8 Youth unemployment
Background-the
figures
132. World Bank and ILO statistics tell us that 75
million young people are registered unemployed, 620 million are
not in training or seeking work and 600 million will enter the
job market in the next decade with only 200 million jobs awaiting
them.[224] The Zambian
Minister of Finance Alexander Chikwanda called youth unemployment
"a ticking time bomb for all of us."[225]
The UN has stated that 'large numbers of unemployed youths are
a potential source of insecurity given their vulnerability to
recruitment into criminal and violent activities.'[226]
World Bank official Justin Lin points out in his paper on the
topic that
the youth bulge will be an important demographic
phenomenon, especially in sub Saharan African countries, in the
coming decades. It is essential to facilitate dynamic structural
change to create jobs for youth. By doing so, the youth bulge
can be transformed into a demographic dividend, and the demographic
bomb can be defused.
But the Foreign Policy Centre highlighted that:
Sluggish structural change is failing to take
advantage of Africa's youthful labour force and generate higher
levels of productivity.[227]
133. Peace Child International said that one of the
major problems for youth job creation is the lack of statistics
on the issue. The 2007 World Development Report: Youth stated
on the first page, "one of the biggest challenges in writing
this Report was that the evidence base was uneven. There were
very few rigorous evaluations of youth programmes and policies
for any of the issues covered in the Report. The Bank's inventory
of over 750 youth employment interventions found that less than
3% measured for cost-effectiveness and many had no evaluation
at all. Professor Michael Grimm wrote an OECD Evaluation Insight
paper "Do We Know how to create Youth Jobs?" and answers:
"No. First and foremost, our review underlines how little
we actually know about how to create jobs."[228]The
World Bank's West Africa Director, Max Andriesen, told a meeting
of youth and youth employment experts in 2008: "Your metrics
are awful".[229]
134. We questioned representatives from youth organisations
why so little was known. Andrew Devenport of Youth Business International
said:
Youth employment, and the study of youth employment,
is a relatively new area, and has really only emerged as a focus
since the World Bank World Development Report in 2007.[230]
As a result he believed it had suffered from a "lack
of investment in research and monitoring evaluation" and
"poor project design". He called for "longterm
research to understand the structural constraints in the labour
market, and monitoring evaluation and programming at the micro
level" and believed that this could be achieved by "better
coordination between different sectors and better planning".[231]
David Woollcombe of Peace Child International (PCI) said it was
very hard to create a cost per job that "analyses the quality
of the job, the length of the contract and the different sectors"
but that PCI had been working on such a metric and was seeking
partners to pilot test the framework in field conditions.[232]
135. PCI said there was a need for longitudinal evaluations,
because "interventions made at age 16 or 17 may not bear
fruit until young people are 25 or 26." And that DFID's research
department could apply to youth the longitudinal kind of evaluations
that it had taken up with younger children. It recommended that:
Government and institutional economists representing
donors and institutions like the World Bank need hard, rigorously-sourced
data of the kind that DFID's research teams are well-placed to
provide.[233]
DFID policy
136. The problem of youth unemployment is a major
priority for most of the countries in which DFID works. The Secretary
of State said:
Wherever I go, particularly in sub Saharan Africa,
when you meet with the leaders of those countries, they are passionate
about the need to create jobs for that young generation that is
growing up in those countries.[234]
On our visit to Sierra Leone and Liberia in 2014,
both President Ernest Bai Koroma and President Ellen Johnson Sirleaf
highlighted youth unemployment as a major concern for them as
a potential trigger for the return to civil war.[235]
We found that even in these countries where DFID was meant to
be working in alignment with national priorities that it was not
working on the issue—it had been invited by other donors
to work on the issue of youth unemployment through the Partner
Group on Youth Employment but had declined.[236]
137. Peace Child International believed that youth
had yet to be a priority in DFID's thinking. It said that
Of the ESDF Pillars, only Pillar Five, "ensuring
growth is inclusive", references the young-and then only
as one of nine groups. So, while 60 to 70% of the populations
of DFID's target countries are young, they appear as a mere 2.2%
of the EDSF focus. Youth unemployment is not mentioned at all.[237]
138. Our predecessor Committee's report on Private
Sector Development in 2006 recognised the need for targeted
interventions for young people:
DFID's current reliance on investment climate
reforms as a means to create jobs is insufficient to reach the
groups who are most in need, especially young people. The Department
should seek to build partnerships with governments and companies
that closely link education with job creation.[238]
139. PCI recommended that DFID needs to create a
senior level youth policy expert adviser. It highlighted that
the UN now had a Special Representative on Youth and the European
Commission at DG DEVCO had an adviser on youth.[239]
David Woollcombe said there was not currently "enough passion
and energy at DFID driving the youth employment agenda".[240]
PCI believed that a youth adviser was needed: to pull the youth
initiatives together into a coherent strategy; to offer country
officers expert advice on youth job creation; and to advise the
Secretary of State on "how better to address the infinitely
complex area of delivering effective youth policy interventions."[241]
David Woollcombe concluded:
What DFID should not do is tinker around the
edges. It has to have a comprehensive strategy, which is why expertise
at a senior level in DFID is really important to this field.[242]
DFID'S MAJOR YOUTH PROGRAMME: INTERNATIONAL
CITIZEN SERVICE
140. DFID's biggest investment in youth employment
is the £64m it has invested in the International Citizen
Service (ICS), designed to complement the National Citizen Service.
