Youth Unemployment – A systematic review of what improve labour market outcomes

This systematic review investigates the impact of training and skills development, entrepreneurship promotion, employment services, and subsidised employment interventions on the labour market outcomes of young women and men. The systematic and meta-analysis is based on evidence from 113 counterfactual-based impact evaluations of 107 active labour market programmes in 31 low-, middle- and high-income countries.

The extent and urgency of the youth employment challenge and the level of global attention currently being given to this topic calls for more and better evidence-based action. Accordingly, this systematic review sought to examine the empirical evidence in order to understand what drives the success (or failure) of youth employment interventions. Investments in youth employment will continue, and even increase, as countries embark on the implementation of the 2030 Agenda for Sustainable Development; therefore, this review focused on identifying “what works” and, as far as possible, “how”.

Achieving an understanding of the “how” element is not an easy task. Frequently, impact evaluations do not assess relative effectiveness and, even more often, reports and papers fail to describe the underlying theory of change and observed transmission mechanisms behind an intervention. In some other cases, there is limited information about the characteristics of programme participants in the evaluation sample and their comparison group as well as fractional discussions about the occurrence and causes of attrition. Much remains to be done to improve reporting standards and advocate for more and better evidence examining the impact of youth employment interventions. The quality of the primary studies determines the quality of the systematic review and any subsequent synthesis of the evidence.

This systematic review builds on a growing base of studies measuring the impact of youth employment interventions and offers a rigorous synthesis and overall balance of empirical evidence taking into account the quality of the underlying research. The review is systematic through a clearly defined and transparent inclusion and exclusion criteria, an objective and extensive search, a punctual data extraction process, a standardized statistical testing and analysis, and a thorough reporting of findings. These elements and underlying methods and tools were laid out and reviewed in the protocol (Kluve et al. 2014).

The review shows that youth employment interventions do improve labour market outcomes of youth. It is an investment that pays off, but not immediately. A comparison of short- vs. long-term estimates indicates that outcomes are greater when measured at least a year after exposure to the intervention. While this result applies globally, it also conceals important contextual differences between developed and developing countries.

The evidence shows a significant impact gap across country income levels. While ALMPs in high-income countries can integrate disadvantaged young people into the labour market, they are not able to fully compensate for a lack of skills or other areas where youth failed to gain sufficient benefit from the education system. On the other hand, youth-targeted ALMPs in low- and middle-income countries do lead to meaningful impacts on both employment and earnings outcomes. Specifically, skills training and entrepreneurship promotion interventions appear to yield positive results on average. This is an important finding, which points to the potential benefits of combining supply- and demand-side interventions to support youth in the labour market.

The evidence also calls for careful design of youth employment interventions. The “how” seems to be more important than the “what” and, in this regard, targeting disadvantaged youth as well as providing incentives for participation of youth, appropriate profiling mechanisms and schemes to motivate service providers to perform effectively appear to act as key factors of success.

The later emphasises the ability of specific design features within employment interventions to affect individual behaviours – in this case among both young people and service providers. It also implies – and calls for – sensible interpretation of the results. The findings from this review need to be discussed vis-à-vis the local and national context and should be complemented by a long-term and holistic commitment towards youth development.

Chosen excerpts by Job Market Monitor. Read the whole story at  Global evidence on youth employment: Interventions to Improve the Labour Market Outcomes of Youth: A Systematic Review of Training, Entrepreneurship Promotion, Employment Services and Subsidized Employment Interventions