Youth Unemployment: Unsalvageable Blow By Covid-19?

As a country amidst a demographic dividend, Bangladesh has to closely monitor the employment opportunities of the youth. The United Nations defines Youth to be the part of the population between the ages 15-24. According to the last census, 19.14% of the Bangladeshi population are the youth while 27.29% of the population are between ages 0-14 and shall be entering the youth population soon.^[1]

While it might seem like the unemployment problem is the cause of the global economic slowdown due to the Covid-19 pandemic, it has been an impediment in the global economy for quite some time now. Despite the global youth population increasing to 1.3 billion in 2019 from 1 billion in 1999, the number of youth in employment decreased to 497 million from 568 million.^[2] This article discusses what implications the global pandemic might have on the already pitiful scenario of employment.

Understanding The Youth Employment Scenario

The Pre Pandemic Situation

The Youth population can be divided into three categories: a) Employed b) Unemployed (people who are looking for employment but cannot find it) c) Not looking for employment. Currently, 429 million people are employed, 68 million are unemployed and 776 million are not looking for employment. ^[2]

However, it could be questioned if the 61% of the Youth who are not participating in the labour force are in some form of education. However, it has been seen that 34.4% of 776 million people outside the labour force are not in any form of training or education either. This section has been classified as NEET or Not in education, employment, or training.^[2] These people are not involved in any way to become a contributing member of society. 

Major Trends In Youth Employment

Informal Employment Widespread Among Younger People: 77% of the employed Youth are informally employed. However, this varies from region to region. While only 12.8% of the employed youth are in the informal sector in North America, the percentage is 95% when it comes to Sub-Saharan Africa and Asia.

Poverty An Issue Even for Employed Youth: 30% of the employed youth are facing some form of poverty.

Automation Might Increase Unemployment Among Youth: While automation is bringing change in all across the Global Employment scenario, the jobs held by the youth are especially in danger. Youth who have higher education get access to jobs which are at less risk of being automated and vice-versa.

Youth Employment In The Covid-19 World

The world economy has turned upside down due to the pandemic with unemployment soaring globally. The biggest hit are the people in the informal sector with the workers losing 60% of their income in within the first month of the strike of the pandemic.^[3] About 1 in 6 people in this sector are out of work while the ones who are still working have seen their hours get cut by 23%.^[3] Since almost three quarters of the youth labour force are in the informal sector, they shall be hit the hardest. Moreover, the class of 2020 study finds that 800,000 young people would join the labour force this year and a large portion of them are likely to be unemployed due to the crisis.^[4]

The Bangladeshi Perspective

The most important indicator to understand the employment scenario of the Youth is finding the NEET or Not in Education, Employment, or Training. This helps us understand what portion of the youth population is not being able to provide any value to the society. Currently, the NEET percentage of Bangladesh is  16.2% higher than the global average youth NEET rate of 21.8%, and 9.4% higher than the South Asian regional average youth NEET rate of 28.6%. This indicates that Bangladesh is not being able to successfully utilize its demographic dividend.^[5] 

The unemployment among Bangladeshi youth has been increasing since 2010 but first saw a dip in 2019. This could be an encouraging trend for the current youth.

The following table tries to find out where Bangladesh stands compared to different relevant economies.

Compared Region	Illustration	Discussion
World		The overall global youth employment has been higher than Bangladesh consistently. However, the global unemployment rate has stayed stable despite the economy going through a recession in 2008. The unemployment rate in Bangladesh, on the other hand, saw many fluctuations.
South Asia		The unemployment rate of South Asia has been steady but has been significantly over Bangladesh over the years.
East Asia & Pacific (Excluding High Income)		East Asia and Pacific has done a commendable job in ensuring youth employment even if the high income countries are not considered. They can be an ideal role model for Bangladesh.
Worse Performing Countries In Region		The cases of countries which have performed worse than Bangladesh can be studied closely to understand what went wrong. Moreover, Indonesia has improved its unemployment rate significantly and has almost reached Bangladesh. Understanding their policies can help Bangladesh.
Better Performing Countries In Region		This group of countries have achieved great success in mobilizing youth employment. Malaysia, especially, improved drastically. They had a higher youth unemployment rate than Bangladesh but are now doing better.

A shocking scenario in the Bangladeshi Youth employment is that the more educated are more likely to be unemployed. It is to be noted here that this data does not take into account the youth who are not looking to employment.^[5]

This could either mean Bangladesh does not have enough high level jobs which require educated individuals or it could mean the education system is not injecting the youth with the necessary skills. 

Bangladeshi Youth Employment And Covid-19

As discussed before, the Covid-19 Pandemic has struck the informal sector first. 87% of the Bangladeshi employed population work in the informal economy and they have been struck the hardest.^[6]  But the rate is much higher for the youth workers. 89.2% of the youth are employed in the informal sector and all their employments are at risk due to the pandemic.^[7]

The strike in the garments industry has also caused a major decline in youth unemployment. About 65% of the garment industry workers belong to the youth category and are at the receiving end of large layoffs.^[8]

Salvaging The Future of Youth Employment

While there was room for improvement, the pre-pandemic situation of youth employment was not as bad as most other regional contemporaries. The dip in unemployment rate in 2019 might have been a promising sign, but, as the Covid-19 pandemic hit, it might seem like the unemployment problem is going to be exacerbated.

The economic downturn due to the pandemic is unavoidable and this shall result in short term increased unemployment among the youth. However, with proper policy planning, this does not have to be permanent. This article points out that one of the biggest problems among the employment of the youth in Bangladesh is that they are employed mostly in the informal sector and are thus not involved in more skilled work. Moreover, the educated youth are more in risk of unemployment. Thus if the skillset of the youth are increased, they can be of more value to the economy. 

The demographic dividend, while talked about a lot, has not been utilized yet. Models of East Asian countries which rapidly grew during the 1990s can be followed to ensure Bangladesh is also following their footsteps.^[8]

The current situation of youth employment might seem bleak but it is, by no means, unsalvageable. Bangladesh’s economy has seen massive growth in the recent years and the hiccup of the pandemic can be dealt with as well.

Kidwa Arif, Content Writer at LightCastle Partners, has prepared the write-up. For further clarifications, contact here: [email protected]