A traditional life cycle for some may typically include: studying, getting a job, getting married, and retiring.
However, this concept is growing archaic as more and more young adults are finding it tougher to find employment after graduation. This obviously derails their future plans such as paying off their student loan debt, buying a home, starting a family and being able to save and invest.
According to the International Labour Office (ILO), the global youth unemployment rate stands at 13 percent – three times higher than the figure for adults, which is 4.3 percent. In their report titled World Social and Employment Outlook – Trends 2018, they noted that “young people under the age of 25 are less likely to find work than adults.”
According to the United Nations in 2015, the global population of youths – individuals aged between 15 and 24 years – numbered to about 1.2 billion globally. This accounts for one out of every six people worldwide. Meanwhile, the Population Reference Bureau (PRB) Projects notes that the youth population is expected to reach 1.4 billion by 2050.
Youth unemployment has been a longstanding issue that affects various countries, including Greece, Spain, Italy, Pakistan, Jamaica, South Africa, Turkey, Malaysia, and Australia.
This map provided by @EU_Eurostat shows the youth unemployment rate on 2018. 📊
You can have a deeper view of the situation clicking here 👉 https://t.co/n2N1bYr67z
Differences between European States jumped out pretty easily. On #WhichTrack is our continent moving? 🛤 pic.twitter.com/pv6owxcNQB
— EuropeOnTrack (@EuropeOnTrack) December 19, 2018
While there are many micro and macroeconomic factors that affect youth unemployment, the primary reasons may vary between countries. For example, Greece’s youth unemployment rate is attributed to the country’s crippling debt while in Malaysia, MIDF Research notes that the problem is attributed to a skills mismatch, with demand for low-skill jobs higher than high-skill occupations.
Other reasons that have been cited in various reports include a lack of job opportunities, a lack of work experience, inadequate qualifications and a discrepancy between a graduates’ asking salary and the salary offered by employers, among others.
Consequences of youth unemployment
A lack of involvement of this dynamic segment of society in the labour force, though, not always by choice, has many negative implications on the lives of youths as well as the economy.
Some of which include youths being unable to pay off their student loan and other forms of debt, which will cause their interest to accrue, and affect their credit score and ability to get future loans.
To boot, youth unemployment has been related to mental health problems; a Swedish study has found that the problem appears to be strongly associated with alcohol and drug use disorders.
It can also negatively affect the physically well-being of youths, impede their skills development, potentially cause youth homelessness and a lower output, loss of human capital and increased poverty, especially in developing countries.
It is clear that being young, educated and involuntarily unemployed has profound effects on an individual’s future, as well as the broader economy.
A way forward
As the reasons for youth unemployment vary between countries, each country needs to ascertain the right solution that would help them tackle the problem of youth unemployment effectively.
For some, it might involve turning to vocational education to minimise the skills mismatch between graduates and what the labour force needs.
A report in The Guardian noted that vocational education “tends to result in a faster transition into the workplace, and countries that have it at the core of the curriculum – such as Germany, Switzerland, Austria and the Netherlands – have been successful in maintaining low youth unemployment rates.”
For example, Germany has enjoyed a relatively low youth unemployment rate by international standards, with reports suggesting that its dual vocational education and training – or combination of on-the-job training and part-time education – has worked well for the country.
While there may be other factors at play that have contributed to their low youth unemployment rates, such as favourable economic conditions, it serves as something other countries could potentially emulate.
Meanwhile, Unesco notes that entrepreneurship is seen as a viable alternative for job creation to tackle the problem of youth unemployment.
It adds that: “At the same time, the traits and characteristics of entrepreneurs – creativity, innovation, critical and strategic thinking, adaptability, resourcefulness, motivation, confidence, risk-taking and more – resonate deeply with educators and parents.
“Countries with such talented girls, boys, women and men will be better equipped to deal with the demands of the 21st century.”
Of course, starting a business as an entrepreneur will require a whole lot more than just a willingness and interest to do so, so it’s not always the most viable option for everyone.
Those who don’t feel confident enough to take such a risk could also consider joining the gig economy – ie. becoming an independent contractor or freelancer and taking up short-term jobs or projects relevant to their expertise on contract basis.
With tech disruptions and virtually every industry going digital came the rise of the gig economy, a trend that can be extremely beneficial for fresh graduates looking to join the workforce. It’s also an opportunity for them to learn the art of the hustle, which will sharpen their survival skills in the long run, especially in a dog-eat-dog world.
Apart from the above, governments could also consider spending more effort on developing educational programmes that will benefit youths. This is being done in Spain, where the government has said it aims to “promote training programmes that come with a promise of employment at the end, by working hand in hand with companies”, reports The Local Spain.
It adds that the government has said it would inject €2 billion (US$2.3 billion) into battling youth unemployment, which stands at a whopping 33 percent.
While the intricacies of youth unemployment suggest that there is no one-size-fits-all approach to tackling the issue, it is clear that a multifaceted approach is needed to address the problem.
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