Youth in Africa's Labor Market
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45488 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Human Development DIRECTIONS INDEVELOPMENT Youth in Africa’s LaborMarket inAfrica’s Youth Marito Garcia and Jean Fares, Editors andJeanFares, Marito Garcia YALM_i-xxxii 3/13/08 6:23 PM Page i Youth in Africa’s Labor Market YALM_i-xxxii 3/13/08 6:23 PM Page ii YALM_i-xxxii 3/13/08 6:23 PM Page iii Youth in Africa’s Labor Market Editors Marito Garcia Jean Fares YALM_i-xxxii 3/13/08 6:23 PM Page iv © 2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 1 2 3 4 11 10 09 08 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The bound- aries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. ISBN: 978-0-8213-6884-8 eISBN: 978-0-8213-6885-5 DOI: 10.1596/978-0-8213-6884-8 Library of Congress Cataloging-in-Publication Data Garcia, Marito, 1951- Youth in Africa’s labor market / Marito Garcia and Jean Fares. p. cm. Includes bibliographical references and index. 1. Youth—Employment—Africa. 2. Youth—Africa—Social conditions. 3. Labor market— Africa. I. Farès, Jean. II. Title. HD6276.A32G37 2008 331.3′47096—dc22 2007044706 Cover painting: Paul Olaja Cover design: Naylor Design YALM_i-xxxii 3/13/08 6:23 PM Page v Contents Foreword xvii Contributors xix Acknowledgments xxi Abbreviations xxiii Executive Summary xxv PART 1 Youth in Africa’s Labor Market: A Synthesis1 Marito Garcia and Jean Fares Chapter 1 Why Is It Important for Africa to Invest in Its Youth?3 Marito Garcia and Jean Fares Why Focus on the Transition to Work?4 Africa’s Demographic Transition Creates a Window of Opportunity 4 The Level of Educational Attainment Has Risen— and Returns to Education Are Rising in Some Countries 7 Despite Progress, Significant Challenges Remain8 The Policy Response 11 Notes 14 v YALM_i-xxxii 3/13/08 6:23 PM Page vi vi Contents Chapter 2 Transitions to Working Life for Africa’s Youth 15 Marito Garcia and Jean Fares Poverty and Large Income Shocks Push Children into the Work Force 18 The School-to-Work Transition of Africa’s Youth Is Long and Difficult 21 Chapter 3 How Do Africa’s Young People Spend Their Time? 27 Marito Garcia and Jean Fares Not Many Youth Are in the Labor Market and Employed 27 A Large Proportion of Youth Are “Inactive” 29 Many Young People Are in School 29 Time Use Varies by Income Group 32 Notes 37 Chapter 4 The Effect of Education on Income and Employment 39 Marito Garcia and Jean Fares How Does Education Affect Income? 39 How Does Education Affect Employment? 42 What Effect Does Education Have on Development? 44 What Keeps Educational Attainment Low? 44 Notes 47 Chapter 5 Working in Bad Jobs or Not Working at All 49 Marito Garcia and Jean Fares What Makes the Transition to Work Difficult for Youth? 49 Youth Are Vulnerable in the Labor Market 53 Youth Unemployment Is High 60 Notes 65 YALM_i-xxxii 3/13/08 6:23 PM Page vii Contents vii Chapter 6 The Three Pillars of Policy: Lessons from International Experience 67 Marito Garcia and Jean Fares Responses from African Countries 73 Future Research to Fill Knowledge Gaps 75 Annex 6A. Methodology: Building an Indicator of the School-to-Work Transition 75 Annex 6B. Inventory of Selected Policies and Programs on Youth Employment and Skills Development in Burkina Faso 78 Government Involvement in Youth Empolyment Issuses 78 Description of Policies and Programs 79 How Well Have Interventions Performed? 82 Annex 6C. Inventory of Selected Policies and Programs on Youth Employment and Skills Development in Ethiopia 84 Government Involvement in Youth Employment Issues 84 Description of Policies and Programs 85 How Well Have Interventions Performed? 89 Annex 6D. Inventory of Selected Policies and Programs on Youth Employment and Skills Development in Tanzania 91 Government Involvement in Youth Employment Issues 91 Description of Policies and Programs 92 How Well Have Interventions Performed? 