Global Youth Unemployment Rate

Abstract 

The research paper presents evidence of some sampled countries has been a rise in decline in youth employment and youth unemployment. Statistical analysis has been conducted to examine the behavior in the rate of change of youth unemployment in the world. A conclusion and recommendation are made based on the observed data. 

Introduction 

Labor force status lies into one of the three categories; economically inactive, unemployed, and employed. Youth unemployment rate is the number of young people unemployed as a percentage of the labor force. Youth unemployment rate is the main indicator of youth unemployment for the age between 15 to 24. People may be classified as being unemployed or employed irrespective of whether they are educated or not. The labor force is at times called the active population which comprises of unemployed or employed people. Latter involves the paid or self-employment and the unemployed ( Awogbenle, Cyril, and Chijioke. Pg.831) . The youth are three times more likely not to get a job than the rest of the population. Therefore, the rate of unemployment is gradually increasing day-by-day. 

Literature Review  

There are approximately 1.2 billion young people in the world aged between 15 and 24 years. This accounts for approximately 17% of the world’s population. 87% of the Youth unemployment in Africa has risen to 23.2 percent significantly higher than the neighboring continents. According to United Nations Human Development report, the youth unemployment stood at 5 percent in Europe and 4.0 percent in Asia. According to US-based Population Reference Bureau (PRB), most of the unemployed people lies between age 15 and 24 years. 

There are complex and multiple causes of youth unemployment in the world. Among them include relevance and quality of education and inflexible regulations and labor market. The relevance and quality of education are considered to cause of youth unemployment. Among the 27 developed countries, 25 have the highest unemployment rate due to lack of quality education. At the same time, some decent jobs do not guarantee a decent job. For instance, 40% of Tunisia’s university graduates have not yet secured any employment against 24% of non-graduates. Beyond the necessity in ensuring its access to all, academic qualification is not adequately tailored to the need of the labor market that results to two consequences; the inability for organizations to hire the skills they need ( Awogbenle, Cyril, and Chijioke. Pg.831) . Due to insufficiency in job creation and economic crisis in most of the countries, there is high unemployment rates globally and skills development crisis. 

Employers are very cautious in hiring the minimum number of workers due to a high level of employment protection regulations. The is reason is that the employees can be easily be laid off during a recession or if the newly hired employees town out to incompetent or unmotivated. Most of the young workers have been left in precarious situations due to short-term contracts and other temporary forms of work such as seasonal jobs and internships. Due to these temporary forms of work, young workers are the first to be laid off when an organization or a firm downsizes. Once laid off, the young workers are typically not qualified for redundancy payments since they were part of the organization only but for a short time. Once the temporary forms of work have been terminated, the young workers are disadvantaged in search of a job or laid off. However, some young professionals prefer to enter work on a part-time while on tertiary education. An internship which as a temporary form of work has been questioned on its legitimacy. Internships are there to help recent graduates or students to acquire work experience which is mentioned in the CV. On the ground, most of the interns perform basic grunt-work instead of acquiring important knowledge and skills. Do all these challenges faced by the young tasks; the unemployed youths have been referred as the “lost generation.” 

High youth unemployment rate results from high population growth rate. However, in some of the countries, unemployment and population growth are not always directly proportional to each other as other specific issues play a part as well to individual countries. For example, Nigeria, Africa had a population of 192.4 million people and ranked number seven globally with 12 percent of unemployed youths. The economic crisis has an effect that suppresses a significant increase in youth unemployment. Statistics show that a large population of young people has become educated therefore flooding before joining the labor market. Some of the young people become frustrated and opt to return to education. 

Methodology 

The data collected comprise of 83 countries globally by International Labor Organization, ILOSTAT database. Click the link below to obtain the data. https://data.worldbank.org/indicator/SL.TLF.ACTI.1524.ZS 

Results 

The table below shows descriptive statistics for the two variables under consideration. 

Statistics
		Labor Force Participation rate 1990	Labor Force Participation rate 2017
N	Valid	70	70
	Missing	13	13
Mean		52.41	44.00
Std. Error of Mean		1.560	1.609
Median		51.50	44.50
Mode		47	38 a
Std. Deviation		13.051	13.458
Variance		170.333	181.130
a. Multiple modes exist. The smallest value is shown

To Compare the two means for the labor force participation rate for age 15-24 (in percentage), we carry out student’s t-test. Student t-test is used to compare the mean obtained from the same method in two independent samples but of equal sizes to make a confirmation if the samples have the same percentage of the measured analyte. 

