Benchmarks for Youth Employment

Transcription

1 Benchmarks for Youth Employment Youth Employment Network 2010 Other Inactive Youth 35% In School 24% Employed 31% Unemployed 9% Discouraged 1% First Benchmarking Exercise of the Lead Country Network 0

2 Benchmarks for Youth Employment Report on the First Benchmarking Exercise of the Lead Country Network I. Executive summary... 5 II. Introduction... 8 III. What is the report about?... 9 A. Why to establish benchmarks for youth employment? B. YEN Benchmarking Areas IV. Benchmarks for youth employment A. Labor market indicators Mapping Youth in the Labor Market a) Indicator 1: Distribution of youth population by primary activity b) Indicator 2: Youth unemployment rate c) Indicator 3: Relaxed youth unemployment rate d) Indicator 4: Youth Employment-to-Population rate Mapping Employed Youth a) Indicator 5: Status of young workers in employment b) Indicator 6: Youth employment by sector c) Indicator 7: Median earnings for wage and salaried workers Linking the Labor Market with Education a) Indicator 8: Educational attainment of the youth labor force B. Employment measures and institutional arrangements Bangladesh Democratic Republic of Congo Egypt

3 4. Ghana Indonesia Mali Nigeria Senegal Sri Lanka Syria Tanzania Turkey Vanuatu Zambia V. Conclusions and next steps A. Lessons learned. Already B. Next steps VI. References and resources A. References B. Links to reports of the Lead Country Network C. Links to resources for Lead Countries D. Links to resources for non-lead Countries: VII. Annex A. Submission dates for Benchmarking Reports B. Cross-country Labor Market Indicators C. Comparative Tables on Policy and Institutional Arrangements in the Lead Countries

4 Tables Table 1: Youth Labor Market Indicators Table 2: Distribution of youth by primary activity, as a percentage of the total youth population Table 3: Youth unemployment rates in the Lead Countries Table 4: Comparison of Indicators 2 and Table 5: Status of young workers in employment Table 6: Youth employment by sector Table 7: Earnings of young workers in Lead Countries Table 8: Educational attainment of youth Figures Figure 1: Map of the Lead Countries... 9 Figure 2: Distribution of youth by primary activity Figure 3: Quarterly Youth Unemployment Rates for three Lead Countries, Figure 4: Youth unemployment rate by gender Figure 5: Youth employment-to-population ratio Figure 6: Youth employment-to-population ratio by gender Figure 7: Mapping employed youth by status Figure 8: Vulnerable employment for youth, total Figure 9: Vulnerable employment for youth, by gender Figure 10: Mapping employed youth by sector Figure 11: Gender distribution of youth in agriculture Figure 12: Gender distribution of youth in industry Figure 13: Gender distribution of youth in services

5 Equations Equation 1: Youth Unemployment Rate Equation 2: Relaxed Youth Unemployment Rate Equation 3: Youth Employment-to-Population Ratio Equation 4: Vulnerable Employment Rate for Youth

6 Benchmarks for Youth Employment Report on the First Benchmarking Exercise of the Lead Country Network 1 I. Executive summary This report presents the results of the first Benchmarking Exercise of the Lead Country Network and explains in detail main benchmarking areas and findings. The Lead Country Network is a diverse group of 19 countries that have committed themselves to finding measures and methods for the promotion of employment opportunities for young people around the world. Aiming at a better integration of youth into the labor market, the lead countries decided to participate in establishing benchmarks for successful youth employment policies and programs and to report to the YEN Secretariat on the situation of youth in the labor market. The primary goal of the Exercise is to identify benchmarks for successful youth employment initiatives that can be shared and replicated in lead countries and abroad. This report is the result of the first effort of the countries in collecting and systematizing selected information to be shared with peer policymakers and the overall community of practice in youth employment. The Benchmarking Exercise consists of two key areas, namely: youth labor market indicators and youth employment measures and institutional framework. The first area consists in a set of eight indicators aiming to (i) support diagnostic efforts of the conditions of youth in the labor market; (ii) provide relevant and robust measures of progress towards the targets of the employment-related Millennium Development Goals; and (iii) serve as a basis for international comparison. The indicators are: (i) the distribution of youth by primary activity; (ii) the youth unemployment rate; (iii) the relaxed youth unemployment rate; (iv) the youth employment-to-population ratio; (v) the distribution of young workers by status; (vi) the distribution of young workers by sector; (vii) mean or average earnings for wage and salaried young workers; and (viii) the educational attainment of the youth labor force. The second benchmarking area contextualizes these indicators with qualitative information on youth employment policies and programs. The report finds that unemployment is a luxury situation for most youth. Information from the lead countries stresses the fact that young people in developing countries, 1 This report was prepared by Susana Puerto (lead author), Markus Pilgrim and Stefanie Weck of the YEN Secretariat on January For further information please contact Markus Pilgrim at pilgrim@ilo.org. We are grateful for the contributions of our focal points in the lead countries as well as substantive feedback and support from external reviewers from ILO HQs and regional offices. Special thanks go to Sara Elder, ILO TRENDS, for her technical input in the selection of the indicators as well as the review of country reports and analyses. 5

7 particularly in low income countries, cannot afford to be unemployed for long time. Most youth in Tanzania and Ghana, and to a lesser extent in Bangladesh, are active and employed, even though measures of job quality such as economic sector and employment status indicate they are not placed in the best jobs or conditions: there is an overreliance on the agriculture sector and most youth work as own-account and/or unpaid family workers. Information on unemployment rates only gives a partial view to the problem. Youth unemployment rates provide a useful piece of information about the labor market conditions of young people, however, such information is not enough to understand the full dimension of the problem and it does not provide enough data on job quality. An analysis of the effect of the economic crisis on youth employment showed that a look at the unemployment rate led to the assessment that the crisis had hit harder developed than developing countries. However, when other information is taken into account such as status of employed youth, working hours, earnings, and discouragement the high vulnerability of young people to economic crises in developing countries is exposed. Similar to the unemployment rate, the employment-to-population ratio indicator is a measure for quantity only. Youth may be highly susceptible to discouragement as they often are highly vulnerable in labor markets affected by economic crises or deficient labor demand. Discouraged young workers provide an idea of the extent at which labor resources are underutilized. Comparisons between the unemployment rate and the relaxed unemployment rate in Jamaica and Ghana indicate a significant role of discouragement factors that are keeping youth away of the labor force. Labor market vulnerability is higher for youth in lower income economies. Mapping employed youth by status in employment displays a large proportion of youth working as wage and salaried employees, particularly in the less disadvantaged economies. Countries such as Egypt, Jamaica, Syria, and Turkey have over 60 percent of employed youth receiving wages/salaries from their work. On the other hand, youth in lower income countries such as Bangladesh and Tanzania are working as household enterprise workers, which means they are either own-account workers or unpaid family workers, the most vulnerable categories of status due to the lack of safety nets and latent informality. Information on employment measures and institutional framework indicates important steps towards full, productive and freely chosen employment for young people. Sri Lanka, Turkey, Egypt, Nigeria, Vanuatu, and Zambia report progress towards implementation of a National Action Plan for youth employment. Other countries are focusing more on the coordinating mechanisms to make implementation a reality and to embed youth employment measures in other national policies, as it is the case of Indonesia through its Indonesia Youth Employment Network (I-YEN). Active labor market measures vary from country to country with a common investment on skills training and entrepreneurship interventions. Bangladesh and Sri Lanka have devoted important resources to improvements of vocational technical education and training systems. Other countries, such as Senegal, Mali, and Tanzania, have launched national funds for the promotion of youth entrepreneurship and self-employment. Public and private programs for youth allow large 6

