indeed it was already over 90 per cent in
1981. Rural-urban disparities in this regard are slight, as are gender disparities. However, in spite
of high levels of literacy, free education up to and including university level, the proportion of
tertiary and university educated people in the labour market is very low. 2 In 1977 only 0.6 per cent
of that particular age cohort completed university study. In 1997 this figure was around 2.5 per
cent. Overall tertiary education enrolment rates (including university education) from 1980 to 1995
increased from 2.7 per cent to 5.1 per cent. On the other hand, average tertiary enrolment rates for
lower-middle income earning countries such as Sri Lanka in 1997 was around 22 per cent.
Countries such as South Korea and other newly industrialised countries have nearly 100 per cent
rate of secondary school enrolment and around 40 per cent for tertiary education in 1977 (World
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
149
Bank 2000). Statistically, therefore, Sri Lanka lags behind its peers in terms of secondary and
tertiary education. Figure 1 below shows the educational attainment for economically active youth
and the economically active population for 1997.
Employment
By and large, liberalisation has been favourable in terms of employment generation for
youth and for the labour market as a whole. However, unemployment rates amongst young people
remain high. Around 35 per cent of teenage and 30 per cent of young adult labour market
participants were unemployed in 1997. Furthermore, it is important to analyse further the nature of
the jobs created. On the one hand, the industrial distribution of young people is similar to those of
the overall workforce with agriculture being the main employer of the young, followed by
manufacturing and personal services (figure 2).
However, in spite of enjoying higher job opportunities and higher rates of job creation by
the private sector since liberalisation, much of the labour force seems to have congregated around
the lower occupational tiers, especially in industries that demand cheap labour and factory type
production. This trend seems to have risen over the decade and is true for both young people and
adults (figure 3). Moreover, evidence suggests that the earnings and the quality of employment may
have deteriorated over time. Rodrigo (2000) for instance argues that gender disparities in earnings
have risen while Gunatilake (1999) argues inter alia that working conditions have deteriorated for
employees in the new economic environment.
The occupational patterns observed amongst youth in general are vastly different to patterns
amongst university graduates. Most graduates cluster around the higher rungs of the occupational
ladder as professionals (15 per cent), technical staff (62 per cent) and clerical staff (10.8 per cent) in
1992. Graduate occupation patterns indicate a revealed preference for higher-rung jobs. It is also
likely that graduate entrants to the labour market—and those unemployed-- aspire to find
employment in the technical, professional or clerical categories. There is clear evidence about the
type of expectations a degree creates, irrespective of the quality of the skills acquired or its
functional value in the labour market. Occupational patterns amongst youth as a whole and
graduates show that there are marked differences and that attempts to solve the issues of a niche
will not solve issues of the rest of the work force. On the other hand, an insignificant proportion of
graduates are occupied as managers during the 1992-98 period compared to soon after liberalisation
in 1981 when around 9.5 per cent of graduate jobs were in the managerial positions. The situation
in 1981 seems a residue of graduate employment patterns prior to liberalisation when a degree was
considered a sufficient qualification to take up managerial roles in the SOEs. In contrast, post
liberalisation patterns of employment by occupation indicate that graduates have been in demand to
provide mainly technical services rather than managerial or professional services.
Formal vs. informal sector
As noted in Part I, classifying economic activity as belonging to the formal or informal
sector is notoriously difficult. The fundamental stumbling block is the definition of what constitutes
the informal sector. One empirically viable, but rather approximate approach is to differentiate
between formal and informal sector activity by categorisation in the labour force. The labour force
survey categorises workers as being an employer, employee, own account worker or an unpaid
family worker. It is likely that much of the workers in the first and second categories probably
belong to the ‘formal’ sector, while members of the latter types of activities, particularly the last
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
150
category, are engaged in informal sector activities. Using this definition it can be seen that over 25
per cent of the employed teenagers and 15.6 per cent of young adults seem to be engaged in unpaid
family work (with around 75 per cent of these being male). The corresponding figure for the
labour force as a whole is no more than 10 per cent in 1997 (figure 4). Around 87 per cent of such
youth are from rural areas and are educated up to the GCE Ordinary Level exam (42 per cent) or
less (43 per cent). Over 70 are male. Nearly 77 per cent of all such youth are in the agriculture and
14 per cent in construction.
If the ‘informal’ sector included both unpaid family workers as well as own account
workers, the proportion of youth engaged in probable informal sector activity rise to around 35 per
cent among teenage youth and 30 per cent among young adults. The corresponding figure for all
employed is nearly 40 per cent. Thus the percentage of youth employed in the informal sector
ranges from 15-30 per cent depending on the definition used. For all employed the range is
between 10-40 per cent. Informal sector employment therefore is not an issue particular to youth.
In fact, fewer young people seem to be involved in informal sector activity than the labour force as
a whole.
Wage employment vs. self-employment
Figure 4 above can also be used to estimate patterns in wage and self-employment. It is
assumed that the ‘own account worker’ category by and large captures those who are self employed
while the ‘employee’ category roughly captures wage earners. Using these definitions it can be
seen that a majority of youth (nearly 68 per cent on average) are in the wage-earning sector (40 per
cent of whom are female). This is 10 per cent higher than the corresponding figure for all
employed. Further, only 9.4 percent of teenage youth and 13.9 per cent of young adults are in selfemployment as opposed to nearly 30 per cent of all employed. This is probably an indication that
self-employment is often taken up as an option of last resort and is not highly preferred among
youth.
Unemployment
The most notable feature when comparing youth unemployment rates with overall rates is
that youth unemployment is almost three times as high as overall rates. High youth unemployment
has been a consistent feature of Sri Lanka for the past several decades. This is in spite of the fact
that youth unemployment rates have been falling over time, corresponding to general rates of
unemployment. It is also notable that similar to the labour force as a whole, female youth
unemployment is higher than male youth unemployment. In 1953, for instance, female
unemployment was 5 percentage points higher than male at 20 per cent, while in 1973 it was almost
double that of male at 36.4 per cent. By 1997, female unemployment nearly tripled male
unemployment rates at 19.7 per cent. Increased participation rates amongst females certainly add to
the phenomena. This pattern is evident in youth unemployment rates as well (Figure 5). Young
females suffer from significantly higher unemployment rates than do young males. The gap (to the
detriment of females) is particularly evident amongst young adults. Even though unemployment
rates between males and females have been falling over the 1990s females come up as being worse
off than males in the youth category.
It has often been argued that unemployment is high amongst ‘educated’ youth. One should
be careful about what level of education such measures refer to, for statistically, the definition of
‘educated’ does not seem to extend up to the graduate level. The bulk of those unemployed (33 per
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
151
cent) are qualified above grade 8 but less than A/L, while 23 per cent are A/L qualified (Appendix 2
Table 9b). In spite of their voice, graduate unemployment rates are generally lower than
unemployment rates for other categories at around 7.3 per cent in 1997. Thus Sri Lanka seems to
have relatively more a problem of educated unemployment where ‘educated’ pertains more to the
Grades 8 to 13 category rather than university education. Alailima (1998:33) argues that there is a
more recent emergence of vocationally trained unemployed as well, indicating perhaps that the
training received is not geared for the labour market or that the pathways from education to labour
market are not well defined.
Another feature is that youth spend considerable time searching for jobs. Amongst
unemployed teenagers, 31 per cent claim to have been looking for a job for over a year, while 4 per
cent claim to have been seeking employment for over 2 years. The corresponding figures for young
adults is 63 per cent and 28 per cent while for all employed it is 57 per cent and 30 per cent
respectively. Thus young adults in particular, incur long search periods. During this period the
main source of support is either from family (28 per cent), government-- including food stamps
(26.2 per cent), and charitable institutions (18.5 per cent).
Thus the high incidence of youth unemployment, its persistence and the long job search
time involved are all significant characteristics very much at the root of youth discontent and
disillusionment. Their frustrations are exacerbated given high levels of literacy, high aspirations for
upward mobility and white-collar employment. High levels of political activity make the
consequences of unemployment in terms of civil disorder particularly plausible as the several
insurrections indicate. What is the cause for unemployment and its characteristics? Some of these
are discussed below.
Underemployment
There have been no formal analyses done in Sri Lanka regarding underemployment. This is
mainly due to data limitations. Even the LFS data, possibly the most comprehensive and consistent
source available to analyse such trends for 1992 onwards, does not enable the calculating visible or
invisible underemployment, apart from a core group (Salih 2000b). If a very general hours-based
analysis is done one may note that as far as hours worked go, 68 per cent of youth claim to work for
over 35 hours per week, exceeding equivalent figures for all employed or graduates. Only around 9
per cent claim to work for less than 9 hours a week.
Estimates of invisible underemployment in terms of relative pay deprivation or skills
mismatch/underutilisation is almost impossible to calculate. This does not mean, of course, that
underemployment is not prevalent. Many of the jobs created for women in the industrial sector
have been in assembly work in areas such as garments, foot-ware, fishing gear, electronic assembly,
etc. It is possible that these workers—who report to have a minimum of secondary level
education—were seriously underemployed in terms of skills utilized. This may also be true for
those workers who out migrated as domestic aids. Nearly 80 per cent of them report to have some
years of secondary education (Eelans & Schamper, 1992).
National Youth Policy (NYP)
Youth issues have been on the Sri Lankan political agenda for several decades, especially in
response to significant youth uprisings and insurgency in the 1970s and then again in the late 1980s.
A special Ministry for Youth Affairs and Employment was established in 1979, taking over youthYouth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
152
oriented functions that had until then been provided as a sub-division of another Ministry. Even so,
youth programmes had never been guided by well-defined policy oriented towards youth. The
direction taken was often ad hoc and short-term in nature, focusing mainly on issues pertaining to
university graduates.
A fresh attempt has been made to draft a NYP in April 2001. The overall objective of the
NYP is stated to be ‘the creation of an environment conducive to a righteous society that must fulfil
the needs and aspirations of youth, with a view to looking at Sri Lankan youth problems from a
youth view-point and assisting in finding or evolving permanent solutions for them and making
youth the active participants in national development.’ The fundamental objective of the NYP is to
work towards integrating the youth into the social life more gainfully by its actions….The NYP
makes an effort also to clarify how adult society is readying itself to help the youth to avoid
contemporary problems and obstacles that modern day young men and woman face, and while
doing so, it also attempts to identify the responsibilities of youth.’ The end result is intended to be
improved well being of youth, self-empowerment, participation, leadership and entrepreneurship.
The NYP identifies a threefold strategy achieve its goals:
1. Addressing issues that are personal to youth, specifically health issues, societal problems arising
from gender differences, poverty and deprivation.
2. Addressing ‘structural areas’ that provide youth opportunities for participation in making social
decisions and accepting responsibilities of citizenship. These areas are noted to be a) law b)
franchise c) rights d) political participation and e) environment
3. Addressing issues that equip youth with skills necessary for entering fully into autonomous
adult life. The areas identified are education, vocational training, employment, national service
programs, sports and entertainment, media and communication, science and technology, arts,
agriculture and industry.
The youth policy also identifies certain groups as being vulnerable needing urgent attention.
The groups include disabled young men and women, young prisoners, drug addicts, those out of
parental care, those driven to ill-fame, disabled soldiers of both sexes, youth soldiers and youth in
the estates and city slums.
For the purpose of policy formulation youth are defined as those in the age group 13-30.
This is then broken further into two subgroups: 13-19 (13 per cent of the population) and 20-30
(19.5 per cent of the population).3 The draft NYP then identifies policies specific to each group.
For the first group, policies will focus on health issues, societal problems arising from gender
differences, poverty and deprivation. For the second group, policies will focus on vocational
training, employment, communication, media, law, franchise, representation and participation in
administrative bodies. Even though the NYP identifies special groups within the youth it does not
give any indication as to the nature of policies to be targeted at these.
The Draft document does not, however, raise issues particular to youth in Sri Lanka.
Moreover, the policy document is not supported by research and analysis based on the Sri Lankan
labour market for youth, their employability, incentive structures, etc. No studies have been carried
out in the areas of the labour market, working conditions, labour laws, employability, the
dimensions of employment, poverty, human capital and technology. Basically, many of the
problems of young people are economic, but no analysis has been made of the economics of youth
labour markets and employability. Insight from such analysis could help carve a clearer and more
focussed longer-term policy direction that is both effective and practical.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
153
Implementing the NYP
Although the proposal is in its initial stages, several issues that may arise in the preparation
of the action plan and implementation have been the subject of discussion.4 The first issue is as to
who will implement the youth policy and who will monitor performance. A related issue is who the
key partners of such an effort would be and how their representation will be weighted. Consensus
amongst officials of the MYA tended towards the notion that present institutions within the ministry
of youth Affairs (MYA) handle a multitude of on-going projects and programmes catered towards
youth, which meant that specific implementation and monitoring functions should be the task
assigned to a separate unit created anew. A second issue is how the responsibilities will be
delineated amongst the various partners and how exactly monitoring would take place. For
example, within the Government itself, several ministries implement vocational training programs,
credit programmes and rural development programmes that have a direct bearing on the youth or
involve them in vicarious ways. There are also numerous private sector, NGO and community
based youth programmes. All these efforts can enjoy largely positive externalities through a
network that facilitates more participation, interaction and information. The main role of a new
unit, if created, would best be one of co-ordination, facilitation and perhaps monitoring using a set
of measures as well defined as possible. The action plan itself could also focus on how to improve
efficiency of existing institutions, and creating supplements where existing programmes are deemed
inadequate.
Active Labour Market Policies
Almost all programmes directly focussing youth are at present handled by the MYA. The
MYA has various institutes under its preview working towards the improvement of different
aspects of youth welfare. These institutes together with the financial provision and proportion of
provision spent during the year 2000 are in Table 1. below. As the table shows, the NYSC enjoys
the largest provision--roughly 86 per cent of the total provision not including the Gramodaya Folk
Arts Centre. The Small enterprises Development and Career Guidance Divisions are allocated 6 and
4 per cent respectively while the Youth Employment Planning Division is allocated 2.9 per cent.
Crude estimates based on Ministry of Youth affairs (2000) information on programme
specific expenditure indicate that the highest expenditure at the NYSC is incurred on technical and
vocational training (around 23 per cent), followed by activities of the cultural division (roughly 17
per cent on youth awards for artistic talents, the national drama school, etc), career guidance and
counselling (roughly 12 per cent) and the Youth Information Bureau (roughly 9 per cent).
Apart from the MYA several other government bodies work towards youth, most notably
the Samurdhi Ministry, the Ministry of Education and the Ministry of Tertiary and Vocational
Training and Rural Industries (TVTRI). Other Ministries such as Women’s Affairs, Agriculture,
etc. all implement various programmes that area accessible to certain groups within youth but are
targeted directly at other categories such as those in poverty, women, etc.
Supply side: Enhancing Human Capital
Education and training
Currently about 13 Ministries are involved in the development and monitoring of technical
training schools in Sri Lanka. These government programmes account for about 80 per cent the
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
154
vocational and technical training provided in the area outside the Western Province (Jayaweera,
2000).
There are also numerous NGOs offering VT. The several private sector training
programmes offering VT are mostly fee levying and are concentrated in a few areas most notably in
computer-oriented subjects, secretarial courses and courses in dress making etc., which are ad hoc
and sparsely distributed especially in urban areas.
The NYSC casts vocational training in the larger framework of youth development and is
thus more holistic in its approach than other training programmes carried out by other bodies. The
NYSC also has strong political backing, residential training facilities and a network of decentralized
district offices to enable close monitoring of rural activity. It also has well-established links with
donor agencies and NGOs. Moreover, the NYSC job market information centre and the career
guidance service supplement training (ILO-Colombo, 2001). On the minus side, however, the
NYSC suffers from a certain degree of institutional rigidity affecting dynamism and flexibility of
the organization—the same types of programmes are implemented year after year leading to a sense
of lethargy in terms of monitoring for external effectiveness and quality. Moreover, the output of
trained individuals—the 1200 annual output of graduates in particular—is mainly a supply-driven
phenomenon with poor demand from the labour market. This may have serious implications to the
future credibility of the organisation’s operations, given rising discontent amongst the unemployed
graduates. There is also a geographical mismatch in terms of supply and demand: training is
provided mainly in the rural areas but job opportunities are by and large in the Western province
and urban areas. Most curricular are conventional in that they do not have a component of
substantial interaction with potential employers. The NYSC also lacks a system to monitor
efficiency and quality of training.
As for the multitude of other technical and vocational programs, the key draw back is that
the TEVT system in Sri Lanka itself is not well designed, complementary or consistent. It has been
argued in various instances that the training system is not demand driven, i.e., there are qualitative
and quantitative mismatches between what the training programmes deliver and what employers
seek. There are qualitative and quantitative mismatches especially pertaining to training delivery
vis-à-vis market demand (Jayaweera 1998). Moreover, the sector lacks effective policymaking,
planning and management leading to poor or non-existent coordination, operational inefficiency,
overlaps and duplication. Thus the internal efficiency and the external effectiveness of training
institutions and programmes are low (ILO 2001). The focus has also been one of increasing
quantity rather than quality. Exacerbating this issue is the fact that vocational training institutions
have been developed in a rather ad hoc manner often in response to incidents of youth violence and
unrest. This has had an adverse impact on the development of the sector (Jayaweera 1998).
Moreover, the sector as a whole has no long-term strategy or goal. Several of the programmes
suffer from ambiguous and at time misleading mandates and there seems to be a lack of clarity as to
target groups, programme objectives and skill levels.
Female enrolment rates in vocational training are almost equal to that of males. However,
the distribution of females within the various training programmes is severely restricted to a few
courses, often those traditionally conceived to be ‘female’ occupations. These include sewing,
weaving, dressmaking, etc. Jayaweera (2000) argues that in the 31 technical colleges women
increased from 14.9 per cent in 1973 to 40.7 per cent in 1992 and were 39.9 per cent in 1998. But
60 – 70 per cent of the women students are still enrolled in commerce and secretarial courses while
the percentage employed in technical courses has increased very slowly from 1 per cent in 1987 to
16 per cent in 1996. Therefore the increase in the number of technical colleges has not necessarily
increased female access to acquiring technical skills. But Jayaweera also observes that the key
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
155
stumbling block to opportunity for skills development is social class, rather than gender. As she
notes, the affluent middle class has more options.
Guidance and counselling
The MYA established a career guidance division in 1998 in order to ‘build up contented and
effective human resources through career guidance’. The unit aims to guide job seekers in
identifying or creating a field of employment that suits them and to assist youth to gain professional
training opportunities. Key programmes organised by the unit include career guidance services
through 32 Divisional secretary offices, awareness programmes on employment and training
opportunities held at the Divisional level and training programmes to prepare for job opportunities.
The Career Guidance Division also authors various leaflets and publications. The most significant
is the ‘Directory of Employment’ that provides a sector-wise classification of employment
opportunity, career guidance manuals and special leaflets.
The functions of the unit could be made more effective if measures of monitoring progress
were developed, including statistics on number of recipients, cost per person, nature of query,
establishing feed-back loops, etc. Moreover, programmes should be targeted at the exit level. This
would be the school level, especially between grades 8 and 10 (Ordinary Level exam classes) since
most teenage entrants to the labour market exit formal education at this point.
Given the dynamic nature of exit and entry in the labour market, an on-line directory and
information service would be useful. If events and publications are in paper form, regularity,
consistency and access are key elements that need to be enhanced. The NYSC has a newly
established large job information centre in Colombo that caters to this need somewhat. The Centre
aims to provide youth with information regarding ‘education, vocational training, business training,
etc.’ (MYA 2000:12) and 3903 youth have already registered with the Centre. However, access is
by and large limited due to geographical constraints and lack of awareness amongst youth with
regard to immediate vacancies.
The NYSC has a separate section providing counselling and guidance for youth.
Counselling services were provided mainly through 1 national centre and 10 district centres. In the
year 2000, around 4500 youth had sort assistance at these centres. Apart from this young inventors
were assisted with guidance, technical know how and finances. Programmes are also conducted to
train youth to be counsellors. In 2000, 60 men and women were trained to be counsellors.
However, this exercise used up a little over 25 per cent of the amount allocated for it. In contrast,
the ‘Political Academy’ established to train youth in political activity benefited 41 people, while the
expenditure incurred over-shot the budget by nearly 300 per cent.
Demand side: Creating job opportunities
Job creation and public works
A key vehicle of employment creation especially for the youth is via large-scale national
level programmes such as the Samurdhi. In 1997, around 36000 unemployed youth with Ordinary
Level passes were recruited by the Samurdhi programme as animators or development officers at
the village level. Around 5000 unemployed graduates were recruited as managers of the program.
Persistent government bulk recruitment as for the Samurdhi programme or as trainee teachers
accentuates and perpetuates biases in youth preferences for public sector jobs. It also helps increase
‘search’ time and creates a specific set of aspirations. As cited elsewhere, twenty years after
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
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liberalisation, over 50 percent of youth still aspire to public sector jobs. This is not surprising,
given the signals the government sends to the labour market.
