ISSUE 1: Job Creation - The basics that will give hope to jobless youths

Wednesday November 14 2012

By ELDAH ONSOMU and BOZ MUNGA

An estimated one million of the nearly seven million youths aged between 20 and 29 are unemployed. They will be joined annually by about 450,000 others graduating from secondary and tertiary institutions.

Despite these growing numbers, the ratio of new formal sector jobs to the number of graduates is less than 1:5, suggesting that the economy does not create adequate decent jobs for a majority of job seekers. (READ: Youths ask Kibaki to declare joblessness national disaster)

The high rate of joblessness among the youth is caused by a number of factors, including a rapid rise in the working-age population, depressed economic growth, lack of skills and skills mismatch.

The unemployed youth are not a homogeneous group. While some of them lack employable skills, others are graduates of post-secondary education and training institutions with malleable labour market skills.

It is thus imperative that strategies be put in place to address the high unemployment rates among the youth, taking into account their diversity.

One of the preliminary tools required to tackle unemployment effectively is to have an updated profile of the unemployed. This should include their age, education, skills level, geographic location, unemployment history, perceptions, and aspirations.

Such data can inform interventions and can be obtained through frequent labour force surveys. It is crucial to ensure that the youth have a good start by providing the “right mix” of education and training.

Studies across the globe indicate that young people who do not have at least a secondary qualification are more likely to experience unemployment. Therefore, the present gains made in enhancing access to primary education will confer greater benefits if primary school graduates transit through to secondary education.

Basic education, of the right quality, opens the doors for further skills training, higher education, and the most profitable niches of employment.

To enhance access to basic education, a key strategy would be to proactively identify those at risk of dropping out and to reach them through various interventions such as distance learning and well targeted cash transfer programmes for the vulnerable groups.

Raising labour productivity is key in expanding decent jobs. The growing informal sector in particular is characterised by low productivity and earnings. This can be halted by reducing the costs of formalisation to encourage informal firms to become formal.

Implementing interventions that enhance the adoption of technology, especially by the informal and agricultural sectors, can also increase productivity.

In addition, improvements in all forms of physical infrastructure like energy, water, and transport, and provision of other social amenities can create synergies for enhancement of productivity, especially in rural areas. This can stem rural–urban migration and reduce the relatively higher urban unemployment rates.

Accelerating and sustaining high rates of economic growth is necessary in order to create jobs.

Even so, the role of economic growth can be enhanced by directing support to the sectors that contribute — or have the potential to contribute most — to employment creation.

A recent cluster analysis study in Kenya identified horticulture, fisheries, transport and logistics, beef, ICT and tourism as the six main clusters that could be analysed further for enhancing decent jobs.

Since some of the clusters with the most potential of creating jobs are in the agricultural sector, increased investment in irrigation presents many benefits, including reduced seasonal unemployment, diminished underemployment, and enhanced productivity by transforming agriculture to high-value production systems.

The group of youths who have no employable skills, such as those who dropped early or never attended school, require measures that go beyond the stimulation of economic growth. Suitable interventions that can be implemented in the short term include:

Providing a “second chance” for those who dropped out early or never attended school: In countries where such programmes have been implemented successfully, such as Germany, they mainly target adolescents by using flexible schedules and less formal instruction methods with a key objective of enhancing literacy and numeracy education. Such programmes can be complemented by interventions that avail credit for training.

Enhancing the role of apprenticeship and internship programmes in creating better outcomes: Well targeted apprenticeship and internship programmes, such as the kind implemented under the Youth Empowerment Programme (YEP) by the Government, the World Bank and other stakeholders, need to be expanded further by offering incentives such as voucher schemes and training subsidies to firms and potential trainees.

Even though this intervention is in the formal sector, the informal or traditional economy apprenticeships could be more widespread in Kenya.

The strategies adopted to expand apprentice and internship programmes should consequently include interventions aimed at improving the informal schemes. Some of the strategies Kenya could implement include upgrading the skills of master craft persons, especially by introducing them to modern technology, and introducing standardised contracts and certification of their graduates.

Public Works Programmes (PWPs) such as the Kazi Kwa Vijana initiative, if well designed, have enormous potential in improving labour market outcomes through skills development and the reduction of unemployment.

PWPs are particularly suitable job creation interventions if the majority of the unemployed youth have low levels of skills. Although in practice they are costly interventions, the social benefits of implementing PWPs could far outweigh their perceived high costs if unemployment is a threat to national cohesion and stability.

Managing the school-to-work transition more effectively: Job seekers, especially in the rural areas, would find their way to the right training and right jobs if they are offered support such as job readiness training, job search assistance, and career guidance and counselling.

A recent study on job search methods by the Kenya Institute for Public Policy and Research Analysis (KIPPRA) indicates that the incidence of job search among non-working individuals is less than 25 per cent.

Over 80 per cent of job seekers relied on friends and relatives. The widespread use of these informal job search methods may have various weaknesses, including deepening inequalities since individuals with no or weak social networks are likely to remain continually disadvantaged in accessing decent employment.

To remedy these anomalies, both public and private sector stakeholders need to make more investments and improvements in job search infrastructure and labour market information.

For the youth with post-secondary education, the government and other stakeholders can, among other interventions, strengthen public employment services and give incentives to private providers of employment services.

This would improve access to career advisory services for all job-seekers looking for information and guidance. Courses offered by training institutions in Kenya and what jobs they can lead to should be accessible from a website.

The government could also assess the feasibility of encouraging employers to hire unemployed young workers by implementing a targeted wage subsidy aimed at job-seekers who have just graduated from school.

Finally, the unemployment alleviation initiatives should have in-built evaluation mechanisms. This will inform improvements in the implementation of current as well as envisaged interventions.

Ms Onsomu and Mr Munga are policy analysts at KIPPRA.