95 Annex 6E. Inventory of Selected Policies and Programs on Youth Employment and Skills Development in Uganda 97 Bibliography for Part 1 101 YALM_i-xxxii 3/13/08 6:23 PM Page viii viii Contents PART 2 Youth in Africa’s Labor Market: Country Case Studies 107 Lisa Dragoset, Jean Fares, Lorenzo Guarcello, Florence Kondylis, Scott Lyon, Marco Manacorda, Daniel Parent, Furio Rosati, Cristina Valdivia, and Lars Vilhuber Chapter 7 School-to-Work Transitions: Regional Overview 109 Lorenzo Guarcello, Marco Manacorda, Furio Rosati, Jean Fares, Scott Lyon, and Cristina Valdivia Aggregate Trends 110 Young People’s Time Use 115 Status of Young People in the Labor Market 120 The Transition from School to Work 131 Assessment of the Transition to Working Life 132 Annex 7A.1 141 Notes 144 References 146 Chapter 8 What Determines Labor Market Participation by Youth in Burkina Faso? 149 Daniel Parent Labor Market Indicators 150 Household Income, School Attendance, and Returns to Education 159 Notes 177 References 178 Chapter 9 Child Labor and Youth Employment in Ethiopia 181 Lorenzo Guarcello, Scott Lyon, and Furio Rosati National Context 182 Child Labor 185 Labor Market Status of Young People in Ethiopia 188 Transition to Working Life 196 YALM_i-xxxii 3/13/08 6:23 PM Page ix Contents ix Child Labor, Human Capital, and Youth Labor Market Outcomes 200 Policies and Programs for Youth Employment in Ethiopia 211 Conclusions and Policy Recommendations 217 Notes 220 References 222 Chapter 10 Youth in the Labor Market and the Transition from School to Work in Tanzania 225 Florence Kondylis and Marco Manacorda Why Is Unemployment Higher among Youth? 226 Descriptive Evidence 228 Determinants of Labor Force Status among Youth 246 Conclusions and Policy Implications 254 Notes 257 References 258 Chapter 11 How Did Universal Primary Education Affect Returns to Education and Labor Market Participation in Uganda? 263 Lisa Dragoset and Lars Vilhuber Education and Earnings in Uganda 265 The Literature on Educational Participation in Developing Countries 266 The Model 267 Results 268 Concluding Remarks 276 Notes 276 References 277 Index 281 Box 1.1 HIV/AIDS Is Projected to Reduce the Size of the Youth Cohort in Southern Africa6 YALM_i-xxxii 3/13/08 6:23 PM Page x xContents Figures 1.1 Africa’s Youth Population Is Projected to Grow Faster Than That of Any Other Region in the World5 1.2 Economic Returns to Secondary Education Are High and Rising Faster Than Educational Attainment in Uganda8 1.3 Too Many Children Are Working in Many Sub-Saharan African Countries9 1.4 The Level of Education among Out-of-School Youth in Africa Is Low9 1.5 The Level of Literacy Varies Widely in Sub-Saharan Africa, with Higher-Income Countries Tending to have Higher Literary Rates 10 1.6 Most African Youth Work in the Informal Sector or Are Self-Employed 10 1.7 Less-Skilled Youth Are Most Vulnerable to Changes in the Supply of and Demand for Labor in Ethiopia 12 2.1 Child Participation in the Labor Force Is High, Particularly among Rural Males in Ethiopia 17 2.2 The Late Age of School Leaving Is Not an Indication of High Educational Attainment in Burkina Faso 23 3.1 Time Use by Income Quintile Varies across Countries 34 3.2 Time Use by Patterns of Young People Vary across Age Groups and Countries 36 4.1 Household Earnings Increase with Educational Attainment in Burkina Faso 41 4.2 More Education Does Not Always Reduce the Rate of Unemployment among Youth 43 5.1 Most Youth Perform Unpaid Family Work, Predominantly in Agriculture in Ethiopia 59 5.2 Unemployment Is Higher among Youth Than Adults in Almost All Sub-Saharan African Countries 61 5.3 Many Urban Youth Remain Unemployed for More Than a Year in Ethiopia 62 5.4 Unemployment Spells Last Much Longer in Urban Than in Rural Areas in Tanzania 63 5.5 Young Females Are More Likely Than Young Males to Be Neither Working Nor Attending School 63 7.1 Regional Unemployment Rates, 2003 112 7.2 Average Years of Schooling, by Region and Year 113 7.3 Educational Attainment of Nonstudent Youth, Sub-Saharan Africa Region 114 YALM_i-xxxii 3/13/08 6:23 PM Page xi Contents