1 ILO/Japan Tripartite Regional Meeting on Youth Employment in Asia and the Pacific 27 February - 1 March 2002 Bangkok

2 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 Solerno Italy

3 Contents Part IAnalytical Framework 1Who are the youth? 2What is the problem? 3Policies to promote decent work for youth

4 Part II:Policy Recommendations 1Problem 2Integration 3Targets 4Education and training systems 5Public employment services 6Labour market information 7Attitudes of and toward youth

5 Part I: Analytical Framework

6 1Who are youth? The conventional international definition of youth includes those between 15 and 24 years old. The sense of this definition is that it runs form the earliest acceptable school leaving age to the age at which most people have completed third level education.

7 2What is the problem? According to Kofi Annan “Youth are an asset, not a problem.” However, young people face serious difficulties in the transition from school to work.

8 Effective transition to Decent Work 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.

9 In countries without social safety nets, youth unemployment underestimates the size of the problem. Some are underemployed. Many young people are in the informal sector. There are substantial numbers of discouraged workers who leave the labour market and are not counted in unemployment statistics.

10 Short term unemployment of labour market entrants might not suggest a serious problem. However, extended periods of unemployment may lead to health problems, drug addiction and social unrest. Young people can be scarred by long term unemployment.

11 Furthermore, the problems of unemployment are typically not distributed evenly among youth. Young women, ethnic minorities and disabled youth may face more serious difficulties in the transition from education to employment. Youth with low levels of education and skills may also have greater problems.

12 3Policies to promote decent work for youth UN/WB/ILO recommendations Employability Equal opportunities Entrepreneurship Employment Creation

13 Active Labour Market Policies: The Supply Side Education and training Guidance and counselling

14 Education and training Education and training play a key role in promoting better work for young people.

15 Education and training Two issues are: the provision of universal basic education to ensure a high level of literacy among the population the need to adapt and make adaptable education and training systems so that they correspond and respond to the labour market

16 Education and training In most countries major advances have been made over the past two or three decades in increasing participation in primary education. However, there are concerns about the relatively low levels of participation at higher educational levels.

17 Education and training Of more direct concern is the inappropriateness and inadequacy of Vocational Education and Training (VET) systems. These are often supply driven with young women channeled into traditionally female dominated areas.

18 Education and training International experience shows that it is important to include both training components and work experience.

19 Guidance and counselling Much of the recent work on youth employment has emphasized the importance of guidance and counselling both before and after young people enter the labour market.

20 Guidance and counselling Young people should be made aware of alternatives in order to make choices. This will require improvements in public employment services, private employment agencies and labour market information.

21 Guidance and counselling Lack of adequate labour market information for effective job matching has been identified in in the Pacific Islands, Sri Lanka and Viet Nam.

22 Active Labour Market Policies: The Demand Side Public works and direct job creation programmes Wage subsidies Youth and ICT Self-employment and small business support Private sector development

23 Public works and direct job creation programmes In many countries of the region public works programmes were introduced in the wake of the 1997 economic crisis. These programmes are designed to provide income support in countries without unemployment insurance and unemployment assistance.

24 Public works and direct job creation programmes They are intended to maintain labour market attachment and avoid long-term unemployment. Public works programmes can also be used to produce goods and services that benefit communities. However, they do not generally promote long-term employment for participants.

25 Wage subsidies Financial incentives to firms including wage subsidies have sometimes been used to promote employment of young people. This is the case of Japan.

26 Wage subsidies The question is does the subsidy create new jobs that would not have existed without them? Or was there a: deadweight loss substitution effect displacement effect

27 Wage subsidies Would more young women and young men be hired at lower wages? In Australia the relative wages of young people have fallen since 1994 and yet the unemployment situation has worsened.

28 Wage subsidies However, in Thailand there is some evidence that a relatively high minimum wage relative to the average wage may have damaged employment prospects for teenagers. It should be noted that the wage effect is outweighed by the overall influence of aggregate demand and labour market conditions.

29 Youth and ICT In order for young people to take full advantage of the ICT revolution certain conditions are required including literacy and infrastructure. Political commitment is also necessary.

30 Youth and ICT Public-private partnerships are common in OECD countries. Public employment services can use Internet for job search.

31 Self-employment and small business support According to the High-level Panel action may be taken at two levels. First, measures may be introduced to reform the institutional and legislative environment. Second, direct measures may be taken to promote self-employment among youth.

