## INTRODUCTION

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---

### Generational inclusion: scope and focus
- Inclusive growth includes sharing economic benefits across genders, ethnicities, regions, and generations in both a static (age groups at a point in time) and dynamic (across generations over time) sense.
- This paper analyzes challenges and policy options to promote static and dynamic generational inclusion, focusing on the two most vulnerable age groups at a point in time: youth and the elderly, and on intergenerational mobility over time.
- Key concerns:
  - Youth have higher poverty rates and significantly worse labor market outcomes than other groups in many countries.
  - The elderly often depend on public income and health systems under increasing strain from demographic trends.
  - Intergenerational mobility: the dependence of economic opportunity on resources and advantages passed from parents to children; in some countries mobility has been falling, exacerbating inequality.

### I. YOUTH POVERTY AND UNEMPLOYMENT — Overview
- The transition from school to work is critical for long-term livelihood outcomes; socioeconomic factors during childhood (access to quality education and health services, geography) strongly influence young adults’ prospects.
- Disadvantaged youth face higher risk of marginalization.
- Global poverty among working youth:
  - 13 percent of working youth live in extreme poverty (defined as living with less than $1.90 a day).
  - 17 percent of working youth live in moderate poverty (defined as living with less than $3.20 a day).
  - In Low-Income Countries (LICs), up to 40 percent of working youth live below the international extreme poverty line.
- Social safety nets often target other groups (e.g., elderly, families with children), leaving working-age youth more vulnerable.
- Financial constraints on young adults can lead to premature school exit and acceptance of low-quality jobs with long-term costs.
- Informality:
  - In emerging and developing countries (EMDEs), high levels of informal jobs among youth are prevalent.
  - In advanced economies (AEs), downturns can push youth into jobs below their skill level with long-term human capital costs.

### I.A Demographics and secular trends — Findings
- Youth population shares and trends:
  - About 25 percent of the world’s population is under the age of 15.
  - Range: 17 percent in high-income countries to 42 percent in low-income countries.
- The working-age population has increased by almost 35 percent in the last two decades and is expected to continue to grow in many parts of the world.
- Implications by region:
  - EMDEs: demographic transition can yield growth dividends by decreasing dependency ratios and boosting income and consumption, but requires job creation for both incoming and already-excluded youth.
  - AEs: aging populations strain financing of social services and pensions; economic immigration can alleviate dependency ratios.
  - EMDE risk: emigration of educated youth can cause brain drain.
- Technological change and automation:
  - Automation changes the nature of work and raises vulnerability for workers.
  - AEs have been more vulnerable thus far, but EMDEs can be affected if AEs automate rather than delocalize activities like light manufacturing.
  - Policy implication: understand technological change and promote flexible/adaptable economies and labor forces to prepare the next generation.

### I.B Young people in the labor market — Key statistics and patterns
- Education enrollment:
  - Secondary and tertiary enrollment rates have increased by more than ten percentage points in the past decade and a half.
  - As of 2017, 36 percent of young men and 40 percent of young women were enrolled in tertiary education.
- Youth unemployment and inactivity:
  - Youth unemployment rate nearly 14 percent as of 2019 (ILO data), more than three times the adult population rate.
  - Regional high: 27 percent in the Middle East and North Africa (ILO, 2020a).
  - Across OECD countries, about 18 percent of unemployed youth have been without a job for a year or longer.
  - ILO estimates 22 percent of youth globally are NEET (Not in Employment, Education, or Training).
  - NEET range: 12 percent in AEs to 30 percent in MENA.
- Employment form and quality:
  - Wage employment about 54 percent globally (ILO, 2020).
  - Underemployed youth share is about three times that of adults (ILO, 2020b).
  - Underemployment ranges from around 18 percent in AEs to over 25 percent in EMs.
  - In EMDEs, around 55 percent of young workers are employed in informal jobs on average (excluding agricultural informal jobs).
- Wage inequality:
  - Mean wage of 16-24 years old in the US is about 65 percent that of 25-34 years old.
  - Wage inequality tends to be higher among youth than adults, though it decreased since the global financial crisis due to falling returns on tertiary education.