8 coverage in terms of population and types of interventions, as it is the case in Syria, where private resources are also invested in the promotion of youth employability. The YEN developed two particular tools to facilitate information gathering on the aforementioned benchmarking areas. These tools, an integrated excel template and a questionnaire, aim at facilitating the collection of data as well as the use of information. Because the tools are practical and easy to use the response by lead countries was very positive. Perceiving the Benchmarking Exercise as an opportunity to collect and use information for their own planning and decision making process, governments showed great interest for the exercise. Nevertheless, certain limitations occur in regards to data sources and links between the YEN focal agency in the countries and other governmental bodies. This can be facilitated by close collaboration and intensified collection of labor market data. The results of the first Benchmarking Exercise will be shared with member countries during the first semester of Then, the YEN Secretariat will organize the next Lead Country Network and launch the second Benchmarking Exercise. For the time being, some refinements on the questionnaire will be made to optimize the clarification of concepts and questions. The YEN Secretariat will also in the future assist YEN focal persons in the countries with feedbacks on their reports and additional explanations on the exercise, if necessary. The overwhelming success of the first Benchmarking Exercise has created even larger motivation and interest for a continuation of the exercise and has sharpened the minds towards a fruitful discussion about a better integration of youth into the labor market. 7

9 Benchmarks for Youth Employment Report on the First Benchmarking Exercise of the Lead Country Network II. Introduction After the revision of the Lead Country Network in early 2009, 19 countries have (re) joined the network. Regional representation is quite broad with a large proportion of countries in Africa, as displayed in Figure 1. The YEN lead countries are: Bangladesh, Democratic Republic of Congo, Ecuador, Egypt, Ghana, Indonesia, Jamaica, Liberia, Mali, Nigeria, Rwanda, Senegal, Sri Lanka, Syria, Togo, Tanzania, Turkey, Vanuatu, and Zambia. Lead Countries are committed to share information and experiences and in particular to participate in the core product of the network: the Benchmarking Exercise in Youth Employment Policies and Programs. The objective of the exercise is two-fold: first, to provide a picture of where lead countries stand as regards to youth employment, and second, to promote the use of this information among lead countries as a benchmark for future policy decisions and monitoring. Eight key indicators are at the center of the exercise. They map youth in the labor market, describe the status and sectors of employed youth, and reflect educational attainment of the youth labor force. This information is supported by in-depth descriptions of labor policies and programs undertaken in the lead countries, contextualizing the conditions of youth in the labor market. This report presents the results of the first Benchmarking Exercise. Fifteen countries, out of 19, submitted information to the YEN Secretariat as of January , namely: Bangladesh, Democratic Republic of Congo, Egypt, Ghana, Indonesia, Jamaica, Mali, Nigeria, Senegal, Sri Lanka, Syria, Tanzania, Turkey, Vanuatu, and Zambia. Extent and quality of reports vary from well elaborated and complete reports to others with partial or draft information. A competitive component was added to the exercise, offering an award to the lead country focal points for the best report. The winner country of the 2010 award is Egypt. The report is organized in seven sections with this Introduction being the second section after the Executive Summary. Section III intends to provide the reader with background information on the Benchmarking Exercise and areas covered. Section IV presents in detail the labor market indicators comprised in the exercise and the reported information from the lead countries. In addition, this section summarizes the reported information on employment measures and institutional arrangements that have been put in place by lead countries in regards to youth employment. Country data is summarized and compared in this section. The conclusion of the report is drawn in section V showing results and findings of the exercise as well as perspectives and further steps for the Lead Countries. Sections VI and VII contain references and resources and annexes, respectively. 8

10 Figure 1: Map of the Lead Countries Bangladesh Vanuatu III. What is the report about? The Lead Country Network is the flagship product of YEN s activities aiming to support governments engagement in the development and promotion of youth employment opportunities. Introduced in 2001 and revised in 2009, the Lead Country Network is framed by a number of benefits and commitments that makes it an attractive avenue for youth employment promotion and information sharing. Benefits to lead countries include technical assistance in the development of youth employment initiatives, capacity-building on developing youth participation in youth employment initiatives, support in devising fundraising strategies for youth employment programs, and access to experiences and good practices from other countries. Commitments of lead countries circle around an active participation in a Benchmarking Exercise that seeks the promotion of informed policymaking for youth employment. The primary goal of the exercise is to identify benchmarks for successful youth employment initiatives that can be shared and replicated in lead countries and abroad. Aiming to explore the whole youth employment spectrum, the governments of the 19 lead countries agreed on annually reporting on the status of selected youth labor market indicators as well as progress made in terms of policy and institutional arrangements. This report aims at presenting the results of the first YEN Benchmarking Exercise providing an in depth description of benchmarking areas and tools in order to discuss their relevance and potential for policymaking. The report presents, summarizes, and interprets the individual Lead Country s reports from 2010 and portrays an overall picture of youth employment in their particular context. 9

11 A. Why to establish benchmarks for youth employment? Young people are especially vulnerable to external shocks such as the economic crisis. According to the ILO s 2010 Global Employment Trends for Youth, between 2007 and 2009, global youth unemployment increased by 7.8 million, implying a rise of the youth unemployment rate from 11.9 to 13.0 percent. Youth rates are more sensitive to business cycles and more uncertain in economic instability than adults. Young people are often less marketable to employers due to their lack of skills and work experience. The breadth of social networks, useful for finding jobs, is also less extended than networks among adults. Insufficient knowledge where to look for work as well as fewer financial means make the integration of youth into the labor market even more difficult, particularly in times of crisis. Box 1: Why focus on youth? Youth are a valuable asset. Their labor, increasing education level, and creativeness represent an important input to development and growth. Appropriate public expenditure on youth, in the presence of a young demographic dividend, can conduce to social inclusion and poverty reduction, as experienced in Asia during the seventies and eighties. Underinvestment, on the other hand, can lead to youth unemployment as well as political and social instability. Youth unemployment and situations in which young people give up on the job search or work under inadequate conditions incur a cost to the economy, to society, and to the individual and his/her family. A lack of decent work, if experienced at an early age, may affect a person s future employment prospects and lead to unsuitable labor behavior patterns that last a life time. There is a demonstrated link between youth unemployment and social exclusion that can latter on translate into political and social instability. The inability to find employment creates a sense of uselessness and idleness that can trigger crime, mental health problems, violence, conflicts and drug taking among youth. Accordingly, focusing and investing in youth entails not only a productive use of the labor force but also valuable long-term social gains. From an economic point of view, investment in youth employment has the potential of boosting savings and aggregate demand while ensuring sustainability of social security systems. It is therefore a cost-effective policy for governments and societies alike. Source: ILO (2010): Global employment trends for youth: August 2010: special issue on the impact of the global economic crisis on youth, Geneva. In order to understand the impact and properly react to an economic crisis, governments need to rely on quality data. Quality data are labor market indicators that improve the ability of analysts to successfully appreciate the big picture. This implies going beyond the commonly used indicators such as the labor force participation rate and the 10

