Realising full, productive employment and decent work for all features prominently among the Sustainable Development Goals. In many developing countries, especially in Africa and South Asia, youth constitute nearly a third of the population. Current projections suggest that a billion more young people will enter the job market over the next decade. Hence, issues of youth employment have risen up the political agenda at both international and national levels. Avenues for youth employment
creation on a substantial scale must be sought as a matter of urgency. This will involve a re-evaluation of the different issues around labour demand and supply, in addition to rethinking how young people’s entrepreneurial spirit can be harnessed.The MasterCard Foundatio

Kilimani, N

English

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ISSUE 136 • FEBRUARY 2017
Realising full, productive employment and decent work for all features prominently 
among the Sustainable Development Goals (SDGs). In many developing countries, 
especially in Africa and South Asia, youth constitute nearly a third of the population. 
Current projections suggest that a billion more young people will enter the job market 
over the next decade. Hence, issues of youth employment have risen up the political 
agenda at both international and national levels. Avenues for youth employment 
creation on a substantial scale must be sought as a matter of urgency. This will involve 
a re-evaluation of the different issues around labour demand and supply, in addition 
to rethinking how young people’s entrepreneurial spirit can be harnessed.
 Accelerating Progress towards 
 Achieving Productive Youth 
 Employment and Decent Work 
The youth employment challenge in 
developing countries
South Asia and especially sub-Saharan Africa 
face the largest youth employment challenge in 
terms of size and share of the youth population. 
These are equally the regions where vulnerable 
employment shares (self-employment and unpaid 
work) are highest. With regard to the pattern of 
distribution, data show that youth unemployment 
rates tend to rise with education and are also 
higher in urban areas. This is largely driven by the 
mismatch between the skills the labour market 
demands against those that youth possess. In 
addition, the nature of skills acquired makes 
them unable to switch to potentially available 
opportunities in the market. Women fare much 
worse than men, both in terms of unemployment 
and vulnerable employment that exposes one to 
the risk of any form of exploitation.
Youth employment outcomes are shaped in part 
by labour demand and labour supply conditions in 
the following ways:
 