### I.B Gender gaps — Findings
- Education convergence: young women now have comparable education to young men in many places.
- Labor market disadvantage persists for young women:
  - Young women have more difficulty finding jobs.
  - Young women disproportionately represented among NEET: 70 percent of youth NEET are young women.
  - Gender pay gap is lower among younger cohorts but persists; young women are more likely to be under-employed and concentrated in low-pay and part-time jobs.
  - Participation progress greater in AEs than EMDEs; EMDE participation gaps remain significantly higher.
  - Evidence suggests young women take longer to find first jobs than young men.
- Drivers: distortions, discrimination, mobility constraints, family obligations, underrepresentation in STEM and vocational streams, lack of networks and role models.
- Marriage and parenthood widen gender gaps, indicating a prevalent penalty associated with household and family obligations.

### I.C Causes of youth vulnerability — Mechanisms and evidence
- Sensitivity to downturns:
  - “Last in – first out” dynamics: youth are less experienced, have shorter tenures, and less secure contracts.
  - Entering the labor market during a recession has lasting negative impacts.
  - In AEs, youth unemployment rose from 13 percent in 2007 to a peak of 18 percent in 2010-13; NEET rate rose to 15 percent in 2010 from 13 percent in 2007.
  - In EMDEs, the informal sector often acts as shock absorber when formal demand decreases.
- Structural constraints:
  - Typical time to find first job around two years, generating high long-term unemployment among those who have never worked.
  - Demand-side: lack of private-sector dynamism amid demographic change and slow economic transformation in EMDEs limits jobs matching growing educational attainment.
  - Supply-side: preference for public-sector jobs can lead educated youth to “queue” and remain unemployed while supported by families.
- Labor market rigidities:
  - High labor costs (e.g., high minimum wages) and rigid employment protection (large severance payments) can discourage hiring of young entrants.
  - Evidence links such rigidities to lower youth employment.
  - In AEs, this often yields more temporary contracts for youth; in EMDEs, it often pushes youth into informal jobs with fewer protections.
- Education and returns:
  - Longer education generally associated with better labor-market outcomes.
  - Returns to education have been decreasing in some regions due to weaker transition to work and lower job quality and more expensive education.
  - Result: young people find it more difficult to get jobs than their parents; declining social mobility intensifies challenges for disadvantaged youth.
- Gender-specific causes:
  - Young women face labor-market distortions and discrimination, mobility constraints, family obligations, and rights restrictions.
  - Marriage and parenthood widen gender gaps.

### Box 1. Youth Labor Market Integration in MENA — Key facts and challenges
- Employment rates:
  - The MENA region has one of the lowest rates of employment globally: "Just over one in every two adults’ work."
  - Female employment is especially low: "Less than one in every six women work," with labor force participation "about 20 percent."
- Youth unemployment and discouragement:
  - "The average unemployment rate for young people is around 30 percent."
  - Youth unemployment appears "mostly of a structural nature" with "structurally longer transition and overall poor labor market outcomes for youth" and "high rates of long-term unemployment among people who have never worked."

### Box 1 — Drivers and mechanisms behind poor youth outcomes in MENA
- Demand-side factors:
  - "Lack of dynamism of the private sector" and "low demand for skilled workers."
  - "Unfavorable business regulations that do not promote entrepreneurship" and "weak governance."
- Supply-side factors:
  - "Skill mismatches" and "preferences toward public sector jobs."
- Labor market discouragement and rising inoccupation: high unemployment "has been accompanied by growing inoccupation rates driven by discouragement."
- Labor market segmentation and social networks: "MENA labor markets are extremely segmented, and social networks ('wasta') have a prominent role in a job transition, creating inequalities of opportunity."
- Correlates of unemployment: "Unemployment is also positively correlated with education levels and parental wealth highlighting mismatches between the supply and demand for labor in the region (skills, expectations, etc.)."

### Box 1 — Public sector role and fiscal implications
- Public sector absorption constraints: "As MENA countries have faced rising budget deficits and public debt, public sectors could no longer absorb the growing labor force."
- Public wage bill pressures: "Public sector wage bills in MENA are higher than in any other countries driven by both higher civil service employees and higher wages and compensations."
- Distortions from legacy employer-of-last-resort practices: "Inefficient hiring and compensation practices, significant wage gaps with the private sector, and a legacy of employers of the first resort have growingly translated into unsustainable public finances and labor market distortions."

### Box 1 — Gender and socioeconomic dimensions
- Gender gaps:
  - "The gender gap in labor market participation is particularly acute in MENA."
  - "The overall unemployment rate of women has been more than doubled that of men," a pattern that holds among young generations.
  - "Young women are likely to drop out of the labor force after marriage, as private-sector jobs are often difficult to reconcile with family obligations."
  - "Even for women who do find a job, their transition period is longer than for men."
- Socioeconomic background:
  - "Socioeconomic backgrounds play an essential role in youth transition to the labor market."
  - "Unemployment is also positively correlated with education levels and parental wealth," and social networks ("wasta") generate inequalities of opportunity.

