## GRADUATING INTO UNCERTAINTY

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**Canonical URL:** [GRADUATING INTO UNCERTAINTY](https://www.imf.org/-/media/files/publications/fandd/article/2026/09/jacques.pdf)

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### Record youth cohort and labor market pressures
- About 1.2 billion people will join the labor market in developing economies over the next decade.
- The World Bank notes: “These young women and men will likely represent the largest youth cohort ever: more than over any previous decade, and more than projected for any decade over the rest of this century.”
- Global growth is described as “roughly a third lower” than at the turn of the century, contributing to weaker prospects for graduates.
- Succession of global shocks (pandemic-era inflation, Russia’s invasion of Ukraine, volatility in energy markets) has squeezed spending and raised living costs, with acute pressure in Asia because many economies depend heavily on imported energy shipped through the Strait of Hormuz.
- About 60 percent of Thailand’s oil imports come from the Persian Gulf.

### Young graduate unemployment and skills mismatch
- IMF research: youth unemployment is elevated across Asia and is often highest among those with the most advanced education.
- Thailand: 3.9 percent of people ages 15–24 were unemployed last year; among Thais ages 15–24 with postsecondary education the unemployment rate was 13.2 percent.
- South Asia: joblessness among the most educated young people ranges from about 36 percent in Bangladesh to 43 percent in Sri Lanka.
- Philippines: percentage of college graduates among the country’s unemployed was growing, reflecting a persistent mismatch between available and graduate skills.
- Quote summarizing employer-skill challenges: “Highly educated young workers are struggling to find positions that match their qualifications.”

### Impact of AI and technological change on entry-level roles
- AI can deliver gains in growth and productivity but could intensify labor market pressures for young workers if adoption outpaces skills development.
- International Labour Organization study (July): generative AI could affect the work of nearly 80 million people across Southeast Asia, though the ILO “sees little evidence yet of widespread job losses.”
- Student and graduate concerns on campus:
  - Students report anxiety that AI integration could reduce job opportunities for highly skilled workers across creative industries and manufacturing.
  - Universities are responding: one university acquired licenses for 1,000 students to be trained in how to use AI to further their careers.
- Employer view: adoption of productivity-enhancing technologies can depress demand for some tasks but may stimulate investment, expand businesses, and create new forms of work.

### Thailand case details and local dynamics
- King Mongkut University of Technology Thonburi (KMUTT) example:
  - Students report anxiety about future employment; some worry AI could replace them unless they gain soft skills and additional hard skills (e.g., another language).
  - University initiatives include AI training licenses for 1,000 students.
- Thailand investment board: for the first quarter of this year recorded applications worth 873,741 million Thai baht ($27.3 billion) across 48 digital projects, mostly in data centers and cloud services.
- Industry executives at conferences warned the immediate challenge is a shortage of workers with the skills to support rapid expansion of data centers and cloud services—less a coming dearth of jobs than a skills shortage.

### Policy implications and recommended responses (implicit in reporting)
- Rethink education and reskilling policies to make universities and technical programs more responsive to employer demand and equip graduates with skills that firms need.
- Prioritize reskilling and upskilling as AI adoption accelerates to avoid widening mismatch between available jobs and graduate qualifications.
- Encourage public-sector and private-sector pathways that can absorb engineering and technical graduates during transitions in labor demand.

*Harry Jacques — Finance & Development, SEPTEMBER 2026.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2026/09/jacques.pdf_