Temporary income generation and employment opportunities through public works are
offered mainly by the national poverty alleviation programme Samurdhi under its rural
infrastructure development component. The target group is the poor and those in transient poverty.
However, unlike in the Maharashtrian Employment Guarantee Scheme (MES), there is a strong
element of coercion in the Samurdhi based food-for-work program. In the MES, poor people
needing assistance turn up for work whenever they need the money and are paid accordingly in cash
or kind. Thus the beneficiaries are targeted on a self-selection basis. The Samurdhi on the other
hand first selects beneficiaries for cash transfers and then require these beneficiaries to participate
in rural works. Participation, therefore, often means foregoing earnings from usual source of
employment. In other words, public works in the form of community projects in the Samurdhi
programme incurs high opportunity costs. Moreover many recipients are often left worse off once
the rural works projects have ended not only because of foregone earnings but also because microavenues of subsistence to which the poor had access before (often derived from patron-client
relationships with more affluent families, landed proprietors, etc) are disrupted.
Job prospects for youth in the information economy
Developing countries such as Sri Lanka are particularly suited for exporting knowledgebased products especially because of the low cost of labour and the availability of a large pool of
human capital. Moreover, the market is still young and offers increasing returns to scale.
Investing, building and expanding the industry, therefore, is a prudent investment for countries such
as Sri Lanka that have a large workforce and the potential to improve the productivity of the work
force.
The Sri Lankan ICT industry is still nascent with significant potential for contributing to
growth and creation of value added employment in the economy. Within the ICT industry the
demand for software development and enabling services has grown significantly during the past
decade due to local and foreign sources. Local demand increases come from initiatives to
modernise both the private and the public sectors for application software specific to industries and
organisations.5 Demand from overseas has increased mainly because of cheap labour and the
reputation the sub-continent has received so far given the thriving Indian ICT industry.
The opportunities for youth in the information economy are significant. For example in the
software development segment alone, there is an urgent need for locally developed software in Sri
Lanka since importing software to meet the rising demand has several limitations. First, there are
systemic differences between nations (e.g. legislative, practice-wise), which make the noncustomised adoption of foreign software senseless. Customising, however, is time consuming,
expensive and error-prone. This reduces the reliability of the software and delays the
implementation of projects. Second, software developers tend to rely on expatriate staff for
undertaking the customisation and adaptation of software. This denies exposure and work to locals.
Third, access to core programmes by local staff is often denied under agreements to ensure that
local developers do not understand the intricacies of the system, and to create dependence. Fourth,
most of the imported systems require the local institutions to make a huge leap into modernised
systems from primitive manual systems. This results in a disruption of operations, resource waste
and delays. Finally, most imported interactive software use only the English language. This denies
a large class of Sinhala/Tamil educated persons from competing for jobs at institutions that use
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electronic systems. Thus, there is a high demand for developing software in particular within the
country and with it huge potential for youth.
But the focus need not be software development alone. The ICT industry is a gold mine in
terms of offering a variety of job opportunities for youth. Moreover, it could contribute towards
increasing labour mobility, vertically and horizontally.
However, there are certain structural deficiencies in the economy that constrain the speed of
growth in the sector. One of the most pertinent is that there is currently no IT policy governing the
direction of the industry. Nor is there any significant research indicating market structures,
potentials, paths, etc. The Computer Information and Technology Council (CINTEC) has been
established by the government to form national guidelines for the sector, amongst engaging in other
tasks such as increasing computer awareness, performing a co-ordinating role, etc. The CINTEC
has identified several thrust areas within which to work and improve the IT sector. These areas are
HRD, e-governance (amongst the public sector in particular where activities are computerised), ecommerce, software enabling services and the development of private sector incentives,
infrastructure development. Various steps have been taken, especially in the capacity of coordinator to move in this direction. These are elaborated in the discussion below. Unfortunately,
however, the lack of a clear policy direction and commitment to that direction the full potential of
the industry may not be realised.
Moreover, computer literacy may well become a repressive device benefiting an advantaged
segment of the youth and marginalizing others. This may lead to lop-sided development
particularly in the short run. It is likely that such effects may be temporary and that a spill over
effect will eventually benefit all segments of the labour market. To minimise temporary
disadvantages, however, it is essential that the government encourage computer literacy throughout
the island, increasing awareness and penetration rates, working within the clear framework of
medium to long-term policy.
Another problem within the industry is that there are no strict national guidelines (imposed
by the state or a professional body) as to the standards and quality targets that should be met by the
local producers. Similarly there are no national standards for ICT-based education. CINTEC has
linked up with the TEVC to delimit standards that improve and make consistent the quality of
various courses offered by institutions.
Inadequate human resources in the local labour market is another major stumbling block.
At present there are very few persons in the domestic labour market who possess requisite skills and
expertise in software engineering and other ICT related areas. Most local institutions that teach
computing skills often focus on out-dated languages and operating systems that have little
professional relevance. Inadequate finances constrain the training of employees on-the-job. The
problem is compounded when trained software engineers look for more challenging and
remunerative jobs overseas. This poses the vital question as to who should bare the cost of training
and educating individuals in developing the relevant skills. The lack of qualified and recognised
teachers and trainers exacerbates the problems in HRD.
On a more positive note, however, the CINTEC has identified HRD as being vital in
developing the IT industry. At present no precise statistics are available as to the number of
professionals in the industry. A rough estimate is that Sri Lanka has about 2500 IT qualified IT
professional in industry, and that only around 10 per cent of this figure comprises those with
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graduate level education The target is to raise the number of computer professionals to 25000 in
the next 5-6 years. Towards this end, the CINTEC encourages the introduction of computer science
as a discipline at the major universities. Qualification is important especially as a screening device
in the job market. CINTEC role is in setting national standards and accreditation for the training
provided by most of the courses.
Finally, inadequacies in physical infrastructure result in congestion and limit the
construction of large interstate networks. A closely related issue is the need to build a macro
environment (both political and economic) that facilitates the growth of the industry. Experience of
the Indian software industry shows that reputation is of fundamental importance in winning
contracts in an industry where contracts are inherently incomplete (Bannerjee and Duflo 1999). A
strong element facilitating the building up of a sound reputation lies within the individual firm as
well as the general macroeconomic environment and infrastructure.
Promoting self-employment and supporting small enterprises
Promoting self employment has become a much discussed and practiced issue in Sri Lanka,
with numerous government and non-government organisation promoting this in various ways such
as improving access to credit, technical skills, guidance, advise in marketing, etc. The most
common support, however, is in terms of facilitating credit. The target group for most of the efforts
are those in poverty.
The Small Enterprises Development Division under the MYA is the key public sector
organisation that targets youth in particular. It should be noted, however that this Division accounts
for only around 6 per cent of the MYA programme expenditure and thus is relatively low key
within the Ministry agenda itself. The Samurdhi scheme is another key player offering both credit
and guidance for self-employment. This programme targets both those in poverty and youth. Apart
from these programmes private sector banks and development banks too have initiated several
schemes, of which the Gami Pubudu Programme under the Hatton National Bank takes priority.
Various public, private and NGOs are also involved in giving technical and other support to youth.
Small Enterprises Development Division of the MYA
This division, as its name reveals, focuses exclusively on promoting small-scale enterprises.
Activities carried out include one day awareness programmes and courses conducted in developing
entrepreneurship, managing small businesses, marketing and accounting, providing consultancy
services and the compilation of handbooks for entrepreneurs. Some of these functions (particularly
the training programs) are performed at the district level. In the year 2000, 680 training
programmes were conducted in 18 districts incurring over Rs. 5 million. Around 20000 young
people are reported to have participated in these sessions.
The Surathura programme
The Surathura programme is a key micro-credit programme operated by the Rural Credit
Division of the Central Bank of Sri Lanka, funded by the three participatory credit institutions: the
Bank of Ceylon, People’s Bank and the Hatton National Bank. It is targeted towards educated
unemployed youth to enable them to undertake income generating activities or a micro-finance
project. The government paid an interest subsidy of 10 per cent per annum to the PCIs to maintain
the on-lending rate of 10 per cent per annum. The programme commenced in 1996. A survey
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conducted on the performance of the project in 1997 revealed that although the target group was
educated unemployed youth, the Scheme had in fact funded relatively well-off individuals from
outside the target group. Moreover, 58 per cent of the loans had been taken to support existing
enterprises. Nearly 80 per cent of the loans had been taken to finance trading activities the balance
had been for agriculture and services. Only 39 per cent of the projects funded recorded satisfactory
loan repayment. In the light of the findings the scheme was re-designed and implemented as a
second phase in 1997/98. In 1999, the Project had financed 16 433 sub-projects to the value of Rs.
614 million throughout the island. A Central Bank based survey on loan defaulters of the project
had indicated that the key cause for default was due to the poor identification of borrowers. 6
SASANA under the Samurdhi program
Samurdhi has initiated several types of credit programmes for the poor. These include the
Small Credit Programme (SASANA) that commenced in 1995, the Accelerated Loan Animator
Scheme that commenced in 1996, and the Enterprise Development Credit Scheme (SAVANA) and the
Samurdhi Leasing Scheme that were introduced more recently in 1998. Of these programs, SASANA
uses the largest amount of financial resources annually. In 1998, SASANA loans to the value of Rs.
500 million had been granted to around 75 000 recipients. The size of loans varied from Rs. 2 500 to
Rs. 10 000 at a 10 percent interest rate. The loans have been granted to develop small enterprises.7
The main focus of this section will be the SASANA programme as it is the longest standing credit
scheme within the Samurdhi, and youth in poverty are a particular target group. The key objectives of
the SASANA programme are to make credit accessible to the poor and youth in particular so that they
can set up and sustain micro enterprises for self-employment. The loan is accessible island-wide to
over 50 per cent of the population given the scope and coverage of the Samurdhi program.8 This
implies that SASANA loans are accessible to a large proportion of youth in poverty.
The loans have been used mainly to fund itinerant trade such as the door-to-door sale of
clothes, sweets, household items, etc., and more metropolitan areas dress making and sewing (albeit to
a lesser extent than itinerant trade). As mandated by the Samurdhi Authority, no loans had been given
to conventional agriculture-oriented projects such as paddy cultivation, plantation, etc. Even though
youth in poverty are a particular target for the SASANA loan, Gunatilake and Salih (1999) find out
that most of the project holders are clustered around the 35-44 age group. Thus poorer youth do not
clamour to obtain credit via SASANA for small-scale enterprise development, in spite of is relatively
high accessibility. This may well be because self-employment is not perceived as an appealing job to
hold by youth. In fact, SASANA project holders themselves (largely in the non-youth category)
indicate that self employment as afforded by the SASANA programme was not what they had aspired
to do. It had been a last-resort option, often driven by credit availability rather than genuine interest.
The Gunatilake and Salih study shows that over 50 percent of the entire sample prefer their children to
be employed in the public sector. Around 20 percent prefer private sector employment. This
“aspirations mismatch” between what Samurdhi offers and what the poor really want poses a real
threat to the longer-term sustainability of the micro enterprises, and certainly for targeting youth for
self-employment via such a broad-based poverty alleviation scheme.
Another serious problem with credit programmes in a poverty alleviation context as argued in
Gunatilake and Salih (1999) is whether ‘the type of markets that the projects cater to can sustain the
projects in the medium and longer-term. Almost all the enterprises cater to a poor, limited, segmented
market where demand is rather inelastic. For example, a soap-maker in Eheliyagoda could market his
tissue-wrapped, homemade cakes of soap mainly amongst plantation workers who appreciated the 25
cent reduction in the price of the cake of soap compared to more popular brands of soap. Moreover,
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most of the buyers of the homemade soap had been persuaded to purchase it because it was a way of
“helping” a fellow Samurdhi recipient. It is doubtful, therefore, whether this industry could expand
beyond this segmented market, even to the less-rural areas of Eheliyagoda. This is true for most of the
other micro-enterprises supported by SASANA. Poor quality and packaging, poor marketing skills
and the lack of effective advertising (apart from attempts at moral suasion) and the lack of benefits of
economies of scale that larger manufacturers enjoy, confine these tiny businesses to very limited,
segmented markets catering to the poor. A possible implication of the nature of the markets is that the
projects may not profit and expand enough to propel its holders out of poverty. Indeed, the projects
may well cause social exclusion and increase the incidence of relative poverty.’ These results may
hold true for youth embarking on such projects as well. Catering to a niche, non-expanding, inelastic
market may well exacerbate social exclusion and restrict labour mobility rather than encourage it. So
even if youth in poverty obtained credit and commenced upon projects, it is arguable whether such
projects would be an avenue out of poverty and social exclusion.
The sustainability of the SASANA programme itself is suspect, given the high loan default rate
and the low profit margins of most projects. The expectation of some recipients of loan-forgiveness in
a government-sponsored programme only exacerbates the problem. Moreover, the SASANA seems to
have been more successful at being a measure protecting the poor rather than increase their income
generating capabilities though self-employment generation. This is particularly so when micro
enterprise credit is targeted at the ultra poor or labouring poor categories, who comprise the lowest tiers
of those in poverty. Poor youth in these tiers in particular, suffer a high opportunity cost associated
with starting up a business. Most projects have long gestation periods before returns are received. If
youth are also main income earners of the family, they are likely to trade off future income for
present income, choosing to seek, say, casual employment over self-employment projects. The
‘upper-ranks’ of the poor, namely the self-employed poor (those in self employment who work alone
or employ a few others), entrepreneurial poor (those in self employment employing five or more
people) or near poor (those in stable wage employment characterised by low earning power) are often
better targets for micro-finance. This perhaps contributes to the success of the Gami Pubudu
Programme, whose target group is the upper-end of those poor, discussed next.
Private sector initiatives in targeting credit to youth: the Gami Pubuduwa Programme (GPP)
Sri Lanka’s handful of private commercial banks generally stay away from offering micro
credit for self employment, given the high risk of default such programmes carry and high
operational costs they incur. The Hatton National Bank of Sri Lanka (HNB) is an exception to the
rule. The HNB launched the Gami Pubuduwa or ‘village reawakening’ programme in October 1989
providing an example of how a commercially profitable micro finance programme is carried out
within the operating structure of a private commercial bank. The Bank’s involvement in microfinance, however, has meant high operational costs and specialised human resource requirements. 9
These constraints also mean that expansion opportunities for such an operation are limited once a
break-even point has been reached.
The GPP provides banking services to households in rural and semi-urban areas in Sri
Lanka, geared to micro enterprise and non-farm business development. It works through GPP units
operating in 20 administrative districts through HNB’s branch network. Between 1989 and 1995
the programme had reached 12 654 borrowers with an average loan size of US $ 360 and USD $ 4.6
million in total loans approved. It has mobilised 44, 500 deposit accounts with average balances of
US $145 and total deposits of US $ 8.15 million. The scheme is implemented by 105 delivery units
staffed by 114 field offices which carry out the credit delivery and recovery facilities.
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The GPP caters to the rural entrepreneurial credit needs but has targets in particular credit
for educated rural youth, particularly school leavers and university undergraduates. It is also
interesting note that the programme was first initiated in 1989 in areas where youth unrest was
highest. So far, youth between the ages 18-25 have obtained around 20 per cent of the loans.
Females have taken around 12.5 per cent of the loans. Roughly half the customers have taken loans
to improve existing projects. The most popular sectors have so far been transportation followed by
carpentry, grocery sale and garment production (HNB 2000). The loan default rate is reported to be
very low at around 3 per cent. The GPP is more than just a credit program. It is an integrated
approach that educates its customers about product quality, marketing, budgeting and banking. The
programme also helps in coordinating, channelling technical help and organising special marketing
events and fairs. The GPP has also made institutional relationships with the Sarvodaya villagebased organisation, the SANASA federation of thrift and credit co-operatives and other NGOs
through the UNDP-CARE network of micro-finance institutions in Sri Lanka. These are invaluable
sources for information about customers and sources that assist customers with their entrepreneurial
endeavours. Moreover, the GPP has benefited from international organisations that carry out
similar ventures such as the Bangladesh Rural Advancement Committee and Australia-based
Opportunity International.
The HNB experience shows that institutional commitment, operating autonomy and a
management environment that encourages responsive procedures to enhance programme
sustainability, are vital ingredients for a successful micro finance initiative (Gallardo et.al.,1997).
Supporting private sector development.
The policy stance of the Sri Lankan Government has long been to use the private sector as
the engine of growth. Since 1994, the main elements of reform have been in terms of tariff and tax
changes, public enterprise reform including privatisation and commercialisation, attempts to reduce
the budget deficit and human resource development.10 Trade reform has lead to the rationalisation
of the tariff structure and reducing certain price distorting elements especially in the agricultural
sphere. These reforms have taken place (e.g., changes to the tariff structure) mainly because of the
political will and commitment to implement them. However, in several cases (e.g., the elimination
of quantitative restrictions on certain agricultural produce), the poor timing of the reform lead to
near-disastrous consequences. The key tax reform has been the implementation of the GST with the
aim of making the tax system simpler and more efficient. Strong political commitment has been a
key contributor to the implementation of this change in the tax system. It is doubtful however,
whether the GST is revenue neutral, given the many exemptions offered. It is also doubtful whether
the GST is price neutral (especially during the initial months of implementation) especially due
malpractices on the part of the trader, arising from inadequate public awareness campaigns.
In the case of public enterprise reform, the main obstacles have arisen from poor labourmanagement dialogue. In several privatisation attempts, the main problem had been union
resistance. This is hardly surprising, given the poor legal and policy framework currently available
to handle labour issues during privatisation. More importantly, the problems were also reflective of
the inadequacies in the exit policy of the Sri Lankan labour market (Kelegama and Salih 1998).
Matching Demand and Supply: Job Brokerage and Placement
Programmes for job placement are rare. Youth often have to rely on career guidance
services for information and guidance on jobs but access to these services is often limited for
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geographical and other reasons. In any case, these programmes at best point to possible directions
young people can investigate. They do not act as intermediaries in terms of information gathering,
processing and dissemination. Nor are these centres a conduit for job brokerage.
Job placement programmes for graduates, on the other hand, have a long history. In spite of
small numbers (around 2.5 per cent of the labour force and 1.5 per cent of all those unemployed in
1997), graduates have always been a vocal group that politicians have sort to appease. Hence
graduate placement schemes and graduate issues have always been important. Indeed, Persistently
high public sector recruitment of graduates and ad hoc solutions to graduate unemployment adds to
the tendency of graduates queuing for public sector jobs, often conceding it to be a right to be
employed in the public sector and such employment an obligation on the part of the government.
This supports the ‘queuing hypothesis’ that public sector pay policies (argued to be higher than
private sector pay), fringe benefits (e.g., job security, social status) and hiring practices skews
worker preferences towards public sector jobs and thus ‘queue’ for them.11 For graduates the pay
policy argument does not really hold as it applies mostly to low skilled and semi-skilled workers.
Instead, what is more applicable is that in the context of a repeated game, the government has built
in expectations over time that has encouraged graduates to queue for public sector jobs. This
further entrenches a possible mismatch between aspirations and skills demanded by the private
sector. The piece-meal and ad-hoc palliatives the government uses time and again, and more
recently the bulk recruitments of unemployed graduates as teachers or managers, clearly worsens
the situation.
Job brokerage deals with the issue of matching job seekers with employment opportunities.
This includes methods that open ‘pathways’ from school to work, from inactivity to activity, from
unemployment to employment, from job search to training programmes and from unproductive jobs
to decent work.
In Sri Lanka, recent attempts have been made to open such pathways. Amongst this is the
activity carried out by organisations such as Young Entrepreneur Sri Lanka, an NGO that aims to
provide young Sri Lankan citizens with experience in practical economic and business education in
the private enterprise to help them be ‘work force ready’. This NGO that was launched in 1997, is
affiliated to Junior Achievement International, a non-profit organisation financed by over 100000
businesses, foundations and individuals. The purpose of the organisation is to educate and inspire
young people to value free enterprise, understand business and economics. The organisation works
together with the Ministry of Education and Higher Education, USAID and TIPS, as well as
business organisations. The programme is carried out in three levels—elementary, middle and
senior, encompassing grades 1 through grade 13 of the formal educational curriculum. At present
schools in both urban and rural areas participate in this program. School children are encouraged to
form their own company, establish their own Board of Directors, open bank accounts under the
name of the company in commercial banks, prepare company reports, advertise, market, sell and
keep accounts. The schools-based companies are more or less miniature versions of their
counterparts in the formal business world. This hands-on experience in actual contact with the ‘real
world’ and the use of the English language to present ideas and performance reviews enables
students to be more work-force ready by the time they actually leave school. It also gives them
invaluable insight and awareness as to the options available outside wage employment or the public
sector.
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The Effectiveness of Youth Employment Policy: Lessons Learnt.
