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Symposium 2012

Proposal - Tackling Youth Unemployment

The Challenge

Among the world's unemployed, young people have been particularly hard hit. Youth unemployment rates are significantly higher than adult unemployment rates in both developed and developing countries. ...

Among the world's unemployed, young people have been particularly hard hit. Youth unemployment rates are significantly higher than adult unemployment rates in both developed and developing countries. Global protest movements of young people are a manifestation of their lack of job prospects.

1. Promote Junior-Senior teams

Young and old workers face a similar problem on the labour market: they have higher unemployment rates than prime age adults. Yet, the reasons for their unemployment are different: young workers typically lack work experience, while old workers have lost out in terms of productivity. A solution is the promotion of junior-senior teams, where a young worker teams up with an old worker. Their skills are often highly complementary. The formation of such teams supports the transfer of expert knowledge and experience from the old to the young worker. Moreover, the young worker may help the old worker to sustain productivity by supplying complementary skills (e.g. physical strength, language skills, or technological skills). Individual pay within such teams may be lower than for a stand-alone worker, but this may be accepted when it keeps workers employed. Additionally, this measure prevents crowding out effects of policies which are targeted on just one of the groups.

2. Tap the potential of trade in tasks

The new wave of globalization offers numerous possibilities for individual persons to become part of the global value chain. Work tasks, which can be transmitted electronically, can potentially be done anywhere in the world. Youth (who are typically especially open to such new technologies) can offer their services globally on central electronic platforms and thereby reach a much larger market. A recent example of this is odesk.com. This may alleviate youth unemployment globally, but is likely to have a particularly strong effect in remote, rural parts of the world.

3. Rethink occupational certification systems

Vocational training often teaches skills which are very specific to an occupation. This is necessary because an apprentice needs to prove specific skills in order to obtain the certification to carry out the occupation. Yet, occupational borders are blurring and occupations tend to become broader and broader in terms of the tasks they entail. Youth may need different and much broader skills today than they used to in the past. Rigid occupational certification systems may prevent them from acquiring such broader skills as the focus of their training remains on issues needed for certification. This results in skill mismatch, leading to youth unemployment. Occupational certification systems need to be rethought.

4. Embed young workers in Green Growth strategies

Our growth paradigm needs modernization. Green Growth strategies are currently developed. Youth are particularly suited to contribute to these initiatives and may be a primary beneficiary in terms of employment prospects. Green Growth strategies need to pay particular attention to youth and encourage them to be part of it.

 

5. Improve macroeconomic conditions

Economic growth would stimulate job creation and would have a positive effect on the young unemployed (despite the fact that the youth are frequently the last to benefit from an economic upturn, and the first to be harmed by a recession). Policy makers should pay particular attention to youth-friendly sectors to increase the positive impact.

6. Wage subsidies and reductions in pay-roll taxes for youth

Direct incentives to hiring youth workers would have a positive effect on the unemployment rates. However, the design of such policies should prevent crowding out of older workers or other disadvantaged groups.

7. Active labour market policies

Various forms of training, career guidance and job search assistance close the gap between youth and aggregate unemployment. Encouraging internship and traineeship programs stimulates skill formation and a smooth transition to more stable positions.

8. Establish a dual system linking education and training

Connecting the education system and the job market leads to better and quicker matches between employers and applicants. This can include vocational training, focusing on practical issues in schools, exploring real world case studies, developing team-work and communication skills.

9. Introduce graded job security

Job security is typically activated only after a fixed amount of tenure. There is no protection before that amount is reached. Such an abrupt change in job security encourages employers to preserve high employee turnover and hire people for shorter periods. Graded job security where job security is increased gradually and smoothly would prevent such effects and thereby improve job protection for youth.

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