• Labour demand, which is largely driven by 
economic growth and structural change. 
Essentially, job creation depends on the 
growth and labour-intensity of production 
in the different sectors of the economy. In 
middle-income countries in sub-Saharan 
Africa, the services sector accounts for a high 
and growing share of employment, while 
the share of agriculture and sometimes even 
manufacturing has been on the decline. The 
majority of developing country workers in the 
services sector are self-employed, mainly in 
retail and transportation services. This trend of 
structural change, with an increasing share of 
the workforce in low-productivity activities is 
worrying since the likely result will be the lack 
of labour demand in high-productivity formal 
enterprises. As such, increasing the productivity 
of sectors with a high labour intensity in 
production would be one opportunity for 
generating youth employment. For instance, 
the growing demand for food puts agriculture 
as one option for employment generation by 
taking advantage of a growing global market, as 
food prices hit record highs. Entrepreneurship 
development would be one way of stimulating 
labour demand through the expansion and 
consolidation of any existing start-ups.
• Labour supply, whereby youth employment 
outcomes are driven by education and skills, in 
terms of quantity, quality and relevance. Skills 
are built through formal general education, 
formal vocational education and training and 
apprenticeships, and through non-formal 
education and training. Access to primary 
education is a first requirement for obtaining 
basic literacy and numeracy skills, which are a 
precondition for ensuring access to decent work. 
Across the developing world, labour supply in 
different places is also affected by rural–urban, 
rural–rural and international migration. Due to 
rural–urban migration patterns, urban labour 
supply tends to grow faster than the working 
age population, further increasing the pressure 
on urban labour markets. This implies that 
the pattern of employment creation might of 
necessity be created to closely follow these 
patterns lest we end up with an army of 
unemployed youth in the urban centres, with 
its attendant adverse effects.
IDS POLICY BRIEFING ISSUE 136 • FEBRUARY 2017 www.ids.ac.uk
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Further reading
Deon, F. and Fox, L. (2014) Youth 
Employment in Sub-Saharan 
Africa, Africa Development 
Series, Washington DC: World 
Bank
ILO (2012) The Youth Employment 
Crisis: Time for Action, 
International Labour 
Conference, 101st Session, 
Report V, International Labour 
Organization
Pieters, J. (2012) ‘Youth 
Employment in Developing 
Countries’, a background paper 
prepared for the European 
Commission
S4YE (2015) Toward Solutions for 
Youth Employment: A 2015 
Baseline Report, www.s4ye.org/
sites/default/files/Toward_
Solutions_for_Youth_
Employment_Overview.pdf
World Bank (2013) Economic 
Growth in Equatorial: Paths to 
Inclusiveness and Sustainability, 
Washington DC: World Bank
Credits
This IDS Policy Briefing was written 
by Nicholas Kilimani and edited 
by Hannah Corbett. It was 
produced as part of the Matasa 
Fellows Network, funded by 
The MasterCard Foundation.
The opinions expressed are 
those of the author and do not 
necessarily reflect the views of 
IDS or The MasterCard 
Foundation’s official policies. 
Readers are encouraged to 
quote and reproduce material 
from the IDS Policy Briefing series. 
In return, IDS requests due 
acknowledgement and quotes 
to be referenced as above.
© Institute of Development Studies, 2017 
ISSN 1479-974X
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Foundation logo>
Policy recommendations
A number of measures need to be undertaken by governments through the 
relevant agencies, the private sector and community-based organisations in order 
to maximise the youth employment outcomes and accelerate progress towards 
meeting the SDG on decent work:
1. Youth employment strategies 
Because of the complex nature of developing country labour markets, and the 
diversity of income-generating activities, the youth employment challenge 
requires policy action beyond basic education and labour markets, into areas such 
as credit markets, infrastructure, business regulation, and rural development. 
In addition to basic education, high productivity skills that can accelerate youth 
employment, including processing, marketing, machinery operation and repair, 
commercial transportation (passenger and haulage), logistics and quality control, 
need to be harnessed as vents for youth employment. Responsibility therefore lies 
with governments through the relevant agencies with the appropriate capacity to 
ensure coherence and coordination.
2. Growth 
Promoting job-rich, inclusive growth is key to youth employment promotion in 
the long term. Although achieving job-rich growth is a major challenge in general, 
strategies to expand labour demand are needed to complement interventions 
targeting more short-term and youth-specific goals, such as wage subsidies and 
skills training. Thus, macro and growth policies need to stimulate private investment 
especially in labour-intensive sectors or sectors with large employment multipliers.
3. Promotion of entrepreneurship 
It is important to promote an entrepreneurial spirit among the youth. One 
important step is to systematically screen youth for latent or active entrepreneurial 
characteristics, such as innovative thinking, leadership attributes, passion and 
results orientation. This, however, has to be done in combination with other 
supporting measures such as access to finance. To improve entrepreneurs’ ability 
to benefit from trade liberalisation and foreign investment, they also need skills for 
developing their networks and linking with higher levels of the value chain.
4. Knowledge gaps 
Much of the existing analytical evidence tends to focus on formal employment 
in the urban areas, where political interest and the data can be found. Little is 
therefore know about the functioning of the informal and agricultural labour 
markets, and even less about the youth specifics of these labour markets. As 
such, investing in youth labour market data by the country statistics agency in 
collaboration with the relevant agencies that are linked to employment, is an 
important first step in aiding policy and programme design. Improving data 
infrastructure in developing countries is furthermore likely to increase attention 
to the labour market situation of the vulnerable youth. Finally, a number of youth 
employment determinants and relatively new policy areas and programmes 
remain particularly understudied. Examples are the role of urbanisation and the 
location of jobs, new technologies in production and in job searching, micro-
franchising for stimulating entrepreneurship, and green growth strategies.


Accelerating Progress towards Achieving Productive Youth Employment and Decent Work

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Accelerating Progress towards Achieving Productive Youth Employment and Decent Work

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