This programme is managed by DFID's Education and Partnerships
Team and builds on DFID's investments in raising awareness for
British youth of the value of international development. Led by
VSO, ICS aims to:
develop 14,000 young people as active global
citizens: in the UK, there will be 7,000 new advocates for international
development; in some of the poorest countries in the world there
will be 7,000 young people whose potential as community leaders
will be enhanced; combined there will be a dynamic global network
of young people who know the potential of work across cultural
boundaries to deliver positive change.[243]
141. The ICS programme has faced criticism. PCI said
there is an in-built tension between the goal
of giving the British volunteers a life-changing 'learning journey'
and the desire to make concrete development impacts on the ground
in Least Developed Countries. Of the seven ICS Quality Principles,
only one mentions development impacts.[244]
PCI questioned the £64 million cost:
£64m divided by 7,000 means that each 3-month
ICS volunteer programme costs DFID £9,143. Most 3-month commercial
gap year programmes cost around £2.5 to £3,000.[245]
And concluded:
the ICS budget invested in our BTCA programme
would train a million young entrepreneurs and launch 200,000+
youth-led business start-ups.[246]
We have heard other criticisms of the ICS programme
including problems with the induction process and the lack of
follow up from the organisation after the placements.
David Robilinho said at the Solutions4Work World
Bank Conference there was an "over-supply of small initiatives"
with a parallel reluctance to go to scale. He pointed out that
"the youth unemployment problem is in the millions, but our
solutions are in the thousands." PCI from discussions with
DFID say that DFID has no intention to scale up the ICS programme
so that it could start to make an impact on youth employment due
to its expense.[247]
ICS Entrepreneur
142. ICS Entrepreneur is a new additional programme
that focuses on the development of small to medium sized enterprises
through the placement of volunteers. Between July 2014 and August
2015, 800 ICS Entrepreneur volunteers (half from the UK and half
from in-country) will work through four agencies in nine countries.[248]
Raleigh International, one of the implementing partners of the
programme said;
aspiring entrepreneurs receive focused support,
delivered in an informal setting through their peers, to develop
and implement a business idea.[249]
VSO told us:
as well as encouraging economic growth in these
countries, the programme enables volunteers to build up their
own enterprise skills, and obtain hands-on business experience
which will boost their employability when they return to the UK.[250]
143. However Youth Business International told us:
There is a fast growing population of young entrepreneurs
in the UK with export opportunities, expertise and the social
conviction to connect with counterparts for mutual benefit. There
is a case to expand the considerable investment in ICS Entrepreneur
to target exchange between young entrepreneurs, rather than generalist
young volunteers.[251]
144. Given the importance of DFID's International
Citizen Service programmes, we believe it is justified for them
to be the subject of an inquiry either by ICAI or our successor
Committee in the new Parliament so that their full effects can
be evaluated.