The key problem encountered in trying to gauge the effectiveness and performance of these
programmes is that meaningful performance targets and effectiveness indicators have not been
developed or defined. There are also no follow-up studies or evaluations conducted in any
systematic way. The lack of follow up and tracer studies is a significant constraint to gauging
programme efficiency and methods of improvement. Moreover, since there are no meaningful
guidelines to follow in terms of performance targets to be achieved, comparison within and across
programmes is almost impossible. Exacerbating the issues is that there is no central database or
source of information that keeps updated records of nation-wide statistics on youth, programmes
available and their costs. Thus it is very difficult to assess programme performance over time.
Furthermore, very little research has been done on the spatial variations and causes of youth
unemployment, or community (group) specific attributes constraining employability. If there were
significant variations in this regard, then an effective labour market policy would be one that
reflects this. With this caveat in mind, the remainder of this section would proceed to draw lessons
from the attempts that have been implemented so far.
Vocational training
With regard to vocational training, the key lessons are that the system has to be more
demand driven and that a clear policy for the sector (with long term goals) is needed to make
delivery more effective and less duplicative. Moreover, national standards for quality and
accreditation have to be developed and monitored. The TEVT system also needs to improve staff
quality, equipment and training quality. Certain courses need to be updated and in some cases
replaced to meet current market demands. The sector could also benefit from more research into
external and internal effectiveness. Conducting tracer studies in this regard is essential. A key
drawback constraining a comprehensive study of the services provided in the sector by the various
partners is the unavailability of an inventory of such activity and organisations.
At present, females tend to pivot around a few types of courses. Increasing awareness and
access to the more technical courses available would help females move out of being occupationally
segregated and instead be horizontally mobile.
A positive lesson learnt from the activities so far is the benefit of adopting a holistic
approach by organisations such as the NYSC in providing training. Here TEVT is delivered more
as an integrated package, which at best combines career guidance and job market information along
with various recreational activities and residential facilities if the need arises, for the trainees. The
NYSC also has well established partnerships and links with NGOs, the private sector and several
other public training providers which has the potential to make TEVT much more effective. Further
involvement with the private sector for practical exposure will enhance the quality of courses.
A principle measure to reduce overlap and duplication in programmes is to foster
partnerships within the various public sector organisations, NGOs and private sector organisations
working in TEVT.
Finally, TEVT programmes should target youth much earlier than they do at present. Most
teenage youth who opt to leave formal education do so at the Grade 8 to 10 level. School-based
training sessions and awareness programmes can by and large be a more effective way of targeting
youth than expecting youth to turn up at training centres as a last resort when all other options fail.
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Moreover, formal education and non-formal education must merge within the school curricular so
that youth entrants to the labour market will be workforce ready at the time they enter the market.
This leaves less time to be discouraged and eventually frustrated. TEVT is as much an issue of
awareness of options as it is the delivery of quality market-oriented training.
Guidance and counselling
Current efforts in career guidance and counselling are rather limited. The main way forward
seems to be to develop partnerships amongst the various service providers to build a strong national
network. This would enable youth seeking assistance to be guided and referred to more appropriate
service providers, if the necessity arises. It will also have large positive externalities through
information flows that cannot be achieved when service is provided in isolation. Career guidance in
particular could benefit from networked databases advertising vacancies and positions. An
electronic database that is dynamic in its information would be an end that is worth working
towards. Until then, career guidance units could play a strong role towards guiding youth towards
various electronic and non-electronic sources of obtaining information.
Public works
Public works are a poor source of employment in Sri Lanka even amongst those in poverty
or transitional poverty. The way it is currently operated in Sri Lanka, public works are non selftargeting leading to high opportunity costs of joining in such work and disrupting traditional
sources of earning a living. A self-targeting programme would be when the poor themselves
approach public works programmes for temporary income support as in the Maharastrian
Employment Guarantee Scheme in India. In Sri Lanka, poverty alleviation programmes such as the
Samurdhi tend to force participation in rural works. Thus, even though useful in certain one-off
situations such as a severe drought or famine, job creation through public works cannot be used in a
prescriptive fashion.
Job prospects in the information economy
The sector has high prospects especially for youth. Unfortunately there is no clear policy
guiding the sector. The lack of a national policy in terms of IT training and education is particularly
important in order to make sure that computer literacy does not become a repressive device
benefiting an advantaged segment of the youth and marginalizing others. The sector should also
define national standards to be met by service providers and trainers.
Currently the sector also suffers from a severe shortage of resource personnel, qualified
professionals and technical staff. This constrains rapid expansion. The unstable political and macro
economic conditions are another drawback affecting the growth of the sector. The information
economy is particularly responsive to these factors.
Self employment
Sri Lankan experience shows that supporting self employment includes providing support in
a vast array of factors including credit, technical skills, marketing accounting, advertising, sales and
transport facility. The provision of credit alone without providing support and guidance in these
other areas is a futile effort. Thus the best support for self-employment comes from organisations
whose approach is integrated. Moreover, regional disparities mean that a single approach to
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developing self-employment will not work in all the areas. Supporting youth in metropolitan areas
for instance requires techniques vastly different from supporting rural youth with little physical
access to a market. Thus large-scale prescriptive nation wide attempts at boosting self-employment
is not cost effective.
In terms of credit programs, those that work best (in terms of low default rates) are those
handled by loan providers other than the government. Most government credit schemes tend to be
highly politicised nurturing a culture of dependency and an expectation of loan forgiveness.
The more successful credit programmes are those whose target groups are above tiers that
are ultra-poor or are labouring poor. In other words, youth that are close to and above the poverty
line tend to fare better in self-employment projects for which they obtain credit than their much
poorer counterparts. The better credit programmes are also those that gather sufficient information
about the feasibility of the project before implementation. Better the information, lesser are the
problems of adverse selection. A rather costly but effective way of information gathering adopted
by the GPP programme was to send programme offices to selected villages, where the offices first
introduced development banking facilities to the poor, networked with the villages and various
other NGOs in the area as well as NGOs around the world who work on similar issues. The GPP
experience is a clear example that proves the effectiveness of forming partnerships and liaisons with
various stakeholders and service providers.
Increasing awareness amongst youth as to options available outside wage employment is
important, as the dominant attitude amongst contemporary Sri Lankan youth is to turn to selfemployment as an option of last resort.
Finally, self-employment works best when the economy is growing rather than otherwise. It
is also more successful when political and economic uncertainties are minimal.
Job Placement and Job Brokerage
There are virtually no job placement programmes for youth in general. However, graduates
have been the subject of various placement programmes for many decades. These programmes
have by and large been unsuccessful. This has often lead the government to engage in the bulk
recruitment of unemployed graduates (and in some cases unemployed youth) in various ways. The
dangers of such bulk recruitment into the public sector are manifold. The most pertinent to the Sri
Lankan labour market is the ‘wrong’ signals it sends to youth, entrants and those already in the
market. A Manifestation of this is that young people tend to ‘queue’ for public sector jobs,
developing aspirations that are difficult if not impossible to match. It also creates a culture of
dependency and an attitude where a public sector job is often considered a right and that such
employment is an obligation on the part of the government.
Very few programmes exist at present facilitating job brokerage. This is an area that should
receive special attention in the NYP action plan.
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Figure 1:
Economically active population and economically active youth by educational
attainment in 1997
Source: DCS(various issues-b). See also Appendix 2- Table 6.
Figure 2:
Employment by industrial category, all employed versus youth in 1997
45
40
% employed
35
30
25
20
15
10
Not defined
Personal
services
Transport,
storage and
communication
Trade and
hotels
Construction
Electricity, gas
and water
Manufacturing
Mining and
quarrying
Agriculture
0
Insurance and
real estate
5
Industrial Category
All Employed
Youth 15-19
Youth 20-24
Source: DCS (various issues-b).
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
167
Figure 3:
Employment by occupational category, all employed versus youth in 1997
Source: DCS (various issues-b)
Employment status
Figure 4:
Employment status for all employed and youth in 1997
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Unpaid family w orker
Ow n account w orker
Employer
Employee
All Employed
Employed Youth aged
15-19
Employed Youth aged
20-24
Source: DCS (various issues-a) and DCS (various issues-b)
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
168
Unemployment rates by gender for the labour force as a whole and youth in
1997
Unemployment rate
Figure 5:
45
40
35
30
25
20
15
10
5
0
Labour force as a
whole
Youth 15-19
Youth 20-24
Category
Male
Female
Source: DCS (various issues-a) and DCS (various issues-b)
Table 1:
Financial provision and expenditure of institutes under the purview of the
Ministry of Youth Affairs in 2000.
Institution
National Youth Services Council
(NYSC)
Youth Employment and Planning
Division
Small Enterprises Development
Division
Career Guidance Division
The Gramodaya Folk Arts Centre1
Financial provision in
Rs. Mn. and (US$ mn.)
Recurrent
Capital
321.7
(3.6)
10.9
(0.1)
22.2
(0.2)
15.2
(0.17)
n.a.
118.5
(1.3)
2.4
(0.02)
4.6
(0.05)
0.5
(0.005)
n.a.
Expenditure as a
percentage of provision
Recurrent
Capital
92.5 %
86.7%
-
-
94.8%
98.4%
9.8%
98.0%
n.a.
n.a.
Note:
1
Information about financial provision is not available. However, the expenditure incurred on programmes in
2000 is slightly over Rs. 1.5 million.
Source: Ministry of Youth Affairs (2000), Annual Report.
Endnotes
1
This is roughly a threefold increase on the number of youth immediately after independence in 1948. Until
1981, the growth rate of the youth population was faster than that of the entire population. However, since 1981,
growth rate of the youth population has declined, due to lower rates of fertility.
2
The formal education system of Sri Lanka follows closely the current British education system. The entire
programme lasts for roughly 13 years starting around the age of 5, with primary schooling lasting from grades 1-5, and
then secondary school education culminating with the General Certificate of Education (GCE) (Ordinary Level)
examination at the end of 11 years. Lakshman (unpublished) argues that education up to the GCE O/L qualification is
now almost a minimum required level of education sort by most employers. Two further years of schooling leads a
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
169
candidate to take the GCE (Advanced Level) examinations in 3 (or 4 up until the year 2000) specialized subjects to
qualify for University entrance. University education in the Arts, Science (physical and biological) and Management
oriented subjects usually take a minimum of three academic years to complete at the ‘general level’ with an optional
‘honours’ year, if specialization is preferred. Courses in Medicine and Engineering often take longer to complete.
Due to the recent political economic problems and student unrest at Universities, the waiting time to enter University
has increased considerably, with the issue of ‘back-log’ batches becoming a serious issue in the mid 1990s. Currently
the age of University entrance would range from 20-23, on average and the age of completing University education at a
local institute would range from 24-27. See de Silva and Peiris (1995) for more details.
3
The rationale for these lower and upper limits in age is not entirely clear. They seem to be based on
biological and social factors rather than on a legal basis such as the end of the age for compulsory schooling, etc. Thus
the age 13 for instance, roughly indicates the moving of a child into being a youth with the onset of puberty.
4
As discussed at the meeting on ‘Introducing a NYP’. See footnote 2.
5
Some of the modernisation proposals in the banking and financial sphere in Sri Lanka which interests the
Central Bank in 1998 were the introduction of a scriptless trading system in Government Securities; the introduction of
an electronic funds transfer and securities transfer system to handle domestic transactions; the introduction of a
modernised Employees Provident Fund (EPF) system in which individual employees are registered (unlike the current
system where employers are registered) and are required to carry a unique identification number until retirement or
death, whichever is early; the off-site surveillance of transactions involving foreign exchange, etc.
6
There are several other credit, micro-enterprise development and employment promotion projects operated by
the Rural Credit Division of the Central Bank. These programmes are accessible to youth, but not targeted specifically
to them. Such projects include the North-Central Province Participatory Rural Development Project (1996-2002 and
1997-2003) funded by the ASDB, IFAD, SIDA and WFP; Small Farmers and Landless Credit Project (1990-2000)
funded by the IFAD, CIDA and the Government of Sri Lanka; the Kegalle District Integrated Rural Development
Revolving Fund Project (1997-2001) funded by the Government of Sri Lanka and the Japan U-Ko Micro-Finance
Project funded by the JBIC.
7
‘Unlike the SASANA scheme the Accelerated Loan Animator Scheme is mainly meant to cover emergency
credit needs. In 1998 Rs. 45.8 million had been awarded under the Scheme. The two other initiatives, the SAVANA and
the Samurdhi Leasing Schemes were budgeted Rs. 200 million each in 1998. The SAVANA loans are meant for developing
enterprises of a larger scale than the type of projects the SASANA targets and this reflects in the size of the SAVANA loans
that range from Rs. 10 000 to Rs. 50 000. Successful SASANA loan recipients are encouraged to apply for SAVANA loans
and thus graduate onto receiving larger loans that will enable them to further develop their business ventures. The
SAVANA loan is granted without collateral at a 10 percent interest rate payable within a period of four years. Roughly
5000 loans were expected to be granted in 1998. The Samurdhi Leasing Scheme aims to provide capital assets (e.g., twowheel tractors, welding machines, etc.) to selected beneficiaries. The cost of such assets is expected to vary from Rs. 50 000
to about Rs. 200 000 and around 200 loans were to be granted in 1998’ (Extracted from Gunatilake and Salih 1999).
8
The programme targets those in poverty. Recent World Bank estimates calculate poverty in Sri Lanka to
capture around only 22-23 per cent of the population. The Samurdhi, however, being a programme cast in the political
economy of Sri Lanka, peppers its grants over 50 per cent of the population.
9
For example, the programme has village banking advisors, who are themselves given special incentives
(motor cycle allowances etc), whose initial is to promote in rural areas banking services available through the HNB and
to accumulate information on non-farm micro enterprises and small-scale business projects suitable for HNB financing
support. This is a rather tedious and specialised function of information gathering that involves high operational costs.
10
The ensuing discussion has been extracted from Salih et al. (1998).
11
Glewwe (1987) initiated this as an explanation for high unemployment in the labour market but was
criticised by Rama (1999) on the empirical tests carried out to validate the argument. The hypothesis, however, seems
to suit the case of graduate employment and unemployment patterns more than it does the labour market as a whole.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
170
Thailand
Young workers have been critical to Thailand’s economic success over the past three
decades during the period of rapid economic growth. Thailand enjoyed an average growth rate of
7.6 per cent per year between 1977-1996, during which time the agricultural share of the GDP fell
to 11.0 per cent while the shares of industry and services expanded to 40.0 per cent and 49.0 per
cent, respectively. The 1997 financial crisis resulted in a major economic contraction leading to
increased unemployment. Youth workers were severely affected by the economic slowdown. While
the quality of life of Thai youth has improved significantly after an extended period of economic
growth and relative political stability, the 1997 “financial crisis has served as a reminder that youth
remain one of the most vulnerable groups in the Thai society” (ESCAP 2000, p. 2).
Economic expansion and increased GDP per capita has lifted Thailand to the group of
middle-income countries and has resulted in overall improvements in human resources
development in terms of education and health. In 2001 Thailand ranked 66 among 174 countries in
the United Nations Human Development Index development (UNDP 2001, see also, table 1,
chapter 1 above). However, the lop-sided economic growth has also had negative socio-economic
implications such as urban-centred economic development that has caused gaps between the rich
and the poor to widen.
While the head-count ratio of poverty, based on the poverty line established by the National
Economic and Social Development Board in 1998, fell from 1988 to 1996 the trend reversed with
the economic crisis leading to a rising proportion of the population in poverty after 1998. Other
indicators such as the poverty-gap ratio and the severity of poverty index also increased in the two
years following the onset of the Asian crisis. In addition, there is a high degree of income disparity
in Thailand across regions. Over the years poverty declined at a slower rate in poor regions than in
rich areas. Average annual per capita incomes in Bangkok were reported to exceed those in the
South, the North and the Northeast by 5 to 10 times in 1988 and 1996 (UNDP 1999). The economic
crisis exacerbated these regional differences. Income disparities between urban dwellers and the
rural population have been significant (WB 2001, p. iii). Inequalities have also been reported
between the male and female workers in the private sector, with women being more likely to earn
lower wages than men.
From the perspective of youth development, these disparities present challenges for
organizations working to improve welfare and potential of youth in Thailand. Youth employment is
inevitably affected by the socio-economic conditions resulting from uneven development that can
be characterized as follows:


Growth-oriented, rather than human-oriented, economic development policy and consequent
disparity in income and access to social and educational services have contributed to
underdevelopment in terms of education and skills for youth.
Rapid economic growth has been achieved at the expense of investment in educational
institutions and skill development for children and youth, especially those in the
underprivileged classes and in the rural areas.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
171
Young People in Thailand
Thai youth account for a little less than one-fifth of the total population. As seen in Table 2,
the youth population has remained rather steady in absolute number from 11.3 million in 1985 to
11.5 million in 2000, but has been on a decreasing trend in terms of the percentage of total
population from 22.0 per cent to 18.4 per cent over the period 1985 to 2000. At the same time the
proportion of ageing population has increased rather significantly from 5.3 per cent to 9.2 per cent
over the same period. This trend accentuates the significance of youth participation in employment
to compensate for the growing numbers of retired people.
Economic activity
The Thai Labour Force Survey presents the principal activities of the population by age1.
Data for August 2000 presented in Table 3 show that for young persons aged 15-24 years, 53.4 per
cent are in the labour force with a higher proportion of young men (57.8 per cent) than young
women (48.8 per cent) who are economically active. This means that slightly less than half (46.6
per cent) of youth are not in the labour force; 42.2 per cent of young men and 51.2 per cent of
young women. Most of those who are not economically active are attending school or doing
housework. A larger proportion of young women (37.8 per cent) than young men (35.6 per cent) are
studying. Likewise, a greater percentage of young women (9.2 per cent) than young men (0.3 per
cent) are not in the labour force and doing household work. Another 1.4 per cent consider
themselves too young to be working or are not in the labour force for other reasons.
A comparison of data for municipal areas and non-municipal areas indicates that greater
percentages of youth in the countryside (56.5 per cent) than in cities (42.2 per cent) are in the labour
force. In rural areas the difference between labour force participation of young men (61.7 per cent)
and young women (51.0 per cent) is greater than in urban areas with 43.2 per cent and 41.3 per cent,
respectively that are economically active.
Labour force participation
Over half of Thai youth or 6.1 million were in the labour force in August, 2000. Youth aged
15-24 constituted 18.4 per cent of the total labour force. As Table 4 shows, there has been a
significant decrease in youth and children in the labour force in percentage terms. Child labour aged
13-14 year dropped dramatically from 37.6 per cent in 1990 to 7.9 per cent in 2000. Labour force
participation of teenagers aged 15-19 years fell from 68.5 per cent in 1990 to 34.5 per cent in 2000,
while that for young adults aged 20-24 years dropped from 86.7 per cent in 1990 to 71.0 per cent in
2000.
The drastic decline of children in the labour force in Thailand can be at least partly
explained by the Labour Protection Act of 1998, which raised the legal working age from 13 to 15
years. Child labour remains due to the fact that the Act has yet to be fully enforced. Children of
poor families still leave school after they have completed the sixth year of primary school in order
to work to supplement the family income. A study conducted by the National Statistical Office on
children and youth in 1997 indicated that the most important reasons for dropping out are: the need
to earn a living (40.0 per cent) and lack of funds for school (33.7 per cent) (NSO Report on
Children and Youth, 1997, cited in ESCAP 2000, p. 43). Fewer children are expected to join the
labour force once the National Education Act of 1999 that extends compulsory education from six
to nine years is fully implemented.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
172
Figure 1 highlights the rise in labour force participation from low levels for children and
youth to peak rates for prime ages of economic activity between the ages of 25 and 49 years.
Labour force participation rates decline for people over the age of 50. Participation of women is
lower than for men at all ages.
Employment
Table 5 shows the proportion of the population in each age group that was in employment at
the time of the August surveys during 1990-2000. For all years youth employment as a percentage
of the youth population is lower than the corresponding rates for adult population aged of 25+ year
or working ages of 15+ years. The proportion of each age group that is in employment was higher
for teenagers aged 15-19 than for young adults aged 20-24 and higher for young men than for
young women.
Figure 3 shows the decline in the proportion of youth in employment during the 1990s. The
decreasing proportion of employed youth to total youth dropped from 73.6 per cent in 1990 to 49.5
per cent in 2000. Employed teenagers as a proportion of the teenage population dropped from 65.0
per cent in 1990 to 31.9 per cent in 2000. The corresponding fall in the employment-to population
ratio for young adults was from 82.4 per cent to 66.8 per cent.
Unemployment
Youth unemployment varies in nature and characteristics from country to country. However,
there are two key features that remain quite constant in different national contexts. First, youth
unemployment rates are generally higher than adult employment rates in almost every country
where statistics are available whether the aggregate rates of unemployment are high or low.
Second, youth unemployment is closely linked to adult unemployment in that youth employment
opportunities appear to be very susceptible to shocks hitting the aggregate labour market
(O’Higgins 2001).
Consistent with global phenomenon, unemployment rates in Thailand are higher for youth
than adults, especially in times of economic hardship. The youth unemployment rates in Thailand
were consistently greater than adult unemployment rates during 1990-2000. Together with the rest
of the population, Thai youth have been hard hit by the economic downturn following the 1997
economic crisis.
