Presentation of Evaluation of World Bank Group Support to Youth Employment
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Presentation made by Emmanuel Jimenez at the Youth Employment workshop in Abuja, Nigeria.
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Presentation of Evaluation of World Bank Group Support to Youth Employment
- 1. Addressing Youth Employment: Evidence from Evaluation and Research at the World Bank Group Youth Employment Workshop Abuja, Nigeria July 2013 Emmanuel Jimenez, Pia Schneider, Xue Li, Susan Caceres, YE team Independent Evaluation Group
- 2. Two questions ► What has IEG learned from its review of what works to address youth employment issues? • Source: A Systematic Review of Evaluations of Youth Employment Programs 2012 • Messages: – Diversity across countries of issues and of programs and policies – Mix and paucity of evidence on what works ► What has IEG learned from its evaluation of the WBG? • Source: Youth Employment Programs: An evaluation of World Bank and International Finance Corporation Support 2012 • Evaluation Questions: – How has the World Group supported countries tackling youth employment problems? – What is the evidence regarding the effectiveness of that support?
- 3. Diversity of the Issue: Expected Increase in Youth Population by Region 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 2005 2010 2015 2020 2025 2030 2035 EAP ECA LAC MENA SAR SSA Source: World Bank Staff, based on data from HNPstats
- 4. Differences in youth employment across countries need different approaches Nature of Problem Context High formal sector unemployment for all young workers Economic crisis, structural reforms and lack of job creation in all countries Youth cohort growth is larger than job growth (e.g. Sub-Saharan Africa) High unemployment for highly-educated youth Voluntary unemployment among higher-income youth in MICs and LICs (e.g. Sri Lanka and MENA region) Large number of casual, low- productivity, low-paid jobs held by youth In MICs and LICs with a small formal sector Rural areas (farm and off-farm) Children in workforce and low school enrollment High unemployment concentrated in subgroups of youth (minorities, poor) Regional disparities in all countries Discrimination against subgroups
- 5. Youth Employment Interventions, by Categories Fostering job creation/work opportunities Smoothing school-to-work transition and job mobility Fostering skill development and labor market relevance of skills Regulations to encourage the hiring of young people Training in entrepreneurship or business management and support to start businesses Wage subsidies Direct job creation (public works programs) Counseling, job search skills, information on vacancies, placement Improving the quality of formal technical and vocational education and training (TVET) Non-formal remedial education/second chance training programs including training subsidies and vouchers Expanding/improving work- based learning Training combined with multiple interventions (training dominates) Improving the business and investment climate* *Not yet evaluated Improving information on labor market , Program for overseas employment of Certification of skills, Providing information on training, Support for transportation and
- 6. Findings from the Systematic Review ►Review of 36 studies conducted between 2000 and 2011 ►Evaluation questions: • What types of youth employment programs work best in which context? • What key features in implementation design and targeting explain variations in employment and earnings in different economic contexts?
- 7. Findings: Mixed Results ► Formal TVET more promising than short-term courses ►Smoothing school to work transition and facilitating job mobility inconclusive ►Among job creations interventions, wage subsidies are most promising • Direct employment programs and labor market regulations have mixed results • Entrepreneurship training has significant but small effects
- 8. Examples of Recent Evaluations ► Tunisia Non academic entrepreneurship training track at the university level can lead to more self-employment (Premand et al. “Entrepreneurship training and self employment among university graduates: evidence from a randomized trial in Tunisia”, December 2011) ► Uganda Unrestricted grants for training can enhance self- employment among groups in poor settings (Blattman et al. 2011: Employment generation in rural Africa: midterm results from an Experimental Evaluation of the Youth Opportunities Program in Northern Uganda).
- 9. Evidence paltry: Mixed and More is needed especially in LICs 0 5 10 15 20 25 30 35 40 OECD MIC LIC Numberobservations Foster skill development (E) School to work transition and facilitate job mobility (L) Foster job creation (I) Skill development is most often evaluated in international Impact Evaluation literature
- 10. Two questions ► What has IEG learned from its review of what works to address youth employment issues? • Diversity of issues • Diversity of programs and policies • Mix and paucity of evidence on what works ► What has IEG learned from its evaluation of the WBG? • How has the World Group supported countries tackling youth employment problems? • What is the evidence regarding the effectiveness of that support?