### Box 1 — Policy options and recommendations for MENA
- Overarching approach:
  - "Designing and implementing reforms to support youth transition into the labor market is critical to foster sustainable and inclusive growth."
  - Strategies "need to be broad-based, including education, labor market, and product market reforms, aiming at facilitating school-to-work transitions into good-quality jobs."
  - "Policies need to consider a large range of factors specific to country circumstances."
- Differentiation by country type:
  - AEs: "reforms should aim at fine-tuning institutions and policies to better prepare and protect youth, especially disadvantaged ones, in rapidly evolving labor market environments."
  - EMDEs: "continue to improve the educational attainment of young people" and "foster economic transformations that create enough jobs for increasingly educated youth"; supporting early transition to good-quality jobs is critical in contexts of high informality and weak social protection.
- Education and skills:
  - Equip youth with better and broader skills; improve education "starting with early childhood development and good quality primary education."
  - For disadvantaged youth, extend formal education via measures such as direct cash transfers to families.
  - In EMDEs, improve access to and quality of secondary education; in AEs, focus on retention through high school.
  - Emphasize "digital and soft skills and ... continuous learning"; modernize "tertiary education and vocational studies."
  - Note: vocational training has mixed outcomes but "in countries such as Germany or Denmark, it has had positive impacts on youth integration into the labor market."
- Labor market institutions and regulations:
  - "Flexible labor markets with social safety nets that aim to protect workers—not jobs—can support youth employment."
  - "More flexible labor market institutions are associated with better outcomes for youth."
  - Policies that "protect workers rather than jobs can limit distortions that put young people at a disadvantage."
  - Example: "reducing severance payments could help promote youth access to stable jobs."
  - Reduce labor market duality, "facilitate workers’ mobility," and design unemployment protection to "support workers’ transition without raising the opportunity cost of work," including coverage for the self-employed.
  - Set labor costs, tax wedge, and minimum wages carefully because "minimum wages have a slightly negative impact on youth employment, and the effect is larger in EMDEs than in AEs."
  - Address "legal impediments for women’s integration" and promote "family-friendly labor regulations such as family leave, childcare services, and flexible work arrangement."
- Active labor market policies (ALMPs):
  - Targeted ALMPs "can support youth employment, particularly those more at risk of unemployment, such as disadvantaged youth."
  - ALMPs are common in AEs; in EMDEs, "wage subsidy programs are less developed than in AEs."
  - In EMDEs, training programs can be effective when youth have lower education; in LICs wage subsidies often take the form of public employment programs with limited efficiency unless they build skills.
  - "Programs aimed at promoting self-employment and entrepreneurship have shown the most positive results among ALMPs in EMDEs, especially when they are combined with other policies in the areas of social protection, access to finance, etc."
  - Implementation considerations: successful programs require high administrative capacity to target, implement, monitor, and evaluate outcomes.
  - Digitalization can "offer opportunities to strengthen public employment services at low costs through online platforms."
  - Evidence on cost-effectiveness: "better targeting, medium duration, and a combination of wage subsidy and training have the most cost-effective results."
  - "Programs targeted at disadvantaged youth are more effective." ALMPs should be combined with measures addressing associated constraints and, to help women, combine ALMPs with measures promoting flexible work arrangements.
  - Caution: "ALMPs have weaker results where job creation is lackluster."
- Reducing informality and first-job interventions:
  - "Reducing informality should be part of a broader policy strategy to improve job quality in EMDEs."
  - Target interventions to "prevent youth entry into informal jobs by aiming at improving young people’s first experience in the labor market."
  - First-jobs programs (apprenticeships, internships, hiring subsidies, special youth arrangements) can be effective.
  - Improve productivity of informal sectors via "human capital build-up and creating enabling environments towards formality (market access, regulations, access to finance, etc.)."
- Private sector development and SMEs:
  - "Fostering private sector development in EMDEs, especially SMEs, is critical to creating more jobs for growing working-age populations."
  - Policies targeted at SMEs and entrepreneurship, notably "access to finance," can support youth transition to work.
  - Leverage youth technological skills: "Young people are tech-savvy, and they can also benefit from technology-driven change if given adequate incentives and opportunities."

