The global economic crisis has exacerbated the difficult situation that already existed in youth labour markets of the contries of the sub-region. The crisis resulted in a dramatic increase in the levels of unemployment among young people. The youth unemployment rate in the region jumped from 17.0 per cent in 2008 to 20.4 per cent in 2009 . The rate decreased between 2009 and 2011 but has not yet returned to pre-crisis levels, and is projected to be slightly over 18 per cent until 2018 . Unemployment and underemployment have adverse long-term consequences for young people. These include deterioration of skills and disaffection. The consequence on labour market outcomes can be long lasting. This has a “scarring” impact on wages that protract over several years of the working life. In addition, youth unemployment and inactivity can lead to social exclusion, as the inability to find employment creates a sense of idleness and frustration. Social exclusion and a sense of unfairness might lead to disaffection and anti-social behaviours.

Moreover, young people in the region are usually over-represented in the informal economy. The higher proportion of informal young workers is found in agriculture, construction and services. The high share of young workers in informal employment points to poor quality of youth employment in these countries, where many young workers do not enjoy basic rights at work, do not have an employment contract and are not covered by social protection measures.Young workers are, to a larger extent than other groups, engaged in low-quality, precarious and hazardous forms of work.

Another challenge that is common to the countries of the region is skills mismatches. The correlation between educational attainment and unemployment, in the sense that the higher the level of educational attainment, the lower the rate of youth unemployment, is generally valid. Nevertheless, the issue of the young “educated” unemployed is increasing. On the one hand, there are not enough jobs for young university graduates. On the other, there is high and unsatisfied demand for technicians at all skill levels.

The response of policy-makers to these challenges does not always address the root causes of the problem. The public employment services have difficulties in reaching out to young people, as illustrated by the fact that the registered unemployment figures tend to underestimate the overall youth unemployment rate, be it for lack of information, on the part of the unemployed, about the services delivered by the employment centres, or for their lack of trust in the assistance that can be provided by these centres. Overall, both targeting and performance monitoring of Labour Market Policies (LMPs) are weak and rigorous impact evaluation is rarely conducted in these countries.

The crisis of youth employment was a main subject discussed by the International Labour Conference (ILC) in June 2012. Representatives of governments, employer organizations and trade unions of 185 countries called for urgent and immediate action to reverse the youth employment crisis and the threat of losing a generation of young people. The 2012 ILC Resolution “The youth employment crisis: A Call for Action” contains guiding principles and a comprehensive set of conclusions describing policy measures that can guide constituents in shaping national strategies and action on youth employment. It affirms that a multi-pronged and balanced approach that takes into consideration the diversity of countries is the desired way to respond to the highest global priority of generating decent jobs for youth. This approach should foster pro-employment growth and decent job creation through macroeconomic policies; education, training and skills; labour market policies; entrepreneurship and self-employment; and rights for young people.

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