12 unemployment rate and exploring other indicators that offer dimensions of job quality and working conditions, key features of labor market functioning. A recent analysis of the effect of the crisis on youth employment illustrates how different indicators may change impact assessments. By looking at the unemployment rate only, the impact of the crisis on youth was larger in developed countries than in developing ones. High levels of informality and self-employment in developing countries remained noncaptured by the unemployment rate, providing an incomplete diagnosis of youth labor market conditions. When other indicators such as status of employed youth, working hours, earnings, and discouragement are considered in the analysis, the high vulnerability of young people in labor markets of developing countries is exposed. The Benchmarking Exercise promoted by YEN among its lead countries seeks to develop tools to assists governments in better understanding the conditions of youth in the labor market aiming at informed and improved policy decisions. Such tools will provide yardsticks to measure progress and support monitoring efforts while contextualizing labor market data with information on country context, policies, programs, and institutional arrangements. B. YEN Benchmarking Areas Upon request from the lead countries (during the Third Lead Country Meeting) and in consultation with the World Bank, the UN, and the ILO, the YEN Secretariat selected two areas for youth employment benchmarks, namely: (i) labor market indicators and (ii) employment measures and institutional framework. These areas are close to policymakers and have therefore high likelihood of impacting their policy and programming decisions. Eight labor market indicators compose the first area, which focuses on establishing quantitative benchmarks. They have been chosen for their relevance, usefulness, and feasibility. They aim at (i) supporting diagnostic efforts of the conditions of youth in the labor market; (ii) providing relevant and robust measures of progress towards the targets of the employment-related Millennium Development Goals; and (iii) serving as a basis for international comparison. In addition, they are designed to be broadly consistent with other global lists and are based on international standards, recommendations, and best practices. The indicators are: (i) the distribution of youth by primary activity; (ii) the youth unemployment rate; (iii) the relaxed youth unemployment rate; (iv) the youth employmentto-population ratio; (v) the distribution of young workers by status; (vi) the distribution of young workers by sector; (vii) mean or average earnings for wage and salaried young workers; and (viii) the educational attainment of the youth labor force. A summary of their rationale is provided in Table 1. Focal points in the lead countries locate the raw numbers behind the indicators and enter the data in an integrated Microsoft Excel template that facilitates the computation of the indicators for (at least) two different years, providing a measure of change. 11

13 The second benchmarking area contextualizes the above listed indicators with qualitative information on youth employment policies and programs. It covers issues from legislation to policies, collecting detailed information on National Action Plans for youth employment and Active Labor Market Programs for youth as well as government perceptions on main achievements and challenges. The collection tool is an easy-to-fill questionnaire, available in Microsoft Word. Table 1: Youth Labor Market Indicators Indicator Rationale Indicators mapping youth in the labor market Indicator 1: Distribution of youth by primary activity Indicator 2: Youth unemployment Rate Indicator 3: Relaxed youth unemployment rate Indicator 4: Youth employment-to-population ratio It captures the full extent of activity options of youth, delineating between active and inactive economic activities. It includes: employed and unemployed within the economically active and discouraged, in school, and other within the economically inactive. The indicator is the best-known and most used labor market indicator. It gives a measure of the inability of an economy to generate employment for young persons who are not employed but are available and actively seeking work. It is a measure of the unutilized youth labor potential. It adds to the standard measure of unemployed those who are not technically unemployed because they do not meet the active job search criteria but who would like to work. It is an MDG target 1b indicator, which is the proportion of a country s young population that is employed. It is a measure of the youth who work among the full range of those who could be available to work. Indicators mapping employed youth in the labor market Indicator 5: Status of young workers in employment Indicator 6: Youth employment by Sector Indicator 7: Mean earnings for wage and salaried workers Indicator linking education and the labor market Indicator 8: Educational attainment of youth labor force It refers to the proportion of the employed youth classified as: wage and salaried workers, employers, and household enterprise workers. The latter is the most vulnerable one, comprising own-account and contributing family workers. It refers to the proportion of employed youth classified by the broad sector of employment: agriculture, industry, and services. Employment in each sector implies differences in terms of pay, job attachment, and work conditions. Changes over time inform on possible areas of economic growth. Earnings relate to remuneration in cash and in kind paid to employees at regular intervals for time worked or work done together with remuneration for time not worked. It gives an idea of job quality. It reflects the levels and distribution of the knowledge and skills base of the youth labor force. It provides an indication of the capacity of countries to achieve social/economic goals. It is the proportion of youth that have achieved certain education level (primary, secondary and tertiary). 12

14 IV. Benchmarks for youth employment The YEN Benchmarking Exercise, areas, and tools were shared with the governments of the lead countries during the Fourth Lead Country Meeting, which took place in December The purpose of the meeting was to instruct YEN focal points on the use of the abovementioned benchmarking tools. It offered training on how to compute, interpret, and apply the labor market indicators and how to write a good narrative report on employment measures and institutional arrangements for youth employment. This section will present the information reported by lead countries between February and October, It is organized by benchmarking area, displaying first the labor market indicators and later the information on national policies, by indicator and topic question, respectively. A list of reporting countries and submission dates can be found in Annex A (Page 45). A. Labor market indicators 2 According to their significance and content, the eight indicators have been divided up into the following three main categories (as displayed in Table 1): 1. Indicators that map youth in the labor market, 2. Indicators that map employed youth, and 3. Indicators that link the labor market with education. The YEN focal points in the lead countries were recommended to gather this information for two different years from reliable sources, such as household-based surveys, surveys of establishments, administrative records, or official estimates. Providing sufficient information regarding the data sources used as well as the age definition of youth applied was compulsory for the exercise. In addition, all indicators were to be disaggregated by sex, whenever possible. Other disaggregations, such as additional youth age bands (e.g and years), educational level, and rural/urban location were encouraged. While 12 countries submitted the MS Excel template, indicators can only be computed in 9 cases due to lack of sufficient data or delayed verification of data and sources Two useful sources of information for definitions and concepts related to labor market indicators are: the ILO s 1990 publication on Employment, unemployment and underemployment and the ILO s Key Indicators of the Labour Market (KILM). This report strongly relies on these sources for consistent terminology and descriptions. 3 The YEN focal point in the Democratic Republic of Congo submitted a narrative report that summarizes a number of labor market indicators, of which, only the youth unemployment rate was part of the selected indicators for the Benchmarking Exercise. The country is therefore only listed under Indicator 2. 4 The YEN focal point in Senegal submitted the quantitative report with detailed information. However, some inconsistencies in data could not be verified and amended before the release of this report. The decision was then to exclude Senegal s information from this version until official amendments could be made. 13

15 1. Mapping Youth in the Labor Market a) Indicator 1: Distribution of youth population by primary activity The first task in the Benchmarking Exercise is to map the relationship of youth to the labor market. Indicator 1 captures the full extent of activity options for youth, delineating between active (employment and unemployment) and inactive economic activities (studying, discouragement, and others), as displayed in Figure 2. The concept of economic activity considers all market production and certain types of non-market production, excluding unpaid activities. 5 Hence, Indicator 1 measures the distribution of youth by activity in the labor market in relation to the total youth population. Active youth is equivalent to the youth labor force. It includes youth who are either employed or unemployed. Employment refers to youth who worked for at least one hour or held a job during a specified reference period. It applies to a large range of working circumstances, including: (a) persons who worked for pay or profit (or pay in kind); (b) persons who were temporarily absent from a job for reasons such as illness, maternity or parental leave, holiday, training or industrial dispute; and (c) unpaid family workers who work for at least one hour. It can also consider (d) working students and (e) members of armed forces. Paid employment should be differentiated from self-employment. This distinction will be further studied under Indicator 5 (below). Figure 2: Distribution of youth by primary activity Unemployment, on the other hand, refers to youth who, during a reference period, were: (a) without work; i.e. had not worked for even one hour in any economic activity; (b) 5 The System of National Accounts 1993 is a conceptual framework that sets the international statistical standard for the measurement of the market economy. 14

