Youth employment policy in developing and transition countries - preventionas well as cure

The structure of the paper is as follows. Section A proposes that the starting point for policy discussion should be the employment problems of those young people in developing and transition countries who are at the greatest disadvantage, rather than merely those who are unemployed. In section B, as a framework for policy formulation, it is suggested that the position and potential in the labor market of the disadvantaged young depends partly on the strength and dynamism of the demand for labor in general and partly on the extent to which they are able to integrate into economic processes so that, when the demand for labor increases, they can take advantage of the greater scope for improving the quality and quantity of their employment. Section C (the longest section) reviews the youth employment policies and programs that have been implemented in developing and transition countries, with headings derived from the analytical framework of section B: 1. increasing the demand for labor in general in relation to supply; 2. increasing the integrability of the disadvantaged young by: (a) remedying or counteracting market failure, including; i) labor market failure; ii) credit market failure; iii) location-related market failure; and iv) training systems failure; (b) optimizing labor market regulations; (c) improving the skills of disadvantaged youth, including i) literacy and numeracy; ii) vocational skills. Section D briefly outlines the policy measures needed to deal with the problem of educated unemployment - not the fundamental youth employment problem but one which is of understandable concern to governments. Section E sets out the key data needs for diagnosis and monitoring of the employment problems of disadvantaged youth, including a minimum format of data that should be routinely available. Finally, in Section F, the threads of the policy discussion are pulled together into a set of policies that can help to prevent the emergence ofemployment problems among the disadvantaged young in developing and transition countries.