Making Labor Markets Work for the Youth : An Approach Paper

Hundreds of millions of young people in the Global South face uncertain futures due to poor access to quality education, inadequate skills, and limited employment opportunities. By 2033, the Global South will host 1.2 billion people ages 15 to 24. However, unless current trends are reversed, only 480 million will attend school, and 420 million will have jobs (often precarious ones), leaving 300 million inactive. Youth inactivity negatively impacts lifelong opportunities, earnings, mobility, and mental health. It also erodes productivity and human capital development, hinders economic growth, and may lead to antisocial behavior and social unrest. Programs and policies that support youth entry into the labor market fall into three categories: those enhancing employment opportunities, training programs to address skills gaps, and those facilitating youth integration into the workforce. Evidence shows that proper program design and implementation are crucial for success, emphasizing the need to tailor interventions to local contexts and youth profiles. The private sector role has a critical role to play beyond job creation. The private sector should be involved in policy decisions to ensure that programs address employers' needs. Its efforts should also complement the public sector in providing quality training and employment services. When wage employment opportunities are scarce, private self-employment and small-scale entrepreneurship initiatives should also become significant pathways for youth to access the labor market. Looking ahead, successful youth employment initiatives need to be brought to scale to unleash the potential of the next generation.