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vary more than adults rates?
Explanations of youth unemployment basically reduce to the discussion of the relative importance of three factors.
„h Aggregate Demand
„h Youth Wages
„h Size of the Youth Labour Force
The intuitive arguments underlying the roles of these three factors are fairly self-evident. In determining responses to the problem, however, it is clearly of fundamental importance to determine the relative importance of these factors in as far as is possible.
Aggregate demand
Aggregate demand affects youth unemployment in a similar way in which it affects the overall level of unemployment. A fall in aggregate demand will lead to a fall in the demand for labour in general and consequently for young labour as well as adult workers. This is a fairly uncontroversial and self-evident (albeit important) statement. Perhaps of more interest and relevance to the discussion here is the fact noted above that youth unemployment rates are typically substantially higher than adult rates, and that they are more cyclically variable as was demonstrated by figures 2a and 2b.
In this regard, rather than ask: does aggregate demand influence youth unemployment? To which the reply is an unequivocal yes, a more interesting and relevant question is: why do fluctuations in aggregate demand affect youths disproportionately?
There are a number of reasons why one might expect youth unemployment to be more sensitive than adult unemployment to changes in aggregate demand. On the supply side, it is often argued that young people are more likely to voluntarily quit their jobs than older workers. Their initial experiences in the labour market are likely to involve a certain amount of "shopping around" in so far as circumstances permit, so as to find an appropriate occupation. The opportunity cost of doing so is lower for young people. They will tend to have fewer skills and lower wages, and are less likely to "need" a job to support a family. Blanchflower & Freeman (1996) report that, in thelabour (and were consequently excluded from the project), and participating factories are concerned about their trainees moving to competitors after graduation (a fear that is not confirmed by dual training system experiences in Germany). To some extent, recruiting students ‘the Egyptian way’ solved these issues: through people who already work for the company and who supported the candidacy of friends or relatives. While this type of favouritism is generally considered harmful, impeding fair and effective recruitment processes, the principle proved useful in the case of the dual training system. Youngsters whose parents or relatives work in the same factory are unlikely to be exploited, as their relative will keep a keen eye on their duties and learning process. After graduation, the family's loyalty towards the factory keeps students committed to their employers.
Investors' Association (IA). Many of its members use relatively sophisticated production methods, and have serious difficulties recruiting adequately qualified workers. Therefore, the IA was willing to invest in the Mubarak-Kohl Initiative. In 1995, a dual vocational education and training centre became operational. The youths, who were to become mechanics, electricians or textile workers, were selected by the factories themselves. Each week for a period of three years, these students receive two days of general and technical education (arranged by the Ministry of Education) and four days of practical work experience. The Regional Unit of the Dual System (RUDS), with specialists from the private sector and the German GTZ, supervised the internships and designed some specialized courses. Together, the Ministry and RUDS designed and evaluated the exams.
Almost all factories that participated in 1995 are still participating four years later. This confirms the viability of the dual training system. But the pilot project also showed that even under ideal circumstances (an enthusiastic and organized private sector, with modern factories and a clear need for qualified workers), a dual training system is not established easily. Some individual factories used their interns as cheap labour (and were consequently excluded from the project), and participating factories are concerned about their trainees moving to competitors after graduation (a fear that is not confirmed by dual training system experiences in Germany). To some extent, these issues were solved by recruiting students 'the Egyptian way': through people who already work for the company and who supported the candidacy of friends or relatives. While this type of favouritism is generally considered harmful, impeding fair and effective recruitment processes, the principle proved useful in the case of the dual training system. Youngsters whose parents or relatives work in the same factory are unlikely to be exploited, as their relative will keep a keen eye on their duties and learning process. After graduation, the family's loyalty towards the factory keeps students committed to their employers.
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