Conference Agenda

This paper examines why India and other South Asian countries require specific macroeconomic and industrial policies so as to reap their demographic dividends. South Asia will account for 30.6% -- and India alone, 16.5% -- of the worldwide increase in working age population over the next three decades (2020-2050). At the same time, there is a possibility that these countries may grow old before ever becoming rich, as their population structures will begin ageing from 2025 onwards. The slowing export demand from western economies and the falling labour intensity of manufacturing add a layer of urgency to the issues facing these countries, which still have very large proportions of their workforce attached to a low value-adding agriculture (40%) and the informal sector (90%)

The crisis relating to economic and employment growth in India and South Asia can be overcome only by widening the sources of demand, by raising the consumption of and investment for the poor and the young. As Stephen Marglin and Amit Bhaduri had argued (1988), wages are an important component of costs to the capitalists, but they are also a source of demand. They had advocated ‘wage-led’ economic growth or policies to raise workers’ wages and incomes, which will help expand the size of the markets and recover the economy from depression.

Increasing the public expenditures on health, education and other social sectors will be crucial for boosting aggregate demand and realizing the demographic dividend. These investments will bring in not only positive outcomes in living standards and future economic growth, but also new employment opportunities -- as teachers, health professionals, and so on. Investments in the social sectors will be particularly helpful for States such as Bihar, Uttar Pradesh, Rajasthan, Madhya Pradesh and Chhattisgarh, which have a growing young population. However, as a proportion of all expenditures by the Union government, development expenditures fell from 49.4% in 2013-14 to 42.9% in 2019-20.

Given the problem of ageing population in many parts of the globe, the rising numbers of the young in India as well as in other South Asian countries offer a new and potential source of demand that could revitalize the global economy. However, translating this potential requires policies that help raise wages and incomes of poor workers. These are policies that very often go against the tenets of mainstream economic fundamentals. Clearly, there is need for greater resolve at multiple levels to implement such path breaking measures.

Youth employment is high in the global development agenda, particularly after the disproportionate impact of the pandemic on young people’s jobs, incomes, education and training. This study synthesizes the empirical evidence of the past three decades from impact evaluations of youth-targeted Active Labour Market Programmes to provide recommendations on tailored interventions to boost labour market outcomes of youth. In particular, the study assesses the role that context, youth characteristics, evaluation features, programme design and implementation have in moderating the impact of youth ALMPs on employment, earnings and business performance outcomes.

The study relies on a systematic search and selection process that resulted in 228 studies published between 1990 and 2022, which assessed 220 interventions within 171 ALMPs across 62 countries worldwide. To synthesize the evidence and assess what determines success of ALMPs, standardized mean differences (SMDs) were computed and a meta-analysis was conducted.

We find that youth-focused ALMPs are effective in improving the labour market outcomes of youth, particularly in low- and middle-income countries as compared to high-income countries, on average. Overall, entrepreneurship promotion and skills training interventions report larger impacts than employment services and subsidized employment programmes. This result contrasts with earlier literature suggesting that the most recent evidence captures more clearly the differential effect of certain intervention types. This does not imply, however, that those programs should be strictly preferred to others; much depends on the needs of beneficiaries and programme design. In high-income countries, studies of skills training interventions report the largest impacts, while in the low- and middle-income countries, the largest impacts are reported in studies of entrepreneurship interventions. The study concludes that ALMPs are effective policy measures to improve labour market outcomes of youth, particularly those hardest hit by the COVID-19 recession such as young women and younger youth. The findings support the case for urgent and targeted investments in youth-targeted ALMPs to address the heightened youth employment challenge. Finally, the study offers a deep-dive on Africa, leveraging the growing evidence on youth employment from the region.

Across low- and middle-income countries young people are at an elevated risk of unemployment. The school to work transition is often a time of income vulnerability in the life course, laying the foundation for unfolding work trajectories which are still highly gendered. We explore how early self-employment (as linked to informality) contributes to current and future work quality or supports subsistence for young men and women.

The informal sector varies considerably across countries (Williams and Kedir, 2018), making cross-national studies of value for identifying factors influencing its extent and dynamics (Gërxhani, 2004) and the potential for formalisation of labour markets. In pursuing this possibility, our study compares across the contexts of Ethiopia, India, Peru, and Vietnam.

We address three research questions. Firstly, to what extent does self-employment provide work for young people making the transition from education to employment? In addressing this question, we examine the type of work engaged in by young men and women as self-employed and how it compares with work in the formal sector. Secondly, does self-employment lead to employment in the formal economy and, if so, for whom does it serve this function? Thirdly, can self-employment be high-quality work or lead to it for young people (is it a stepping-stone, a trap or an important means of subsisting)?

We use data from the older cohort of Young Lives, a longitudinal cohort study conducted in Ethiopia, India, Peru, and Vietnam over 6 time points to date. We focus on the surveys conducted at ages 19 and 22. At ages 19 and 22, self-employment rates showed considerable varation across the four countries. At age 19 self-employment accounted for 12% of those in work in Ethiopia; 21% in India, 6% in Peru and 5.5% in Vietnam. By age 22

(when the majority-78 percent- were in paid employment) self-employment levels were un changed in Ethiopia and India; had fallen in Vietnam to 4 percent and risen to 10 percent in Peru. Females were just as likely as males to be self-employed across all the countries. The results show that self-employment provides lower quality work than in the public sector or private companies for young people, in line with Carmichael et al., (2022). Nevertheless, the analysis explores whether self-employment acts as a stepping-stone to formal sector employment for some young people or if it serves as an important source of income support and how the institutional context is relevant.

Introduction

Entering the labour market on a fixed-term contract (FTC) can act as a stepping-stone towards a prosperous career or it can keep individuals trapped in precarious employment. To increase our understanding of how the economic and policy context influences whether FTCs act as a stepping-stone or a trap, we compare the quality of career trajectories of employees who entered the Dutch labour market before a policy change aimed at reducing labour market dualization (cohort 1) with the career trajectories of those who entered after (cohort 2). Because these two cohorts entered the labour market in different economic circumstances, this allowed us to study changes in the economic and policy context simultaneously.

Methodology

We studied employees who entered the labour market on an FTC in either 2009 or 2015. We measured employment quality with the following indicators: contract type, self-employment, receiving benefits and income. The policy context was measured by including data from collective labour agreements on restrictions regarding the use of FTCs and the economic context by including a variable on level of unemployment and economic outlook of employers. We used mixture hidden Markov models to identify employment quality states, and transitions between these states.

Contribution to literature

Previous research on the trap versus stepping-stone literature found mixed results. As of yet, it is largely unclear how changing contextual factors influence whether a stepping-stone or trap scenario is more likely to occur. This study adds to the literature by investigating how changing policy and economic circumstances influence the likelihood of each of the two scenarios occurring. In addition, by using a processual approach and monthly data, we are able to study careers more comprehensively.

Findings

We distinguished eight states, including an inactive state, a state in which the majority of individuals receive benefits and a state in which all individuals have an agency or on-call contract. In the 2009 cohort, transitions to both the inactive and benefits state occur more often and transitions out of these states occur less often. In addition, transitions to the agency/on-call cluster occur more often in the 2009 cohort than in the 2015 cohort. The results indicate that careers of the 2009 cohort, which entered a more dualized labour market and in worse economic conditions, were more precarious.