### Implementation and capacity considerations
- Administrative capacity matters: "Successful implementation of cost-efficient programs tends to require a high administrative capacity to target, implement, monitor, and evaluate outcomes which can be more challenging in EMDEs than in AEs."
- Digital solutions: "Digitalization can offer opportunities to strengthen public employment services at low costs" even in LICs with high mobile phone penetration.
- Program design features linked to effectiveness: better targeting, medium duration, combination of wage subsidy and training, and focus on disadvantaged youth.

*Source: wpiea2021072-print-pdf - Introduction (IMF)*

### Introduction ...........................................................................................................

### INTRODUCTION

### Generational inclusion: scope and focus
- Inclusive growth includes sharing economic benefits across genders, ethnicities, regions, and generations in both a static (age groups at a point in time) and dynamic (across generations over time) sense.
- This paper analyzes challenges and policy options to promote static and dynamic generational inclusion, focusing on the two most vulnerable age groups at a point in time: youth and the elderly, and on intergenerational mobility over time.
- Key concerns:
  - Youth have higher poverty rates and significantly worse labor market outcomes than other groups in many countries.
  - The elderly often depend on public income and health systems under increasing strain from demographic trends.
  - Intergenerational mobility: the dependence of economic opportunity on resources and advantages passed from parents to children; in some countries mobility has been falling, exacerbating inequality.

*Source: wpiea2021072-print-pdf - Introduction (IMF)*

### I. YOUTH POVERTY AND UNEMPLOYMENT — Overview
- The transition from school to work is critical for long-term livelihood outcomes; socioeconomic factors during childhood (access to quality education and health services, geography) strongly influence young adults’ prospects.
- Disadvantaged youth face higher risk of marginalization.
- Globally:
  - 13 percent of working youth live in extreme poverty (defined as living with less than $1.90 a day).
  - 17 percent of working youth live in moderate poverty (defined as living with less than $3.20 a day).
  - In Low-Income Countries (LICs), up to 40 percent of working youth live below the international extreme poverty line.
- In many countries, social safety nets target other groups (e.g., elderly, families with children), leaving working-age youth more vulnerable.
- Example: In the United States, young adult poverty has increased over past decades and is among the highest for any age cohort (Hawkins, 2019).
- Financial constraints on young adults (see Figure 1c in source) lead to responses that can worsen long-term prospects (prematurely ending education, accepting low-quality jobs).
- Informality: In emerging and developing countries (EMDEs), high levels of informal jobs among youth are prevalent; in advanced economies (AEs), downturns can push youth into jobs below their skill level with long-term human capital costs.

### I.A Demographics and secular trends — Findings
- Youth compose a large share of the world’s population:
  - About 25 percent of the world’s population is under the age of 15.
  - Range: 17 percent in high-income countries to 42 percent in low-income countries.
- The working-age population has increased by almost 35 percent in the last two decades and is expected to continue to grow in many parts of the world (Figure 2).
- Implications:
  - EMDEs: demographic transition can yield growth dividends by decreasing dependency ratios and boosting income and consumption, but requires job creation for both incoming and already-excluded youth.
  - AEs: aging populations strain financing of social services and pensions; economic immigration can alleviate dependency ratios.
  - EMDE risk: emigration of educated youth can cause brain drain.
- Technological change and automation:
  - Automation changes the nature of work and raises vulnerability for workers.
  - AEs have been more vulnerable thus far (Ahn and others, 2019), but EMDEs can be affected if AEs automate rather than delocalize activities like light manufacturing (Anh and others, 2019; UNCTAD, 2017).
  - Policy implication: understand technological change and promote flexible/adaptable economies and labor forces to prepare the next generation (World Bank, 2019).

### I.B Young people in the labor market — Key statistics and patterns
- Education enrollment:
  - Secondary and tertiary enrollment rates have increased by more than ten percentage points in the past decade and a half (Figure 3).
  - As of 2017, 36 percent of young men and 40 percent of young women were enrolled in tertiary education.
- Youth unemployment:
  - Youth unemployment rate nearly 14 percent as of 2019 (ILO data), more than three times the adult population rate.
  - Regional high: 27 percent in the Middle East and North Africa (ILO, 2020a).
- Long-term youth unemployment:
  - Across OECD countries, about 18 percent of unemployed youth have been without a job for a year or longer.
- NEET (Not in Employment, Education, or Training):
  - ILO estimates 22 percent of youth globally are NEET.
  - NEET range: 12 percent in AEs to 30 percent in MENA.
- Employment form and quality:
  - Wage employment ~54 percent globally (ILO, 2020), on par with adults, but nonstandard forms of work are increasing (temporary, part-time, gig).
  - Underemployed youth share is about three times that of adults (ILO, 2020b):
    - Underemployment ranges from around 18 percent in AEs to over 25 percent in EMs.
  - In EMDEs, around 55 percent of young workers are employed in informal jobs on average (excluding agricultural informal jobs, Ahn and others, 2019).
- Wage inequality:
  - Mean wage of 16-24 years old in the US is about 65 percent that of 25-34 years old.
  - Wage inequality tends to be higher among youth than adults, though it decreased since the global financial crisis due to falling returns on tertiary education (ILO, 2020).

