You may have seen a hint of the problem of urban youth unemployment before the Covid-19 pandemic in the growth of the “gig economy” in the USA and other high-income countries.
You may have seen a hint in the college choices your children and grandchildren are making as they understand that the security of long careers with a single employer that graduates enjoyed 50 years ago can no longer be readily available. Life-long jobs in government or manufacturing or services like banking seem to be increasingly scarce, especially jobs that include substantial benefits such as health insurance, pensions, and paid leave for vacations and illness and parenthood.
What you may have missed is how threatening the growth of urban youth unemployment is in other countries, especially in China and India and across Africa.
I started focusing on this problem in 2017. The context for this decision is described in a Note at the end of this piece.
Don’t take just my word about the problem. Here are recent reports about youth unemployment in China and India:
· Two scholars at UC/San Diego recently wrote about new data on youth unemployment in China, which put the unemployment rate at 19.3 percent in mid-2022, compared with 15.4 percent a year earlier and forecast to rise to 23 percent a few months later: https://china.ucsd.edu/opinion/post/youth-unemployment-crisis-looms-large.html
· The International Labor Organization put India’s youth unemployment rate at 28.3 percent in 2021, up from 23.1percent in 2018. A recent blog from the London School of Economics examines the trends and highlights how most of youth unemployment is much higher among university-educated youth than youth with only a primary school education: https://blogs.lse.ac.uk/southasia/2022/02/21/the-mounting-challenge-of-youth-unemployment-in-india/
Youth unemployment is not a problem confined to low-income or densely-populated countries. There is a youth unemployment problem in the USA and in almost every other high-income, economically-advanced country. It would be no exaggeration to say that virtually every country in the world is implementing one or more youth employment program.
These programs typically take three forms. The most basic form is vocational training at the high school level in the public sector. What’s new is greater efforts to place graduates seamlessly into decent jobs with benefits. A growing number of large-scale employers have launched training programs for youth, often as a corporate social responsibility (CSR) initiative.
Now more and more governments are providing incentives/subsidies for private companies to hire young men and women, including apprenticeships.
My research project was built around two hypotheses. The first was that no combination of private sector initiatives and public sector programs would create enough “decent jobs” (as defined by the International Labor Organization) for the number of young men and women entering the labor force each year.
The other was that a pool of unemployed young men and women in urban settings threatened to be more socially disruptive than an equal number of unemployed youth in rural areas. The public policy challenge in urban areas would be greater because of the potential for creating gangs that would prey on well-employed households and communities.
My research project also included a possible solution. Policies could be adopted to encourage young men and women to form teams that engage in socially-constructive activities ranging from childcare/eldercare to teaching to the performing arts to removing plastic trash. A key to success in this direction would be financial support, either through grants or loans or equity. But social support in the form of recognition and rewards could also be important reinforcing actions.
A broader view of the challenge of youth unemployment suggests the benefits of instilling entrepreneurship skills and experience at an early age, even in primary school. If young men and women enter the work force expecting to have to “create their own jobs”, the process of actually doing so should be much easier.
There are, however, some mitigating factors worth mentioning. In particular, with fertility rates below replacement level and showing few signs of turning around, more and more countries will have shrinking populations. One result should be labor shortages, implying more employment opportunities for youth. Technology is another factor; broadband access everywhere could make finding jobs and changing jobs much easier. The growing role of women in public life could also contribute to implementing socially calming policies.
A final policy implication from my research is how the concept of Universal Basic Income (UBI) could ultimately solve the problem of youth unemployment. UBI is not well known, but the concept emerged decades ago. In its simplest form, it would provide to every adult in a country’s population a nonconditional grant sufficient to purchase decent food, shelter, and health services. It is controversial because it seems inflationary and likely to produce a population of lazy people, but pilot projects over many years have not validated these concerns. UBI will be the subject of the next piece posted on my website.
A NOTE ON THE CONTEXT FOR INITIATING
MY WORK ON URBAN YOUTH UNEMPLOYMENT
In 2017, I decided to make “the global challenge of urban youth unemployment” my major policy research project at the Brookings Institution. There were push and pull factors behind this decision. The major push factor was giving up on Myanmar/Burma after ten years trying to understand and assess the country’s economic renaissance following decades of isolation and misrule. The event that convinced me I was beating my head against a wall was the ethnic cleansing operation by the Myanmar army against the Rohingya minority that forced more than 800,000 members (reportedly) of this community to flee into Bangladesh.
The major pull factor was an interest in demographics that started in college where my senior thesis advisor was the head of the Office of Population Research. I spent a lot of time in the OPR Library working on course assignments. I concluded—from scanning books in the library long before global warming was widely seen as an existential threat for the human race—that success in reducing global poverty to tolerable levels would require stopping the exponential population growth that began in the 1800s. Another significant pull factor was learning about volunteer service programs in Africa that were explicitly targeting youth unemployment. This awareness emerged from my service as a Peace Corps Volunteer in India in the mid-1960s and basic policy research on international volunteer service I carried out while at the Brookings Institution in 2003-2006.
I drafted a 2-page Scope Paper on this new youth unemployment project in August 2017 (attached). Here is what I wrote in the Overview: “Urban youth unemployment by some accounts is one of the world’s greatest challenges alongside climate change, infectious disease, food security, and terrorism/conflict. This study will examine multiple dimensions of the challenge ranging from demographics to social media. It will explore the hypothesis that volunteer service has the potential of being a leading component of effective programs to alleviate urban youth unemployment.” Here is a link to the initial blog piece I wrote for the Brookings Institution, posted in May 2018: https://www.fromthebridge.org/post/urban-youth-unemployment-a-looming-crisis .
My research was set back in 2019 when Brookings decided not to extend my Nonresident Senior Fellow appointment for another year. I made an easy transition to The Stimson Center at the beginning of 2020, but the Covid-19 pandemic effectively killed the project. In fact, I was in Kolkata, India, undertaking the first round of field research on youth unemployment when the pandemic was declared. My research plan included additional interviewing in Cairo, Lagos, and Mexico City. The pandemic made travel to these cities impractical. Besides, I was close to celebrating my 80th birthday and feeling that I no longer needed an institutional affiliation to pursue my policy interests. Building a website seemed like a more sensible next step in my life.
ã Lex Rieffel
From the Bridge Foundation
30 November 202