World Employment and Social Outlook 2016: Trends for Youth

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Author(s): International Labour Organization (ILO)

Published: Aug. 24, 2016

Report Intro/Brief:
"In a climate of renewed concerns about global economic growth, youth unemployment is on the rise after several years of improvement… Global economic growth in 2016 is estimated to stand at 3.2 per cent, 0.4 percentage points lower than the figure predicted in late 2015. The downward revision is a result of recessions that were deeper than expected in some key emerging commodity-exporting countries, including Argentina, Brazil and the Russian Federation. In addition, growth in developing countries, at only 4.2 per cent in 2016, is at its lowest level since 2003. Despite anticipation of a slight improvement in global growth for 2017, global investment and hiring decisions remain subdued in the face of the uncertainty generated by a rapidly changing environment.

Consequently, the global youth unemployment rate is on the rise after a number of years of improvement, and is expected to reach 13.1 per cent in 2016 (from 12.9 in 2015). This is very close to its historic peak in 2013 (at 13.2 per cent) and where it is expected to remain in 2017. As a result, after falling by some 3 million between 2012 and 2015, the number of unemployed youth globally will rise by half a million in 2016 to reach 71 million and will remain at this level in 2017.

The deterioration is particularly marked in emerging countries where the unemployment rate is predicted to rise from 13.3 per cent in 2015 to 13.7 per cent in 2017 (a figure which corresponds to 53.5 million unemployed in 2017, compared to 52.9 million in 2015). The youth unemployment rate in developing countries is expected to remain relatively stable, at around 9.5 per cent in 2016, but in terms of absolute numbers it should increase by around 0.2 million in 2016 to reach 7.9 million unemployed youth in 2017, largely due to an expanding labour force. Finally, in developed countries, the unemployment rate among youth is anticipated to be the highest globally in 2016 (14.5 per cent or 9.8 million) and although the rate is expected to decline in 2017, the pace of improvement will slow (falling only to 14.3 per cent in 2017).

Unemployment figures understate the true extent of youth labour market challenges since large numbers of young people are working, but do not earn enough to lift themselves out of poverty. In fact, roughly 156 million youth in emerging and developing countries live in extreme poverty (i.e. on less than US$1.90 per capita per day) or in moderate poverty (i.e. on between US$1.90 and US$3.10) despite being in employment. Moreover, youth exhibit a higher incidence of working poverty than adults: 37.7 per cent of working youth are living in extreme or moderate poverty in 2016, compared to 26 per cent of working adults.

Meanwhile, in developed countries with available information, youth are more at risk of relative poverty (defined here as living on less than 60 per cent of median income) despite having a job. For example, the share of employed youth categorized as being at risk of poverty was 12.9 per cent in the EU-28 in 2014, compared to 9.6 per cent of working adults, i.e. aged 25–54. In addition to low pay, young people frequently work involuntarily in informal, part-time or temporary jobs. For example, in the EU-28, among youth employed in part-time or temporary positions in 2014, approximately 29 per cent and 37 per cent, respectively, are doing so involuntarily."