‘95% youth in developing nations work in informal economy’

Our Bureau New Delhi | Updated on March 09, 2018


ILO report calls for policies attuned to skill challenges thrown up by newer tech

In developing countries, as many as 19 in every 20 young men and women work in the informal economy, compared with adult workers, says a new ILO study, which shows that globally 76.7 per cent of working youth are in informal jobs, compared with 57.9 per cent of working adults.

“India, Tanzania and Zambia all have an extremely low prevalence of formal wage employment; in all three countries, fewer than one in ten young workers are in wage employment with a contract. However, whereas in Tanzania and Zambia almost all youth and adult employment is vulnerable...In India, almost half of all young workers are employed as wage labourers, without a written contract,” says the ILO report titled Global Employment Trends for Youth 2017, released on Tuesday.

As India embarks on a major policy measure to increase job creation, the report cautions that “the youth employment challenge is not just about job creation, but also – even more so – about the quality of work and decent jobs for youth.”

According to the report, as much as 39 per cent of young workers in the emerging and developing world – 160.8 million youth – live in moderate or extreme poverty, ie on less than $3.10 a day.

The report also points out that an estimated 21.8 per cent of young people are neither in employment nor in education or training (NEET), most of them female.

“The NEET rates for young men are lowest in developing countries, at 8 per cent, followed by emerging countries, at 9.6 per cent, and the developed countries at 11.3 per cent,” it says, adding that the gender gap has become even wider, with the female NEET rate at 34.4 per cent, compared with 9.8 per cent for males.

Shifting skills

Noting the role of technology, such as automation, in shifting the demand for skills, the report said that in most BRICS countries, educated and empowered young women were gaining presence in sectors traditionally dominated by men, such as construction and communication.

“Over the past decade, in both developed and developing countries there has been greater polarisation towards high- and low-skilled wage workers, with a decline in semi-skilled wage employment, consistent with the hypothesis of routine-biased technological change,” it said, while pointing out that in developing and emerging countries such as Brazil and India, there has been a rise in the high-skill segment, but also a rise in low-skill wage work, such as in India.

“Investing in lifelong learning mechanisms, digital skills, and sectoral strategies that expand decent jobs and address the vulnerabilities of the most disadvantaged should be prioritized in national policies,” Azita Berar Awad, Director of ILO’s Employment Policy Department said in a release.

Overall, the report noted that the incidence of unemployment among youth in South Asia was expected to remain stable, at 10.9 per cent in 2017 and 2018, mainly because “fast economic growth in India, the region’s largest economy, will be compensated by slightly worsening labour market conditions in the rest of the region.”

However, in absolute terms, the challenge of youth unemployment in South Asia will remain pressing, as almost 14 million economically active youth will be without a job in 2017, representing nearly 20 per cent of unemployed youth worldwide.

Published on November 21, 2017

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