Worldwide, young people are three times more likely to be unemployed than adults, according to data from the International Labor Organization (ILO). Even among employed youth, many work bad jobs for painfully low wages. More than 160 million working youth are below the UN's poverty threshold, and 96.8 per cent of employed youth in developing countries work in the informal sector, according to ILO data. So what works to get young people into jobs and raise their wages?
Skills training programs have been shown to be effective in a wide variety of environments all over the world. After training, youths are more likely to be employed and they earn more. Notably, these positive effects appear in a wide range of contexts, including low-income and high-income countries, as well as among youth who are particularly disadvantaged.
This evidence comes from one of 3ie's systematic reviews which combines the results from numerous studies around the world. This approach provides stronger evidence than relying on a single case, where idiosyncratic issues can affect program outcomes. This particular 3ie review analyzed 107 youth employment interventions of various types, including 68 that trained youth in a skill. An earlier, more limited systematic review by a different set of authors found similar results.
The positive results for skills training interventions stand in contrast to a lack of evidence supporting the effectiveness of other types of programs, like providing employment services or subsidized employment. Next week we'll write about one other promising type of intervention: entrepreneurship programs for youth, which seem to work in low- and middle-income countries.
The youth skills trainings programs analyzed in the review provided a wide range of job-specific technical skills, business skills, literacy skills, numeracy skills, or other non-technical skills. The key is that they provided a new skill for participants, rather than just offering services to help them look for a job or offering them subsidized employment. While the programs vary in their definition of 'youth,' all of the interventions targeted people between 15 and 35 years old. This range takes into account time it can typically take people to transition from education to employment.
Participating youths' earnings and employment rates rose after skills training programs in countries across the income spectrum, although the effects were smaller in high-income contexts. Earnings, in particular, rose substantially more in low- and middle-income countries than in high-income countries. The review draws evidence from 29 interventions in high-income countries and 38 interventions in low- and middle-income countries.
Skills training programs were particularly effective at raising earnings for disadvantaged youth, defined as those youth who were particularly low-income, at risk, or vulnerable. The programs' positive effects were not limited to these youth, however — earnings and rates of employment also went up for youth who were not classified as disadvantaged.
For more information about the study's findings and methodology, the full study and a shorter summary are available here. Beyond this study, hundreds of other systematic reviews and thousands of impact evaluations are available in our evidence hub here.
This is the fifth blog in our campaign 2020 Hindsight: What works in Development. Learn more about the campaign and read past blogs here.
Comments
Questions from the top of my head: Which skills are most effective in improving employment and earnings outcomes? Is there a wage premium for soft skills (which seem to be a favourite among employers)? What are the complementarities between skills, e.g., is a training combining soft skills and technical skills more effective than the sum of their individual impacts? How do training capacities (e.g. didactic abilities of vocational trainers) mediate the impact? How do the studies control for Hawthorne effects? It would be great if future reviews by 3ie could address (some of) these questions, as they are at the core of our work as practitioners.
a. It is clear to most practitioners that Government,Sectors and Non state actors are candidates in the generation of employment opportunities for the youth. Therefore there is need to agree on a common outcome or program regarding youth employment to which all contribute. This means that interventions to inform the outcomes have to be reviewed to ensure that; equity is emphasized to address the different effects on various categories including youth based on ethnicity, religion, residence zones, disabilities etc.;
b. In addition the review should help to ensure that inequalities are corrected by the intervention rather than deepening them. The interventions such as skilling should be reviewed to ensure that it doesn't have unintended effects, such as laying off of the youth that may not have undergone the skill training for example. What strategies work for the youth require having the right and appropriate resources to address the unemployment question ( material resources and technology), especially in developing countries;
c. Often times Governments especially in developing countries design and promote policies to address youth unemployment, but fail on the aspect of the management and implementation of the policies and interventions. As noted at the begining, sectors of Government and No State actors have the opportunities to address the youth unemployment problem, however, the many different actors in the sectors is its a challenges informing the outcome. This is so because they are not only many, but also have different motivations, objectives, and approaches to delivering or contributing to the outcome. There is therefore need to establish appropriate system of incentives and sanctions to guide the activities of the other actors by Government.
d. Its also important that we review the acceptability of policy and its accompanying interventions by the stakeholders to ensure adopt ability, ownership and implementation.