Youth inclusion

With global youth unemployment on the rise and over 40 per cent of the world’s active youth population either unemployed or living in poverty despite being employed, youth inclusion has become a critical social, economic and political issue. 600 million productive jobs are needed for young people over the next decade to absorb currently unemployed and provide job opportunities for the 40 million youth entering the labour market each year.

Youth employment is the difference between a growth-boosting demographic dividend and a social time bomb. Youth between the ages of 15 to 24 representing one quarter of the world’s population are threatened by poor employment prospects, job quality, health outcomes, education, and economic opportunities.

The countries where the EBRD works are no exception. Access to skills, under-utilisation of workforce and skills mismatches are central challenges with implications for all layers of the economy and society.

The lack of a well-trained and motivated work force results in high staff turnover, lower productivity, inconsistent quality of products and services and high operation costs and constitute a barrier to innovation and growth. Similarly, while businesses suffer from scarcity of skills, the absence of gainful and stable employment opportunities combined with long-term unemployment threatens social cohesion and transition.

Addressing youth unemployment is a key priority for many EBRD countries and in particular those in south-eastern Europe and the southern and eastern Mediterranean (SEMED) region. In these regions, unemployment levels for 15-24 year olds are among the highest in the world, reaching over 50 per cent in some countries, while up to a third of young people are not engaged in education, employment or training (NEET). The problem is especially acute for young people from households with low incomes or low levels of parental education.

By comparing data from across the EBRD regions, the Bank is able to identify the gaps that exist between young people entering the labour market (15-24 year olds) and older groups, in regards to available economic opportunities.

These gaps relate to labour market flexibility (since labour market rigidity particularly harms new entrants), youth unemployment and NEET rates, the length and quality of education and levels of financial inclusion (i.e. use of bank accounts, debit cards and business finance).

Based on this economic inclusion gap assessment, the EBRD designs projects that aim to remove some of the systemic hurdles facing young labour market entrants, such as poor progression routes from training into employment.

For example, the EBRD works with its clients in retail and property developments to establish partnerships with local education institutions at vocational and tertiary levels to open up quality work-based training opportunities for young people.

Similarly, it supports the introduction of high quality and certified training to youth living in underserved regions by collaborating with its clients and their contractors in natural resources and power and energy sectors.

Other projects introduce international best practice in inclusive (public) procurement to encourage construction companies to engage with education providers to offer on-site training to unemployed young people to gain work experience and exposure to potential employers and networks.

Through donor-funded Technical Cooperation (TC) the EBRD supports the development of client-tailored inclusion models, enhanced and expanded curricula, improved career guidance and teacher training as needed.

In Turkey, examples include tyre maker Brisa Bridgestone, a joint venture between Sabancı Holding and Japan’s Bridgestone Corporation, which is investing in a new tyre plant in Aksaray province in Turkey where it expects to create over 550 jobs for young people.

The EBRD is helping to develop technical and vocational training programmes that will provide these young people with the necessary skills, in a country, where over 30 per cent of EBRD investments already boost the economic inclusion of under-employed social groups such as young people and women.

Other examples in Jordan include the Ayla Oasis project, a regeneration plan in the city of Aqaba on the Red Sea in Jordan, and the Abdali Mall, a new shopping and entertainment centre in Amman, which sets out to address the issue of youth unemployment and access to training in Jordan and will contribute to the employability of the local population.

Investments such as these, backed by policy dialogue, help to raise the standard of vocational skills training in line with the requirements of employers and create direct progression routes from education into employment for young people.

Contact Barbara Rambousek

Director, Economic Inclusion

Contact the Economic Inclusion team

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