During the years of tight labour markets in the late 1980s and early 1990s the
unemployment rates of young men and young women were about the same. However, during the
crisis years, unemployment rates for young men were greater than for young women. It may be that
more men lost their jobs. Perhaps women were more likely to find self-employment opportunities in
the informal sector. Or perhaps their work is more “invisible” in terms of official statistics. Men
and women who dropped out of the labour force and were not counted as unemployed. For the
labour force as a whole, participation rates for men decreased from 78.7 per cent in 1997 to 77.3 per
cent in 2000 while those of women fell from 64.8 per cent to 63.3 per cent. It is interesting the
LFPR for women in 1998 was 68.5 per cent. This may mean that additional workers entered the
labour force to earn extra income but then dropped out as discouraged workers.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
173
Figure 5 shows youth unemployment rates divided by adult unemployment rates.
Unemployment rates for youth are over three times higher than for adults. While the ratio dipped
from 4.0 in1998 to 3.1 in 1999, it rose to 4.5 times in 2000.
Unemployment rates are generally higher in rural or non-municipal areas than in urban or
municipal areas. In August 2000 the unemployment rate for youth was 7.0 per cent in cities,
compared to 6.5 per cent in the countryside. These data are for the peak season of the agricultural
cycle. Differences are greater in the off-season.
Unemployment Rates by Education
Although data on unemployment rates by educational attainment for the youth population
are not available for this study, it is instructive to look at the rates for the entire labour force. While
the overall unemployment rate in August 2000 was 2.4 per cent, the rates for persons with
vocational training at the secondary level (5.6 per cent) and tertiary level (7.3 per cent) are
significantly higher. On the other hand, unemployment rates for those with less than an elementary
education and lower elementary are much less than the average. This suggests that those with
vocational training and academic qualifications may not always find it easy to find jobs. Poor
workers with little education may not be able to afford open unemployment.
National Youth policy
Government policies for youth development in Thailand have been in place since 1963. Four
national youth policies have been formulated, generally linked to the National Economic and Social
Development Plans. Along with expansion of formal education in the country, the First National
Economic and Social Development Plan (1961-1966) emphasised better academic preparation and
vocational training for youth in order to develop middle-level human resources. Four of the twentyfour guidelines directly concerned employment issues. Other policies ranged from preventing drug
addiction to correcting undesirable behaviour.
Youth strategies reported in Perspective Policies and Planning for the Development of the
Youth (1982-2001) were the most significant policy statement prior to 2000. The plan was
promulgated in 1982 but not adopted until 1994. Policies were intended for long-term planning for
youth development over the period 1982-2001 in the areas of education, employment, morals,
government, health and resources. Specifically the strategies proposed by the report were:




Review the ability of the state to offer formal education, including provision, distribution and
extension of education both at the compulsory level and beyond.
Consider how to divide responsibilities for the cost of education among the government, the
private sector and the students on a basis of justice, equality and the greatest good for the
development of the country.
Revise programs of studies within and between each level and type so that they are more
realistic and especially in order to prepare the young to enter into an occupation and be able to
lead a good and moral life.
Consider how to use non-formal education and informal education (especially through mass
media) to help those young people, outside of the formal school system, to help themselves to
have better jobs.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
174

Reform the compensation system, whether it be wages or salaries so that it corresponds to
abilities, experiences, specialized skills or standard skills instead of using the number of years
of education as a norm.
The report suggested that more jobs be created for young people particularly in the
provinces through budget allocations from the capital to the regions. It recommended reforms in
agriculture related to the pricing system and plantation development. For the manufacturing sector
it urged the promotion of labour-intensive industry including agro-industry, weaving and
electronics with better quality control for export markets. It encouraged the development of small
and medium enterprises, since they accounted for about 80 per cent of all enterprises. The report
sought to promote manufacturing activities in rural areas. It pressed for decentralisation of the
government budget to the provincial level in order to promote the creation of jobs in retailing
services and other services at the provincial level. The report stressed the need for a commitment
by the government to develop areas outside of Bangkok and encouraged training services in nonformal education. In order to promote more productive jobs with greater income it urged planners
to identify target groups of youth to create employment opportunities and enhance vocational
training. The recommendations are included in Annex 3.
Planning and Implementation
(1) Planning bodies
Two key bodies for planning youth policies are the National Youth Commission and the
National Youth Bureau.
National Youth Commission
The National Youth Commission is chaired by the Prime Minister with a Minister to the
Prime Minister’s Office as the vice-chairperson. Consisting of representatives of ten government
agencies and eight prominent persons from the public and private sectors The National Youth
Commission has the following mandate (ESCAP, 2000):






To propose policies and recommendations on youth issues to the Cabinet.
To consider youth promotion and development plans - both governmental and nongovernmental - in line with the national youth policy.
To consider implementation measures including the coordination, follow-up and evaluation of
programmes, projects and activities in line with the national youth policy.
To provide suggestions to the Cabinet on methods to improve the national coordination
mechanism for youth, as well as youth programmes implemented by governmental agencies and
non-governmental organizations.
To report the situation of youth to the Cabinet at least once a year.
To consider youth issues upon the request of the Cabinet.
National Youth Bureau
In 1963 the National Youth Office was established under the National Research Council in
the Office of the Prime Minister to serve as the focal point for research on youth issues. Since its
inception the National Youth Office has changed its name and status through a series of
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
175
governments and constitutions. In 1973 it was upgraded to departmental status and became known
as the National Youth Bureau under the Office of the Prime Minister.
As a department under the Office of Prime Minister, the National Youth Bureau comprises
seven divisions. Among them are the Youth Policy and Planning Division, the Youth Promotion
and Development Division and the Training Division. The official roles of the National Youth
Bureau are:









(2)
To implement the measures of the National Youth Commission.
The follow-up and evaluate the implementation of the national youth policy, plans and projects.
To act as a central coordinating body for youth work and activities and to disseminate
information about youth.
To compile studies and research on youth.
To develop plans and projects on youth development.
To prevent and address youth problems.
To initiate, support and promote beneficial youth activities.
To train youth officers.
To support youth activities - both governmental and non-governmental.
Legal and policy framework
The legal and policy framework for youth issues includes the Occupational Training
Promotion Act of 1993, the Constitution of 1997, the Labour Protection Act of 1998 and the
National Education Act of 1999.
Occupational Training Promotion Act of 1993
The Occupational Training Promotion Act of 1993 is aimed at upgrading skills of workers
in order to increase productivity. The Act encourages on-the-job training through cooperation
between employers of youth and institutes for training. It seeks to reduce the mismatch between
human resources development and labour market demands (ESCAP 2000, p. 85.).
Constitution of 1997
In addition to protecting human rights and personal freedom the Constitution of 1997
stipulates that the state must provide free educational and health services for youth, ensure gender
equality, create employment and guarantee a living wage and adequate income for self-sufficiency
(ILO-EASMAT, 2002, annex 2).
Labour Protection Act of 1998
The Labour Protection Act promulgated in 1998 is in line with the Eighth Economic and
Social Development Plan and the Constitution of 1997. The Labour Protection Act provides legal
measures to safeguard the rights of workers under the 18 years age and female workers. Under
Section 15 the Act stipulates that employers must provide equal treatment of men and women.
Section 16 prohibits sexual harassment of women and children. Under the Act employers must
abide by regulations related to working hours, holiday periods, overtime work and rest periods.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
176
The Act prohibits labour of children under 15 years of age. Additional rules and restrictions
apply to employees below 18 years of age. The Act requires that they be registered and that
authorities be regularly informed about their employment status. Employers are prohibited from
assigning night work and jobs involving hazardous substances and heavy machinery to those under
18 years. They are also prohibited from working in dance halls, gambling dens, slaughterhouses
and establishments offering sexual services (ESCAP 2000, pp. 84-85).
The Labour Protection Act provides additional rights to youth under 18 years. These youth
can take paid leave for up to 30 days to upgrade their skills. They must be paid directly rather than
through parents or guardians. There are also regulations affecting female workers including young
women. Employers are prohibited from assigning hazardous tasks such as working underground or
on scaffolding. Pregnant workers are not to perform tasks that endanger themselves and babies.
Women cannot be terminated due to pregnancy. Women who are pregnant may request a change in
duties.
Education Act of 1999
The National Education Act of 1999 is the first comprehensive legislation to promote
education aimed at developing the full potential of the Thai people through creating awareness and
knowledge in the areas of political processes, democratic governance, human rights, local wisdom,
environmental preservation, individual self-reliance and enhanced creativity through self-instruction
and lifelong learning (ESCAP 2000, p. 30). Most Articles of the National Education Act of 1999
are relevant to youth especially those that specify the duration of education (Articles 10, 11 and 17).
These stipulate nine years of compulsory education and oblige the state to provide twelve years of
education free of charge (EASMAT, 2002, annex 3).
(3)
National policies
National policies for youth employment are generally linked to the National Economic and
Social Development Plans and the current policies of government administrations.
Eighth National Economic and Social Development Plan (1997-2001)
The Eighth Plan was never fully implemented due to the economic crisis. It introduced
strategies to develop the full potential of people, to ensure their capacity to adjust to changing
circumstances in order to maintain a satisfactory livelihood, and to participate fully in sustainable
economic and social development (National Economic and Social Development Board, 1991, pp.
11-12). Under the Eighth National Economic and Social Development Plan strategies were
designed for children and youth dealing with human potential, suitable environment, management
and administration, research and assistance to children in special need.
Children and youth suffered from inadequate services resulting from reduced budgets due to
the economic crisis. In addition they were affected by the impact of the unemployment of their
parents. During the reformulation of projects after the onset of the crisis government agencies
assigned a high priority to safety nets. Some of the projects created job opportunities for young
people and provided financial support to education and development for deprived children and
youths. This included efforts to protect the rights of the child and to promote sustainable
development. Such projects would be considered consistent with the child and youth development
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
177
plans prepared for integrated development outlined in the report on Perspective Policies and
Planning for the Development of Youth (1982-2001). (National Youth Bureau, 1998, p. 4).
A list of 24 projects was identified for youth employment under the Eighth Plan. Among
them were guidance for graduates, pre-employment training for special groups, occupational
training outside of the school system, training for detainees, rural youth development, training for
agriculture, development of agricultural youth groups, non-formal education, government support
for garment workers, special funds for skills development, training programmes in private schools,
occupational training in Bangkok community colleges, new science centres, textile weaving for
young people, non-formal education for youth, occupational training in rural areas, promotion of
SMEs, job fairs, occupational training for young people in the private sector and development of
information technology for the Department of Skill Development. Many of these projects were
implemented during the economic crisis.
Ninth National Economic and Social Development Plan (2002-2006)
The Ninth National Economic and Social Development Plan (2002-2006) has five major
strategies for human development (National Economic and Social Development Board, 2001, pp.
40-48):





Improving the human resources by understanding threats and opportunities from changes in
order to adapt accordingly through improvement of health and educational systems to be more
flexible as to serve individual needs. It also aims to improve standards of skills of the Thai
people through various forms of training and networking to be more consistent with the changes
in production and technology.
Promoting self-employed persons and entrepreneurs of small enterprises, increasing
employment through more off-farm activities, encouraging overseas employment, and
developing labour market information technology as well as relevant labour market indicators.
Increasing efficiency of the system of social protection through improvements in social security
management and improving social safety nets for the poor and the underprivileged.
Improving the system to prevent and solve the problem of drugs as well as to improving the
management system of security in life and property of the people.
Promoting the roles of family, religious organizations, communities, non-government
organizations, volunteers and mass media to participate in the human development effort.
Government policy of the Taksin Administration
Government policy of the Taksin administration promotes youth employment through its
labour development. The overriding goal of government policy is economic recovery. Specific
policies have not been identified for youth employment. However, five policies for labour
development outlined by Prime Minister Taksin should improve the employment situation of young
people:

The government will encourage the private sector to participate in skills development of
workers in order to increase labour quality and standards. The government will provide
monetary and financial support to develop the skills and flexibility of workers in order to
respond appropriately to the needs of enterprises for each community. Workers should be
compensated by fair wages in order to provide adequate incentive for them to find employment
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
178




within their own communities. This will address the problems of migration and unemployment
at the same time. The quality of life of people in each community will be improved at the same
time.
The government will promote social security measures and enlarge social welfare services for
workers to improve protection of both formal employees and informal workers. There will be
health, safety and environmental protection within each firm. Special protection will be
provided to women and youth.
The government will promote the system of labour relations such that all relevant parties are
involved in the processes of problem solving, development issues and labour protection in a
way that is just and effective.
The government will protect Thai workers overseas from being exploited by their placement
agencies and employers.
The government will adopt appropriate measures for foreign workers in Thailand. Such
measures will take into consideration of the demand for labour in the private sector, the question
of internal security as well as develop local skills to meet urgent demand.
Government policies will affect young women and young men together with other workers.
They are generally aimed at improving employment in rural areas through increases in non-farm
activities as well as appropriate measures in dealing with immigrant workers and increasing the
numbers of skilled workers in the areas that are in short supply. The policy instruments designed to
support these policies are to promote a key product of one tambon for one product. Financial
support of one million baht will be provided to each village as an investment loan for villagers.
Illegal immigrants are encouraged to be registered openly by their employers in order to avoid illicit
activities by both government officials and the workers themselves. Finally, manpower that is in
high demand but short supply such as information technology and other specific areas of science
and technology will receive special encouragement from the government through higher education
and private organizations to jointly improve the quality of such manpower.
Active Labour Market Policies
Supply-Side: Education and Training
Department of Skill Development (DSD)
With 43 skill development agencies under its auspices, the Department of Skill
Development is directly in charge of skill development of Thailand’s labour force. DSD operates
one Central Institute for Skill Development, 11 Regional Institutes for Skill Development, and 31
Provincial Centres for Skill Development, and plans to establish the Provincial Centre in every
province. The main responsibilities of the DSD are as follows: Hasten manpower planning to
correspond to the Master Plan for Industrial Restructuring.




Develop the labour force for domestic production and international markets
Create skill development information systems at all levels for the manpower planning in the
private sector as well as for public employment.
Provide economic incentives and improve legal measures to encourage the private sector to
participate in skill development.
Increase cooperation in skill development among national stakeholders and at international
level.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
179
The operation of the DSD involves four key skill development activities: vocational
training; occupational skill standards promotion; personnel development training; skill development
promotion. During 1995-2000 DSD has provided vocational training services to approximately
200,000 trainees per year.
Vocational training in the Department of Skill Development is divided into three
programmes in its standard training system: (1) pre-employment training; (2) skill upgrading
training; and (3) training for self-employed persons.
(1)
The Pre-employment Training Programme provides basic skill training in various
professions for male and female job seekers aged 15-30. Generally, training courses provided
include two components – centre-based training courses which last 2-10 months followed by inplant training at private enterprises for 1-4 months. Centre-based training is generally provided for
new entrants into the labour market, disadvantaged groups aged 15 or over and educationally
disadvantaged youth aged between 13-15 years who have left school at the primary level and lack
an opportunity to continue in the formal educational system. Community-based pre-employment
training courses are also provided to specifically targeted groups including unemployed persons and
laid-off workers, agricultural labour in the off-harvest season, soldiers, prisoners and children and
youth in juvenile institutions.
(2)
The Skill Upgrading Training Programme offers training courses of various skill areas to
those already in the labour force aged 15 or over. As a rule prospective trainees already have basic
skills in the chosen area and must have completed secondary school. This programme is designed
to provide advanced skills for workers to participate effectively in the labour market and to enhance
their careers prospects. The course duration typically ranges from 18 to 60 hours.
(3)
The Training for Self-employed Persons Programme provides training to those who have
professional knowledge and plan to set up their own business. Training courses such as those in
management, law, ethics, taxes, credit, accounting, budgeting and marketing last about two weeks
or 60 hours.
The DSD’s training courses provide primarily industrial skills such as auto repairs, plant
mechanics, welding, and construction. More recently skills for business and services have been
introduced into the curriculum. Training is provided for skills used for hotels, restaurants,
computers and offices. The emphasis is more on practical applications rather than the theoretical
issues for trainees without work experience.
During recent years the DSD has developed strategies to promote private sector involvement
in skills development by encouraging cooperation between private enterprises and educational
institutions. Under this arrangement students at educational institutions obtain hands-on experience
in private business. At the same time workers in the private sector gain access to additional training
at educational institutions or government vocational training centres.
Tax incentives have also been used to promote business participation in skills development.
Private enterprises registered as training providers under the Vocational Training Promotion Act of
1996 are entitled to certain privileges, including 50 per cent income tax deduction for training
expenses. Financial incentives have also been given to private enterprises that wish to establish
skills testing for work overseas. Skills testing is also encouraged for private vocational training
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
180
institutes. Private enterprises can apply for low-interest loans from the DSD to establish or expand
training programmes in skill fields that are in high demand.
From 2001 the Department of Skill Development has undertaken some skill development
programmes. These include the following:
(1)
National manpower coordination. The DSD began formulating an operational plan for the
master plan of manpower development for production and services industries in Thailand 20002006. The operational plan is sub-divided into two periods. The first period (2000-2001) is the time
to assemble operational plans from various agencies and adjust them to be consistent with the
master plan and common usage of existing resources. The second period (2002-2006) will be actual
execution of operational plans for the master plan. The DSD has coordinated with Ministries of
Public Health, commerce and foreign Affairs in formulating the plans to promote business activities
through specific skills formulation in five areas. These skill areas are Thai cooking, child and
elderly care, Thai traditional medicine and patient care.
(2)
Improved efficiency of skill development process. The DSD has introduced new materials
into the training curriculum for job seekers without work experience. The new subjects include
English courses, self-employment training, computer skills, career visions and industrial habits.
There has been an improvement in moving from an older system of time-based training to the new
one of competency-based skills training. This new system will provide opportunities for trainees to
improve themselves in order to meet the skills standards.
(3)
Skills development for the stimulation of the Thai economy in 2001. The DSD has organized
a project to develop training for e-commerce and management for those who are unemployed and
laid-off as well as those earning less than 10,000 baht per month with a bachelors degree or higher
and those with basic computer skills.
The DSD faces a number of challenges including a lack of coordination among various
bodies that undertake training programmes. Trainees in pre-employment training generally have a
weak educational background. School drop-outs are not easily trained to be skilled workers.
Efforts should be continued to promote training in the private sector (ILO, 2000).
Despite integrated strategies and targeted programmes for youth employment the number of
young people benefiting from programmes is small compared to the dimensions of the problem.
The Department of Skill Development counted in its vocational training programmes 274,457
trainees in 1999 and 189,178 trainees in 2000. Vocational trainees in the training centres of the
Department of Public Welfare numbered 8,486 in 1999 and 7,154 in 2000.
From a gender perspective the courses are not always friendly to women, especially those
provided by Department of Skill Development that has traditionally provided heavily male-oriented
skills training such as automotive mechanics and other heavy industrial skills. New courses
provided to promote women's participation tend to be low-level skills and traditionally “female”
skills such as sewing, cooking, hairdressing, hotel maids and office assistance. The vocational
training services provided by the main governmental vocational training agency that aims at
servicing youth outside of the formal school system caters more to the needs of the males - new
entrants and experienced workers. The 2000 figures indicate that only 37 percent of all trainees in
the DSD training system were female, and only 25 percent of the standard, centre-based preYouth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
181
employment training, whose beneficiaries include largely teenagers and young adults, were female
(Busakorn, 2001).
As a result, Thai women and girls have had limited access to skills training within the DSD
vocational training system. While its seven welfare and vocational training centres located in all
regions in the country have reached a segment of disadvantaged women and girls, the training
capacity is very small. The DPW system has provided training services to only several thousand
disadvantaged women and girls a year, compared to about 200,000 a year under the DSD system.
Moreover, skill selection in the DPW training system is limited, largely confined within the
traditionally female and low-skill areas such as handicrafts and services. This is partly the result of
institutional limitations: (i) the DPW lacks the necessary budget, expertise and mandate to provide
vocational skills training on a comprehensive scale; and (ii) the objective of DPW is to provide only
elementary job skills in order for its clients - who require many social services - to survive at the
subsistent level (Busakorn, 2001).
Gender disparities in vocational skills training have been recognized by vocational training
agencies. Initiatives to encourage women’s participation in skills training have been created within
the DSD, largely by (i) adding new courses deemed suitable for females to existing list of skills
training curriculum, and (ii) introducing special project targeting women and girls of disadvantaged
backgrounds (Busakorn, 2001). A 30 per cent target has been set to increase women’s participation
by 2002 in institution-based pre-employment training programme. This target is part of the
department’s loan agreement with the Asia Development Bank.