16 currently available for work; and (c) actively seeking work; i.e. had taken active steps to seek work during a specified recent period (usually the past four weeks). 6 Inactive youth can be either discouraged, in school, or under other inactivity options. Discouraged workers can be seen as an extension of the unemployed. A young person is discouraged if he/she is (a) without work in the reference period (and not studying), (b) available to work and would accept work if offered, but (c) did not actively seek work in the reference period for a reason implying he/she felt that engaging in a job search would be futile. If information about the reason for not seeking work is unavailable, a more general measure of discouragement can be: not working and available to work but did not actively seek work regardless of reason. Availability for work, however, is especially hard to measure due to the difficulty to determine when and how a person is ready to work. The group of discouraged young workers is interesting for considerations of mapping the labor market because they represent, as well as unemployed, unutilized labor resources. Young discouraged workers are affected by an economy s inability to provide sufficient employment opportunities. Yet, they are most likely to re-enter the labor force if an economy is recovering. Youth in school is a relevant category to measure since it supports the analysis of the school-to-work transition and the linkages of education with the labor market. A young person is considered to be in school when he/she is enrolled in full-time education and is neither working nor seeking work. Young people in school are mainly engaged in noneconomic activities during the reference period and therefore are regarded as inactive. Exceptions are students who work part-time or full-time during vacation. They should be classified among the employed and students looking for work should be classified among the unemployed. Youth inactive for other reasons include young non-students who are neither working nor looking for work. The category can include persons with disabilities and persons engaged in housework (e.g. housewives), or income recipients. Table 2 displays the information reported by lead countries. An interesting pattern emerges from low income countries, such as Ghana, Tanzania, and to a less extent Bangladesh, where the majority of youth, over 50 percent, are accounted as active and employed. Such cases reflect economic conditions where poverty, insufficient employment opportunities, relatively weak links between the education system and the labor market, and a lack of social safety nets push young people to work, even though not in the best conditions. Indicators 5 to 7 will offer further light on the situation of employed youth. 6 Steps can include: registration at an employment exchange, direct application to employers, checking at worksites, farms, factory gates, markets or other assembly places, use of media or personal relations to seek information. 15

17 Table 2: Distribution of youth by primary activity, as a percentage of the total youth population Country Year Employed a Unemployed Discouraged In School Other Inactive Youth Arab Republic of Egypt Bangladesh Ghana Indonesia Jamaica Sri Lanka Syrian Arab Republic United Republic of Tanzania Turkey Vanuatu c c, f i % 8.2% 1.2% 24.2% 36.7% b % 8.3% 1.2% 24.2% 35.1% % 3.4% 1.7% 17.9% 26.6% % 4.2% 2.1% 18.0% 28.1% % 3.5% 5.7% 18.0% 7.2% % 4.0% 6.5% 13.4% 6.0% % 16.4% 3.8% 29.8% 17.3% % 11.8% 1.6% 33.4% 19.2% % 9.7% 3.9% 59.4% d d % 9.2% 3.1% 60.9% % 10.0% NA 31.4% 21.0% g % 8.8% 1.2% 29.4% 23.0% % 11.0% 0.8% 12.2% 33.7% h % 8.3% 0.7% 37.9% 29.6% % 3.8% 3.4% 13.4% 5.7% % 4.9% 2.4% 14.9% 3.4% % 7.7% 2.0% 31.9% 30.0% % 8.0% 2.0% 32.9% 28.7% % 9.7% 2.9% 47.3% 13.5% % 37.2% 7.7% 8.0% 13.2% e Notes: a. Also regarded as Indicator 4: youth employment-to-population ratio. b. This figure is a lower bound as there is no information on female discouragement. c. Between the reference periods there is a negative growth in the youth population that is not supported in the UN population database. In the case of Sri Lanka, this change can be explained by the exclusion of the Northern and Eastern provinces. d. The country did not report on wage and salaried workers, therefore, the number of employed youth (and the corresponding total for active youth) were reconstructed based on information on employed youth from the ILO Key Indicators of the Labour Market (KILM). e. In school and other inactive youth are reported together. f. There is no information on discouraged youth for 2000; therefore, these figures should be interpreted with caution. g. There is no information on young employers; therefore, this figure should be interpreted with caution. h. Figures for employed youth need to be considered with caution. There is a significant fall between 2003 and 2008 in the number of employed youth, which may be related to changes in data sources or methodology. i. Sources of data and underlying methodology between 2000 and 2009 differ. Therefore intertemporal comparisons are not recommended will be considered the benchmark for future YEN benchmarking exercises. b) Indicator 2: Youth unemployment rate The youth unemployment rate is a measure of the inability of an economy to generate employment for those persons who are not employed but are available and actively seeking work. It is an important measure to identify the labor force and is one of the bestknown and most used labor market indicators. It displays the age composition of the unemployed population and facilitates addressing social concerns. 16

18 The unemployment rate is defined as the number of unemployed youth divided by the youth labor force (employment + unemployment). Equation 1: Youth Unemployment Rate = number of unemployed young persons Youth Labor Force Table 3 displays the reported youth unemployment rates for some lead countries. Crosscountry comparisons should be observed with caution. Despite its utility for measuring the capacity of the labor market, the youth unemployment rate can reflect limitations to comparability across countries including divergences in the definition of what age group should be covered, how trainees and other particular categories of workers are counted, and what criteria are deciding what constitutes an active job search. 7 Therefore, crosscountry comparisons should be treated with caution. Table 3: Youth unemployment rates in the Lead Countries Country Year Total Female Male Arab Republic of Egypt Bangladesh Democratic Republic of Congo Ghana a, b Indonesia Jamaica c Sri Lanka a, d Syrian Arab Republic e United Republic of Tanzania Turkey Vanuatu f Notes: a. Between the reference periods there is a negative growth in the youth population that is not supported in the UN population database. In the case of Sri Lanka, this change can be explained by the exclusion of the Northern and Eastern provinces. b. The unemployment figures look quite low, relative to ILO's KILM records. c. The country did not report on wage and salaried workers, therefore, the number of employed youth (and the 7 See Annex A (Cross-country Labor Market Indicators, in Page 46) for information on the age definitions used by each country in their labor market indicators report. 17

19 corresponding total for active youth) were reconstructed based on information on employed youth from the ILO Key Indicators of the Labour Market (KILM). d. There is no information on young employers; therefore, this figure should be interpreted with caution. e. A significant fall between 2003 and 2008 in the number of employed youth reduces the base of active youth (denominator of the youth unemployment rate). Therefore, intertemporal comparisons of the unemployment rate for youth in Syria should be considered with caution. Such change in the number of employed youth may be related to changes in data sources or methodology. f. Sources of data and underlying methodology between 2000 and 2009 differ. Therefore intertemporal comparisons are not recommended will be considered the benchmark for future YEN benchmarking exercises. The highest youth unemployment rates are reported in Indonesia, Jamaica, and Syria. Some reasons behind high youth unemployment rates include: High(er) vulnerability of youth to external shocks and changes of the labor market situation. Figure 3 shows quarterly data from the ILO s Global Statistics on the Labour Market over the period for a small sample of lead countries. The period of observation allows visualization of increases in the unemployment rate for youth during the economic crisis of Lack of job experience, which hinders entry opportunities of youth in the labor force. Youth are sometimes easier to dismiss, which reflects a common perception among employers about the relative low cost of releasing young employees. Figure 3: Quarterly Youth Unemployment Rates for three Lead Countries, Jamaica (ILO) Jamaica (Benchmarking Report) Sri Lanka (ILO) Sri Lanka (Benchmarking Report) Turkey (ILO) Turkey (Benchmarking Report) 15.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Sources: ILO s Global Statistics on the Labour Market and reports from the lead countries In some economic contexts, high youth unemployment rates may reflect lost opportunities for young people to attend school. If youth are actively seeking jobs, they 18

