Sher Verick

The relationship between female labor force participation and economic development is far more complex than often portrayed in both the academic literature and policy debates. Due to various economic and social factors, such as the pattern of growth, education attainment, and social norms, trends in female labor force participation do not conform consistently with the notion of a U-shaped relationship with gross domestic produc (GDP). Despite the initial impact, Covid-19 did not have a lasting negative effect, on average, on women’s participation. At the same time, some countries have made significant progress in increasing participation rates for women, including those who have started from a lower level. illustration

Promoting youth employment has become a crucial priority for policymakers worldwide, particularly in developing countries where governments seek to provide opportunities for a youthful population and take advantage of the well-recognized ‘demographic dividend’, which is critical for accelerating growth and prosperity. However, young people continue to experience much higher unemployment rates, usually around three times higher than for older adults, and are much more vulnerable to increases in unemployment during crises as witnessed in recent years. More concerning is that crises can have long-term effects for young people in their chances of finding decent employment. A more comprehensive perspective on the situation facing young people in labour markets is provided by looking at other indicators, including the share of young people not in employment, education or training (NEET rate), which went up during the COVID-19 crisis. In terms of employment quality, more than three out of four of the world’s young workers are informally employed with young people also overrepresented in working poverty and less-protected forms of work. Against this backdrop, this chapter presents the latest global and regional trends across key labour market indicators that highlight both progress and challenges for young people, with a specific focus on the impact of the COVID-19 crisis on youth employment. An important finding is the divergence between low- and high-income countries. The chapter then explores policy responses, including the latest evidence on the effectiveness of active labour market programmes, before highlighting the different dimensions needed to adequately address youth employment challenges, especially in developing countries.

The pace of progress on the SDGs in general, and on jobs, social protection and just transitions in particular, has been uneven across countries. Access to decent and productive jobs and social protection continues to elude billions. Sustained progress on jobs, social protection and just transitions cannot be achieved without proactive, engaged macroeconomic policies. Conversely, full and productive employment and social protection are critical to bolstering the capacities of a country as it navigates short-term crises and reduces longer-term vulnerabilities. Global experience and lessons learned from the rise of Asia, from the 2008 global financial crisis or more recently from the Covid-19 pandemic and the impending green transition have exposed the limits of a narrow focus on stability, and highlighted instead the critical role of macroeconomic policies in promoting productive capacities and employment and the extension of social protection and essential services. This Practitioner’s guide has been developed to assist evidence-based and stakeholder-driven policy dialogue at country level. Finance ministries, central banks and other core macroeconomic players are critical to advancing decent jobs, social protection and just transitions agendas. And equally important is the engagement of labour, social and sectoral ministries, and business and worker representatives in determining fiscal space and other macro-policy choices. The focus is on country-specific and global evidence to inform a broad-based policy dialogue that supports the convergence of the macro and the wider socioeconomic agendas.

The Indian economy is currently passing through a critical phase of economic development as its structural transformation in employment has stalled, whilst both the youth unemployment rate and the number of youths "Not in Employment, Education, and Training (NEET)" have increased to an unprecedentedly high level. In the context in which the share of the youth population is continuing to rise despite the declining fertility rate to below the replacement rate, increased educated youth unemployment has caused an upsurge in the Discouraged Labour Force (DLF). This paper explores the trends, composition, and determinants of rising DLF in India using national level employment-unemployment surveys and macro-level panel data. Based on Multinomial logit and System GMM regression results, it is argued that policies aiming to enhance human capabilities through an improved base of technical education and the promotion of industry are necessary to enhance the growth of quality jobs in order to combat the problem of rising educated youth unemployment and DLF. Moreover, these measures could help in the process of harnessing the demographic dividend in India through an increased level of labour productivity in the long run.

The challenge of youth employment is not new. Even in good economic times, young people experience unemployment rates that are 3–4 times higher than adults. More than three out of four of the world’s young workers have informal jobs, while young people are overrepresented in working poverty and less protected forms of work, such as temporary and gig employment. During economic crises, the situation for young people in the labour market deteriorates much faster than for adults and persists for longer periods. The scarring effects for youth were clear after the global financial crisis (GFC) of 2008–09. Beyond these negative trends, it is important to recognise where countries have done much better in getting young people into decent and productive employment, including in the wake of crises. The success of European countries in tackling youth unemployment and inactivity has led to many attempts to replicate the policy approach, which involves integrated programmes such as the EU Youth Guarantee. However, there are major constraints to applying such an approach in developing countries and emerging economies. Against this background, the paper reviews the longer run trends in youth employment, along with the impact of crises on young people, focusing on the COVID-19 pandemic, in both advanced and developing countries. Next, it explores the lessons learned on how best to deal with youth employment challenges drawing from recent global meta-analyses. While the paper highlights that not all lessons can be extrapolated, it is important that countries develop integrated youth employment strategies that address job creation, quality of jobs, and inclusion.

Les auteurs montrent que les marchés du travail ont davantage souffert des effets de la pandémie de COVID-19 en 2020 que de ceux de la crise financière en 2009. Les mesures de confinement ont joué un rôle déterminant. La crise a donc touché plus durement les économies à revenu intermédiaire, certains secteurs comme l'hébergement et la restauration, et certains groupes comme les jeunes femmes. Les auteurs établissent également que, cette fois, la hausse des flux concerne surtout la mobilité vers l'inactivité (plus que vers le chômage). Ils affirment que les pouvoirs publics doivent maintenir leurs politiques de soutien pour que la reprise profite à tous.

En 2020 la pandemia causó una crisis del mercado de trabajo más profunda que la generada por la crisis financiera mundial de 2009. Las medidas de contención fueron la principal causa del daño a los mercados de trabajo, que afectó particularmente a las economías de ingreso mediano, así como a ciertos sectores, como las actividades de alojamiento y servicio de comidas, y determinados grupos poblacionales, como las mujeres jóvenes. Frente a los procesos de ajuste del empleo impuestos en la crisis financiera mundial, durante la crisis de la COVID-19 la inactividad ha aumentado más que la desocupación. Deben mantenerse las políticas de apoyo para evitar la desigualdad en la recuperación.

The COVID-19 pandemic has resulted in a more severe labour market crisis in 2020 than witnessed during the 2009 global financial crisis. Reflecting the effects of lockdown measures, which has been the main cause of damage to labour markets, the deepest impacts have been found in middle-income economies, while certain sectors, such as accommodation and food services, and groups, especially young women, have been more negatively affected over 2020. Contrary to the adjustment process during previous shocks, the COVID-19 crisis has resulted in a greater rise in inactivity than unemployment. Policy support needs to be maintained to avoid an unequal recovery.

The COVID-19 pandemic resulted in a more severe labour market crisis in 2020 than that witnessed during the 2009 global financial crisis. As a consequence of lockdown measures, which have been the main cause of damage to labour markets, the deepest impacts in 2020 have been found in middle-income economies, while certain sectors, such as accommodation and food services, and groups, especially young women, have proved to be particularly vulnerable. Contrary to adjustment processes during the global financial crisis, the COVID-19 crisis has resulted in a greater rise in inactivity than in unemployment. Policy support needs to be maintained to avoid an unequal recovery.