In 1998 Department of Skill Development with funding from the Asia Development Bank
established the first women-oriented training centre in Chiang Mai Province later known as the
“Women’s Friendly Centre” (WFC). The Chiang Mai WFC provides tailor-made vocational
training courses aimed at providing women with skills to meet the changing requirements of labour
markets. The Chiang Mai WFC is considered by the DSD to be a “best practice” training facility
for women.
Department of Public Welfare (DPW)
Through its 75 provincial and 169 district public welfare offices nationwide, the Department
of Public Welfare provides social welfare services including job training to the disadvantaged and
impoverished population. The DPW views vocational training as a key part of its services that will
help its clients move towards the goal of self-reliance. The target disadvantaged groups coming
under the DPW’s remit are as follows:








Disadvantaged children and youth aged under 18 years
Marginalized elderly aged over 60 years
People with disabilities
Marginalized women
Disaster victims
Ethnic groups (largely identified as members of hill tribes)
Homeless people
Impoverished families
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
182
While the DPW provides social services to several groups of the disadvantaged clients listed
above, its seven welfare and vocational training centres for women largely cater to young girls aged
from 13 years into their twenties. This is because part of the DPW’s mandate is to protect the
welfare of disadvantaged groups. Vocational training is provided to girls and women as a
preventive measure against female migration into Bangkok or large cities and to discourage girls
and women from entering prostitution.
Training duration is six months for standard centre-based training courses and ten days to
one month for short-term courses. Standard training courses include entry level skills such as for
barbers, beauticians, electricians and plumbers. New courses have been added such as for computer
services, hotel services, office assistance, traditional Thai massage and child and elderly care.
During the 1990s the DPW provided services to 2,500-8,500 trainees per year (Busakorn, 2001).
Department of Vocational Education (DOVE)
The Department of Vocational Education (DOVE) has a wide coverage and broad network
for providing vocational education. It has a Dual Vocational Training Project for apprenticeship
training. It also provides equivalent general education at the elementary and secondary levels. A
number of problems were identified by the Country Employment Policy Review (CEPR) including
the fact that many courses are bridges to higher levels of training rather than direct routes to jobs.
Services for guidance, counselling and placement are limited. According to the CEPR there is
insufficient coordination of the DOVE services with other vocational education and training
providers. In addition, existing national occupation skill standards have no linkage with the
curricula of DOVE, hence lessening the effectiveness of the skill recognition system (ILO 2000, pp.
64-65).
Department of Non-Formal Education (DNFE)
The Department of Non-Formal Education (DNFE) in the Ministry of Education provides
three major tracks of education general education, vocational education and self-educating
activities. Vocational education is the most relevant to youth employment. Within the vocational
track there are four different training programmes (Department of Non-Formal Education, 2000, pp.
12-13):
(1)
Short courses in occupation training. The main purpose of short courses is to train for selfemployment that may eventually lead to wage employment. Among the skills offered by the DFNE
are mushroom growing, food processing, electrical repair, haircutting, welding and repair for
bicycles, motorcycles, radios and television.
(2)
Training for specific occupational groups. This training is aimed at groups of people who
want to find additional work in order to supplement family income or to form a community
business. The basic requirement for the training programme is that groups of fifteen persons or
more identify a common interest in a specific occupation. The total training period is within 30
hours. One trainer is provided by DNFE while the group must be responsible for the costs of all
training materials.
(3)
Certificate programme for occupations at the lower secondary education level. This
programme is aimed at those with a complete primary education (at the level of grade 6) who wish
to continue their education up to the lower secondary level. The main purpose is for the students to
generate some income while learning from their existing vocational experience. After completing
all the requirements, students receive a lower secondary education certificate.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
183
(4)
Vocational certificate of the non-formal education programme. The programme is designed
for those with a lower secondary education certificate who want to continue to a higher level of
vocational education and are currently employed by using some vocational skills. It is intended to
upgrade vocational skills as well as academic credentials without trainees losing an opportunity to
work for their own living. The certificate is equivalent to that of the upper secondary level in the
vocational track. Among the occupational skills offered are computing, management, English and
services for businesses; care of children and the elderly; training for hotels, tourism, electronics,
ceramics, mechanics and agriculture; food processing and engine repair.
The Department of Non-Formal Education normally aims at providing educational
opportunities to those who have not been able to do so through a formal educational channel.
Trainees are generally from poor families. It may be argued that certificate programmes provide
better credentials as well as improved skills but do not necessarily help generate employment
opportunities for young people. Short courses for vocational training might be identified as “best
practices” for youth employment insofar as they promote self-employment among rural youth. The
Department of Skill Develop does not focus on rural areas. The main target group for the second
type of DNFE training is for adult women in the rural areas. Nevertheless, additional employment
or income generation of any group will indirectly benefit young people as well.
Other Government Training Programmes
Other government departments provide short-term training courses. The Department of
Community Development and the Offices of Accelerated Rural Development in the Ministry of the
Interior provide training for youth. The Department of Agricultural Promotion with the Ministry of
Agriculture and Cooperatives provides training opportunities to young farmers (ESCAP 2000, p.
86).
Demand-Side: Promoting Self-Employment and Small Business Development
Department of Industrial Promotion (DIP)
The Department of Industrial Promotion is the main institution involved in the development
of policies and programmes for micro and small enterprises (MSEs) and small and medium
enterprises (SMEs) in Thailand in line with National Social and Economic Development Plans,
government policies and economic conditions. It is charged with developing policies to enhance
capacity and provide training for SME development. Key priorities are management skills and new
technology to enhance enterprise productivity and achieve international standards. The DIP has
provided assistance for training, information, research and extension services. The DIP also
supports rural-based cottage and handicraft industries. The Institute for SME Development also has
responsibility for training and consulting. An SME Development Committee has been established
to coordinate and monitor policies for SMEs in Thailand (ILO 2000, pp. 28-29).
Matching Demand and Supply: Job Brokerage and Placement
Department of Employment (DOE)
The main function of the Department of Employment (DOE) in the Ministry of Labour and
Social Welfare is to organize job fairs and job placement in order to reduce the time it takes for the
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
184
unemployed to find employment and businesses to fill positions. The role of providing adequate
information about labour markets is useful for reducing youth unemployment. The Department of
Employment in the Ministry of Labour and Social Welfare is charged with this responsibility. The
DOE organizes job fairs that place prospective employers in direct contact with potential
employees. It also serves as an agent for official job placement services. It collects data on job
seekers, job vacancies and job replacements. Information for the supply side is derived from labour
force registration of new entrants and retrenched workers. Data for the demand side are collected
from its satellite employment offices and daily newspaper listings.
The ILO argues that it would be useful to have more information on the performance of
Thailand’s employment. This would include the proportions of job seekers registered and placed by
the employment services. In addition to these measures of performance, it would be useful to have
indicators of quality for services provided such as the speed of replacement and the rate of retention
of job seekers placed by the employment services. A report by Fraser (1999) revealed that the
placement to applicant ratio fell from about 67 per cent in 1997 to 53 per cent in 1998, while the
placement to vacancies rate rose from around 64 per cent to 80 per cent. Such finding represents
some improvement of the placement services.
Conclusions and Recommendations







Youth employment is a serious problem in Thailand where unemployment rates for young
people aged 15-24 year have been at least three times those of adults increasing to four and a
half times in recent years
As is the case elsewhere in the world youth are especially vulnerable to economic downturns as
evidenced by the fact that youth unemployment rates increased threefold from 2.2 per cent in
1997 to 6.6 per cent in 2000.
Growth-oriented, rather than human-oriented, economic development policy and the consequent
disparities in income and access to social and educational services have contributed to the
underdevelopment of education and training for young women and young men in Thailand.
Rapid economic growth has been achieved at the expense of equitable development and
adequate investment in education and skills for children and youth, especially those in the
underprivileged classes and those in the rural areas.
Youth unemployment is a result of the interaction between social problems and uneven
development, and is further affected by frictional unemployment during the transition from
school to work. Social problems concerning youth include primarily drugs, crime, prostitution,
premature sexual relations among youth and HIV/AIDS.
National policies have included integrated strategies for youth employment but their
implementation seems to have been hampered by frequent changes in government
administration and inadequate coordination among government agencies.
Opportunities for development and employment of youth have not been equally shared among
geographical regions, across income groups, between urban areas and rural areas, in rich
households and poor families and by young women and young men.
Recommendations
Thailand has produced a number of comprehensive plans for youth development included
integrated strategies for employment promotion. The following recommendations from consultative
studies point to specific areas where youth policies might be strengthened and improved:
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
185















Greater attention by the Thai government to youth unemployment
Direct funding to improve provision of education and training to smooth the school-to-work
transition for young women and young men
Concerted efforts from relevant government agencies and the National Youth Bureau to counter
social problems related to youth
Improved policies to promote full employment through support for youth self-employment,
young entrepreneurs, SME development, decentralised power, and the “sufficiency economy”
of His Majesty the King
Serious attention by Thai government to the “sufficiency economy” by practising a “New
Theory” for farming enterprises, community business and schooling systems with more
emphasis on promoting youth entrepreneurship
Greater support for a knowledge-based economy in parallel with a “sufficiency economy” and
employment promotion
Continued efforts to coordinate vocational education programmes through a broad strategy that
assigns responsibility for education and training to particular agencies within a national
framework
Greater attention to youth employment in rural areas through promotion of off-farm activities,
agricultural processing and youth entrepreneurship
Strengthened role of the private sector in training activities
Improved policies for young women in areas of employability and entrepreneurship
Better coordination among government agencies, and between government organizations and
non-government organizations
Greater participation of youth themselves in formulating, implementing and evaluating policies,
programmes and projects for youth employment
Increased emphasis on poor households, informal sector, agricultural production and rural areas
Specific policies to prevent and alleviate the problem of school drop-outs by providing financial
support that takes into account both the direct costs and opportunity costs of continued
education for poor households
Effective measures to enforce laws and regulations that protect and support young people
Table 1:
Key indicators
1995
Gross domestic product at 1988 Prices (% change)
Agricultural sector at 1988 Prices (% change)
Non-agricultural sector at 1988 prices (% change)
Labour force participation rate 13+ years (%)
Unemployment rate 13+ years (%)
9.3
2.4
10
73.0
1.1
1996
5.9
3.2
6.1
71.4
1.1
1997
-1.4
0.2
-1.5
71.7
0.9
1998
-10.8
-0.1
-11.4
70.6
3.4
1999
4.2*
2.2*
4.4*
69.2
3.0
2000
4.4*
3.1*
4.6*
69.7
2.4
Source: Bank of Thailand at http://www.bot.or.th and National Statistical Office, Labour Force Survey, Round 3,
August at http://www.nso.go.th.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
186
Table 2:
Distribution of youth and ageing population in Thailand (1985-2000) in
thousands and percentages
1985
15-24
(%)
60+
(%)
Total
1990
1995
1996
1997
1998
1999
2000
11,343.3
22.0
12,166.9
21.6
11,561.2
19.4
11,579.2
19.3
11,446.8
18.9
11,561.8
18.9
11,527.1
18.6
11,466.9
18.4
2,734.8
5.3
3,426.8
6.1
4,817.3
8.1
4,936.5
8.2
5,237.8
8.6
5,288.4
8.6
5,502.0
8.9
5,742.7
9.2
51,450.6
56,405.0
59,450.8
60,045.3
60,648.9
61,248.4
61,856.7
62,481.4
Source: National Statistical Office, Reports of the Labour Force Survey, Round 3, August.
Table 3:
Economic and non-economic activities of youth aged 15-24, 2000
Total
Total Population
Total Labour Force
Current Labour Force
Employed
At work
With job but not at work
Unemployed
Looking for work
Available but not looking for work
Seasonally inactive labour force
Persons not in the labour force
Household work
Studies
Too young/old/incapable of work
Others
Under 13 years
100.0
53.4
53.0
49.5
49.2
0.4
3.5
1.4
2.1
0.3
46.6
4.7
36.7
1.4
3.8
0.0
Male
Female
100.0
57.8
57.4
53.3
53.0
0.0
4.1
1.8
2.3
0.4
42.2
0.3
35.6
1.7
4.5
0.0
100.0
48.8
48.5
45.6
45.2
0.4
2.9
1.0
1.9
0.3
51.2
9.2
37.8
1.1
3.1
0.0
Source: National Statistical Office, Report of the Labour Force Survey, Round 3, August 2000.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
187
Table 4:
Labour force participation rates in Thailand by age group and sex in 1990 and
2000
1990
Age
Group
Total
2000
Male
Female
Total
Male
Female
Total
56.3
59.7
52.8
69.7
77.3
62.3
13-14
15-19
20-24
25-29
30-34
35-39
40-49
50-59
60+
37.6
68.5
86.7
90.2
92.3
92.8
92.1
85.3
41.7
37.0
67.7
91.6
96.6
98.0
98.7
97.9
94.8
53.0
38.2
69.4
81.7
83.6
86.6
86.9
86.3
76.5
32.2
7.9
34.5
71.9
87.2
89.5
90.8
89.8
81.3
33.6
8.7
38.0
77.2
94.4
96.2
97.6
97.6
93.2
45.8
7.1
30.9
66.4
79.7
82.8
84.0
82.1
70.1
23.1
Source: National Statistical Office, Labour Force Survey, Round 3, August 1990 and 2000.
Table 5:
Employment-to-population ratios by age group, 1990-2000
Year
2000
1999
1998
1997
1996
1995
1990
15-19
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
31.9
34.8
28.9
29.9
33.3
26.3
34.7
38.3
31.0
37.9
39.9
36.0
40.8
42.7
38.8
46.4
47.3
45.5
65.0
64.1
65.9
20-24
66.8
71.5
61.9
67.4
71.7
62.9
69.8
74.5
64.8
77.4
82.4
72.2
76.8
82.3
71.1
78.8
84.4
73.0
82.4
87.0
77.6
15-24
49.5
53.3
45.6
48.8
52.7
44.7
52.3
56.5
48.0
57.7
61.2
54.1
58.7
62.4
54.9
62.4
65.7
59.1
73.6
75.4
71.7
25+
77.5
86.8
68.4
76.8
86.4
67.5
77.4
86.5
68.5
79.5
88.6
70.7
78.8
88.6
69.4
79.9
89.2
71.0
82.6
90.7
74.7
15+
70.6
78.4
62.9
69.7
77.7
61.9
70.9
78.6
63.4
73.9
81.4
66.5
73.5
81.5
65.6
75.2
82.7
67.8
79.7
85.6
73.8
Source: National Statistical Office, Reports of the Labour Force Survey, Round 3, August.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
188
Table 6:
Unemployment rates classified by age group and sex for the whole kingdom,
1990-2000
Unemployment Rates
Total
1990
1995
1996
1997
1998
1999
2000
Youth (15-24)
Male
Female
4.3
2.3
2.5
2.2
7.5
7.8
6.6
4.3
2.3
2.6
2.5
8.3
8.3
7.1
Adults (25+)
Male
Female
Total
4.3
2.3
2.3
1.8
6.5
7.2
6.0
1.3
0.8
0.7
0.5
2.4
1.9
1.5
1.0
0.5
0.6
0.4
2.2
1.8
1.4
Total (15+)
Male
Female
Total
1.6
1.1
0.8
0.7
2.7
2.0
1.5
2.2
1.1
1.1
0.9
3.4
3.0
2.4
2.0
0.9
1.0
0.8
3.4
3.0
2.4
2.4
1.3
1.1
0.9
3.4
3.0
2.4
Source: National Statistical Office, Reports of the Labour Force Survey, Round 3, August.
Table 7:
Unemployment rates classified by age group and sex for municipal and nonmunicipal areas, 2000
Total
Municipal
Non-Municipal
Total
15-19
20-14
15-24
25+
6.8
6.5
6.6
1.5
5.2
7.6
7.0
2.0
7.0
6.3
6.5
1.3
Source: National Statistical Office, Reports of the Labour Force Survey, Round 3, August 2000.
Table 8:
Unemployment rates by educational attainment and sex for municipal and nonmunicipal areas, 2000
Total
Total
Less than lower elementary
Elementary
Lower elementary
Upper elementary
Secondary
Lower secondary
Upper secondary
Vocational
University or equivalent
Academic
Technical vocational
Other
Teacher training
Total
Male
Female
Total
Municipal
Male
Female
Total
Non-Municipal
Male
Female
2.4
1.3
2.4
1.4
2.3
1.2
2.7
0.9
3.0
1.7
2.4
0.1
2.3
1.3
2.3
1.4
2.3
1.3
1.0
2.9
1.0
2.8
1.1
3.1
1.8
2.0
2.3
2.2
1.2
1.6
0.9
3.1
0.8
2.9
1.1
3.3
3.4
3.5
5.6
3.6
3.8
5.5
3.1
3.1
5.7
2.4
3.4
4.0
2.4
3.3
4.4
2.3
3.7
3.4
3.8
3.6
7.0
4.0
4.1
6.4
3.4
2.9
8.0
3.8
7.3
4.1
6.8
3.6
7.8
3.7
5.5
3.8
5.5
3.6
5.5
4.1
8.6
4.5
7.9
3.7
9.5
1.6
0.7
2.3
1.4
1.6
1.2
1.7
0.4
2.8
Source: National Statistical Office, Report of the Labour Force Survey, Round 3, August 2000, Summary Results, p.
85.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
189
Table 9:
Number of vocational trainees in the Department of Skill Development
Vocational Training Programmes during fiscal years 1995, 1998 and 1999
1995
Activity
Male
1998
Female
Total
Total
69,174
28,865
Pre-employment training
15,900
2,059
17,959
Rural training
13,249
9,475
22,724
Upgrading training
22,944
8,204
31,148
Non-technical training
14,832
8,139
22,971
2,249
988
3,237
Personal skill development
Male
Female
1999
Total
Male
Female
Total
98,039 141,421 80,332 221,753 178,006 96,451 274,457
60,324 24,904
-
-
85,228
88,555 22,845 111,400
-
-
77,465 52,911 130,376
3,632
2,517
-
-
85,620 71,221 156,841
-
-
6,149
-
3,831
-
2,385
6,216
Source: Department of Skill Development and N. Teeravit cited in ILO, Decent work for all: Targeting full
employment in Thailand, Bangkok, 2000.
Table 10:
Number of vocational trainees in the Department of Public Welfare Vocational
Training Centres during 1990-2000
Number of Trainees
Training Center
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Lampang
Chiang Rai
Sri Saket
Khonkaen
Nontaburi
Chonburi
Songkla
1,154
0
224
243
970
0
0
1,316
0
513
245
908
0
150
1,377
0
261
193
981
0
400
1,322
0
599
435
1,025
334
500
1,192
0
655
510
816
414
490
1,100
0
638
550
1,000
450
540
726
330
606
378
1,271
418
314
1,670
531
731
416
1,151
399
360
1,701
728
961
753
1,201
839
830
1,834
780
983
806
1,199
1,645
1,239
1,805
681
996
878
963
1,309
522
Total
2,591
3,132
3,212
4,215
4,077
4,278
4,043
5,258
7,013
8,486
7,154
Source: Department of Public Welfare cited in Busakorn (2001).
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
190
Figure 1:
Labour force participation rates by age group and sex, 2000
120.0
100.0
LFPRs
80.0
60.0
40.0
Total
Male
Female
20.0
0.0
13-14
15-19
20-24
25-29
30-34
35-39
40-49
50-59
60+
Age Group
Source: Table 4.
Figure 2:
Employment-to-population ratios by age group and sex, 2000
Employment-to-Population Ratio
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
15-19
20-24
15-24
25+
15+
Age Group
Total
Male
Female
Source: Table 5.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
191
Figure 3:
Employment-to-population ratio by age group, 1990-2000
Employment-to-Population Ratio
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1990
1995
1996
1997
15-19
1998
20-24
1999
2000
15-24
Source: Table 5.
Figure 4:
Youth unemployment rates by sex, 1990-2000
9.0
Unemployment Rates
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
1990
1995
1996
1997
1998
1999
2000
Year
Total
Male
Female
Source: Table 6.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
192
Figure 5:
Youth-to-adult unemployment rates, 1990-2000
5.0
4.5
4.0
3.5
Ratio
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1990
1995
1996
1997
1998
1999
2000
Year
Source: Table 6.
Endnotes
1
See ILO-EASMAT (2002, annex 1) for a description of concepts and definitions used.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
193
Viet Nam
Vietnam is located in Southeast Asia, bordering China to the North, Laos and Cambodia to
the West, and the Pacific Ocean to the East and the South. It is composed of three main geographic
zones -- the North, the Center and the South -- with a total area of 331,000 km2. In terms of
administration, Vietnam has 61 provinces and centrally administered cities, which are subdivided
into 609 urban and rural districts. The districts are subdivided into urban wards and rural
communes. In terms of population, the 2001 general population and housing census registered 78.7
million inhabitants (up to July 2001), of whom 19,2 million inhabitants (equal to 24,4%) living in
urban areas and 59,5 others (75,6%) in rural areas.