32 Self-employment and small business support Examples are the TKPMP in Indonesia, the Employment Fund in Viet Nam and the YTPT in Hong Kong. In Sri Lanka there are micro-credit programmes. The New Enterprise Incentive Scheme in Australia is another example.

33 Private sector development The need to provide conditions to encourage the development of the private sector lies at the heart of the UN/WB/ILO Recommendations. Macroeconomic policies conducive to economic growth are very important.

34 Private sector development Governments must also make it easier for SME development. There are many areas where regulations and procedures can be simplified for “one stop shops” for business start-ups.

35 Active Labour Market Policies: Matching Demand to Supply - Employment Services

36 Public Employment Services The functions of public employment services can be developed in the region to implement active labour market policies. Internet-based job search is becoming increasingly important.

37 Private Employment Agencies The ILO Private Employment Agencies Convention, 1997 (No. 181) recognizes the growing role of the private sector in providing placement services. These tend to concentrate on placing highly-skilled professionals. However, in Indonesia they area involved in hiring casual workers.

38 Private Employment Agencies It is not always obvious to employees who is responsible when disputes arise. For example, in the case of a dismissal is it the recruiting company or the specific employer.

39 Active Labour Market Policies: Evaluating the Effectiveness of Youth Labour Market Policies In order to identify target groups among young people and to monitor and evaluate policies and programmes it is necessary to have labour market information.

40 Impact evaluation seeks to compare the experience of participants with what might have been the case in the absence of the programme. Most of the countries in the region would benefit from improvements in information and analysis related to labour markets.

41 Active Labour Market Policies: The Social partners Linking school with the labour market Active labour market policy Guaranteeing training

42 Linking school with the labour market One way to link education and work is to divide vocational preparation into school-based training and firm- based training. In Germany the involvement of employers’ organizations and trade unions help link curricula to the world of work.

43 Linking school with the labour market Trainees may also be placed in private firms. In some cases corporations may sponsor workers in universities. Trade unions often discuss job opportunities with young people. Employers sometimes provide incentives through prizes.

44 Active labour market policy In many countries employers’ and workers’ organizations become involved in the design and implementation of active labour market policies.

45 Active labour market policy ILO Employment Service Convention, 1948 (No. 88) calls for collaboration of “representatives of employers and workers in the organization and operation of the employment service and the development of employment service policy.”

46 Guaranteeing training The presence of a trade union increases that probability that the firm will provide training. Both employers’ and workers’ organizations play a role in guaranteeing the quality of training. They can also influence the financing of training.

47 Guaranteeing training Employers’ and workers’ organizations also play a promotional role in improving employment prospects for young people.

48 Part II: Policy Recommendations

49 Problem The integration of young people into decent work is one aspect of the transition from education to employment. Two points are:

50 Problem First, young people need a basic education before entering the labour market. Second, unemployment is the tip of the iceberg. Many young women and young men are underemployed. A growing number are working in the informal sector.

51 Integration Policies for youth employment must be integrated into a general employment strategy.

52 Integration Employment policies must also be integrated into other policies for young people such as drug addiction. This means co-ordination among a number of agencies and institutions.

53 Targets It is important to establish targets for policy. The means must also be provided to achieve these targets. This includes making adequate resources available for youth issues.

54 Education and training systems Basic levels of education and literacy are necessary to exploit new technology. Systems for education and training must be responsive to the market. Two methods mentioned in country papers are the modern apprenticeship system in Australia and community based approaches in the Pacific Islands.

55 Public employment services For the most part job search in the region is conducted without the support of public/private employment services. Employment services can provide better links between job seekers and employment opportunities through telephones and Internet.

56 Labour market information The studies for this regional meeting point to the important role of labour market information in opening jobs to young women and young men. Youth need better information about employment opportunities. Governments need LMI for policies.

57 Attitudes of and toward youth It is often argued that young people do not have the “right attitude.” But attitude depends on education and training. It also depends on accurate information about job opportunities.

58 Attitudes of and toward youth Much can be done by getting employers and workers involved in schools and universities as well as through employment services. Local communities can have an impact on youth employment.

59 Attitudes of and toward youth In these cases the solutions lie in changing the circumstances of youth not in focusing on their attitude. As Kofi Annan has stated young people should be viewed as an asset and not a problem.