Youth: Employment, Unemployment and Labour Market Programmes Niall O’Higgins, Senior Research Specialist, Youth Employment Programme, ILO, Geneva 1CREATING JOBS FOR EQUITY AND PROSPERITY, REGIONAL CONFERENCE ON EMPLOYMENT AND SOCIAL INCLUSION, APRIL 2015, SKOPJE

Introduction Youth Labour Market Situation Policies and programmes to promote youth employment 2

Youth Unemployment is a major challenge 3

As can be seen also from the ratio of the youth (15-24) unemployment rate to the adult (25-49) unemployment rate 4

But the real ‘unemployment’ problem concerns the long-term unemployed, also amongst the yo ung 5

Also, job quality is an issue for young people 6

Informality and poor quality employment Informal employment rates (and other indicators of poor job quality) are disproportionately high for the young Concentrated amongst the least educated e.g. in Macedonia, FYR prevalence is around 70% amongst young people with primary education or less; under 20% for those with tertiary education Consequences: Strongly associated with – job dissatisfaction – ill-health – Lower wages

What to do about it?  Youth unemployment strongly dependent on Aggregate Demand  Labour Market Institutions:  reducing employment protection is not the answer  EPL associated with lower job turnover, not more jobs for YP  Tax wedge (Gap between wages received by workers and labour costs paid by employers) - consistently found to have a strong positive impact on youth unemployment (e.g. Jimeno & Rodriguez-Palenzuela, 2002), and negative impact on youth employment (Bassanini & Duval, 2006; Bertola et al. 2007)  Need to recognise (and exploit) complementarity amongst institutions and programmes  Stronger EPL associated with productivity gains – supports economic growth  Resolving problems associated with regulation is more about designing AND APPLYING rational rules rather than removing regulations per se  Education and Training systems – important, but long term solution 8

ALMPs  ALMPs = promising avenue to develop and improve  Effectiveness varies greatly according to a number of factors  Comprehensive interventions  Job Search Assistance  Training vs. employment subsidies  On-the-job training  Public vs. Private  Business Cycle  Targetting  Social partner involvement  Timing of evaluation Encouraging Youth Entrepreneurship? 9

Thank You & Best of Luck 10