Vietnam is a multi-ethnic nation (with 54 ethnicities) the overwhelming majority of which is
the Kinh (accounting for over 87%); the remainder consists of ethnic minorities, most of whom
inhabit upland areas.In terms of faith and religion, about one-third of Vietnam's population are
followers of 6 main religions: Buddhism, Catholicism, Protestantism, Islamism, Cao §µi and Hoµ
H¶o. Buddhism accounts for the largest number of believers, followed by Catholicism, then
Protestantism, Islamism, Cao §µi and Hoµ H¶o. Throughout the historical process of their
development, the various ethnic and religious communities in Vietnam have been bound to each
other by economic and cultural ties, and by solidarity in the struggle against nature and foreign
aggression.In terms of birth rate, achievements in population activity have reduced it from 4.0 in
1987 to 2.7 in the 1992-1996 period. As shown by the 1999 general population census, this
downward trend has continued.
In terms of the economy, Vietnam has embarked upon a process of economic renewal, with
a switch from the centralized planning management mechanism to a market economy under State
management. That the different economic sectors are recognized and their development facilitated
has promoted a rapid growth of the economy. In particular, Resolution No 10 granting long-term
land use right to farmers has breathed a new life into the Vietnamese agriculture. Foreign
investments, coming to Vietnam since 1987, have led to a broad participation of various countries
in an economy which is open in orientation, multilateral in relationships, and diverse in forms. So
far, the economy has acquired a fairly high growth rate, which is quite evident in all branches and
domains.
GDP recorded an average annual increase of 3.9% during the 1986-1990 period, and 8.2%
for the 1991-1995 period. Adversely affected by the regional financial-economic crisis for the
1996-2000 period, it still managed to score an average annual increase of 7%. Per capita per year
GDP has reached nearly 400 USD, or almost doubled the 1990 figure. Economic development has
provided the basis for the settlement of social issues, such as hunger eradication and poverty
alleviation (the ratio of households below the poverty line has dropped sharply from 55% in 1990 to
11% in 2000); health care; and education (by 2000, Vietnam had completed primary education
universalization and illiteracy eradication).
Young People in Viet Nam
According to the survey in 2001 on labour and employment, Vietnam's youth population
(from 15 to 34 years of age) amounts to 27,135, 760, or 34,5% of the total population. Of these:
13, 459, 337 are males, or 49.6%;
13, 676, 423 are females, or 50.4%.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
194
In terms of age:
The 15-24 age group accounts for 15,134, 000 , or 55.77%;
The 25-34 age group accounts for 12,001,760 , or 44..23%.
In terms of place of residence:
20,477,200 , or 75.46%, live in the countryside;
6,658,560, or 24.54%, live in urban areas.
Over the past 10 years, along with the process or urbanization and renewal, the urban youth
population has increased by 5.2%, while the rural youth population has decreased accordingly.
In terms of social labour force:
Young people engaged in permanent economic activity account for 55.5% of the social labour
force, and 73.6% of the youth population. Of these:
The 15-24 age group accounts for 25.2% of the social labour force, and 33.4% of the youth
population;
The 25-34 age group accounts for 30.3% of the social labour force, and 40.2% of the youth
population.
Overview of job opportunities and labour market
Employment
Overview
Under the Vietnamese Labour Code, the working age starts at 15. However, workhands in
the 15-17 age group are described as under-age labour, and the Code has specific regulations for
their employment. On the basis of those regulations, the figures listed below also start with 15
years' olds. The labour population consists of males from 15 to 60 years of age and females from 15
to 55 years of age.
From 1995 to 2000, the number of workhands getting employment increased from 34.6 to
40.6 million, i.e. by 31.0%. In general, the number of newly employed tended to increase year after
year: on average 863,000 per year during the 1991-1995 period, and 1.2 million per year during the
1996-2000 period (or 39% up from the 1991-1995 period). However, 1.4 million people reach
working age every year. Added to the 2.4 million still unemployed, the rural underemployed (about
26%), and the high urban unemployment rate, this places a heavy employment burden on the
country.
The urban unemployment rate has registered positive changes: 6.4% in 2000 against about
6.6%-6.7% in 1998-1999. The rural underemployment rate has ranged between 26% and 28%, and
was 26.1% in 2000. While the economy has been faced with numerous difficulties, the renewal
policy for the development of a multi-sector commodity economy and the elimination of State
subsidies has helped provide employment for 60% of job seekers, 40% of whom self-employed in
different economic sectors.
The statistics about young people’s participation in economic activity over the past 10 years
show the following:
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
195
- The (15-34) age group has decreased slightly in proportion: from 35.7% in 1991 to 34.7% in 2000,
while increasing in number. The decreasing percentage results from fruitful population activity:
the birth rate has dropped from 2.75% in the early 1990s to 1.7% at present.
- The proportion of young people participating in economic activity compared with the total labour
population has decreased considerably: from 62.8% in 1991 to 50.0% in 2000. This results from
the increasing participation in universities, colleges and vocational secondary schools.
- As shown by the 1999 population census, working youth now account for the majority of the
youth population (73.6%).
Youth employment by Industrial sector
By economic branch, 63% of the labour force worked in agriculture, 14% in industry, and
23% in services. The proportion of young people working in industry was higher than the average
(19.52% for the 15-24 age group and 17.85% for the 25-34 age group, compared with the average
14.24%). The main reason was that, in the countryside, quite a large number of persons above
labour age and under 15 years of age were taking part in farm work.
By gender, for the 15-24 age group, the percentage of females working in services was
higher than that of males and the average. The reason was that a high percentage of rural youth took
part in small commerce, especially in farm products. For the 25-34 age group, the percentage of
males working in industry and construction was fairly higher than that of females. Of these, many
rural young men went to urban areas to seek employment during idle times. Their number was
500,000 for Hå ChÝ Minh City alone.
In rural areas, for all age groups, most of the labour force worked in agriculture (71.11%).
Only 12% and 16.8% worked in industry and services respectively. However, the percentages for
young persons within the 25-34 age bracket were somewhat higher: 14.86% and 18.65%
respectively.
In urban areas, the proportion working in services was considerably higher than that of those
working in industry (63.7% compared with 30%). As regards the working age population as a
whole, the higher the age bracket, the lower the proportion of people working in industry and the
higher that of people working in services. That was why young people accounted for the majority of
the industrial workforce, while their proportion was quite low in agriculture (mainly in the rural
outskirts). In fact, urban services were mainly limited to the informal sector.
Employment by type of firm
As shown by the 1999 population census, the number of young people taking part
permanently in economic activities accounted for 55.5% of the social labour force, of these, 63.2%
operating in the individual sector, 25.5% in the collective sector, 8.1% in the State sector, and the
rest (in negligible proportions) in other sectors.
- The State economic sector:
According to the 1999 population census, only a small percentage of young people (8.1%) operated
in the State sector.
The proportion of workhands in the State sector has constantly decreased, from 14.7% of the
social labour force in 1985 to below 9% in the mid-1990s, and 9% in 2000. On the other hand, it
has increased gradually along with the age groups: 5.47% for the 15-24 bracket, 10.3% for the 25Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
196
34 bracket, and 13.06% for the 35-59 bracket. According to reports on the reform of State
enterprises, the proportion of workhands operating in the State sector has continued to decrease.
The 1999 population census also showed that young people participating permanently in
economic activities in the collective economic sector (rural agricultural cooperatives and urban
handicrafts cooperatives) accounted for over 1/4 of the labour force in all economic sectors. Over
recent years, this economic sector has created employment for numerous young workhands.
The private and individual economic sector accounted for 62% of the social labour force
participating permanently in economic activity. For young workhands, the sector accounted for
64.1%. During the years of renewal, this sector has provided employment for numerous laid-off or
unemployed workhands (accounting for about 90% of the job opportunities created annually).
Thanks to the policies encouraging the development of different economic sectors, over the past
years, the private and individual sector has developed vigorously, with various forms of activity,
such as producers' or business households, limited liability companies, and farms. According to a
report of the Ministry of Labour, Invalids and Social Welfare, despite limited investments in
technology and working conditions, the small and medium enterprises have proved their potentials
and advantages in employment generation. There are now 41,000 small and medium enterprises
(excluding household enterprises), representing 96% of the total number of enterprises in the
country. They account for 32% of the total industrial output, 25% of Gross Domestic Product, and
nearly 49% of the non-agricultural labour force. In 2000 alone, with the coming into effect of the
Law on Enterprises, 13,000 small and medium enterprises were founded, providing employment for
hundreds of thousands of workhands. In agriculture, farms have become an efficient model the
development of which is being encouraged in the new countryside. There are now 113,000 farms
throughout the country, providing employment for 678,000 workhands, or 6 workhands per farm
averagely.
The foreign-invested sector, including industries and services, created employment for
300,000 workhands from 1993 to 1998. The figure has gone down in recent years, parallel with
decreases in foreign investment. Although accounting for only about 1% of the labour force (both
direct and indirect) at present, this sector has played an active role in the labour restructuring in the
direction of industrialization, modernization and international integration.
Unemployment and Underemployment
Employment generation has seen positive developments during the 1996-2000 period,
increasing by 3% annually, but remains unable to satisfy the employment demands of the society in
general and the youth in particular. Urban youth unemployment and rural youth underemployment
are pressing issues today.
- Rural underemployment
Over recent years, the rural underemployment rate has increased constantly, accounting for
26-28% of the total labour force engaged in economic activity in rural areas. A decrease was
registered in 2000 compared with 1999, but only negligible. The majority of the underemployed in
rural areas are young people (usually 60-63%). The youth underemployment rate is high in such
regions as the Red River delta (37.8%), or Northern Central Vietnam (33.6%).
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
197
By economic sector, underemployment is registered mostly in the non-State sector (98.3%),
then the State sector (1.4%). There are many reasons leading to rural youth underemployment, such
as:
- Limited arable land acreage.
- Slow restructuring of animal and vegetal cultivation.
- Irrational economic structure (almost purely agricultural), underdeveloped trades and crafts.
- Few entities offering job opportunities.
- Low educational and vocational standards compared with labour market demands.
- Lack of funds to develop production and business.
- Urban unemployment
In the 1996-2000 period, job generation made much progress, but still failed to meet the
employment requirements of working people. Unemployment remains an urgent problem for urban
areas. According to a labour and employment survey in 2000, the nation-wide urban unemployment
rate amounts to 6.3%. On average, the number of unemployed workhands increased by 16% a year
during the 1996-1999 period.
As shown by the survey, the unemployed were mainly those without professional
qualifications. Their rate increased by 2.5% from 1996 to 1999, while the unemployment rate
among the professionally qualified decreased from 5.5% to 4.6% in 1999. Still, the unemployment
rate among the professionally qualified remained high. In 2000, the urban unemployment rate was
somewhat lower than the 1998 and 1999 figures, but was quite high in Hanoi (7.95%), H¶i Phßng
(7.76%) and CÇn Th¬ (7.15%).
Of the 8 territorial regions, in the 4 northern regions (from Northern Central Vietnam up) the
male unemployment rate was higher than that of female unemployment, while in the 4 southern
regions (from the Southern Central Vienam coastal provinces down) the situation is reversed.
One of the causes of the growing unemployment rate is that the training quality and training
structure fail to meet the requirements of the labour market. Besides, the limited number of work
places and the unattractive policies and mechanisms provide no incentives for the qualified (trained)
workhands.
National Youth Policy
Characteristics
Youth policy represents the institutionalization of Party and State policy stance on youth
into legal institutions and a system of programs and plans, with targets, tasks, and proposed
mechanisms and resources for the solution of youth-related problems, in order to tap the creative
potentials of the youth and facilitate their contribution and growth in the process of national
construction and safeguarding. The overall objective of Vietnam's youth development strategy in
the period of stepped-up industrialization and modernization is to shape a comprehensively
developed Vietnamese younger generation, a young human resource of high quality meeting
adequately the nation's development needs and also the youth's own development needs, and to
promote the fine nature and great potentials of the youth as a creative shock force for the successful
realization of national industrialization and modernization.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
198
Main targets
Target 1: To raise the educational, professional and vocational levels of the youth, and their
advanced scientific-technological capacity.
Target 2: To ensure a rational youth labour structure, generate more job opportunities and reduce
unemployment; to increase the incomes and improve the living conditions of the youth and young
families.
Target 3: To cultivate fine qualities and revolutionary morality among the youth.
Target 4: To rapidly build for the country a contingent of young managers, leaders and scientifictechnological workers.
Target 5: To improve youth health and physical development; to raise the quality of the youth
population.
Target 6: To promote the shock role of the youth for the firm defense of the socialist Vietnamese
Homeland.
Target 7: To cultivate a civilized lifestyle, preserve and promote the national cultural identity,
acquire the cultural quintessence of mankind, and cater for the cultural and spiritual life of the
youth.
Target 8: To forge the youth as a shock force, to promote the right and role of the youth as masters
in national socio-economic development.
Target 9: To intensify youth participation in international exchanges, in contribution to the defense
of peace, and the strengthening of solidarity and friendship with the youth the world over.
Target 10: To ensure the implementation of basic youth rights, to support and facilitate the
execution of youth obligations.
Guidelines of the Communist Party of Vietnam in relation to education and training
 To develop education and training constitutes a primary State policy. To invest in education and
training is to invest in development. To link science & technology and education & training
with the national development strategy.
 To develop education with a view to raising the population's intellectual level, training human
resources and grooming talents, and forging high-quality human resources for national
development.
 To materialize an education for all, advance toward a learning society, and assert lifelong
learning as the right and obligation of all citizens.
 To diversify forms of training. To effect social equity in education and training.
 To closely link the expansion of education and training with the improvement of its quality and
efficiency, study with practice, talent with virtues, and the school with the family and the
society.
 To make education and training an undertaking of the society. To mobilize the entire society for
education work; to motivate people of all callings to contribute to shaping a population-based
education under State management.
Targets of development of education and training until 2020
 To broaden the scope and raise the quality of the education and training system to match the
level of the world's developed countries.
 To raise the quality of comprehensive training, to groom the Vietnamese into people with
sufficient qualities and capacity for national industrialization and modernization, and a worthy
role in the international division of labour and cooperation.
 Concerning the target of raising the population's intellectual level:
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
199
- To eradicate illiteracy, to raise the proportion of literates aged 15 and older from 94% in 2000
to 97% in 2020. To raise the proportion of students aged 23 and younger from 47% in 1996 to
60% in 2010, and 80% in 2020. To increase the number of schooling years for persons aged
25 and older from 5 in 1996 to 9 in 2020.
- To raise the proportion of persons under uninterrupted schooling for the 2005-2020 period.
- To raise the proportion of students in the 17-23 age group from 2.2% in 1996 to 20% in 2010,
and 25% in 2020.
- To ensure a quantitative and qualitative improvement of the scientific-technological personnel
to match the regional and international standards.
 Concerning the target of training human resources:
- To increase the ratio of trained labour from 20% in 2000 to 40% in 2010.
- To increase the ratio of university-level scientific-technological workers (per thousand
inhabitants) from 25%o in 2000 to 50%o in 2020. To intensify the overseas training, shortterm training and post-university training of scientific-technological personnel.
 Concerning the target of grooming talents:
- On the basis of raising the population's intellectual level and training human resources, to
groom talented persons and develop talents.
- The State is to attach importance to building the systems of specialized schools and selected
classes, and a number of high-quality university-level training centers, for grooming talents
and, at the same time, to pay attention to sending talented persons for overseas training.
- To effect policies capable of attracting and worthily utilizing talents.
Major policies and measures
 To improve the national education system, diversify the forms of schools and classes (public,
semi-public, private), encourage self-learning, and ensure learning opportunities for all.
 To renew the objectives, curriculums, and teaching and learning methodologies in the direction
of increasing the proactiveness and creativeness of learners in the learning process.
 To ensure a quantitative and qualitative improvement of the teaching staffs, and encourage
bright students to enroll in teachers' training institutions.
 To gradually increase State investments in education and training and, at the same time,
mobilize reasonable contributions from the population.
Policy on employment and income generation
The national policies on labour and employment have the following aspects:
+ Maximum mobilization of the existing labour force.
+ Labour efficiency.
+ Job opportunities for job seekers.
+ Early re-employment for the unemployed.
+ Rational relationships between economic growth and employment generation.
The State has invested in the creation of new job opportunities in the national economy through
socio-economic development programs, such as the "Program for greening barren land and bald
hills", "Program for the exploitation and utilization of riverside and seaside alluvial banks",
"National target program on hunger eradication and poverty alleviation", and especially the
"National target program on employment" and "Program on job training for the 1999-2000
period".
The State has also helped the population in self-employment or employment creation through the
following main channels:
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
200
+ Enactment of policies encouraging economic development.
+ Funding in the form of preferential credit.
+ Support in training.
Through the above-mentioned efforts, job opportunities have been created annually for 1 - 1.2
million workhands, most of whom young people.
Targets for Employment 2001-2005
According to the 9th Party Congress (April 2001), for the 2001-2005 period, employment is
to be created for 15 million workhands, including those newly coming to labour age (about 1.2
million annually) and the unemployed left from preceeding years. Of these, the rural areas account
for (in workday equivalents) about 12.5 million, and the urban areas about 2.5 million.
For the next 5 years, employment is to be created for over 7.5 million workhands in
economic and social fields, or averagely 1.5 million a year. The rural areas are expected to generate
employment for about 9 million workhands, thus raising the number of rural workhands getting
employment to 28 million in 2005. The urban areas are expected to generate employment for 1.78
million workhands in 5 years, thus raising the number of urban workhands getting employment to
11 million.
In 2005, the ratio of rural worktime utilization is to be about 80%; urban unemployment is
to account for about 5.4% of the labour age population.
Basic Strategies
To achieve the above-described objectives, the Government has adopted the following main
strategies:
- To promulgate and organize the implementation of a concerted system of laws, decisions and
policies designed to promote a sustainable development of the economy. To develop concentrated
industrial parks and key economic zones. To pay attention to developing medium and small
enterprises. To ensure the comprehensive socio-economic development of the rural areas. To
exert control over the labour utilization norms; to create new job opportunities in programs and
projects. To combine economic growth with employment creation.
- To increase direct support activities for a solution, to act against mass dismissals of employees. To
gradually elaborate and put into practice a policy on unemployment insurance.
- To increase direct support activities to provide employment for the unemployed, the
underemployed, and the disadvantaged in the labour market.
The Hå ChÝ Minh Communist Youth Union
The Hå ChÝ Minh Communist Youth Union is the socio-political organization of
Vietnamese youth, founded, led and forged by the Communist Party of Vietnam and President Hå
ChÝ Minh. Of its current 7 action programs, 3 are directly related to the youth labour and
employment issue.
Program 1: The youth to learn, create, and master science and technology.
Objective: To cater for the improvement of the educational, vocational, and foreign language
qualifications of the youth and adolescents. To organize for the youth to serve as a shock force in
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the implementation of the Strategy for the development of education and training and the Strategy
for the development of science and technology laid down by the Party and the State, in contribution
to raising the quality of the young human resources to the benefit of national industrialization and
modernization.
Main contents and measures:
 To encourage and motivate the learning and self-forging movement of youth and adolescents
both within and outside the school; to help raising the quality of education and training,
achieving illiteracy eradication and primary education universalization nationwide; to ensure
junior secondary and vocational education universalization for the youth.
 To enhance vocational guidance and training for the youth and adolescents, to shape for the
youth a proper occupational attitude and style.
 To sponsor movements for the youth to advance into sciences and technologies, such as the
"Creative youth movement", "National IT contests", CKT movement (for better quality, design
and economization), etc.
Program 2: The youth to volunteer in the implementation of key national programs and projects.
Objective: To motivate the youth to volunteer in the implementation of key
programs and
projects at the national and local levels, through which to educate and forge themselves.
Main contents and measures:
 To arouse among the youth the spirit of "Three readinesses", "Five Forwards", "Wherever the
Party needs and whatever is difficult, the youth are present", to motivate young people to go to
difficulty-ridden areas to bring prosperity to their native places, the Homeland and themselves.
 To involve actively the entire Union in the government programs for forest planting, tending
and protection (e.g. program for 5 million hectares of forest, etc.).
 To proactively elaborate programs and projects for developing marine and island economies,
such as the "youth islands" of B¹ch Long VÜ and Cån Cá.
 To participate in building and developing the infrastructures and major or key projects at the
local and national levels, such as the Hå ChÝ Minh Highway, the Yaly Hydropower Project, the
program to eliminate the single-trunk "monkey bridges" in the Mekong Delta provinces, etc.
 To take the initiative for the construction of "youth economic zones" and "youth selfestablishment villages" in difficulty-ridden ecological areas, e.g. mountain areas in the
Northwest or the Central Highlands.
 In 2000 alone (Year of Vietnamese Youth), Union chapters nationwide mobilized 3 million
public utility workdays, the equivalent of one year's labour of 10,000 volunteers working on the
Hå ChÝ Minh Highway project.
Program 3: The youth to help each other in self-establishment and socio-economic development.