Potential policy options
145. Filmer and Fox's research on Youth Employment
in sub Saharan Africa said that 83% of new jobs will be created
in household enterprises (family or individually-run micro-enterprises),
9% in government and public services and 8% in formal private
sector waged employment.[252]
146. However from studying DFID's Development tracker
website PCI said that current DFID spending is overly-skewed towards
formal, private sector, waged employment and the enabling environment-not
family or individually-run household enterprises where youth jobs
are to emerge. YBI found:
the majority focus of the five pillars is on
larger-scale, macro interventions that enable rather than deliver
job creation directly. Certainly a conducive policy, legal, regulatory
and institutional environment is central for markets to work and
businesses to grow, but DFID also has an important direct programming
role to catalyse growth that is not comprehensively addressed
in the Framework.[253]
Both organisations had clear policy solutions for
DFID to consider which addressed both the existence of youth employment
in the informal economy and potential direct programmes-helping
young people to create their own employment through entrepreneurism
which required direct support as well better education to teach
the skills required in the informal economy.
ENCOURAGING ENTREPRENEURSHIP
147. YBI said:
Entrepreneurship is part of the youth employment
solution-particularly in developing countries where other job
options are less viable and the informal sector makes up a substantial
share of the economy. Entrepreneurship is widely acknowledged
as a driver of sustainable economic growth as entrepreneurs create
new businesses that drive and shape productivity and innovation,
speed up structural changes in the economy and introduce new competition,
and they create new jobs that can drive inclusive growth.[254]
148. David Norman from SAB Miller explained what
being an entrepreneur meant in the developing world:
when we are talking about entrepreneurs here
in the UK, people have a very particular image of someone innovating,
fast, dynamic, probably young and already rich. They contrast
with the entrepreneurs who are small scale retailers who buy from
us. […] They have a little stall. They are perhaps buying
from us just a very small number of crates of beer per month.
These are what you might call survival entrepreneurs. These are
people who do not have another job opportunity, who have chosen
to set up a stall and sell our products and other products in
a very poor community close to the poverty line, because that
is virtually their only choice. [255]
Gerry Boyle of CARE International said:
many of the young people in developing countries
have the strongest possible incentive to be enterprising, insofar
as they have no other likely source of income. The issue becomes,
then, one of: how does one make them see what is possible and
feasible, and allow them to start to formulate plans that will
make them an effective entrepreneur?[256]
David Norman asked:
It is quite helpful to think about what it takes
to invest in those people's ability to turn that from a simple
stall into a growing and thriving business"[257]
149. PCI and YBI were already working with young
people in developing countries to encourage them to be entrepreneurs-PCI
through Be the Change Academies and YBI through its global network
of independent non-profit initiatives. Andrew Devenport explained
that YBI worked by:
· promoting
an entrepreneurial culture through celebrating success;
· reducing the
risk of starting a business by focussing on supply chaintype
businesses and promoting microfranchising;
· improving young
people's confidence by also providing nonfinancial support
such as mentoring, training and helping to build networks; and
· helping young
people face the challenges of both failure and success that will
come with starting a business.[258]
| Be the Change Academies
Peace Child International's Be the Change Academy (BTCA) is a youth-led programme that provides enterprise training, loans and mentorship to aspiring young entrepreneurs in West Africa and India.
It takes the call to action-"you have to be the change you want to see in the world"-and uses it to inspire young people to take their futures into their own hands.
Each BTCA runs youth-led free business plan creation trainings which are linked to a Revolving Loan Fund that invests in the best business plans. At the moment, there are three BTCAs running in three African cities: Kenema, Sierra Leone; Paynesville, Liberia; and Conakry, Guinea.
The BTCAs :
· concept was designed by young people
· are staffed and run by young people
· young staff are trained and supported by professionals
· link practical business plan creation training to an internal bank, which offers non-collateralised loans at affordable interest rates to make the best of the plans happen
· offer a unique brand of 'differential mentorship'-24/7 support and nurturing from a variety of mentors to ensure that each Youth-Led Business Start-Up (YLBS-U) is successful
|
Source Peace Child International Website
150. Gerry Boyle said that government agencies, NGOs
and donors could work to reach these potential young entrepreneurs
through already established mechanisms such as savings and loan
associations. DFID could then help them to work together with
peers in groups, to start to develop business ideas then access
finance in pools.[259]
151. YBI also said DFID could link up young entrepreneurs
in the UK who had the "export opportunities, expertise and
the social conviction to connect with counterparts for mutual
benefit." He suggested expanding the recent investment in
the new ICS Entrepreneur programme as discussed in the previous
section.
