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In comparison with the OECD as well as the transition economies and the Latin American countries, much less empirical work on wages and/or youth unemployment has been undertaken on other developing countries. The main published exceptions are Hoddinott (1996) on Côte d'Ivoire; Dickens and Lang (1995) on Sri Lanka and Schultz and Mwabu (1998) and Moll (1993) on South Africa; Blanchflower (1999b) on the Philippines as well as a new crop of unpublished papers by Rodgers and Nataraj (1998) on Taiwan and Kingdon and Knight (1998) on South Africa.
A number of generalized facts emerge from a set of country studies commissioned by the ILO on the nature of the youth labour market in Asian and African countries:
a. Youth unemployment in most developing countries is perceived as a major problem. In many countries young people constitute a very high proportion of both the total population and total unemployment, comprising more than half the total number of the unemployed in Africa. In many countries the young unemployed are looking for their first job (e.g. India).
b. Inadequate and incomplete data make it hard to know exactly the scale of the problem. Some of the features of the problems related to the data for the purpose of making cross-country comparisons are: (1) cross-country variations in the definition of youth; (2) cross-country variations in measurement of employment, unemployment and underemployment; and (3) country-specific data gathering and survey systems.
In general, Africa is thought to be caught in a number of self-reinforcing, vicious circles:
a. African economies are unable to generate adequate growth rates in GDP and enough employment and income generating opportunities to absorb the majority of their labour forces;
b. The inability of the private sector to generate sustainable livelihoods has given prominence to rivalry over control of the state as a primary means for attempting to share in whatever fruits of the economy that there may be, further exacerbating the possibility of unrest; and
c. The capacity of the state to govern and deliver with respect to social services, such as education, and the security is compromised.
High inflation and restrictive macroeconomic policies have especially harmed youth. The main feature of the African labour market is the slow growth of employment in the formal sector and the retrenchment of labour in the course of implementing structural adjustment. In response, the non-formal sectors have not only acted as residual sectors but also as labour absorbers of last resort. Such structure of wages and unemployment can have some perverse effects on youth:
a. High unemployment rates may discourage youth from investing in education and training as the investment appears wasted;
b. The association of increasing age with increasing probability of employment may result in a passive approach to job search; and
c. Youth who have relatives in wage employment may develop a dependency that makes them have a high reservation wage for entry into formal employment (ILO/SAMAT, 1999).
In a different context, the south-east Asian experience has demonstrated that youths are more vulnerable to external shocks such as the financial and the resulting socio-economic crisis since they are the first ones to be retrenched and face greater difficulties in finding employment. Overall, there seems to be some recognition that the problem is closely linked with adult unemployment and overall economic performance.
Various strategies have been tried unsuccessfully, and the public sector job generation has not worked. The World Bank and IMF have come to the aid of countries in financial crisis but forced them to reduce public sector employment (e.g. United Republic of Tanzania, Vietnam). There have been some attempts at reforming the existing educational and training system in Africa (e.g. Zambia). The main aim of such reforms is to increase the relevance of education and training system, making it better geared towards the demands of the labour market.
Minimum wages exist in many countries (e.g. Indonesia, United Republic of Tanzania, Mali, Côte d'Ivoire, India, Mauritius, Zimbabwe, South Africa). High levels of the minimum wage apparently exist in Mauritius, Zimbabwe and South Africa which may reduce employment. The absence of a youth sub-minimum is likely to have the largest employment consequences on the young who tend to have the least skills, if the minimum is actually implemented. Lustig and Mcleod (1997) found minimum wages increased unemployment but lowered poverty in four African countries (Ghana, Mauritius, Morocco, Tunisia) and five Asian countries (India, Indonesia, Philippines, Sri Lanka, Thailand).
A number of countries have experimented with some success with policies to increase self-employment in both urban (e.g. PMRY in India) and rural areas (e.g. TRYSEM also in India). These include workshops on how to set up in business (e.g. Mali and Zimbabwe), provision of lines of credit and advisory activities to help the creation and survival of small businesses (e.g. Philippines, Indonesia, Sri Lanka, Zimbabwe, Mali, Côte d'Ivoire and Cameroon). It is increasingly the case that reforms of the existing educational and training institutions are integrated into programmes for entrepreneurship development and enterprise promotion.
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