The global youth unemployment rate has proved sticky, and remained close to its crisis peak. At 12.6 per cent in 2011 and projected at 12.7 per cent in 2012, the global youth unemployment rate remains at least a full percentage point above its level in 2007. Nearly 75 million youth are unemployed around the world, an increase of more than 4 million since 2007.
Global Employment Trends for Youth 2012
by International Labour Office
http://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/publication/wcms_180976.pdf
The global youth unemployment rate has proved sticky, and remained close to its crisis peak. At 12.6 per cent in 2011 and projected at 12.7 per cent in 2012, the global youth unemployment rate remains at least a full percentage point above its level in 2007. Nearly 75 million youth are unemployed around the world, an increase of more than 4 million since 2007.
Youth unemployment and situations in which young people work under poor conditions incur social as well as economic costs. Youth unemployment has been shown to be tightly linked to social exclusion, as the inability to find employment creates a sense of uselessness and idleness among young people. The most obvious gains then, in making the most of the productive potential of youth and ensuring the availability of decent employment opportunities for youth, are the social and personal gains to young people themselves.
The second clear gain to recapturing the productive potential of underutilized youth is an economic one. Idle youth are not contributing to the economic welfare of their country. The loss of income among the younger generation translates into a lack of savings as well as a loss of aggregate demand. Many youth who are unable to earn their own income have to be financially supported by the family. Governments fail to receive contributions to social security systems and are forced to increase spending on remedial services. A lack of decent work, if experienced at an early age, also threatens a person’s future employment prospects and frequently leads to undesirable labour market outcomes over longer periods. All this is a threat to the growth potential of economies.
In order to design appropriate labour market and macroeconomic policies to promote better labour market outcomes for youth, it is necessary to understand the specific situation of young people in labour markets. Although this situation is strongly dependent on the overall labour market, youth also face specific barriers as they try to secure decent employment. These include the inexperience trap, which means that employers prefer workers that are experienced, and youth therefore do not manage to obtain an opportunity to gain experience. Youth also may be disadvantaged in the sense of having fewer contacts in the world of work. Furthermore, once employed, they may still be among the first to be dismissed on the basis of the last-in first-out principle, as they have the least seniority. But even though young people might lack experience they tend to be highly motivated and capable of offering new ideas or insights. They are the drivers of economic development in a country, and forgoing this potential is an economic waste. Designing appropriate policies to support their transition to stable employment should therefore be a country’s highest priority.