20 may not be investing properly in education which may hinder their productivity and earnings in the future. When compared to adult unemployment rates, youth unemployment rates are typically higher. There are numerous reasons for this, including the bias given to the youth s lack of experience, as mentioned above, but also to the tendency of some young people to shop around in search of an appropriate job. It is also explained by the seasonality of the educational system, which opens and closes at various points of time throughout a year, making entries and exits of young people more frequent into the labor market (ILO 2010). Low unemployment rates for youth are reported in Ghana, Tanzania, and Bangladesh, as shown in Table 3. The main reason behind these low rates has to do with the challenging economic contexts where young people cannot afford to be unemployed. In the absence of unemployment insurance or other public relief schemes, relatively few people in low income countries can survive lengthy periods of unemployment without family support. The majority of the workers must engage in some form of economic activity, however insignificant or inadequate. This is often in the informal economy and/or in selfemployment which also leads to the paradox that the unemployment rate in low income countries is often lower than in countries with higher income levels. Figure 4 displays youth unemployment rates by sex. Significant differences are found in Syria, Egypt, Jamaica, and Sri Lanka, where unemployment rates for young women are at least two times larger than those of young men. Social norms may play a role in some of these countries, increasing difficulties of women to access the labor market. An opposite phenomenon occurs in Vanuatu, where the youth unemployment rate for young men is about three times larger than the rate for women. Figure 4: Youth unemployment rate by gender Total Female Male Vanuatu Syria Indonesia Jamaica Turkey Egypt Sri Lanka Bangladesh Tanzania Ghana Note: Rates for the last year reported for each country. 19

21 c) Indicator 3: Relaxed youth unemployment rate The relaxed youth unemployment rate is defined as the number of unemployed youth plus the number of discouraged youth divided by the youth labor force (employment + unemployment). It is a measure of the unutilized youth labor potential as it basically adds to the standard measure of unemployed those who are not technically unemployed because they do not meet the active job search criteria but who would like to work. In this way, it helps to interpret the youth unemployment rate and offers a broader perspective. Equation 2: Relaxed Youth Unemployment Rate unemployed youth + discouraged = youth labour force youth The relaxed youth unemployment rate is also referred to as youth joblessness. Some of the advantages of using the relaxed definition are: Its ability to capture information on discouraged youth, i.e. those who are not productively or usefully occupied and that despite not actively seeking work, would do so if conditions in the labor market improve; and Along with the youth unemployment rate, it helps in the interpretation of the employment adjustment process and sheds further light on cross-country differences in youth unemployment rates. Table 4 displays the relaxed rates reported by the lead countries and compares them to the youth unemployment rate. Relaxed rates are always going to be larger than unemployment rates. It is the size of the difference that provides the relevant information regarding the extent of labor underutilization. Jamaica and Ghana showed the most acute differences between the two rates, implying a significant burden of discouragement among youth in the countries. On the other hand, both rates tend to fluctuate in the same direction, within the reported years, with a statistical simple correlation of Table 4: Comparison of Indicators 2 and 3 Country Arab Republic of Egypt Bangladesh Ghana Indonesia Jamaica Youth unemployment Relaxed youth Simple percentage rate unemployment rate point change Year Indicator 3 - Indicator 2 Indicator 3 Indicator a b c

22 Sri Lanka Country Syrian Arab Republic United Republic of Tanzania Turkey Vanuatu Youth unemployment Relaxed youth Simple percentage rate unemployment rate point change Year Indicator 3 - Indicator 2 Indicator 3 Indicator NA NA b, d e f Notes: a. This figure is a lower bound as there is no information on female discouragement. b. Between the reference periods there is a negative growth in the youth population that is not supported in the UN population database. In the case of Sri Lanka, this change can be explained by the exclusion of the Northern and Eastern provinces. c. The country did not report on wage and salaried workers, therefore, the number of employed youth (and the corresponding total for active youth) were reconstructed based on information on employed youth from the ILO Key Indicators of the Labour Market (KILM). d. There is no information on young employers; therefore, this figure should be interpreted with caution. e. A significant fall between 2003 and 2008 in the number of employed youth reduces the base of active youth (denominator of the youth unemployment and relaxed rates). Therefore, intertemporal comparisons of the unemployment rate for youth in Syria should be considered with caution. Such change in the number of employed youth may be related to changes in data sources or methodology. f. Sources of data and underlying methodology between 2000 and 2009 differ. Therefore intertemporal comparisons are not recommended will be considered the benchmark for future YEN benchmarking exercises. d) Indicator 4: Youth Employment-to-Population rate The employment-to-population ratio and the youth unemployment rate are the most common indicators to measure labor market performance. The employment-to-population ratio is the proportion of a country s young population that is employed. The indicator is computed by dividing the total number of employed youth by the population of the same age group. 8 Equation 3: Youth Employment-to-Population Ratio Total youth employment = 100 Youth Population Employment-to-population ratios are becoming increasingly common as a basis for labor market comparisons across countries or groups of countries. Employment numbers alone are inadequate for purposes of comparison unless expressed as a share of the population who could be working. The use of the ratio helps to determine how much of the young population of a country is contributing to the production of goods and services. It can be viewed, both in its level and change over time, in connection with economic growth to 8 This formula also corresponds to the first figure computed under Indicator 1 (employed youth as a percentage of total youth population). 21

23 determine the extent to which economic growth is pro-employment growth and, in connection, pro-poor. Reported ratios from the lead countries are shown in Figure 5, as well as Table 3, employed column. High rates are found in Tanzania, Ghana, and Bangladesh implying that a large proportion of the countries young population is employed. Low rates, such as the ones reported in Vanuatu, Jamaica, and Turkey, indicate that a large share of the youth population is not involved directly in production. A declining youth employment-topopulation ratio over time as seen in Bangladesh, Syria, and to a lesser extent in Jamaica can signify a positive change if the declining share is a reflection of gains in educational enrolment, with more young people gaining access to education and staying in education longer. Figure 5: Youth employment-to-population ratio Tanzania ( ) Ghana ( ) Bangladesh ( ) Syria ( ) Sri Lanka ( ) Indonesia ( ) Egypt ( ) Turkey ( ) Jamaica ( ) Vanuatu ( ) Year 1 Year Note: Format: Country (Year 1 Year 2) The employment-to-population ratio indicator, however, is a measure for quantity only. It says nothing to the quality of employment in which people work and this poses a dilemma in terms of prescribing a positive direction for the indicator s trends over time. An increase in the indicator, meaning a larger share of the country s population has gained employment, has positive implications on poverty reduction only if the jobs gained are well-paid, productive and secure in other words, if the jobs gained are decent jobs. Further, there is no optimal employment-to-population ratio. Developed economies tend to have lower ratios than developing economies because their higher productivity and incomes means that fewer workers are required to meet the needs of the entire population. Very high ratios, on the other hand, indicate that the majority of poor people are working out of the necessity to subsist regardless of the quality of work. Disaggregating the youth employment to population ratio by age allows comparisons with the adult population. Lead countries are encouraged to look at such contrast. In general, the ratios for youth should be lower than for the overall working-age population as more young 22

24 people participate in education in comparison with adults. Unless the young person is working as a principal activity while studying, they will be counted as outside of the labor force. Figure 6 shows the youth employment-to-population ratios for young men and women, providing information on gender differences in the labor markets of reporting countries. In all cases, with the exception of Ghana and Vanuatu, the ratio is lower for females than for males. The largest gender gaps are seen in the countries in the Middle East and North Africa (Egypt and Syria) where social norms continue to discourage the employment of young women. Figure 6: Youth employment-to-population ratio by gender Tanzania Ghana Bangladesh Syria Sri Lanka Indonesia Egypt Turkey Jamaica Vanuatu Total Young men Young women Note: Ratio for the last year reported for each country. 2. Mapping Employed Youth Indicators 5 to 7 inform on some of the characteristics of employed youth, from employment status to aggregate economic sector and earnings. As stated previously in Indicator 1, employed youth refers to youth who worked or held a job for at least one hour during the reference week, including: persons who worked for pay or profit (or pay in kind), persons who were temporarily absent from a job, and unpaid family workers. The definition is intended to capture youth working in the formal and informal sectors. Most common sources of information for the indicators in this group are household-based labor surveys, official estimates, and population censuses. 23

