Tackling Youth Unemployment: Challenges and Policy Considerations

1. Youth employment Cecil Mlatsheni School of Economics and Southern Africa Labour & Development Research Unit University of Cape Town Email: cmlatshe@commerce.uct.ac.za Tel: (021) 650 3507

2. Introduction • SA youth unemployment is estimated to be 47% by the narrow definition or over 60% by the broad definition. • Racial disparities are significant • Throughout Africa youth tend to migrate to cities for economic and other reasons • However, they are often perceived to be a threat or a nuisance in the urban environment. • In SA distortion to traditional family relations caused by the fight against apartheid contributed to the negative perceptions of youth. • Effort has to be directed at tackling the plight of marginalised youth because to an extent it is society that is failing youth.

3. From the youths perspective • Evidence throughout Africa suggests that youth wish/need to be involved in policies about them. • In connection with this, youth perceptions of the labour market are worth investigating. • 2002 initial wave of the Cape Area Panel Study (CAPS) conducted on 4 752 youth in 1472 households. • Racial profile of Cape Town, according to the 2001 census, is 32% African, 48% Coloured, 1.5% Indian, and 19% White. • CAPS data indicates that the perceptions of 14-22 year olds were rather gloomy in 2002 but had surprisingly improved in 2004. • But these upbeat expectations need to be realised or else long-term unemployment may erode the psychological fibre of youth.

4. Challenges to finding employment • Distance and costs: predominantly affects black youth where townships are often situated far from centres of business activity • Networks: most common method of finding employment • But they are often poor for black youth • Catch-22 situation of black youth resorting to networks because of lack of financial resources to search. • Possible policy intervention would be to facilitate the dissemination of information about job opportunities and promote awareness of programmes.

5. The importance of early work-experience • Work-experience: affects employability at all age levels • However, early work-experience in particular has been documented as having enormous benefits such as: • transition from school to work, choosing a career, instilling a number of desirable employer related characteristics • Indeed international evidence indicates that high school graduates who worked while at school tend to obtain better quality employment.

6. CAPS shows that whites make a smooth transition from school to work, less so for coloureds and Africans. • 19% of White, 7% of coloured and 1% African youth were studying and working simultaneously. • However, the non-studying unemployed youth are possibly the most marginalised. • CAPS indicates that 93% of white, 63% of coloured and 1% of African youth had worked within 12 months prior to the interview. • Literacy experts highlight the importance of language and numeracy and locate the source of the problem far earlier • The average language age of seven year old pupils from disadvantaged backgrounds is reported to be equivalent to that of 3 to 4 year olds • 32% of sampled WC grade 3 pupils can read at the level set in the national curriculum while 37% meet the numeracy requirements • Implications are these children are trapped in catch-up mode for most or all of their schooling and are not likely to reap the full benefits of their schooling

7. Policy related considerations • The role of aggregate demand: chief influence on youth unemployment • Implications are that skills-training initiatives will not immediately succeed and may gain stigma of failure • But it is a complex issue in that increased business activity depends on appropriately skilled personnel.

8. Quality of education • Besides the poor performance of primary school pupils, matric exemption passes are a concern • In 2002 69% passed matric but only 25% did so with matric endorsement. • At tertiary institutions, 82% of first year students are reported to be functionally illiterate with a literacy level below that of grade 8 while 60% are failing to cope with the level of mathematics and science offered at university • Official estimates are that15 000 teachers per year are lost to the profession, compared to only 5 000 who enter

9. FET colleges • Arguably the most important providers of intermediate-level technical and vocational skills • They are in the first instance reported to be under resourced and often not situated where they are most needed • Thus far only 34% of their graduates, aggregated across all fields, find employment • But mainly in commerce and engineering • However, as a many as 80% - 90% of FET graduates in cookery, hairdressing and hospitality find employment • Apprenticeships have declined and this impacts disproportionately on youth as they make up the bulk of the unemployed • Learnerships are not a substitute as they are more suited to workers employed in the formal economy whereas the most vulnerable youth are either unemployed or engaged in survivalist micro-enterprises

10. Promoting wage employment • Work experience versus vocational training: • A combination of both has been found to produce the best results. • Work experience programmes tend to produce a deadweight effect • Vocational training programmes generally do not facilitate access to employers and job specific training

11. Targeting programmes • Closely targeted programmes are better designed to meet the needs of a specific group • Consideration should be given to whether focus should be on the most vulnerable youth or those that are most likely to enhance a programmes success rate.

12. Decentralisation of programmes • Implementation of programmes should be at the local level so that they are more relevant to local needs. • However, standards may vary therefore monitoring should occur at national level.

13. Youth and entrepreneurship: challenges experienced in Africa • Starting capital is hard to acquire • Youth attitude: giving up too soon or changing ideas • Interference from significant others with the advice given by business mentors • Cultural expectations and conventions. • Crime as a deterrent to entrepreneurial activity

14. Youth entrepreneurship: what has worked • Believe in the youth and develop their idea rather than prescribing one • Allocate mentors to youth and use successful entrepreneurs as role models • Visit sites that youth entrepreneurs are operating from.