EDUCATION AND SKILLS TRAINING FOR
THE INFORMAL ECONOMY
152. DFID puts resources into improving access to
primary and junior secondary education. The then Minister Lynne
Featherstone MP said that "basic education is economic development.
Getting a cohort through who are capable of work and better work
and go on, ultimately, to tertiary skills". Luqman Ahmad
from ASI agreed that education was very important so developing
countries were "able to benefit effectively from the demographic
dividend of having young, productive people." However he
warned that "if the education system […] does not work
effectively, you will have potential opportunities to radicalise
youth or draw youth into unproductive parts of the economy. [260]
153. It would seem from our and other's experience
that there is a failure in the system as Francis Teal of Oxford
University said:
Those most dissatisfied by their job prospects
are the newly educated young. There are two possible reasons for
this. […] One is that the education is of such low quality
that it fails to produce skills of value in the market place.
The second is that there is a mismatch between the type of jobs
being created and the education supplied.[261]
Luqman Ahmad said the problem was that for those
coming out of formal education there was:
a limited formal job market that they can enter
into. They must be competing quite intensively for the formal
jobs and, therefore, they have to move into an informal environment
and an informal economy, where they need to make a livelihood
in informal trade, in some type of agriculture production or in
small-scale manufacturing. Those skills are not being taught.
[…] Yes, there is education to help improve the likelihood
of them getting formal jobs, but we also need to recognise that
there is still a big role that the informal sector plays. How
does one prepare people to succeed in that context?[262]
154. We have been particularly disturbed to hear
about the high levels of graduate unemployment in developing countries.
Our report on Sierra Leone and Liberia highlighted the 70% graduate
unemployment rate in Sierra Leone, for which we never discovered
a satisfactory explanation. The DFID Minister told us it was because
of the "lack of appropriate skills in terms of getting jobs"
amongst graduates. We also heard that there was corruption in
the exam process with a culture of buying qualifications and certificates.
In addition we were told that the graduates all wanted employment
with the government but that these jobs were already all filled
with people who were often of poor quality and ineffective but
impossible to remove. When we spoke to university students in
Dodoma on our Tanzania visit they told us that they did not feel
that their university courses were preparing them for life in
the working world, they were interested in the idea of sandwich
courses where they could spend a year out in industry applying
their studies.
155. PCI would like to see skills for self-employment
taught in schools. David Woollcombe said:
education, as it exists in those countries, does
not educate for selfemployment; it educates for waged employment.
When 83% of jobs are not in waged employment, there needs to be
much more education for enterprise startups, […] selfemployment
and selfreliance[263].
He went on to say:
There needs to be much more imagination and innovation
pushed into education, especially in sub Saharan Africa, where
I am afraid they have inherited a 19thcentury form of British
education which remains, in many cases, largely unchanged.[264]
Gerry Boyle highlighted the lack of financial literacy
of those applying for micro-credit through his organisation lendwithcare
which it had to teach before giving loans:
a lot of our effort is around financial literacy,
and very basic financial literacy such as the concepts of saving,
of what financial institutions might be out there and what products
might be available. Clearly, if that is captured better within
schools, and achieved more effectively, then it does give everybody
a step up.[265]
156. We were given examples of initiatives which
were providing the young with the necessary skills to survive
in the economies in which they would be working. Andrew Devenport
of YBI said:
There are significant initiatives such as Junior
Achievement, which is working with 200,000 young people in sub
Saharan Africa, bringing into the classroom people from the business
world and having entrepreneurs share their experiences.[266]
He also gave the example of a type of schooling in
Paraguay: Fundación Paraguaya,
A combination of conventional schooling 50% of
the time and 50% of the time focussed on agriculture, but agriculture
as a business and agriculture in its different forms, seeing how
basic processes can be improved producing young graduates who
have ability and excitement about being able to make a viable
living out of the land.[267]
157. David Woollcombe referred to 'skills matching'
as 'the low hanging fruit of job creation where you educate for
the skills that the private, waged sector needs' and recommended
that there needed to be much more work on it. He highlighted a
programme called Entra 21 where private sector educators, young
people, and the Government sit around a table, discuss what the
needs of the private sector are, in terms of skills, and then
makes sure that the education provision is delivering that.