- 11. What is the Bank doing? 11 11.5 12 12.5 13 13.5 0 100 200 300 400 500 600 700 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YouthUnemploymentRate(%) US$Millions Fiscal Yearof Approval IBRDActual IDA Actual Youth Unemployment Rate World Development Report on Youth GlobalCrisis Youth Unemployment Rate Between FY01 and FY11, the Bank loaned $2.85 billion to youth employment through 90 operations in 57 countries, reflecting 0.9% of total lending
- 12. Where did lending and analytic support for youth employment go? ► 70% of lending to 10 countries, and 30% to 47 countries ► Education • 40% of 90 projects and of $2.35 billion lending for YE • Other sectors: social protection, finance and private sector development, economic management, social development, gender, ► Projects have a supply-side approach: • Most often supported: Labor market information, quality of formal Technical-Voc Education and Training TVET, information on training, skills recognition • Few interventions to support hiring, self-employment, business environment • Comprehensive approach missing including demand-side ► In the Africa region, analytic work tends to focus on formal employment in the urban areas. • Few Bank reports examine youth employment in rural low-income areas, and employment opportunities in agriculture although the majority of low-income youth live in rural areas.
- 13. What is the evidence regarding the effectiveness of Bank support? ►Youth employment is not a strategic issue in most WB country strategies ►Evidence is scant on employment/earning effect in projects: • Tracer studies find positive employment and earning effects of TVET • Workplace training increases effectiveness of formal TVET, but is restricted by small formal sector • Little is known from Bank support to: – Smoothing the transition from school to work and facilitating job mobility – Job creation / work opportunity interventions ►Few Bank operations identify impact on low-income youth ►Need better diagnostics to inform policy
- 14. Some program features lead to better post-program results in employment and earnings ►Programs with multiple interventions that complement each other – such as class-room and on-the-job training with job search assistance ►Wage subsidies are promising if there is a strong private sector and youth have an opportunity to learn on the job, and attend regular training • Problem of low uptake among employers ►Programs need to be managed professionally and employment bureau needs to provide regular follow up. • Job search assistance is often not well implemented
- 15. Key lessons for Bank 1: A comprehensive approach is more effective than isolated interventions ►A comprehensive approach includes interventions that address: • Supply- and demand-side for youth, and • constraints in labor, credit and land market for youth ►In rural low-income areas, programs are essential for stimulating: • market environment for growth of farms • household enterprises • rural agribusinesses • Access for rural youth to land, credit and skill
- 16. Lessons for Bank 2: Take a strategic and evidence-based approach ►Work across sectors and in rural areas: • Work with private sector • Work in rural low-income areas ►Better and more diagnostics are needed: • On youth employment interventions that target youth in low- income and rural areas, especially in Africa • Report results by beneficiary groups, socio-economic background, education levels, geographic areas and gender. • Conduct cost and cost-benefit analysis of interventions and their fiscal impact.
Notas do Editor
- My colleagues have given you a perspective of jobs from a global perspective from the WDR; and of youth employment in Africa in the regional report. WDR: Some jobs do more for development than others – especially those that enhance living standards, productivity and social cohesion. Reality for African youth: Youth employment agenda must include enhanced opportunities in agriculture and HH non-farm enterprises, labor intensive enterprises, quality of education. Females and the poor may be doubly disadvantaged.Question is: what is the evidence regarding which programs and policies work to improve youth employment outcomes?
- Partly as a result of Arab spring, IEG was asked to conduct evaluations of what the WBG had done about it. Conducted lit survey that was very rigorous. Then, looked at WBG portfolio. I will talk about the results but many of the views are informed by other relevant work.What is the nature of the youth employment problem? The nature of the youth employment in developing countries is diverse.Policies and programs to deal with them area also diverseThe evidence of what has worked (or not) is mixed and needs to be strengthened.
- SSA, MENA and South Asia are in the midst of a demographic transition that will rapidly increase the share of youth in the total population. SSA # of youth will increase from 174 million in 2010 to 269 million in 2030 MENA and S. Asia youth population will also increase by around 20 % over the next 2 decades LAC stable and youth pop will contract in ECA and E Asia. Demographic transition can be a threat or a dividend. Threat: large numbers of unemployed – Can be a demographic dividend if this human capital can be deployed well. Because dependency rates are declining. Will be working when there are few children and still not so many retired. 25% of all growth in EA tigers attributed to this dividend Not automatic – human capital needs to be deployed well. Youth need to be employed productively. When young people enter the labor force, what kind of job they get etc can have lifetime effects Their employment outcomes can have economywide effects: Lots of human capital is built up when young
- In most cases, high formal sector unemployment for young workers. U-rate among youth is higher than that of adults; U-rate higest in MENA (double that of E Asia).High u=rates among univ graduates in Egypt, Jordan, Tunisia; but not in all. In UAE, Iraq it is mostly primary. Idle youth – Those who are not working and not studying – 60-80% in Egypt and Lebanon.In Mena, S. Asia SSA: 40-70 % of youth are in agric sector. No SS.