25 a) Indicator 5: Status of young workers in employment Indicator 5 refers to the proportion of the employed youth population classified as: (a) wage and salaried workers (employees); (b) household enterprise workers; and (c) employers. These three groups of workers are presented as percentages of the total youth employment, as displayed in Figure 7. Figure 7: Mapping employed youth by status The indicator provides information on the distribution of the workforce by status in employment and can be used to answer questions such as what proportion of employed persons in a country (a) work for wages or salaries; (b) run their own enterprises without hired labor or work without pay within the enterprise operated by another household/family member; or (c) run their own enterprises with hired labor. These three categories provide a statistical basis for describing the workers relationship to the job and the conditions of work. They can give a general indication of the type of economic risk associated with the job as well as the type of authority over establishments and other workers. The classification follows the World Bank s 2007 Guide for assessing labor market conditions in developing countries, a simplified clustering of the International Classification of Status in Employment (ICSE), displayed in Box 2. Accordingly: An individual is a wage or salaried worker if he/she is employed by others. It is equivalent to category (i) of the ICSE). An individual is a household enterprise worker if he/she is either an own-account worker or an unpaid family worker residing in the same household as an ownaccount worker. This group constitutes what has been termed Vulnerable Employment by the ILO and recently adopted as an indicator for measuring MDG target 1b. It is equivalent to categories (iii), (iv), and (v) of the ICSE. 24

26 Last, an individual is an employer if he/she employs at least one other person for pay. It is equivalent to category (ii) of the ICSE. It is important to note is that the definition of an employed person may vary from country to country, according to questions set in the household-based labor surveys. Some countries with large armed forces may, for example, refer to civilian employment, which will underestimate the number of people classified as employees. The second category, household enterprise workers, would not be affected, although its relative share would be. Box 2: 1993 International Classification of Status in Employment The 1993 International Classification of Status in Employment (ICSE) set up different categories for status of employment: i. Employees: Employees are all those workers who hold the type of jobs defined as paid employment jobs, where the incumbents hold explicit (written or oral) or implicit employment contracts that give them a basic remuneration that is not directly dependent upon the revenue of the unit for which they work. ii. Employers: Employers are those workers who, working on their own account or with one or a few partners, hold the type of jobs defined as a selfemployment jobs (i.e. jobs where the remuneration is directly dependent upon the profits derived from the goods and services produced), and, in this capacity, have engaged, on a continuous basis, one or more persons to work for them as employee(s). iii. Own-account: Own-account workers are those workers who, working on their own account or with one or more partners, hold the type of jobs defined as a self-employment jobs [see ii above], and have not engaged on a continuous basis any employees to work for them. iv. Members of producers cooperatives: They are workers who hold selfemployment jobs [see ii or iii above] in a cooperative producing goods and services. v. Contributing family workers: Contributing family workers are those workers who hold self-employment jobs as own-account workers [see iii above] in a market-oriented establishment operated by a related person living in the same household. vi. Workers not classifiable by status: Workers not classified by status include those for whom insufficient relevant information is available, and/or who cannot be included in any of the preceding categories. Source: 25

27 Table 5 displays these three groups of workers as percentages of the total young people employed for both periods reported by each country. A high proportion of wage and salaried workers is common across the sample and suggests some improvements moving toward a formalization of labor institutions in the course of economic development. The highest share of young employees is reported in Turkey with nearly 70 percent of employed youth working under such status. Table 5: Status of young workers in employment Country Year Wage and salaried young workers Household enterprise young workers Young Employers Arab Republic of Egypt Bangladesh Ghana Indonesia Jamaica Sri Lanka b c b, d Syrian Arab Republic e United Republic of Tanzania Turkey Vanuatu f as % of employed youth % 27.3% 14.2% % 25.0% 15.0% % 60.5% 0.3% % 59.7% 0.3% % 53.3% 2.1% % 50.6% 2.2% % 53.4% 1.1% % 52.9% 0.8% % 37.8% 3.0% % 32.9% 2.6% % 41.1% NA % 40.8% NA % 39.4% 2.3% % 30.0% 2.8% % 93.3% 0.3% % 91.3% 0.7% % 29.3% 1.1% % 29.0% 1.2% % 53.6% 0.0% % 48.7% 0.1% a Notes: a. The proportion of employers is significantly large. The lead country has been asked to double-check figures and sources. b. Between the reference periods there is a negative growth in the youth population that is not supported in the UN population database. In the case of Sri Lanka, this change can be explained by the exclusion of the Northern and Eastern provinces. c. The country did not report on wage and salaried workers, therefore, the number of employed youth (and the corresponding total for active youth) were reconstructed based on information on employed youth from the ILO Key Indicators of the Labour Market (KILM). d. There is no information on young employers; therefore, this figure should be interpreted with caution. The base of employed youth may be slightly larger. e. Figures for employed youth need to be considered with caution. There is a significant fall between 2003 and 2008 in the number of employed youth, which may be related to changes in data sources or methodology. f. Sources of data and underlying methodology between 2000 and 2009 differ. Therefore intertemporal comparisons are not recommended will be considered the benchmark for future YEN benchmarking exercises. 26

28 Large proportions of household enterprise young workers, as reported in Tanzania (grouping over 90 percent of employed youth), and to a less extent in Bangladesh, Ghana, and Indonesia, are an indication of a large agriculture sector and/or low growth in the formal economy. The household enterprise workers have a low likelihood of benefiting from formal work arrangements and access to benefits or social protection programs and therefore face a greater degree of economic risk and insecurity. The proportion of household enterprise young workers is therefore equivalent to the vulnerable employment rate for youth presented in Equation 4. Equation 4: Vulnerable Employment Rate for Youth #of young own - account # of young unpaid family + workers workers = total youth employment 100 A view at the composition of the vulnerable employment rate shows a varied picture (Figure 8). Most household enterprise young workers in Jamaica are own-account workers, while the opposite occurs in Vanuatu, where most youth within the category are contributing family workers. Looking at the disaggregation by sex (Figure 9), most own-account workers in Jamaica are men (67 percent), while the distribution for contributing family work is pretty homogeneous (45 percent are female and 55 are male). Historically, contributing family work has been a status dominated by women. From the reporting lead countries the assumption is supported only in Vanuatu, Jamaica, and Ghana. Figure 8: Vulnerable employment for youth, total Jamaica Tanzania Sri Lanka Syria Ghana Bangladesh Egypt Individual ownaccount workers Contributing (unpaid) family workers Indonesia Turkey Vanuatu Note: The graph shows the latest year reported by the country. 27

29 Figure 9: Vulnerable employment for youth, by gender Jamaica Tanzania Sri Lanka Syria Ghana Bangladesh Egypt Indonesia Turkey Female individual ownaccount workers Male individual ownaccount workers Female contributing (unpaid) family workers Male contributing (unpaid) family workers Vanuatu % 25% 50% 75% 100% Note: The graph shows the latest year reported by the country. The vulnerable employment rate for youth is not without its limitations; some wage and salaried workers might also carry high economic risk and some own-account workers might be quite well off and not vulnerable at all. But, despite the limitations, vulnerable employment shares are indicative of employment in the informal economy, especially for the less developed economies and regions. As regard to young employers, last column in Table 5, the proportions are often small and insignificant. Besides Egypt, whose figures seem to be out of range, only Jamaica, Syria, and Ghana have shares of over 2 percentage points of employed youth working as employers. b) Indicator 6: Youth employment by sector While Indicator 5 shows the status of employment, Indicator 6 shows where youth are working, i.e. in what specific sector. It divides employment into three broad groupings of economic activity: agriculture, industry and services, as displayed in Figure 10. These three sectors imply some differences in terms of pay, job attachment, conditions of work, etc. The indicator is computed as the participation of youth employed in each of the three main sectors in total youth employment. 28