Objective: To motivate, organize and guide the youth to participate in the implementation of socioeconomic development programs at the national and local levels, help settle the employment issue,
increase income and improve living conditions, and ensure a safe, healthy and progressive social
environment.
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Main contents and measures:
 Regarding the rural youth: To organize, encourage and guide extension programs in agriculture,
forestry and fishery; to intensify activities for knowledge dissemination and scientifictechnological transfer; to grant support and loans for the restoration of traditional crafts,
development of new crafts, generation of employment and augmentation of income; to
restructure vegetal and animal cultivation, raise productivity, quality and efficiency in
agriculture; to effect agricultural and rural development in the direction of industrialization and
modernization.
 Regarding the urban youth: To push ahead the movements for "Better quality, design and
economization", "To review theories, practice skills, and enter contests", "To innovate and
improve techniques", etc.
 To take an active part in the national employment program.
 To continue improving and broadening activities for youth education in issues related to
population, health and environment; to combat social vices (drug abuse, etc.).
 To expand humanitarian and charity activities.
In 2000 alone, the Union held 9,955 scientific-technological courses for 442,901 rural
youths, founded 3,763 technical display entities, and consolidated or built 2,500 agro-extension
clubs. Especially, Union members were mobilized for rural communication building, notably the
project for the elimination of single-trunk "monkey bridges" in the Mekong Delta provinces, under
which 2,100 new bridges are to be built. To provide 250,000 young people with vocational training
and job placement.
The Vietnam Youth Federation
The Vietnam Youth Federation is the broad social organization of the Vietnamese younger
generation and youth organizations. All young Vietnamese from 15 to 35 years of age, regardless of
gender, ethnicity, religion, social origin, historical backgrounds, and place of residence, and all
Vietnamese youth organizations, who agree with the Federation Statutes are eligible for Federation
membership.
Of its current 5 major campaigns, 2 are related to the youth labour and employment issue,
namely:
- The campaign for "Strenuous efforts in learning and creation to the benefit of national
industrialization and modernization".
Its objectives are: to effect a shift in the perception and action of the youth, to help them
realize clearly that strenuous efforts in learning and creation constitute the road to overcome
poverty and backwardness, surmount the challenges of bitter economic competition at the time of
scientific and technological advances and international integration, and contribute to the successful
process of national industrialization and modernization.
Its main activities are: To help each other raise educational levels; to develop movements for
learning and scientific researches with a view to future careers; to hold contests in scientifictechnological creation; to establish education extension and talent promotion funds among the
youth.
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Over the past 5 years, in the "Summertime Culture Light" campaign, the Federation
sponsored 35,000 anti-illiteracy courses for 500,000 participants, ensured primary education
universalization for 125,000 persons, and offered education extension grants worth 53,750 million
VND to 440,000 students.
- The campaign for "Mutual aid in self-establishment for a prosperous people and a forceful
country".
Its main objectives are: To help the youth acquire a positive and proactive attitude in
employment generation and self-establishment, and practice mutual aid and solidarity in production
and business; to motivate the youth to bring into play their dynamism, creativeness and boldness in
contribution to economic development to their own and the country's benefit.
Its main activities are: To provide counselling, vocational guidance, employment generation, tranfer
of scientific-technological advances; to expand job service and vocational training for the youth; to
help the youth with credits for production and business; to launch and popularize the movement for
"Economization and accumulation" among the youth; to develop job creation projects and farms for
the youth.
Over the past 5 years, the Vietnam Youth Federation has mobilized funds worth nearly
1,171 billion VND with which to help 825,000 young people develop production and business,
thereby generating self-employment, increasing income and contributing to economic development.
Federation chapters have sponsored scientific-technological training for over 1.2 million young
people, and founded more than 3,500 agro-extension clubs. Youth vocational training and job
placement centers have trained 550,000 young people, and provided employment to 268,000 young
men and women.
The Vietnam National Union of Students
The Vietnam National Union of Students is the socio-political organization of Vietnamese
students, a bridge linking students with the Party, the State and mass organizations. It operates as an
educational entity in learning institutions. Its membership includes Vietnamese citizens studying in
colleges and universities at home and abroad, who wish to join the Union on a voluntary basis, with
an understanding of its Statutes, and with its approval.
Of its current 6 main action programs, 2 are directly related to the student labour and
employment issue.
- The program "Students to strive in learning, scientific-technological research, and talent
development". The forms of activity are varied: faculty or subject clubs, subject Olympic contests;
round-tables or symposiums targeting knowledge and skills improvement; fund-raising to provide
scholarships to assiduous yet poor students, awards to talented students, support for access to new
technologies, or incentives for participation in technological transfers to rural areas. From 1993 to
1998 alone, Union chapters founded 60 preceptors' and student job placement clubs; scholarships
worth 41,576 million VND were granted to 20,788 students. Up to February 2001, the Union had
in coordination with credit banks granted loans worth 39,354 million VND to 28,000 students
from 100 universities, colleges and vocational schools, assuring poor students of a major suport
for their learning endeavors.
- The program "Students to join hands with the community". It includes activities of young
intellectuals volunteering to participate in rural development. It provides students with an
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opportunity to get close to realities and put their knowledge to use to the benefit of the inhabitants
of hinterland, remote and difficulty-ridden areas. From 1993 to 1998 alone, 44,700 students took
part in summertime voluntary work in poor villages and needy places. This program has over
recent years become a fine student tradition.
Active labour market policies
Supply side: Improving human capital
Education and training
As mentioned above, Vietnam has enforced legislation on primary education
universalization and considers schooling for all children the responsibility of the family and the
education sector. By 2000, primary education universalization had been completed, with diverse
forms of education for difficulty-ridden children and children in hinterland, remote and ethnic
minority areas. Hence, enrollments in primary and junior secondary education have increased
constantly, with no major differences among geographical regions.
Under the general education program, all persons could have finished junior secondary
education by the age of 18. However, in many localities, many persons in the 20-24 age group still
follow general education. On the other hand, most persons in the 25-34 age group have stopped
schooling, and turned to vocational training or working.
As shown by the 1998 survey on the population's living standards, the educational level of
young people is higher than that of persons aged 35 and older. By gender, there is no major
difference between the educational levels. Especially, for the 6-24 age group, the educational levels
of males and females are virtually the same. For the 25-34 age group, the educational level of males
is higher, but not much, than that of females (8.1 compared with 7.8). Meanwhile, for the 35-59 age
group, the educational level of males is much higher than that of females.
By location, there is a remarkable difference between the educational levels in urban and
rural areas, and the higher the age the greater the difference. Thus, in terms of schooling
opportunities, the rural youth have more constraints than urban youth, in terms of economic
conditions, material facilities, social environment, etc. Thanks to higher intellectual, living and
development standards, most urban families tend to work hard for their children to finish general
education as a basis for higher schooling or a stable job. Meanwhile, unable to find non-agricultural
employment, many rural families tend to accept that their children do not necessarily finish general
education, because in the final analysis they will only go back to farm work.
As shown by the table, the 5th, 9th and 12th grades accounted for the highest proportions.
They are the last grades of the three cycles of general education (primary education from the 1 st to
the 5th grades, junior secondary education from the 6th to the 9th grades, and senior secondary
education from the 10th to the 12th grades). Having finished a cycle, only part of the students are
able to continue with the next; the rest, due to their families' economic constraints or their own
limited learning capacity, have to quit for a job or stay home. For the youth age groups, completion
of junior secondary education accounts for the highest proportion, then comes completion of senior
secondary education, then completion of primary education. Things are quite different for higher
age groups, where completion of primary education accounts for the highest proportion. It can be
said, therefore, that today's young people have greater access to education than their parents had in
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their times. This is a good sign, since young people with a high educational level will supply the
main human resources for the national industrialization till 2020. However, there still remain many
young people having finished only the 5th, 6th, 7th or even lower grades. They mainly inhabit
mountain areas and difficulty-ridden rural areas. This constitutes a constraint for the economic
development of these areas.
It can be seen that, for the 25-34 age group, there is no big difference between the
educational level of males and the combined educational level of the whole group; and this also
means that there is no difference between the educational level of males and that of females. For the
20-24 age group, however, there is a difference, although not so big. This is shown in the higher
proportion of males having finished senior secondary education compared with females, and the
higher proportion of females having finished junior secondary education compared with males. This
trend is also true with the 15-19 age group. The number of males in the 20-24 age group having
finished junior secondary education upwards accounts for 44.83%, while the combined proportion
for the whole age group is 44.62%. For the 25-34 age group, the proportions are 56.6% and 55%
respectively.
The education level of urban population in general is much higher than that of the rural
population. Statistics have shown an increasing gap in education between urban and rural
populations, though the levels of both populations have in overall terms improved. Urban young
people having finished secondary schools in the 20-24 age group account for 43.49% and in the 2534 age group for 40.78%, while corresponding figures for rural young people are 15.81% and
12.71%, which mean that the number of urban young people having finished secondary schools is
three times higher than that of rural young people. One of the important reasons leading to such a
considerable difference is that the majority of rural young people with a high level of education,
after graduation from universities or vocational schools, have stayed on in urban centers for job
opportunities instead of returning to their home villages.
Vietnam in fact underwent a relatively long period of training structure imbalances in which
university and college education enjoyed development priority while vocational training was
neglected. As a result, upon shift to the new period of economic development and expanded roles of
economic sectors, the contingent of skilled technical workers has become insufficient. In 1998, the
Vietnamese Government decided to set up the General Department of Vocational Training (GDVT)
to unify the State administration and promote activities in this field to provide human resources for
economic development. Prior to 1998, because of the inadequate investments in vocational training,
young people having finished secondary schools were apt to either quit further learning or enrol in
universities and colleges. This generated an irrationality in the proportions of trained labour at
various levels: Technical workers are seriously insufficient in contrast to the seemingly excessive
number of university graduates against the needs of the economy.
In order to gradually meet the requirements of upgrading the people’s intellectual levels,
training human resources and nurturing talents, the university education sector with 104 universities
and 64 colleges throughout the country has over the past years constantly renewed their training
content and methodologies while expanding their scope and diversifying their forms of training. In
the 1998-99 academic year, they registered 641,147 students, of which 575,446 were students of
public institutions and 65,701 of private institutions. Every year, the education and training sector
supplies a marked force of quality labour to the cause of national industrialization and
modernization. (Graduates numbered 38,466 in 1996, 58,059 in 1997, 74,015 in 1998 and 113,600
in 1999).
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In Vietnam, in parallel with the system of universities, there is also a system of training
institutions (whose number has gone down from 366 in 1980 to 129 in 1998). Thanks to the
increasing attention given to vocational training, activities in this field have become increasingly
diverse. According to official statistics, today’s vocational training system consists of:
- 164 vocational schools, of which 157 are public and 7 are private;
- 148 vocational centers; and
- 137 secondary schools and colleges covering vocational training activities.
In addition, there are many in-enterprise vocational training units plus a large number of
other centers also conducting vocational training activities such as job service centers, vocational
guidance centers, etc. Vocational activity is also quite common in craft villages where workers
mainly learn while working. In such a sense, vocational training has been extended to all economic
sectors, with short-term training being the main form conducted in private training institutions and
longer-term training being the focus of State training institutions. As reported by GDVT, the
enrolment in vocational training institutions has on an average increased by 20% per annum. In the
1999-2000 academic year, the numbers of students enrolled in long-term vocational training and
short-term vocational training were 130,000 and 600,000 respectively.
Findings from a survey conducted by the Institute of Labour Science and Social Issues show
that as high as 53% of vocational training institutions concentrate in the two major economic
centers of the Red River Delta and the Southeastern region. The remaining 47% are located in the
other six economic regions. There are two economic regions covering 8 provinces, yet having a
meager 1% of all vocational training institutions. This irrational distribution will exert an adverse
impact on plans to supply labour force for economic and social sectors in these regions. However,
according to general assessment at present, vocational training institutions are overtraining 25%
their capacity. Hence, the discrepancy between vocational training needs and the capacity of
training institutions in response.
The 1989 population census revealed that there were 3.4 million people with technical
worker training or higher (excluding short-term training). In the 1999 census, the figure was 4.1
million, marking an increase of 0.7 million on the national scale in a decade - a disproportionately
modest ratio if an increase of 8.9 million workhands in the same period is taken into account.
Following is the labour structure breakdown by technical & professional level:
Youth with technical & professional levels, including technical workers and graduates from
secondary schools, colleges and universities and higher institutions, accounted for only 5.87%. This
is low compared to the 13.1% accounted for by those aged between 35 and 59. With the present
figure of 5.87%, it will be extremely hard to attain the target of training 30% of the labour force set
for 2005 despite the special attention reserved for vocational training in recent years. Among youth
aged between 15 and 24, a large number are undergoing technical & professional training after their
completion of general education. However, the figure of 9.03% of those with technical &
professional education among the 25-34 age group is surprisingly low, as people in this group in
general would need a certain level of technical & professional education in order to find a job,
particularly given the seemingly impossible increase of employment in the agricultural sector. With
Vietnam’s gradual industrialization, with the relatively fast growing inflows of foreign investment,
and with this country’s accelerated international economic integration, it has become evident that
technical and professional training for the young people should be enhanced. Another aspect of
irrationality arises from the disproportionately low percentage of technical workers among youth
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and the labour force alike against the number of graduates from colleges, universities and higher
institutions. As shown by the 1999 population census, the population aged 13 and older who
experienced technical training accounted for 2.3%, specialized schools - 2.8%, colleges - 0.7%,
universities - 1.7%, and post-graduate education - 0.1%. While college and university graduates
find it difficult to get a job, enterprises, especially foreign invested enterprises, find it difficult to
catch technicians and skilled workhands.
From a gender perspective, young females with technical & professional training level and
higher account for 5.29%, while the figure for young males is 6.47%. The difference is not
considerable between males and females among those with college, university and higher
education, but there are more males pursuing vocational training than females, and more females
pursuing specialized secondary education than males. Actually, in Vietnam it is more likely for a
person with a specialized secondary education to find a clerical job at a State agency, and therefore
his/her workload would be less burdensome, also meaning having more time to take care of his/her
family. Consequently, more females tend to enter specialized secondary institutions. In the 15-24
age group, there are more females graduating from colleges and universities than males, but the
tendency is reversed for the 25-34 age group.
Rural labour with technical & professional education account for 4.2%, and urban labour 17.47%, this gap is in fact not very important. The reason: In the rural areas, economic activities are
basically agro-based, small-scaled and manual, while in the urban areas non-agricultural activities
are dominant and requiring technical & professional skills from workers. Nevertheless, given the
view that the labour force constitutes the driving force for economic development, the current
percentage of the rural labour force with technical & professional education is too low to promote
generation of non-agricultural employment in the rural areas.
As regards rural youth, the percentage of those with technical & professional training is a
meager 3.36%, of whom those in the 15-24 age group account for a very low figure of 1.98% and
those in the 25-34 age group - 5.07%. Meanwhile, the corresponding percentages for urban youth
are 13.36%, 7.2% and 20.16%. The very low percentage of technical & professional training among
the 15-24 age group is justified by the fact that a large number of them have quitted before they
finish secondary education schools while others are continuing their general education, especially
among those aged between 15 and 19. The difference in education between rural and urban youth is
most distinctive among those having college, university and higher education: Only 0.79% of rural
youth have accessed such education, while the figure for urban youth is 5.2%. As for rural youth,
there are more with technical training than with college and university education, but for urban
youth, it’s just the reverse. This constitutes an irrationality, for there is a huge shortage of technical
workers, meaning operators, but not managers.
In sum, the percentages of youth with technical & professional education in general and in
specific age group in particular are both lower than the percentage of labour force with technical &
professional education in the working age group (15-60 age group for males and 15-55 age group
for females). This is true for both males and females, rural and urban areas, and it can only be
explained by the attendance at technical & professional training courses of a relatively large number
of workers aged between 35 and 59.
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Guidance and counselling
In today’s Vietnam, the labour market information system has not yet developed.
Consequently, learners select education mainly on the basis of suggestions of their families rather
than a close linkage between labour users and training institutions. As revealed by a survey in 2000
on employment of college and university graduates in 1999, as high as 23.8% of them were
unemployed, and as high as 24% of those employed had jobs which were not suitable with their
trained skills. So, the combined percentage of the unemployed and the unfitted employed accounts
for around 42%. And this again constitutes a major irrationality in college and university training
plans, originating from among others lack of communication between suppliers (training
institutions) and demanders (labour employers).
In vocational training in particular, learners seem to suffer greatly from a lack of
information of both training institutions and users in need of technical workers. As a result, it is a
common mindset for workers to rush for training in such occupations as electronics, mechanical
repair, garment, etc. while a bundle of occupations closely associated with new calls of
manufacturing technologies have so far been not covered, for instance clerical skills, sea-products
processing, automated equipment operation, etc. which are in great need by enterprises. Typical is
the water subsurface welding which is among the occupations that Japan wishes to receive trained
Vietnam labour, yet there has been no institution providing such training.
due to the inadequate attention given to vocational guidance as well as insufficient information on
technical and occupational needs.
Demand side: Creation of job opportunities
Prospective employment for youth in an informatics-based economy
Informatics is one of the areas in which Vietnam is much behind other countries, as its IT
infrastructure is quite limited. However, the renewal process has brought about great strides in the
country’s post and telecommunications industry. The expanded application of IT in all economic
and social fields is considered by the State a priority in the national economic development strategy.
Diverse activities related to IT represent a big opportunity for Vietnamese youth, for only they are
capable of accessing new technologies. At the moment, almost all new recruits in IT companies are
young people.
Besides, thanks to the development of information channels, workers -especially youth find it easier to get a more suitable job. Moreover, also thanks to information development, it has
become easier for undergraduates to determine which occupation to learn to fit their capabilities.
Employment information has become increasingly widely publicized in the mass media. However,
modern means of communication are only good at present for a small segment of urban population
and for the key target group of students and young intellectuals. Regarding the rural areas, due to
the overall economic underdevelopment, economic difficulties and low professional standards, only
radio and newspapers are accessible but not such updated IT facilities as the Internet, and therefore
employment opportunities and competitiveness are quite low for rural labour.
Pioneering in IT application for employment and recruitment are foreign- invested
enterprises and Vietnam-based foreign representative offices.
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Self-Employment and small enterprise support programs
Prompted by the pressing need for employment, the Government in 1992 set up the National
Employment Fund which was in 1999 turned into the National Employment Program. During 19962000, the Fund lent out 3,000 billion VND and provided employment for 1.8 million workhands, or
30% of the newly generated employment, of whom 0.8 million workhands got new jobs and 1
million others had sideline jobs. In 2000 alone, the Fund made loans worth 754 billion VND to
more than 16,000 projects, thus creating employment for nearly 350,000 workhands. The Fund is
targeted at small-scale projects to create more job opportunities. As such, the Fund has helped many
localities restore and develop traditional craft villages and generate employment for handicraft and
small-scale industries. And this program has yielded positive results in rural employment
generation.
Apart from the National Employment Program, there are other target programs that are
important as well in employment generation. The Vietnam-Czech Program, Vietnam-Germany
Program are just two examples whose borrowers are Vietnamese guest workers who had to return
prematurely when Eastern European countries fell into crisis. The rural credit program is another
example. As statistics show, these programs for the past 10 years have contributed to creating
about 5.7 million new work places with young people being the main beneficiaries.
Small enterprises make up the majority in Vietnam’s private economic sector. According to
statistics, enterprises with less than 100 workers each in Vietnam account to 97.6% of all private
enterprises. Vietnamese private enterprises are small in labour force and capital. In Vietnam’s
economic development strategy, small enterprises are regarded as a potential source of employment
and a mobilizer of idle money available among the population. Yet, Vietnam has so far had no
separate policy to support small enterprises. However, related policies are numerous, as
demonstrated in policies toward enterprises, policies on employment, hunger eradication and
poverty alleviation, etc. Vietnam at the moment is drafting a Decree on developing small and
medium enterprises (SME) in support of the latter. According to the current regulations, SMEs are
those with less than 200 workers each and a business capital of less than 5 billion VND.
The Law on Enterprises effective as of the 1st January 2000 has granted preferential
conditions for small enterprises and households in terms of registration procedures and charges. By
31 May 2001, there were 21,234 new enterprises and 220,000 private business households
established under this Law with a total registered capital of about 36,000 billion VND. Reports
show that each new enterprise on an average creates some 20 new workplaces. This means that new
enterprises alone (excluding business households) have created 420,000 new workplaces.
Vietnam’s credit policies have reserved certain attention for small enterprises. Among the
many support funds which have been set up in service of national programs and to lend at
preferential interest rates, most notable are the Fund for Hunger Eradication and Poverty
Alleviation, the National Employment Fund, the Vietnam-Germany Fund for Vietnamese
Returnees, and the Fund to Support SMEs, etc.