158. We asked DFID what it was doing on this—Stefan
Dercon, DFID's Chief Economist said:
there is a lot of scope and a lot of interesting
studies going on in trying to get much better at forms of skills
training. DFID is supporting quite a lot of these kinds of things,
but also schemes in practice.[268]
CROSS GOVERNMENT WORKING
159. YBI said for there to be progress there needed
to be:
better coordination and leverage across the different
sectors-public, private and civil society-identifying targeted,
value-add roles for bilaterals and others.[269]
PCI said that:
DFID could learn a lot from its colleagues in
BIS, where the Start-up Loans company and its 75 Delivery Partners
(DPs) have launched 20,000+ businesses and lent over £100m
with a repayment rate of over 90%. Many of these, like the Prince's
Trust, School for Start-ups and Rockstar Mentors, operate internationally
and can show DFID proven methods for training, supporting and
mentoring young entrepreneurs to succeed with their business start-ups.[270]
160. We asked the Secretary of State about this and
it seems the only work DFID has done with a British industry is
on the extractives, looking at skill requirements for companies
operating in these areas so local staff can be trained up in them.[271]
Conclusions and recommendations
161. Youth unemployment is a great challenge and
is a potential cause of social and political unrest. We recommend
that DFID more explicitly target youth unemployment. We have seen
examples of effective interventions, but have also received evidence
about the need for improvement. Currently, donors, the private
sector and developing country governments are not working together
on a scale to even approach meeting the challenge. The work needs
to be scaled up and a sense of urgency injected into the thinking
and planning.
162. The majority of young people entering the
labour market in developing countries will be self-employed and
in informal employment. They need to be supported in this position
as young entrepreneurs. DFID needs to ensure the education in
schools is focused on creating the skills young people will need
to enter the world of work especially self-employment. In rural
areas schools should focus especially on agricultural skills for
example animal husbandry. DFID should encourage recipient developing
country governments to introduce sandwich courses in higher education
institutions. In our Beyond Aid inquiry we stressed the importance
of better policy coherence and in particular UK government departments
working together. We again highlight the need for DFID to work
with BIS on expanding its support to further and higher education
in its priority countries.
163. We also recommend a number of small, immediate,
practical actions. We recommend that DFID officials meet with
BIS officials to discuss which of the BIS youth programmes could
be transferred to developing countries. To ensure it gives greater
priority to youth unemployment, we recommend DFID creates the
position of a senior adviser on youth employment. As the focus
on this area becomes more acute there is an urgent need for far
more data to be collected and examined to fully understand the
problem and solutions so that targeted programs can be developed.
We encourage DFID to work with organisations such as Peace Child
International and Youth Business International to create and pilot
innovative ways of collecting and measuring youth job creation
data.
164. Jobs and livelihoods is such an important
issue we recommend that our successor Committee takes it up in
the next Parliament to assess what progress has been made.
224 Youth Job Creation a Policy Primer created by Peace
Child International Back
225
Peace Child International Back
226
UN Peacebuilding, Joint Response to youth employment in Sierra
Leone Back
227
Foreign Policy Centre Back
228
Peace Child International Back
229
Peace Child International Back
230
Q80 Back
231
Q80 Back
232
Peace Child International Annex A Back
233
Peace Child International Back
234
Q187 Back
235
International Development Committee Sixth Report of Session 2014-15
Recovery and Development in Sierra Leone and Liberia HC 247 Back
236
International Development Committee Sixth Report of Session 2014-15
Recovery and Development in Sierra Leone and Liberia HC 247, para
114 Back
237
Peace Child International Back
238
International Development Committee Fourth Report of Session 2005-06
Private Sector Development HC 921, para 87
Back
239
Q104 Back
240
Q104 Back
241
Peace Child International Back
242
Q95 Back
243
VSO Back
244
Peace Child International Back
245
Peace Child International Annex A Back
246
Peace Child International Annex A Back
247
Peace Child International Annex A Back
248
VSO Back
249
Raleigh International Back
250
VSO Back
251
Youth Business International Back
252
Peace Child International Back
253
Youth Business International Back
254
Youth Business International Back
255
Q8 Back
256
Q84 Back
257
Q8 Back
258
Q84 Back
259
Q84 Back
260
Q10 Back
261
Francis Teal Back
262
Q30 Back
263
Q80 Back
264
Q83 Back
265
Q82 Back
266
Q81 Back
267
Q103 Back
268
Q224 Back
269
Youth Business International Back
270
Peace Child International Back
271
Q226 Back
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