30 Figure 10: Mapping employed youth by sector Based on the International Standard Industrial Classification (ISIC) System (Revision 3) the agriculture sector comprises activities in agriculture, hunting, forestry and fishing. The industry sector comprises mining and quarrying, manufacturing, construction and public utilities (electricity, gas and water). The services sector consists of wholesale and retail trade, restaurants and hotels, transport, storage and communications, finance, insurance, real estate and business services, and community, social and personal services. Sectoral information is particularly useful in identifying broad shifts in employment and stages of development. Interesting analyses come from looking at the labor flows from agriculture and other labor-intensive primary activities to industry and services, as well as the rural-urban flows in relation to sectoral changes. The indicator on employment by sector can be used in conjunction with other indicators, in particular employment by status (Indicator 5), to pin point vulnerable groups in the labor market. The breakdown of the indicator by sex allows for analysis of gender segregation of employment by specific sector. Table 6 shows the distributions reported by the lead countries. Tanzania reports the highest proportion of working youth in agriculture, with slightly more female agricultural workers than male, as displayed in Figure 11. It is followed by Vanuatu, where female agricultural workers largely out-number male workers. The smallest proportion of youth in agriculture is found in Syria and Jamaica. As regards to participation in the industry sector, Turkey shows the largest share of employed youth in industry, dominated by young men (Figure 12). Significantly low female shares in industry are found in Egypt and Syria, with 7.7 and 4.2 percent of the total number of youth in the sector, respectively, in Only Ghana reports a larger proportion of young women in industry, with three of every five youth in the sector being female. Low proportions of youth in industry are found in Tanzania, Vanuatu, and Ghana. 29

31 Jamaica has the largest share of youth in services, likely in tourism hotels and restaurant services. 9 Syria also reports large proportions of youth in services. The gender balance in services is greater than for the other sectors; with female workers in services outnumber male workers in Tanzania, Ghana, and Jamaica, as displayed in Figure 13. Services is the dominant sector for youth employment in all countries but Bangladesh, Ghana, Sri Lanka, Tanzania, and Vanuatu. Table 6: Youth employment by sector Country Arab Republic of Egypt Bangladesh Ghana Indonesia Jamaica Sri Lanka Syrian Arab Republic United Republic of Tanzania Turkey Vanuatu Year % of employed youth in: Agriculture Industry Services % 12.6% 55.7% % 12.9% 55.5% % 12.6% 36.3% % 15.7% 40.3% a % 9.6% 24.0% % 10.0% 25.1% b % 29.2% 39.7% % 28.9% 50.3% b % 20.1% 68.8% a % 15.7% 55.8% a % 32.1% 30.4% % 33.2% 31.5% % 18.5% 49.5% % 22.0% 61.3% % 2.3% 12.8% % 4.0% 19.5% b % 36.2% 51.0% % 36.3% 50.8% c % 5.1% 19.7% % 9.7% 41.6% Notes: a. The sum of youth in the different sectors is smaller than the total number of employed youth reported under Indicator 5. b. The sum of youth in the different sectors is larger than the total number of employed youth reported under Indicator 5. c. Sources of data and underlying methodology between 2000 and 2009 differ. Therefore intertemporal comparisons are not recommended will be considered the benchmark for future YEN benchmarking exercises. Limitations of the indicator of youth employment by sector are related to the definition of employment and the corresponding non-comparability effect across countries. Other aspects that may limit such comparisons include age group covered, geographic coverage, treatment of armed forces, and how trainees and other particular categories of workers are counted. 9 As reported by the Statistical Institute of Jamaica. 30

32 90.0% Figure 11: Gender distribution of youth in agriculture 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Bangladesh - Egypt Ghana Indonesia Jamaica Sri Lanka Syria Tanzania Turkey Vanuatu % Female Male Figure 12: Gender distribution of youth in industry 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Bangladesh Egypt Ghana Indonesia Jamaica Sri Lanka Syria Tanzania Turkey Vanuatu % Female Male Figure 13: Gender distribution of youth in services 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Bangladesh Egypt Ghana Indonesia Jamaica Sri Lanka Syria Tanzania Turkey Vanuatu Female Male 31

33 c) Indicator 7: Median earnings for wage and salaried workers The concept of earnings, as applied in wages statistics, relates to remuneration in cash and in kind paid to employees at regular intervals for time worked or work done together with remuneration for time not worked, such as for annual vacation, other paid leave or holidays. Statistics of earnings should relate to employees gross remuneration, i.e. the total before any deductions are made by the employer in respect of taxes, contributions of employees to social security and pension schemes, life insurance premiums, union dues and other obligations of employees. An increase in median earnings is viewed as a positive labor market development. Earnings of young workers give an idea of the quality of their jobs. Earnings exclude employers contributions in respect of their employees paid to social security and pension schemes and also the benefits received by employees under these schemes. Earnings also exclude severance and termination pay. Earnings should be measured as comprehensively as possible, including and distinguishing between earnings in-kind and the monetized value of benefits, when feasible. Earnings from all jobs worked in the reference period should be added together. Where possible, the reference period is considered to the month preceding the survey. As regards to the coverage of workers, the indicator aims to cover all employed wage and salaried young workers. If data is not available for this full subsample of youth, lead countries are encouraged to compute earnings for certain industries where data may be more readily available. Lead countries with data on earnings are encouraged to explore further disaggregation by sex, urban/rural, region (if relevant), education level, sector of economic activity, and ethnicity/race (if relevant). Table 7 reports earnings of young people in a sample of lead countries. The reference period is generally the past 12 months. The last column shows the earnings deflated and converted to standardized prices at PPP in dollars of The lowest levels of earnings are reported in Tanzania, Bangladesh, and Egypt. The average of all reporting countries for the last year reported is about US$190 per month in PPP Table 7: Earnings of young workers in Lead Countries Country Year Value a Local Currency PPP US$ 2005 b,c Arab Republic of Egypt Egyptian pound Bangladesh , BD Taka , Indonesia Indonesian rupiah ,

34 Country Year Value a Local Currency PPP US$ 2005 b,c Syrian Arab Republic , Syrian pound United Republic of Tanzania Tanzanian Shilling Vanuatu d Vanuatu vatu Notes: a. Unless noted otherwise, the reference period is the month preceding the survey and the amount reported indicates monthly earnings. b. PPP: Purchasing Power Parity. c. The value of reported earnings in PPP US$ 2005 was computed based on information from the World Development Indicators for the corresponding countries and years. d. Sources of data and underlying methodology between 2000 and 2009 differ. Therefore intertemporal comparisons are not recommended will be considered the benchmark for future YEN benchmarking exercises. 3. Linking the Labor Market with Education a) Indicator 8: Educational attainment of the youth labor force Recognizing the relevance of the school-to-work transition and the linkages of education with the labor market, the Benchmarking Exercise comprises one additional indicator on education of young workers. The educational attainment of the youth labor force reflects the levels and distribution of the knowledge and skills base of this population group. It informs about the accomplishment of primary, secondary, and tertiary schooling; data typically collected through household surveys, official estimates, and population censuses. Some of the main advantages of this indicator are: it provides an indication of the capacity of countries to achieve important social and economic goals; gives insights into the broad skill structure of the labor force; highlights the need to promote investments in education for different population groups; supports analysis of the influence of skill levels on economic outcomes and the success of different policies in raising the educational level of the workforce; gives an indication of the degree of inequality in the distribution of education resources between groups of the population, particularly between men and women, and within and between countries; and provides an indication of the skills of the existing labor force, with a view to discovering untapped potential. The indicator covers four general categories of educational attainment, which follow the ten levels established by the International Standard Classification of Education (ISCED). These categories are: less than primary school, primary school, secondary school, and tertiary school. The indicator presents these categories as a share of the total youth labor force (sum of employed and unemployed youth). 33