### I.B Gender gaps — Findings
- Education convergence:
  - Educational attainment has broadly converged; young women now have comparable education to young men.
- Labor market disadvantage persists for young women:
  - Young women have more difficulty finding jobs (Figure 4).
  - Young women disproportionately represented among NEET: 70 percent of youth NEET are young women.
  - Gender pay gap is lower among younger cohorts but persists; young women are more likely to be under-employed and concentrated in low-pay and part-time jobs.
  - Progress in participation has been greater in AEs than EMDEs; EMDE participation gaps remain significantly higher (Ahn and others, 2019).
  - Evidence suggests young women take longer to find first jobs than young men (Manacorda et al., 2017).
- Drivers: distortions, discrimination, mobility constraints, family obligations, underrepresentation in STEM and vocational streams, lack of networks and role models.

### I.C Causes of youth vulnerability — Mechanisms and evidence
- Sensitivity to downturns:
  - “Last in – first out” dynamics: youth are less experienced, have shorter tenures, and less secure contracts.
  - Entering the labor market during a recession has lasting negative impacts (Cockx, 2020).
  - In AEs, youth unemployment rose from 13 percent in 2007 to a peak of 18 percent in 2010-13; NEET rate rose to 15 percent in 2010 from 13 percent in 2007.
  - In EMDEs, informal sector often acts as shock absorber when formal demand decreases (Ahn and others, 2019).
- Structural constraints:
  - Typical time to find first job around two years, generating high long-term unemployment among those who have never worked (Manacorda and others, 2017).
  - Demand-side: lack of private-sector dynamism amid demographic change and slow economic transformation in EMDEs limits jobs matching growing educational attainment (Fox and Kaul, 2018).
  - Supply-side: preference for public-sector jobs can lead educated youth to “queue” and remain unemployed while supported by families.
- Labor market rigidities:
  - High labor costs (e.g., high minimum wages) and rigid employment protection (large severance payments) can discourage hiring of young entrants (Quintini and Martin, 2014).
  - Evidence links such rigidities to lower youth employment (Duval and Loungani, 2019).
  - In AEs, this often yields more temporary contracts for youth; in EMDEs, it often pushes youth into informal jobs with fewer protections.
- Education and returns:
  - Longer education generally associated with better labor-market outcomes (lower unemployment/inactivity, higher-quality jobs, better chance to transition to formal work in EMDEs).
  - Returns to education have been decreasing in some regions due to:
    - Weaker transition to work as labor demand fails to keep pace with more educated supply (EMDEs).
    - Lower job quality and more expensive education (AEs).
  - Result: young people find it more difficult to get jobs than their parents; declining social mobility intensifies challenges for disadvantaged youth.
- Gender-specific causes:
  - Young women face labor-market distortions and discrimination, mobility constraints, family obligations, and rights restrictions (ILO, 2020; Elborgh-Woytek and others, 2013; Gonzales and others, 2015; Shehu and Nilsson, 2014).
  - Marriage and parenthood widen gender gaps, indicating a prevalent penalty associated with household and family obligations.

*Source: wpiea2021072-print-pdf - Introduction (IMF)*

### Box 1. Youth Labor Market Integration in MENA

### Box 1. Youth Labor Market Integration in MENA

### Key facts and challenges
- The MENA region has one of the lowest rates of employment globally: "Just over one in every two adults’ work."
- Female employment is especially low: "Less than one in every six women work," driven in large part by low labor force participation, which "stands at about 20 percent."
- Youth unemployment and discouragement are severe: "The average unemployment rate for young people is around 30 percent." Youth unemployment appears "mostly of a structural nature," with "structurally longer transition and overall poor labor market outcomes for youth" often translating into "high rates of long-term unemployment among people who have never worked."

