Youth Employment Programs - Independent Evaluation Group

Interventions to Address Youth EmploymentBroad policy interventions, such as supporting macroeconomic growth, trade,and foreign investment are necessary to promote overall employment, aswell as a stable political and macroeconomic environment, access to energyand infrastructure, and a conducive business and labor market environmentare all basic requirements for investment and job creation, and affect all agegroups. However, in some cases, this may not be sufficient to tackle youthemployment. Government interventions with a “youth lens” may be needed.Governments design youth employment interventions to address imperfectinformation, externalities, and market regulations that may negativelyaffect development outcomes. For instance, education interventions addressinformation failure in education management, which negatively affectsquality and the registration and accreditation of providers (Robalino andothers 2010). With more education, girls from lower-income groups delay theirmarriage age, which helps decrease fertility rates. Labor and credit marketconstraints limit access to jobs, credit, and markets for lower-income groups(Begg and others 2000).The country context is an important driver for policy directions. Asemphasized in chapter 1, differences in country context (table 1.2) implydifferences in policy effectiveness. Governments use three main strategicdirections—policies to increase the demand for young workers, labor marketreforms, and education reforms—to address youth employment. AppendixA, table A.1 categorizes youth employment problems and the relateddeterminants by country context. It suggests the main strategic directions toaddress these issues. In each youth employment context, policies to improvethe business environment and foster trade, entrepreneurship, and growthare crucial to increase net job creation and labor demand. They may needto be accompanied by education policies to address a skill mismatch, andincrease the human capital level and employability of youth, especially incountries with growing youth cohorts and structural changes in the economy.Reforms in labor regulation may be needed in middle-income countries toincrease flexibility in contracting and pay, and to reduce segmentation anddiscrimination.Youth-specific strategic directions and their interventions (table 4.1) alignwith the “I, L, and E” of the Bank’s MILES framework (box 2.1). MILESclassifies labor market regulations under (L); however, because they influencethe demand by firms for workers, for the purpose of this evaluation,regulations are classified under (I). Macroeconomic growth policies (M)are closely tied to business cycles and affect all age groups. Similarly,investments in infrastructure and energy are necessary for firms to createjobs for all age groups, and not just for youth. Unemployed youth in higherincomecountries can get access to unemployment benefits (S), but in mostBank client countries this is not an option. Public works programs can playa temporary safety net role for low-income groups. Social safety nets andWhat Are the World Bank and IFC Doing in Youth Employment? 15