Elva López Mourelo

Understanding the drivers of the youth labour market in Kenya

This article identifies the macro and microeconomic determinants of youth unemployment and inactivity rates. It finds that although the size of the youth cohort does have significant implications for the status of youth in the labour market, aggregate labour market conditions have a greater influence. The article also finds a large gap between the youth and the overall employment elasticities in the country. This implies that fostering economic growth and ensuring economic sustainability, important as these factors are, will not be sufficient to address youth challenges. Efforts will need to be focused on improving the youth employment content of growth. In this regard, results from the microeconometric analysis find that boosting tertiary school attendance and providing targeted vocational training to young people (particularly women) would be the most effective measures for improving youth employability in the country.

The employment effect of changes in the composition of fiscal consolidations

Abstract This paper assesses the magnitude and nature of fiscal consolidation policies and their impact on employment. In particular, in an attempt to address fiscal imbalances in the near term, countries have been faced with the delicate challenge of doing so without damaging recovery prospects and thus, counter to their original aim, worsening further public finances. In this regard, the paper reviews recent austerity measures adopted by governments and discusses how prolonging fiscal consolidation measures in their current form could be counterproductive for guaranteeing debt sustainability. Moreover, the article shows how poorly designed fiscal cuts – directly or indirectly affecting labour – seem to have been dampening job prospects. The paper sheds light on how fiscal and employment goals can be achieved together. More specifically, it finds that a fiscally-neutral change in the expenditure and revenue composition of fiscal consolidation can boost job creation. In this sense, the paper shows that it is imperative to find the right policy mix and recommends countries to be mindful of the nature and pace of consolidation.

Can labor provisions in trade agreements promote gender equality? Empirical evidence from Cambodia

In recent years, an increasing number of regional and bilateral trade agreements have emerged that include provisions on labor standards. The claimed purpose of these labor provisions is to improve working conditions in developing and emerging economies. However, little is known about whether such provisions actually do impact working conditions. This paper conducts an econometric study on the effectiveness of labor provisions in trade agreements. In particular, we evaluate the impact of the 1999 Bilateral Textile Agreement between Cambodia and the United States (CUSBTA) on both the gender wage gap and discrimination. The agreement combined the incentive of higher exports with the obligation of textile manufacturers to comply with international core labor standards, which include the elimination of discrimination in respect of employment and occupation. Using data from the Cambodia Socioeconomic Survey and applying a difference†in†difference estimation, we find a statistically significant reduction of the gender wage gap in the textile sector that can be attributed to the CUSBTA.

Youth Labour Market Prospects and Recent Policy Developments

Youth continue to face important labour market challenges today, often significantly greater than their adult counterparts. While unemployment rates have fallen in recent years, long-term unemployment remains persistently high as does the share of youth neither in employment nor in education or training. This raises concerns about the consequences of a prolonged joblessness among youth and the role of labour market policies in addressing these challenges. In this context, this chapter presents first, an overview of global youth labour market trends since the economic crisis, focusing on the developments in Europe. Second, the chapter examines the consequences of the current situation in Europe along several dimensions, notably the risk of detachment from the labour market and concerns about job quality. Finally, this chapter discusses valuable lessons learned on the effectiveness of youth labour market policies, using the European Youth Guarantee as a framework for the analysis of more specific measures.