Financing for Development

Investing in Youth & Ensuring Decent Jobs to Harness the Demographic Dividend

Remarks by Mr Aeneas C. Chuma ILO Regional Director for Africa at a Side on Event Investing in Youth & Ensuring Decent Jobs to Harness the Demographic Dividend on the Occasion of the First-Ever World Youth Skills Day, during the Third International Conference on Financing for Development.

Statement | 15 July 2015
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Excellencies, Distinguished Delegates, Ladies and Gentlemen,

It is a great pleasure to be with you today as we mark the first-ever World Youth Skills Day.

The demographic dividend

A population with a significant share of young people can be both a challenge and a window of opportunity. There are over 1.2 billion young people in the world and the majority live in developing countries.

At the same time, as a result of lower fertility and increased longevity, the proportion of children is beginning to decline in an increasing number of developing countries, while the share of working-age adults rises.

With additional labour supply, the productive capacity of the working-age population may surge during a demographic transition. In order to benefit from this transition, countries need to be in a position to create decent and productive jobs for the growing workforce.

Unemployment remains a top concern in both advanced and developing economies: there are currently around 74 million unemployed youth: the highest number we have seen since ILO started collecting such data at a global scale. The youth unemployment rate is practically three times higher than that of adults.

But we must not ignore the issue of an overall declining quality of jobs for young people. This distinguishes the current generation from those of the past. Stable employment has become a relic of the past in developed economies. In developing countries, the challenge is not only creating more jobs but ensuring quality jobs for youth who are often under-employed and working in the informal economy. About 228 million young people living in developing countries work but cannot escape poverty. This is particularly the case in countries and regions with a youth bulge.

Research conducted by the ILO in several low- and middle-income countries tells us that nearly half of youth in developing economies are not achieving their full economic potential: this is a further hindrance to development. This innovative research goes beyond standard labour market indicators and looks at issues such as irregular employment and under-utilization, job quality and satisfaction, and the transitions of young people to and within the labour market.

This research also tells us that:
  • ­ almost eight out of ten young workers are in informal employment,
  • ­ four in ten young workers lack a stable employment contract,
  • ­ five in ten are undereducated or overeducated for the work that they do,
  • ­ six out of ten young workers receive below-average wages.
  • ­ As much as half of young persons in developing regions are either without work, not studying or engaged in irregular employment.

With no improvements in raising the productive value of the work of young people, progress on reducing poverty is at risk. More needs to be done in these countries to reap the benefits of a young and motivated generation. We must act now and before the “demographic window” closes.

It is by providing young people with better working and living conditions at home that migratory flows are driven by choice rather than necessity. Labour under-utilization and meagre earnings are the most important “pushes” for our young generations to move to another country or region. We must deploy any possible effort to ensure that decent work becomes a reality in the home countries of these young people.

A balanced policy agenda

It is in the face of the current and unprecedented youth employment crisis that the International Labour Conference of the ILO unanimously adopted in 2012 the Resolution “The youth employment crisis: A call for action”.

The Call for Action, not only underlines the urgency for immediate and targeted action to respond to the youth employment crisis but also serves as a global framework that can be adapted to the specific context. It contains guiding principles and a comprehensive set of practical and tested policy measures that can guide policy makers in shaping balanced strategies and action on youth employment. The policy mix should simultaneously combine interventions to increase both quantity and quality of jobs with measures to enhance the employability of young people. Targeting disadvantaged young workers is equally important, particularly for those young people who are in survival activities or discriminated against in the labour market.

Skills for employment

Education and training systems are key determinants of youth employment outcomes: they can provide young people with the right skills and attitudes to prepare them for the world of work and facilitate the school-to-work transition or help them move to better quality jobs.

The skills for employment measures proposed by the “Call for Action” that I just mentioned include: (i) improving the links between education, training and the world of work; (ii) enhancing technical vocational education and training (TVET); (iii) improving the range and types of apprenticeships and other measures that provide work experience; (iv) supporting second-chance initiatives for those who leave school early or never attended it; (v) developing systems of recognition of prior learning; and (vi) introducing social protection measures so that education and training are affordable to all.

Countries that have been successful in linking skills to productivity, employment, and development have focussed on matching supply to current demand for skills; helping workers and enterprises adjust to change; and anticipating and delivering skills needed in the future.

There is a need to overcome barriers for young women in accessing training; expand training opportunities for persons with disabilities; and to combine core skills, training, work experience, employment services, and entrepreneurship in interventions targeting young people.

Shaping up the future with better opportunities for decent jobs for youth

Policies that foster strong aggregate demand, increase productive investment and improve access to finance can have a positive impact on young people’s employment prospects. Macroeconomic and growth policies can encourage economic diversification and the development of sectors that are conducive to the creation of jobs for youth.

Skills development should be part of comprehensive growth strategies and go along with technology, labour market, macroeconomic, trade and development policies.

Investments in education and skills development can help an economy to move towards higher value added activities and dynamic growth sectors. A growing workforce can lead to more possibilities for saving and private and public investment in human and physical capital. The period when the share of the working-age population is high and the dependency burden low, also allows for the introduction of social protection systems.

The proposed SDGs include goals on inclusive and equitable quality education and life-long learning opportunities, and on sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all; Its targets call for increased numbers of youth and adults with employable skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship; increased participation of young people currently excluded from the labour market and full and productive employment and decent work including for young people;

Excellencies, Ladies and Gentlemen,

On the eve of a new development agenda, I look forward to a very timely discussion on investing in young people, effective approaches to skills development to address underemployment, unemployment and working poverty; and practical ways to maximize the benefits of the demographic dividend.

Skills for Sustainable Development: Connecting Youth to Labour Market

On the first-ever commemoration of World Youth Skills Day, Aeneas Chapinga Chuma, Assistant-Director-General and Regional Director for Africa talks about how to provide skills that will enable young people to get productive employment in a changing world of work.