### Drivers and mechanisms behind poor youth outcomes
- Demand-side factors:
  - "Lack of dynamism of the private sector" and "low demand for skilled workers."
  - "Unfavorable business regulations that do not promote entrepreneurship" and "weak governance."
- Supply-side factors:
  - "Skill mismatches" and "preferences toward public sector jobs."
- Labor market discouragement and rising inoccupation: high unemployment "has been accompanied by growing inoccupation rates driven by discouragement."
- Labor market segmentation and social networks: "MENA labor markets are extremely segmented, and social networks ('wasta') have a prominent role in a job transition, creating inequalities of opportunity."
- Correlates of unemployment: "Unemployment is also positively correlated with education levels and parental wealth highlighting mismatches between the supply and demand for labor in the region (skills, expectations, etc.)."

### Public sector role and fiscal implications
- Public sector absorption constraints: "As MENA countries have faced rising budget deficits and public debt, public sectors could no longer absorb the growing labor force."
- Public wage bill pressures: "Public sector wage bills in MENA are higher than in any other countries driven by both higher civil service employees and higher wages and compensations."
- Distortions from legacy employer-of-last-resort practices: "Inefficient hiring and compensation practices, significant wage gaps with the private sector, and a legacy of employers of the first resort have growingly translated into unsustainable public finances and labor market distortions."

### Gender and socioeconomic dimensions
- Gender gaps:
  - "The gender gap in labor market participation is particularly acute in MENA."
  - "The overall unemployment rate of women has been more than doubled that of men," a pattern that holds among young generations.
  - "Young women are likely to drop out of the labor force after marriage, as private-sector jobs are often difficult to reconcile with family obligations."
  - "Even for women who do find a job, their transition period is longer than for men."
- Socioeconomic background:
  - "Socioeconomic backgrounds play an essential role in youth transition to the labor market."
  - "Unemployment is also positively correlated with education levels and parental wealth," and social networks ("wasta") generate inequalities of opportunity.

### Policy options and recommendations
- Overarching approach:
  - "Designing and implementing reforms to support youth transition into the labor market is critical to foster sustainable and inclusive growth."
  - Strategies "need to be broad-based, including education, labor market, and product market reforms, aiming at facilitating school-to-work transitions into good-quality jobs."
  - "Policies need to consider a large range of factors specific to country circumstances."
- Differentiation by country type:
  - Advanced economies (AEs): "reforms should aim at fine-tuning institutions and policies to better prepare and protect youth, especially disadvantaged ones, in rapidly evolving labor market environments."
  - Emerging market and developing economies (EMDEs): "continue to improve the educational attainment of young people" and "foster economic transformations that create enough jobs for increasingly educated youth"; in context of "high informality and often weak social protection systems, supporting youth transition to good-quality jobs early in their career is critical."
- Education and skills:
  - "Young people need to be equipped with better and broader skills."
  - Improve education "starting with early childhood development and good quality primary education," and for disadvantaged youth "extend their stay in formal education as long as possible, for example, by providing direct cash transfers to their families (ILO, 2011)."
  - In EMDEs, "improving access to and quality of secondary education"; in AEs, "focusing on retention through high school (Quintini and Martin, 2014)."
  - Emphasize "digital and soft skills and ... continuous learning"; modernize "tertiary education and vocational studies."
  - Evidence: vocational training has mixed outcomes but "in countries such as Germany or Denmark, it has had positive impacts on youth integration into the labor market (Zimmermann and others, 2013)."
- Labor market institutions and regulations:
  - "Flexible labor markets with social safety nets that aim to protect workers—not jobs—can support youth employment."
  - "More flexible labor market institutions are associated with better outcomes for youth (Ahn and others, 2019)."
  - Policies that "protect workers rather than jobs can limit distortions that put young people at a disadvantage."
  - Example: "reducing severance payments could help promote youth access to stable jobs (Purfield and others, 2018)."
  - Reduce labor market duality, "facilitate workers’ mobility," and design unemployment protection to "support workers’ transition without raising the opportunity cost of work," including coverage for the self-employed (O’Higgins, 2017).
  - "Labor costs as measured by the tax wedge and minimum wages should be carefully set" because "minimum wages have a slightly negative impact on youth employment, and the effect is larger in EMDEs than in AEs (O’Higgins, 2017)."
  - Address "legal impediments for women’s integration" and promote "family-friendly labor regulations such as family leave, childcare services, and flexible work arrangement" to reduce gender gaps.
- Active labor market policies (ALMPs):
  - Targeted ALMPs "can support youth employment, particularly those more at risk of unemployment, such as disadvantaged youth."
  - ALMPs are common in AEs; in EMDEs, "wage subsidy programs are less developed than in AEs."
  - For EMDEs, training programs can be effective when youth have lower education; in LICs wage subsidies often take the form of public employment programs with limited efficiency unless they build skills.
  - "Programs aimed at promoting self-employment and entrepreneurship have shown the most positive results among ALMPs in EMDEs, especially when they are combined with other policies in the areas of social protection, access to finance, etc. (O’Higgins, 2017)."
  - Design and implementation considerations: "Successful implementation of cost-efficient programs tends to require a high administrative capacity to target, implement, monitor, and evaluate outcomes," and EMDEs often face "fragmentation, poor administrative capacity, flaws in program design, bottlenecks, and lack of accountability" (Angel-Urdinola and Leon-Solano, 2013).
  - Digitalization can "offer opportunities to strengthen public employment services at low costs through online platforms" even where mobile phone penetration is high (ILO, 2020).
  - Evidence on cost-effectiveness: "better targeting, medium duration, and a combination of wage subsidy and training have the most cost-effective results (O’Higgins, 2017, Levy-Yeyati and others, 2019)."
  - "Programs targeted at disadvantaged youth are more effective (O’Higgins, 2017)." ALMPs should be combined with measures addressing associated constraints (e.g., ALMPs for entrepreneurship paired with improved access to credit); to help women, combine ALMPs with measures promoting flexible work arrangements.
  - Caution: "ALMPs have weaker results where job creation is lackluster."
- Reducing informality and first-job interventions:
  - "Reducing informality should be part of a broader policy strategy to improve job quality in EMDEs."
  - Target interventions to "prevent youth entry into informal jobs by aiming at improving young people’s first experience in the labor market."
  - First-jobs programs (apprenticeships, internships, hiring subsidies, special youth arrangements) can be effective (example: Latin America, O’Higgins, 2017).
  - Improve productivity of informal sectors via "human capital build-up and creating enabling environments towards formality (market access, regulations, access to finance, etc.)."
- Private sector development and SMEs:
  - "Fostering private sector development in EMDEs, especially SMEs, is critical to creating more jobs for growing working-age populations."
  - Policies targeted at SMEs and entrepreneurship, notably "access to finance," can support youth transition to work.
  - Leverage youth technological skills: "Young people are tech-savvy, and they can also benefit from technology-driven change if given adequate incentives and opportunities."