The credit policy of the Fund for Hunger Eradication and Poverty Alleviation is to focus
mainly on private business households by the Bank for the Poor as a proxy. This Fund reserves
preferences for women involved in economic activities through the Women’s Union. A problem
with this Fund, however, is that its beneficiaries often do not know what to use the credit for. The
credit policy that requires commercial banks as an intermediary is also problematic, for the banks
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still mainly base their lending decisions on related enterprises’ collaterals rather than their real
payment abilities. As a result, money is piling up at banks while most enterprises are hungry of
capital. This kind of policy seems to fit big enterprises only. One of the most important sources of
capital for small enterprises at present is the informal source. Entrepreneurs take their selfgenerated capital as the main source, to be complemented by borrowings from their relatives.
As regards labour policies: Although designed to regulate the industrial relations between
employees and employers, the Labour Code has many provisions unapplicable to enterprises with
less than 10 workers, and in practice it has not been substantially realized in the private economic
sector constituted largely by SMEs. However, the national employment program has made an
important contribution to founding small enterprises which ultimately aims to generate
employment. In terms of labour recruitment, small enterprises are confronted with a lot of
difficulties in training and recruiting workers with appropriate skills. Recruitment has been done
mainly through recommendations by acquaintances. Skills improvement has been done mainly
through on-the-job training. Close to 70% of entrepreneurs have not experienced any business
governance training course.
In sum, support for small enterprises remains an issue in need of enhancement, and it is
hoped that its problems will be gradually solved once a government decree on SMEs is enacted.
Job intermediation: Matching demand and supply
Public employment services
Currently, there are 143 employment service centers throughout the country which every
year provide occupation counselling for some 200,000 workhands and supply 80,000 workers for
enterprises. Most of these centers are subordinates of provincial Departments of Labour-Invalids
and Social Affairs, while some others belong to such institutions as the Women’s Union, the Youth
Union, the Chamber of Commerce and Industry, etc. Apart from their principal functions in
employment counselling, these centers also organize vocational training courses to meet the need of
enterprises for skilled labour. Their counselling has actually developed vigorously in Hanoi and Ho
Chi Minh City where labour markets are relatively matured. The centers came into being in parallel
with national employment programs, and they have in general enjoyed the State support in terms of
equipment, infrastructures and the annual finances from national employment programs.
Surveys have shown that as many as 96% of job seekers came to these centers for
opportunities, and they were all under 40 years of age. So, the de facto beneficiaries of these centers
were young workhands. However, as judged by enterprises with advanced technologies, especially
foreign invested enterprises, labour recruitment procedures at these centers remain rather complex
and not yet satisfying to the demands of enterprises. According to stipulations of Vietnamese laws,
foreign invested enterprises should recruit labour through employment service centers, and could
only recruit on their own if the centers fail to respond after 30 days since application. But field
surveys show that some 55% of these enterprises recruit labour absolutely on their own. This in part
reflects the weaknesses inherent in employment service centers.
To redress the situation, the Government plans to direct these centers to specialize in
employment services, while facilitating the various economic sectors’ extensive activity in this field
on the basis of legal provisions.
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Labour export is also a priority in Vietnam’s employment strategy. It is seen not only as a
means to generate employment, but furthermore, a way to help workers learn managerial expertise
and technical skills in operating modern technological instruments in service of the industrialization
process in Vietnam and at the same time a considerable source of income for workers, as many
returning guest workers have been able to establish successful businesses. To date, Vietnam has
exported labour to 38 countries and territories, in an increasing number. Between 1991 and 2000,
the country sent more than 120,000 guest workers overseas on a termed basis. The labour export
annual growth rate during the 1994-2000 period was approximately 27.3%. In 2000 alone, some
30,000 Vietnamese guest workers were sent off, 3 times more than in 1995. At the moment, there
are about 250,000 Vietnamese workers and specialists working overseas, sending back nearly 1
billion USD a year to their families.
Labour market information remains fragmented on both input and output levels. Vietnam
has yet to build a nationwide network to collect information, even in major cities. Evaluation of the
labour force currently is mainly based on sample surveys. And one of the important reasons leading
to failure to take hold of employment information is that in Vietnam, there have been only policies
regarding employers upon sacking workers rather than unemployment insurance.
Conclusions and Lessons learnt
Employment generation efforts made by Vietnam over the past years show the following
lessons:
First, employment generation is one of the pressing and sensitive social issues, for it relates to the
life of many, and is one of the most important factors contributing to social stability and
development. However, employment generation should be done through economic measures, which
means that it should be done on the basis of the vigorous development of the various industries and
economic sectors, in combination with application of the market mechanism in parallel with
ensuring social equity and progress.
Second, it’s necessary to radically change the mindset of all sectors and strata, especially of young
people, on generating employment in a market economy. It’s also imperative to improve the young
people’s adaptability and competitiveness, help turn their past passivity into proactivity as things
are now (to proactively seek or create employment rather than sit idle and waiting for assignment).
Third, employment for workers should be generated through major project programs and their
efficient integration with each other.
Fourth, employment programs should pay attention to disadvantaged social groups in the labour
market such as jobless young people, the unemployed, the disabled, social vices target groups, etc.
Favorable conditions should be created for them to get a job.
Fifth, employment policy is a fundamental social policy of the State. And in this regard, the labourinvalids and social affairs sector play a core role, with the involvement of every individual and
social organization, particularly at rural commune and urban ward level. Given their functions and
tasks, mass organizations have a major role to play in generating employment for their members.
The actual work in counselling, vocational training and employment generation of the Ho Chi Minh
Communist Youth Union and the Vietnam Youth Federation during the past few years has asserted
the great role of mass organizations in vocational training, counselling and employment generation
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
212
for the youth. However, in face of the limited material base and constrained operational skills, the
activity in employment generation and occupational counselling for the youth will gain greater
efficiency if more investments in terms of material conditions and improvement of professional
skills can be made.
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
213
Table 1:
Yearly increases in employment (1995-2000)
Unit: thousand persons
Newly employed
Increase
1995
34,600
936
1996
35,792
1,192
1997
36,944
1,202
1998
38,194
1,200
1999
39,394
1,200
2000
40,594
1,200
General Statistics Office - Survey on labour and employment
Table 2:
Youth population in economic activity
Unit: %
Age group
Compared with
total labour
population
15-24 years' old
25-34 years' old
Compared with
(15-24) age
group
(15-34) age
group compared
with total
population
1991
62.8
1992
62.9
1993
62.4
1994
63.1
1995
61.7
1996
55.8
1997
54.7
1998
52.6
2000
50.0
31.7
31.5
83.5
31.2
30.2
84.9
30.2
32.1
83.3
29.9
29.1
81.8
29.1
32.6
80.1
26.0
29.8
79.1
24.9
29.1
77.2
23.3
29.3
75.8
21.8
28.2
72.8
35.7
34.8
34.8
34.8
34.8
33.6
33.5
33.2
34.7
Source: Situation regarding labour and employment in Vietnam, 1991-2000
Table 3:
Youth activity
Unit: person
Working
Housework
20,211,288
1,197,619
Under schooling
4,290,619
Labour incapacity
170,283
Unemployed
Undefined
1,178,122
411,247
Accounting for
73.6%
Accounting for
4.4%
Accounting for
15.6%
Accounting for
0.6%
Accounting for
4.3%
Accounting for
1.5%
of total youth
population
of total youth
population
of total youth
population
of total youth
population
of total youth
population
of total youth
population
Source: General population and housing census, 1999
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
214
Table 4:
Employment for persons aged 15 and older in 2000
Unit: %
Age group
Fully
employed
Total
Underemployed
Unemplo
yed
Fully
employed
Females
Underemployed
70.57
69.10
73.82
27.17
26.13
24.05
2.26
4.47
2.13
71.13
67.91
72.56
26.65
27.54
25.30
2.21
4.55
2.15
66.80
61.63
69.52
26.86
21.15
24.59
6.34
16.81
5.89
65.97
60.50
67.80
27.87
23.44
26.00
6.16
16.06
6.20
71.67
70.62
75.19
27.26
27.06
23.89
1.06
2.32
0.93
70.95
69.42
74.03
28.04
28.38
25.08
1.01
2.20
0.89
Nationwide
Combined
15-24
25-34
Urban
areas
Combined
15-24
25-34
Rural areas
Combined
15-24
25-34
Unempl
oyed
Source: Survey on labour and employment in 2000
Table 5:
Rural youth underemployment
Unit: %
Age group
15-24
25-34
Total youth
population
1996
26.6
37.0
38.0
1997
25.5
32.8
29.4
1998
28.2
34.1
28.2
1999
28.0
30.7
29.7
2000
27.1
23.9
27.3
Source: Situation regarding labour and employment in Vietnam, 1996-2000
Table 6:
Urban unemployment rates by professional skills
Unit: % of whole group
Professional skills
Total in urban areas
Of which:
- Without professional skills
- With professional skills
1996
5.7
1999
7.2
5.8
5.5
8.3
4.6
Difference
16.0
20.0
-4.2
Source: Survey on labour and employment, 1996-1999
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
215
Table 7:
Employment structure by economic branch and gender:
Unit:%
Branches
Gender
Age group
Combined
Males
Females
15 - 24
25 - 34
15 - 24
25 - 34
15 - 24
25 - 34
Agriculture
Forestry
Aquaculture
64.52
57.48
65.74
54.20
63.30
60.69
Industry
Constructio
n
19.52
17.85
19.79
21.35
19.24
14.43
Services
15.97
24.67
14.47
24.45
17.46
24.88
Combined
24.33
21.69
24.94
22.01
23.76
21.38
Source: Survey on population's living standards, 1998
Table 8:
Main employment structure by economic branch and location
Unit: %
Age group
Location
Rural areas
Urban
areas
0 - 14
15 - 24
25 - 34
35 - 59
60+
Combined
0 - 14
15 - 24
25 - 34
35 - 59
60+
Combined
Agriculture
Forestry
Aquaculture
90.20
70.56
66.49
67.67
83.30
71.11
11.11
6.93
3.89
5.30
19.29
6.30
Branch
Industry
Construction
Services
Combined
4.56
17.26
14.86
10.28
3.95
12.06
22.22
41.00
35.66
5.24
12.18
18.65
22.05
12.75
16.84
66.67
52.08
60.45
7.51
25.08
21.14
38.14
8.12
100.00
0.47
18.96
25.63
25.72
10.00
29.99
68.98
70.71
63.71
47.58
7.35
100.00
Source: Survey on population's living standards
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
216
Table 9:
Permanent employment in 1999 for persons aged 13 and older
Unit: %
Age
group
Total
13 - 14
15 - 24
25 - 34
15 - 34
35 - 59
60+
Total
100.00
1.60
25.21
30.27
55.48
38.62
4.30
State
9.62
0.49
5.47
10.30
8.11
13.06
1.75
Collective
26.84
18.21
25.22
25.70
25.48
28.10
36.38
Economic
Private
Individual
61.95
80.88
66.54
62.10
64.12
58.09
61.64
sectors
Mixed
Foreign
invested
0.95
0.53
0.17
0.03
1.50
1.13
1.18
0.63
1.33
0.86
0.53
0.12
0.08
0.03
Undefined
0.11
0.22
0.13
0.09
0.11
0.11
0.12
Source: 1999 general population and housing census
Table 10:
Average educational level by age group, gender and location
Unit: %
Gender
Age group
6 – 14
15 – 19
20 - 24
25 - 34
35 - 59
60+
Combined
Rural
4.5
7.6
7.4
7.8
7.8
5.4
6.8
Males
Urban
5.1
8.8
8.9
9.5
9.6
7.5
8.6
Combined
4.6
7.7
7.7
8.1
8.1
5.8
7.1
Rural
4.7
7.4
7.2
7.5
6.3
3.3
6.2
Females
Urban
5.6
9.4
9.5
9.3
8.4
4.7
8.1
Combined
Combined
4.7
7.6
7.7
7.8
6.7
3.6
6.5
4.7
7.7
7.7
8.0
7.3
4.8
6.8
Source: Survey on the population's living standards, 1998
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
217
Table 11:
Grades finished by population groups aged 15 and older
Unit: %
Grade
Finished
0
1
2
3
4
5
6
7
8
9
10
11
12
Total
15 - 19
20 - 24
1.22
2.79
4.05
7.70
13.18
9.20
7.73
8.02
17.40
9.45
6.34
12.93
100.00
1.10
3.78
4.56
7.41
12.15
9.44
8.70
8.24
19.11
2.58
2.21
20.72
100.00
Age group
25 - 34
1.22
3.47
5.00
6.33
9.24
7.02
6.00
6.72
28.65
3.55
2.89
19.91
100.00
35 - 59
1.36
6.00
8.15
7.49
14.85
5.14
4.04
3.98
25.76
3.15
3.41
16.67
100.00
60+
0.10
4.24
17.79
19.99
11.93
21.25
3.45
2.20
1.99
9.58
0.84
0.73
5.91
100.00
Source: Survey on the population's living standards, 1998
Table 12:
Grades finished by male population groups aged 15 and older
Unit: %
Grade
Finished
0
1
2
3
4
5
6
7
8
9
10
11
12
Total
15 - 19
20 - 24
1.76
3.73
3.95
6.44
10.83
9.88
7.10
9.07
16.97
10.83
6.07
13.39
100.00
1.44
4.40
4.04
8.18
12.58
9.07
7.73
7.73
17.25
3.14
2.70
21.74
100.00
Age group
25 - 34
1.15
3.34
4.20
6.04
8.12
6.33
6.33
7.89
28.21
4.49
3.17
20.73
100.00
35 - 39
0.45
3.65
5.16
5.52
12.46
5.39
5.26
4.74
27.56
4.07
4.87
20.88
100.00
60+
0.10
2.04
8.45
14.67
11.66
25.56
4.76
3.30
3.01
14.77
1.36
0.87
9.43
100.00
Source: Survey on the population's living standards, 1998
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
218
Table 13:
Grades finished by urban population groups aged 6 and older
Unit: %
Grade
finished
0
1
2
3
4
5
6
7
8
9
10
11
12
Total
15-19
20-24
Age group
25-34
0.92
2.46
2.77
3.69
4.92
5.85
7.38
4.31
11.69
15.08
12.92
28.00
100.00
1.04
1.82
2.86
3.13
6.51
5.47
7.03
4.69
16.15
4.17
3.65
43.49
100.00
0.17
0.68
2.20
3.05
5.08
5.92
6.60
6.94
20.47
4.23
3.89
40.78
100.00
35-39
0.80
1.77
4.52
2.48
9.40
5.05
4.08
3.72
24.56
4.17
3.99
35.46
100.00
60+
0.26
3.58
12.02
11.51
10.49
20.20
3.84
2.56
1.28
16.88
1.02
1.02
15.35
100.00
Source: 1998 survey on the population's living standards
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
219
Table 14:
Gender
Combined
Males
Females
Professional & technical levels of labour force, by gender
Age
group
Total
13-14
15-24
25-34
15-34
35-59
60+
Total
13-14
15-24
25-34
15-34
35-59
60+
Total
13-14
15-24
25-34
15-34
35-59
60+
Total
population
aged 13 and
older
Without
technical
skills
100.00
6.81
27.51
22.90
50.41
31.40
11.38
100.00
7.32
28.29
23.72
52.01
30.83
9.84
100.00
6.33
26.78
22.14
48.92
31.94
12.81
92.40
99.85
96.72
90.95
94.10
86.90
95.64
90.76
99.85
96.74
89.64
93.50
83.85
91.13
93.93
99.85
96.71
92.25
94.69
89.62
98.84
Technical & professional level
Technical Secondary College,
Undefined
skills
education university
plus
education
2.28
0.06
1.07
2.97
1.85
3.83
1.19
3.46
0.05
1.49
4.30
2.77
5.78
2.42
1.18
0.07
0.66
1.29
0.95
2.09
0.31
2.80
0.00
1.06
3.39
2.12
4.98
1.49
2.72
0.00
0.81
2.95
1.79
4.88
2.93
2.88
0.00
1.31
3.83
2.45
5.06
0.46
2.47
0.00
1.10
2.85
1.90
4.25
1.55
3.01
0.00
0.91
3.10
1.91
5.45
3.44
1.97
0.00
1.29
2.61
1.89
3.18
0.21
0.05
0.09
0.03
0.02
0.03
0.04
0.14
0.04
0.10
0.03
0.02
0.03
0.05
0.09
0.05
0.08
0.04
0.02
0.03
0.04
0.18
Source: General population and housing census, 1999
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
220
Table 15:
Technical & professional education of rural and urban working youth
Unit: %
Location
Age
group
Total
female
populatio
n aged 13
and older
95.74
1.34
1.88
College,
university
plus
education
0.99
13-14
100.00
7.27
99.89
0.02
0.00
0.00
0.09
15-24
25-34
15-34
35-59
60+
Total
13-14
15-24
25-34
15-34
35-59
60+
27.87
22.56
50.43
30.40
11.91
100.00
5.44
26.43
23.92
50.35
34.40
9.81
97.99
94.91
96.61
84.62
117.9
82.48
99.69
92.76
79.82
86.61
71.68
15.25
0.68
1.56
1.07
2.31
0.82
5.05
0.24
2.33
6.22
4.18
7.82
2.52
0.78
2.39
1.50
3.28
1.09
5.53
0.00
1.95
6.22
3.98
9.43
2.91
0.52
1.12
0.79
1.67
0.65
6.88
0.00
2.92
7.71
5.20
11.03
4.79
0.03
0.02
0.03
0.04
0.14
0.05
0.07
0.04
0.02
0.03
0.04
0.15
Total
Rural
Urban
Technical & professional level
Without
skills
Technical
skills
Secondary
education
Undefined
0.05
Source: General population and housing census, 1999
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
221
Part III: Conclusions and Policy Recommendations
Lessons Learnt & Recommendations
As noted above, the countries under study here differ widely in terms of their characteristics,
however a number of common themes and recommendations may be identified. Of course the
degree to which they apply to each country here varies to some extent.
1) The Problem - The integration of Youth into Decent Work is an issue of fundamental
importance. In this regard, the analysis here can but add support to the recommendation of the
high level panel that the problems of youth should take centre stage in policy formulation. To
this one might add that there are several elements to promoting the transition from school to
decent work.
-
-
First, young people need to be given the basis before they enter the labour market. That
is to say, in many countries the need to ensure access and fulfilment of basic levels of
education has not yet been achieved. Although, in most cases, a relatively small group,
there are still significant numbers of young people who enter the labour market before
reaching the age of the fifteen and therefore without having the opportunity to exploit
their potential through the attainment of at least basic levels of education
Youth unemployment is an important problem but it is only the tip of the iceberg.
Access to Decent Work involves rather more. In many countries informal sector jobs and
underemployment are significant and worsening problems.
2) Integration - 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.
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 areas. 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.
3) Targets (and the means to achieve them) – An important issue arising in the studies discussed
here as well as in the High Level Panel’s recommendations is the importance of establishing
targets for policy. In many countries this has already been achieved to a greater or lesser degree.
Equally important, but perhaps less successfully achieved in many of the countries considered
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
222
here, is the need to ensure 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.
4) 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 had in particular (but not only) from the newer technologies. In most countries
considered here major advances been made in recent decades, however, this remains a
significant obstacle in the Pacific Islands. Second, very often there is a need to make Education
and Training (and above all VET) systems more responsive to the market. Problems in this area
and a number of ways in which this can be mitigated have been discussed in Parts I and II.
These include the development of a modern apprenticeship system as in Australia or the more
community based approaches to be found in many countries including the Pacific Islands.
5) Public Employment Services – Often there is need to develop this area. For the most part, in
the countries considered here, 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 in the Pacific Islands, in others, 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. The case of Viet Nam illustrates that a legal
requirement for employers to use the Public Employment Services is not sufficient and in my
opinion is not to be advised. Rather, 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 the PES. However, 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.
6) Labour Market Information – A basic lesson to be learnt from the studies here 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.
7) Attitudes of, and to, young people – Often the argument is made that young people don’t hold
the right attitudes; they seek the type of work which is not available, they undertake
inappropriate preparation or simply they don’t want to look for work. Where this is true, it is
likely to depend on a variety of factors. First, young people need to have access to opportunities
for appropriate education and training. This is a basic obstacle in many countries as noted above
and regards the provision of such appropriate education and training. Second, much depends
also on information being available on job opportunities. Here, much can be done by getting
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
223
employers and workers involved in schools and universities as well as by activating the
employment services as advocated above. Whilst the second of these is very much dependent on
the development of Labour Market Information Systems, the involvement of the local economic
communities in the education system is not. Getting local economic actors involved can do
much to promote this informational function. Finally, particularly in the case of the Pacific
Islands, a problem was identified regarding young people being unwilling to take on work
because of the social and economic obligations this would entail through the wantok system.
Whilst it is always dangerous to meddle in local cultural systems, it is important to recognise
that such types of impediments do exist and to seek solutions to them.
In each of the cases mentioned here, the main point is that the difficulty lies not with the
young people themselves but with the conditions which they face. One can only end by
reiterating the wise words of Mr. Kofi Annan:
Young people are an asset not a problem!
Youth Employment in Asia and the Pacific: Analytical Framework and Policy Recommendations
224
References
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