We are after that formulating a hypothesis that for the test; 

Null hypothesis: The mean for the labor force participation rate for age 15-24 (in percentage) in 1990 is equal to the mean of the labor force participation rate for age 15-24 (in percentage) in 2017. 

Alternative hypothesis: The mean for the labor force participation rate for age 15-24 (in percentage) in 1990 is not equal to the mean of the labor force participation rate for age 15-24 (in percentage) in 2017. 

Where is labor force participation rate for age 15-24 in 1990 and  in labor force participation rate for age 15-24 in 2017. 

One-Sample Statistics
	N	Mean	Std. Deviation	Std. Error Mean
Labour Force Participation rate 1990	70	52.41	13.051	1.560
Labour Force Participation rate 2017	70	44.00	13.458	1.609

One-Sample Test
	Test Value = 0
	t	df	Sig. (2-tailed)	Mean Difference	95% Confidence Interval of the Difference
					Lower	Upper
Labor Force Participation rate 1990	33.601	69	.330	52.414	49.30	55.53
Labor Force Participation rate 2017	27.353	69	.200	44.000	40.79	47.21

Analysis 

From the results obtained using SPSS software, the p-value is > 0.05, therefore, the test fall in the rejection region. We reject the null hypothesis and accept the alternative hypothesis. The mean for the labor force participation rate for age 15-24 (in percentage) in 1990 is not equal to the mean of the labor force participation rate for age 15-24 (in percentage) in 2017. From the analysis, we realize is an increase of unemployment rate among youths aged 15 to 24 

Conclusion 

Present, there has been a rise in unemployment in youths as well as a decline in youth employment. Most of the young people were hard hit by the commencement of the Great Recession. Other youths “lost generation” live with their parents until late twenties, therefore, suffering from “full-nest syndrome.” In some of the countries like Egypt, Tunisia, Yemen, and Libya, there is some anti-social behavior and political unrest which has attributed to youth unemployment. In 2011, youth unemployment became a key factor that fueled protests in most of the countries in the world. Poor or lack of productive engagement of young people has resulted in a high level of under-employment and unemployment. From the analysis, countries like Denmark, Djibouti, Dominica, Ecuador, Egypt, and Equator youth unemployment has increased public spending when their economies are battling to maintain social and competitive benefits increase along with growing and aging population. Some of the direct costs that youth unemployment causes include lost income-tax revenues, benefit payments, and wasted capacity. 

From the above analysis, some of the consequences due to youth unemployment in some of the countries is a brain drain. Brain drain has deteriorated competitiveness of these countries resulting in the economic crisis. There is lack of innovation most countries due to high risk of loss of skills and talents since a most of the university graduates have no place to exercise their capabilities and knowledge into contributing and producing innovation that results to economic growth. 

Recommendation 

The institutions and labor market policy roles vary a lot from countries to countries. Some of the key propositions that may facilitate youth employment include reliable employment protection for both temporary and permanent workers. The protection act ensures that the young people with little or no work experience can have the chance to prove their skills and abilities and progressively transfer them to regular employment. An equal employment protection act enables equal treatment between temporary and permanent workers and helps fight informal employment. The discussions should focus on the spread and level of income support provided to young people who are unemployed. Countries such as India, Morocco, and Canada should shift from offering direct financial assistance to apprenticeship funding (Clark, Kim, and Lawrence pg. 199-234) 

. The government of the respective countries should progressively involve trainers and employers in creating a holistic way of handling youth unemployment and ensure intensive programs focus on work experience, remedial education, and adult mentoring. American Economists argue that upgraded values of minimum wages are among the many factors that increase youth unemployment. 

References

Freeman, Richard B., and David A. Wise. "The youth labor market problem: Its nature causes and consequences."  The youth labor market problem: Its nature, causes, and consequences . University of Chicago Press, 1982. 1-16. 

Awogbenle, A. Cyril, and K. Chijioke Iwuamadi. "Youth unemployment: Entrepreneurship development programme as an intervention mechanism."  African Journal of Business Management  4.6 (2010): 831. 

Tanveer Choudhry, Misbah, Enrico Marelli, and Marcello Signorelli. "Youth unemployment rate and impact of financial crises."  International journal of workforce  33.1 (2012): 76-95. 

Breen, Richard. "Explaining cross-national variation in youth unemployment: Market and institutional factors."  European sociological review  21.2 (2005): 125-134. 

Clark, Kim B., and Lawrence H. Summers. "The dynamics of youth unemployment."  The youth labor market problem: Its nature, causes, and consequences . University of Chicago Press, 1982. 199-234.