### Implementation and capacity considerations
- Administrative capacity matters: "Successful implementation of cost-efficient programs tends to require a high administrative capacity to target, implement, monitor, and evaluate outcomes which can be more challenging in EMDEs than in AEs."
- Digital solutions: "Digitalization can offer opportunities to strengthen public employment services at low costs" even in LICs with high mobile phone penetration.
- Program design features linked to effectiveness: better targeting, medium duration, combination of wage subsidy and training, and focus on disadvantaged youth.

*Source: Box 1. Youth Labor Market Integration in MENA — wpiea2021072-print-pdf*

### 2018. Fair Progress? Economic Mobility Across Generations Around the World. Equity

### wpiea2021072-print-pdf - 2018. Fair Progress? Economic Mobility Across Generations Around the World. Equity

### Intergenerational mobility and social mobility
- 2018. Fair Progress? Economic Mobility Across Generations Around the World. Equity and Development. Washington, DC: World Bank.
- OECD, 2018, “A Broken Social Elevator? How to Promote Social Mobility,” OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264301085-en
- Social Mobility Barometer, 2018, “Public attitudes to social mobility in the UK,” Social Mobility Commission https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/766797/Social_mobility_barometer_2018_report.pdf
- State of the Nation: Social Mobility in Great Britain, 2017, Social Mobility Commission, November 2017 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/662744/State_of_the_Nation_2017_-_Social_Mobility_in_Great_Britain.pdf
- The World Bank Global Database of Intergenerational Mobility (GDIM) https://www.worldbank.org/en/topic/poverty/brief/what-is-the-global-database-on-intergenerational-mobility-gdim
- Sun, F., Ueda, A., 2013, “Intergenerational earnings mobility in Taiwan,” Economic Bulletin, Vol. 35, Issue 1, http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I1-P21.pdf