- Because the nature of the problem manifests itself differently across countries, the right program must be prioritized. Contrast South Africa (high rate of youth unemployment > 40%; very different from Kenya, where there are still large numbers of youth in rural areas but are not productively employed; versus Niger where there is still a large number of very young people who have to be educated.Supply, demand and transition: On supply, much has been written about quality of basic education. Won’t say any more about that and focus on some examples of what countries have tried to address youth employment explicitly. Must add that macroeconomic policies that are not targeted at young people may have a disproportionate effect on them. Any program that affects the unskilled or new entrants will do. Minimum wage – protect those with formal sector jobs but alienate others.
- Based on a systematic review Evaluation questions:What types of youth employment programs work best in which context? What key features in implementation design and targeting explain variations in employment and earnings in different economic contexts?Online literature search published in English between 2000 and 2011. Evaluations were included if they:Measure outcomes for youth Disentangle youth employment interventions from other labor market interventions. Provide information on intervention objective, design, and targeting criteriaStudy sample includes recent evaluations of youth employment interventions:from18 countries and 4 regions36 studies conducted between 2000 and 2011 described 43 estimates of 29 programs4 World Bank working papers and reports (11%)16 articles from peer-reviewed journals (44%)16 working papers and reports from other institutions (44%) Impact evaluationsIdentify a comparison group of non-beneficiaries Experimental or quasi-experimental methods (including propensity score matching, diff-in-diff, IV or regression discontinuity) to construct the counterfactual to program participation. Regression uses individual microdata and include robustness tests. Results are robust to a variety of factors including changes in econometric methods and specification, endogeneity issues, context and implementation aspectsOther evaluations with outcomes measures (5 studies)Surveys, national or regional time series data report outcomes of intervention. Impact evaluations without microdata or a robustness test
- Formal technical vocational education and training (TVET) is promising (3 observations)Higher private returns to investment in TVET compared with general secondary education in East Asia and LACIncreases likelihood for full-time salaried employment and earnings in Sri Lanka, but no difference in RomaniaShort term skill training courses (5 observations)No employment / earning effect in the U.S., Colombia, European ALMPs, China and SwedenEffects were better for women than for menKenya voucher program is too early to tellSchool-to-work interventions (3 observations)Has a marginal positive but insignificant effect in European ALMPsThe a 4-month “gateway” of the U.K. New Deal program significantly raised transition to employment. Gateway provides unemployed youth with a personal advisor who assists in job search. Weak performance of the job placement service in U.S. Job Corps. Strengthening it could enhance program resultsWage subsidies are promising but low uptake (6 observations)In European countries, wage subsidies have a 30 to 50 percentage-point higher employment effect than skills-training programsProblems are low uptake among employers, insufficient planning and follow-up for program participants by the employment service, work on low-quality tasks without building any higher-level skills (Sweden, U.K)Direct employment / public works programs has no impactMeta-analysis of European Union countries finds 25 percentage points less likely to have a positive post-program employment effect relative to training programs, and score below wage subsidies programsLabor market regulations are inconclusive (4 observations)Reduced severance payment legislation increases exit rates into and out of unemployment. Younger workers were more affected than adults (Colombia).Job security reduces youth employment rates by almost 10 percentage points which is almost two times larger than for adults (LAC, OECD)Minimum wages lead to flatter wage profile over time (Portugal) and disemployment effect for youth is smaller with a sub-minimum wage for youth (OECD)Entrepreneurship training and supporthas small effects (3 observations)Uganda - positive employment and earnings outcomes for youth. Mexico’s Probecat program has no self-employment effect; on-the-job training for unemployed youth in larger firms increased their employment and income.Training offered to university students in Tunisia led to a negligible 3 percentage point increase in their probability to be self-employed (about 24 additional self-employed). No employment or earning effect.
- Be careful not to assume that just because it works in one setting it will work in another. German apprenticeship system is a good example.
- What is the nature of the youth employment problem? The nature of the youth employment in developing countries is diverse.Policies and programs to deal with them area also diverseThe evidence of what has worked (or not) is mixed and needs to be strengthened.
- One thing to note: interventions that affect the whole labor market affect youth. Some of these may even have a more than proportional effect on youth (labor market regulations). But we wanted to assess those programs that specifically targeted youth.
- Evidence is scant on employment/earning effect :55% of projects have no indicator on youth employment6 projects with impact evaluation (Uganda, Kenya, + 4 in LAC)Few tracer studies