The economic crisis that began in 2007 reversed the gradual declining trend in global youth unemployment rates observed between 2002 and 2007, changing the course of the trend to increasing youth unemployment between 2007 and 2010. This turn of events quickly led to discouragement and significant withdrawal from the labor force among young workers and jobseekers. It is estimated that nearly 6.4 million youth worldwide moved into inactivity as a response to the crisis, while many others continue working yet living in poverty (ILO, 2012).
Today, the global youth unemployment rate has settled at 13.0 per cent, with nearly 73.3 million youth actively looking for jobs. While the unemployment rate among youth is expected to remain relatively constant in the near future, it is still well above its pre-crisis level of 11.7 per cent. Youth remain overrepresented among the unemployed and shaken by the changing patterns in the labor market. Two-fifths (42.6 per cent) of the global youth labor force were reported unemployed or working poor in 2013 (ILO, 2015). In addition, many youths are idle. In 2014, 12.4 percent of youth in the European Union (EU-28) were not in employment, education or training (NEET) (ILO 2015a).
As a result, many countries have implemented active labor market programs (ALMPs) aiming to connect youth to wage- or self-employment. These include general employment services (counseling, job search assistance, and intermediation), training, wage subsidies, and entrepreneurship programs. Unfortunately, although this has been changing over the last decade, the majority of programs have been implemented without proper evaluations, and our knowledge about their effectiveness has been limited.
This study reviews the evidence on the impact of youth employment programs on labor market outcomes.
The analysis looks at the effectiveness of various interventions and the factors that influence program performance including country context, targeted beneficiaries, program design and implementation, and type of evaluation.
We identify 113 counterfactual impact evaluations covering a wide range of methodologies, interventions, and countries. Using meta-analysis methods, we synthesize the evidence based on 2,259 effect sizes (Standardized Mean Differences, or SMD) and the statistical significance of 3,105 treatment effect estimates (Positive and Statistically Significant, or PSS).
Overall, we find that just more than one-third of evaluation results from youth employment programs implemented worldwide show a significant positive impact on labor market outcomes – either employment rates or earnings. In general, programs have been more successful in middle- and low-income countries; this may be because these programs’ investments are especially helpful for the most vulnerable population groups – low-skilled, low-income – that they target. We also conjecture that the more-recent programs might have benefited from innovations in design and implementation. Moreover, in middle and low income countries, skills training and entrepreneurship programs seem to have had a higher impact. This does not imply, however, that those programs should be strictly preferred to others; much depends on the needs of beneficiaries and program design. In high-income countries, the role of intervention type is less decisive – much depends on context and how services are chosen and delivered, a result that holds across country types. We find strong evidence that programs that integrate multiple interventions are more likely to succeed because they are better able to respond to the different needs of beneficiaries. We also find evidence about the importance of profiling and follow-up systems in determining program performance, and some evidence about the importance of incentive systems for services providers.
Chosen excerpts by Job Market Monitor. Read the whole story at Do youth employment programs improve labor market outcomes?: a systematic review