35 A number of factors can limit the appropriateness of using the indicator for comparisons between countries or over time. First, it should be noted that the same limitations relating to comparability of other indicators based on labor force apply here as well. In addition to the differences associated with varying information sources, how individuals in the labor force are assigned to educational levels can also severely limit the feasibility of crosscountry comparisons. Many countries have difficulty establishing links between their national classification system and ISCED, especially with respect to technical or professional training programs, short-term programs and adult-oriented programs. In numerous situations, ISCED classifications are not strictly adhered to, therefore the actual distribution of education levels must be understood before making comparisons. Table 8 shows the proportion of active youth that has attained the above-mentioned education levels. The highest proportions of youth labor forces with secondary and above are reported in Egypt, Turkey, and Indonesia. Despite recent progress in educational attainment around the world, the largest shares of the youth labor forces in Bangladesh, Indonesia, Syria, Tanzania, and Turkey are still those with an education level of primary or below. Table 8: Educational attainment of youth 10 % of youth labor force with: Country Year Less than primary schooling Primary schooling Secondary schooling Tertiary schooling Arab Republic of Egypt Bangladesh Indonesia Syrian Arab Republic United Republic of Tanzania Turkey Vanuatu b c d % 8.5% 35.1% 15.4% a % 9.0% 34.9% 15.5% % 10.8% 9.8% 3.9% % 10.4% 11.7% 3.7% % 71.1% 33.3% 2.8% % 60.8% 40.7% 5.0% % 73.5% 7.0% 5.1% % 61.3% 9.2% 8.7% % 63.3% 3.1% 0.0% % 60.3% 3.8% 0.1% % 36.0% 34.5% 7.6% % 38.6% 30.6% 8.0% % 85.0% 13.5% 0.5% % 87.4% 9.9% 1.7% Notes: a. These proportion of youth with less than primary school looks quite high, relative to ILO's KILM records. b. The sum of youth in the different education levels is larger than the total number of youth labor force reported by the country. c. The sum of youth in the different education levels is smaller than the total number of youth labor force reported by the country. d. Sources of data and underlying methodology between 2000 and 2009 differ. Therefore intertemporal comparisons are not recommended will be considered the benchmark for future YEN benchmarking exercises. 10 Data from Ghana, Jamaica, and Sri Lanka have been omitted due to missing information. 34

36 B. Employment measures and institutional arrangements The second benchmarking area, employment measures and institutional arrangements in the lead countries, aims to complement the labor market indicators with qualitative information on youth employment initiatives in the country. This narrative information can contextualize the data and provide further insights of the youth employment characteristics in countries with low data availability. Fourteen lead countries reported on this area (Annex A, Page 45). Quality and precision of the information vary from one country to other. This section provides a brief summary of the narrative reports per country and is supported by Annex C (Page 50), which contains the information as it was originally reported by the countries. 1. Bangladesh Youth unemployment is high and poses significant challenges for country. The main policy for youth employment is the National Youth Development Policy, which aims to facilitate gainful employment, provide vocational skills and access to credit for youth, and promote youth participation in the national development process. While there is no specific legislation for youth employment or steps towards the development of a National Action Plan (NAP), the country has succeeded in putting up small scale, comprehensive training programs that provide youth with vocational skills and access to credit for entrepreneurial initiatives. The current government recently introduced the national Service Scheme, an agency for temporary employment of unemployed youth. 2. Democratic Republic of Congo Information on Democratic Republic of Congo is quite limited, as the submitted report did not follow the predesigned questionnaire. In 2009, the Department of Employment, Labor and Social Welfare, made significant efforts towards (i) the development of consistent mechanisms for establishing and updating regular statistics on the labor market with special emphasis on youth employment and (ii) the implementation of the Action Plan on Youth Employment. In addition, a project for establishing an Observatory for Employment and Training in the National Employment Agency was under consideration. 3. Egypt Public youth employment initiatives in Egypt are supported through the National Employment Bulletin, programs under the Social Fund for Development, and Youth Employment NAP. These policies are embedded in a number of laws and presidential decrees that support workers of all ages, including youth, with labor regulations and access to credit for the creation of small enterprises. The NAP for youth employment has been drafted and its implementation started in 2010 with support from the ILO. The preparation 35

37 of the NAP served as an avenue for youth participation through the Egyptian Youth Consultative Group. Interesting active labor market programs for youth include a number of vocational training programs across the country, the introduction of entrepreneurship education for in-school youth, and the provision of employment services to increase employability and support a culture of self-employment among youth. Some of the major achievements of the government of Egypt as regard to youth employment include: the provision of training to over 400,000 trainers in the Ministry of Manpower and Migration training centers, improvements in eight labor offices, and the provision of over 450,000 employment opportunities for Egyptian youth between January 2009 and Ghana Youth employment activities in Ghana are coordinated by the Ministry of Youth and Sports, the National Youth Employment Program, and the National Youth Council. The first two host National Youth Symposia, workshops, and seminars to promote youth participation in the formulation of youth employment and development initiatives. While there is currently no legislation to support youth employment policies, the National Youth Employment Program has received significant support from the central government and has the capacity to offer numerous training programs in different trades along with job placement opportunities to unemployed youth. Its areas of intervention include: vocational training (in agricultural trades, ICT, mobile phone repairs, etc), on-the-job training, entrepreneurship training, public works, youth in security services, and health extension work. Youth learning to repair and assemble cell phones, Accra, Ghana, May Source: YEN archives. 36

38 5. Indonesia While there is no specific legislation for youth employment in the country, the Medium term Development Plan outlines some areas of work that will impact employment opportunities for youth. Government efforts on youth employment are centralized through the Indonesian Youth Employment Network (IYEN), an inter-institutional body hosted by the Planning Agency (Bappenas) and working closely with the Coordinating Ministry for Economic Affairs and the Ministry of Manpower. IYEN has recently revised its mandate and identified key areas of intervention, namely entrepreneurship, internships, and knowledge sharing. The IYEN Secretariat will focus on the facilitation of knowledge sharing, coordination of resources, and the development of an inventory of youth employment players in the country. The latest NAP covered the period and there are currently activities for the preparation of the new action plan. Working towards the development of a National Action Plan for youth employment, Jakarta, Indonesia, July Source: YEN archives. 6. Mali Since 2003, the Agency for Promotion of Youth Employment (l Agence pour la Promotion de l Emploi des Jeunes, APEJ) coordinates and delivers public employment measures for youth in Mali. APEJ is supported by the central national budget as well as a portion of employer contributions. It delivers active labor market programs in four fronts: learning and training of professional qualification; entrepreneurship development; labor-intensive programs for rural youth; and access to credit. Monitoring efforts have been undertaken by the National Directorate of Employment, which seeks to closely follow up on the progress of the interventions. Key measurement indicators include: number of graduates, change in the number of unemployment graduates, and placements. Some achievements of APEJ between 2004 and 2008 include: entrepreneurship training delivered to nearly 20,000 youth, about 40,000 jobs created, and around 1,700 businesses created by young people. The latest NAP for youth employment started implementation in 2004, with collaboration from the Government of Luxembourg and the ILO. 37