### Labor market, youth employment, and informality
- O’Higgins, N., 2017, “Rising to the youth employment challenge: New evidence on key policy issues,” ILO.
- Quintini, G. and S. Martin, 2014, “Same Same but Different: School-to-work Transitions in Emerging and Advanced Economies,” OECD Social, Employment and Migration Working Papers, No. 154, OECD.
- Palmer, R., 2008, “Skills and productivity in the informal economy”; Employment working paper 5, ILO.
- Shehu, E. and Nilsson, 2014, “Informal Employment Among Youth: Evidence from 20 School-to-Work Transition Surveys,” International Labour Organisation, Geneva.
- Zimmermann, K. and others, 2013, “Youth Unemployment and Vocational Training,” Foundations and Trends in Microeconomics: Vol. 9: No. 1–2, pp 1-157.
- World Bank, 2012, “Enabling employment miracles,” in “The Middle East and North Africa Region – A regional economic update,” April 2012.
- World Bank, 2014, “Jobs and privileges: unleashing the employment potential of the Middle East and North Africa,” World Bank Regional Report.

### Pensions, aging, and health
- OECD, 2019, Pensions at a Glance 2019: OECD and G20 Indicators, OECD Publishing, Paris.
- Shang, Baoping, 2014, “Pension Reform and Equity: The Impact on Poverty of Reducing Pension Benefits” in Benedict Clements, Frank Eich, and Sanjeev Gupta,” Equitable and Sustainable Pensions. Challenges and Experience,” International Monetary Fund.
- Pew Research Center, 2015, “Family Support in Graying Societies: How Americans, Germans, and Italians Are Coping with an Aging Population.”
- United Nations, 2019, World Population Prospects: the 2019 Revision
- United Nations, Department of Economic and Social Affairs, Population Division, 2017. World Population Ageing 2017 (ST/ESA/SER.A/408)
- World Health Organization, 2015, World Report on Aging and Health. World Health Organization. https://apps.who.int/iris/handle/10665/186463
- United Nations, 2020, Policy Brief: The Impact of COVID-19 on older persons. MAY 2020

### COVID-19, strategy, and related responses
- World Health Organization, 2020, “COVID-19 Strategy Update, April 14, 2020”. https://www.who.int/publications-detail/covid-19-strategy-update---14-april-2020
- United Nations, 2020, Policy Brief: The Impact of COVID-19 on older persons. MAY 2020

### Gender, inclusiveness, and inequality
- OECD, 2017, “The Pursuit of Gender Equality: An Uphill Battle,” OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264281318-en
- OECD/ILO, 2019, “Women at Work: Progress and Policy Action,” Paper prepared under Japan’s G20 Presidency.
- Sieverding, M., 2012, “Female disadvantage in the Egyptian labor market; a youth perspective,” SYPE Policy Brief 4, The Population Council.
- Purfield, C. Finger, H., Ongley, K., Baduel, B., Castellanos, C., Pierre, G., Stepanyan, V., and E. Roos, 2018, “Opportunity for all: promoting growth and inclusiveness in the Middle East and North Africa,” IMF Departmental Paper, Middle East and Central Asia Department.

### Institutions, reports, and broader analyses
- Stiglitz, J., J. Fitoussi and M. Durand (eds.) (2018), For Good Measure: Advancing Research on Well-being Metrics Beyond GDP, OECD Publishing, Paris. https://doi.org/10.1787/9789264307278-en
- World Bank, 2019. “World Development Report: The Changing Nature of Work.”
- World Economic Forum, 2020, “The Global Social Mobility Report 2020”, https://reports.weforum.org/social-mobility-report-2020/
- United Nations Conference on Trade and Development (UNCTAD), 2017, “Robots, Industrialization, and Inclusive Growth,” in “Trade and Development Report 2017: Beyond Austerity – Towards a Global New Deal”, Chapter 3.
- Tamirisa, N. and others, 2018, “Title: Public wage bills in the Middle East and Central Asia,” Departmental Paper, Middle East and Central Asia Department, International Monetary Fund, 2018.
- Zouhar, Y., N. Lustig, J. Jellema, and M. Trabelsi, forthcoming, Public Expenditure and Inclusive Growth - A Survey. IMF Working paper.
- Norges Bank Investment Management, 2020, Retrieved from https://www.nbim.no/ on April 17, 2020.

*wpiea2021072-print-pdf - 2018. Fair Progress? Economic Mobility Across Generations Around the World. Equity and Development. Washington, DC: World Bank.*

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_Source: https://www.imf.org/-/media/files/publications/wp/2021/english/wpiea2021072-print-pdf.pdf_