Youth employment

The Youth Guarantee in the Western Balkans: five lessons to learn from the case of North Macedonia

Among the many notches that North Macedonia put on its belt in recent years, there is one for being the first non-EU country bent on introducing a fully-fledged youth guarantee (YG). When the Recommendation of the European Union Council compelled EU Member States to put in place a YG, in 2013, Governments and their social partners committed to ensure that all young people would receive a good-quality offer of employment, continued education, an apprenticeship or a traineeship within four months of becoming unemployed or leaving formal education.

News | 07 August 2019

©ILO/Marton Kovacs

Some EU Member States had to learn the hard way that the successful implementation of this policy instrument is not for the faint of heart. Clearly, manifold forms of support were available: the Youth Employment Initiative and the European Social Fund provided matching funds; the European Commission and the ILO offered technical assistance to Member States falling behind; mutual learning and peer-assist opportunities could be availed through the Mutual Learning Programme. In spite of that, some Member States struggled with insufficient resources and the inability to systematically deliver on ‘early intervention’, one of the three policy pillars underpinning the YG, together with ‘activation’ and ‘labour market integration’.

So how is North Macedonia faring in the implementation of this policy, without having access to the same support system as the EU Member States?

Back in 2017, North Macedonia appealed to the ILO to begin a process of reflection on critical issues to consider before embarking on this substantive reform of the labour market. While other development partners can offer financial resources for implementation, the ILO is a technical agency whose strong suit is the provision of policy advisory services and technical assistance. Thus, the ILO engaged in the analysis of the statistical and administrative labour market data. Through a capacity development programme, ILO experts developed technical guidance documents for the North Macedonian institutions on desirable design features to consider during the pilot phase reaching out to several thousand youth in three municipalities, based on the review of EU practices and a sound knowledge of the institutional landscape and service delivery models in the country. In May 2019, the ILO conducted a monitoring mission to assess the results of the pilot phase and furnished a series of recommendations for the YG Implementation Plan 2020-2022, which will cover the entire country.

Thus, what are so far the key lessons to learn from the North Macedonian experience with the operationalization of the youth guarantee?

1)    The conundrum of early intervention. Similarly to EU Member States, the progress under this policy pillar has been slower than expected, with the burdensome procedures for amending the legislation playing a role, among other factors. The rationale for including these measures in the youth guarantee is mainly associated with minimizing the risk of becoming NEET (not in employment, education, or training) for youth who are still at school. With an estimated stock of over 100,000 young North Macedonians already eligible to apply for the youth guarantee, the focus of policy-makers may be drawn elsewhere. However, one should not give in to the erroneous perception that delays in this policy pillar would not severely affect also the short-term outcomes of the guarantee.
2)    It is a priority of the entire Government. The implementation of the youth guarantee has received a high level of priority in the Government Plan (2017-2020). This is a smart move to catalyse energy and resources around this policy. The youth guarantee would not withstand weak policy coherence and coordination across the ministries of Labour, Education and Science, and Finance.
3)    The risk of “creaming off”. A critical element of a successful YG is to include those who are the most detached from the labour market and not only the most employable ones (usually referred to as the creaming effect). The Government of North Macedonia has relied on well-established youth organizations to identify these young people who are hard to reach. This could prove a daunting task, whereby youth need to be accompanied on an activation path that may be checkered with overwhelming personal circumstances (youth facing substance abuse issues, homeless youth, etc).
4)    Reaching the tipping point. The ILO estimated that the introduction of a YG policy framework modelled on the one implemented in the EU would increase the stock of young unemployed eligible to receive a quality offer by 30 percent. Furthermore, if even only half of those outside the labour market (but willing to work) would seek support at the Employment Service Agency (ESA), the agency would face an increase of about 70 percent of its workload compared to the baseline. While ESA is a strong employment service, with qualified staff and adequate tools and procedures in place, extending coverage by 70 percent requires not only additional human and financial resources, but also a change in the service delivery system. Other public employment services in the region currently contemplating a similar policy initiative, should consider how fast their employment service agency would reach the tipping point and come to a dangerous halt.
5)    Funding. Data from 2017 show that there is a significant variation in the spending planned per eligible participants across countries, ranging from more than 13,300 euros (PPP) per participant in Hungary to 115 euros (PPP) per participant in Croatia. Cost per participant in North Macedonia may not be a good gauge of the required financial commitment. Parts of the YG pillars had to be built from the ground up. The implementation plan for the pilot phase already pointed to specific labour market policies and institutions, which had to be adapted to meet the specific commitments of the YG. The lesson here is that key reforms need to be costed and enacted before extending the YG coverage and that reliance on external funding to carry out these reforms should be minimal.

More lessons will emerge from the next phase of the youth guarantee. The ILO remains a close technical partner of the North Macedonian constituents in this endeavour. The ILO is the only international organization active in the region with a track record of providing technical assistance on the design, implementation, and Monitoring and Evaluation of the Youth Guarantee. This is done through a series of already established tools, which the ILO developed for the EU Member States (a Catalogue of ILO Tools for the youth guarantee is available here), as well as through tailor-made technical assistance programmes such as the one delivered for the North Macedonian constituents.