Overview: Young people across the globe face tough labor markets, but the situation is particularly severe in emerging markets and developing economies. About 20% of 15- to 24-year-olds in these countries are neither employed nor in school, a group often referred to as NEETs (Not in Education, Employment, or Training). Countries like Brazil, Ghana, and Malaysia are examples of nations grappling with this issue, and the figure is double that of advanced economies.
Major Issues Faced by Young People in Emerging Markets:
- Labor Market Gaps: In emerging markets, the average percentage of young people (aged 15-24) not in work or education is around 20%.
- Gender Disparities: Young women are disproportionately affected, with 30% of young women in emerging and developing economies neither working nor in school. This is nearly double the rate for young men.
Policy Recommendations:
A study by the IMF suggests that several policies could improve job prospects, especially for young people. The paper outlines three critical areas for reform:
- Better Functioning Labor Markets:
- Policies need to focus on creating more dynamic labor markets that can absorb young people into work. Removing barriers to employment and making it easier for businesses to hire young workers are critical steps.
- More Open and Competitive Product Markets:
- More open markets encourage entrepreneurship and innovation, providing new opportunities for young people. Competitive markets can lead to more job creation, especially in sectors that are currently closed off or under-regulated.
Policy Impact on Older Workers:
The proposed policies do not require a trade-off between young and older workers. In fact, they benefit all workers and contribute to stronger, more sustainable economic growth in the long term.
Key Takeaways:
- High NEET Rates: Around 20% of young people in emerging markets are neither in work nor in education, double the rate of advanced economies.
- Gender Gap: Nearly 30% of young women in emerging markets are excluded from work or education, nearly twice the rate for young men.
- Policy Solutions: Addressing gender inequality in the workplace, improving labor market flexibility, and opening up product markets can significantly improve job prospects for young people.
- No Trade-offs: Policies that support young workers can benefit the entire labor market without disadvantaging older workers.
These findings underscore the need for comprehensive, inclusive policies that not only focus on youth employment but also address structural inequalities, especially for women.
