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Fact Sheet: IDB and Youth Employment

Challenges of youth unemployment and underemployment

Despite the relatively high economic growth Latin America and the Caribbean has experienced over the past few years, a significant portion of its population remains in poverty, including a large percentage of youth.

The scarcity of opportunities to make a decent living is one of the most critical problems young people face today. Many have trouble finding a first job. When they do get one, it often is part-time or a brief contract. Too often, they are informal jobs with no benefits or prospects for progress. Youth face greater difficulties than adults in entering the labor market with unemployment rates anywhere between twice to four times as high than adults.

In addition many young people drop out of school to look for work. Their chances of becoming productively employed are slim, as most of them lack basic job skills, experience and contacts. According to a recent IDB study, in the18-24 age group, 60 percent of those with 9 years or less of education were either unemployed or underemployed. Among those who completed at least 12 years of education, the rate was substantially lower, but still a dispiriting 35 percent.

When young Latin American job seekers fail to find decent work, they either take precarious jobs or become “NiNis,” a Spanish expression for those who neither work nor study. The description fits 22 million young people in region (one in five in their age group). Adding to their woes, individuals in this cohort are at higher risk of engaging in dangerous and harmful activities, such as violence, drug trafficking or prostitution.

Under these circumstances, Latin American and Caribbean countries are pressed to create favorable employment conditions and training programs to help their youth find, obtain and keep that crucial first job. The most effective ones are those that meet both the needs of their young charges and the demands of employers, who typically have specific skills requirements for job candidates.

Promising Programs

The IDB is supporting several programs designed to prepare young people to find and secure better jobs. The following are some of the more innovative and successful ones: 

This program provided life skills training and job placement services to more than 57,000 at-risk young Dominicans. During its first phase, implemented between 2001 and 2008, 47,000 youth completed the training and internships. Of that total, 22 percent were hired by the companies where they interned. Nearly 60 percent found a job within six months of completing the program. There were other positive social outcomes: a reduction in cases of violence and pregnancies and an increase in the rate of returns to school among participants.

In 2011 the IDB approved a $20 million loan to support an enhanced version of the program, which will benefit 24,000 more youth with an expected employment rate of at least 80 percent.

  • Honduras: PROEMPLEO

More than 12,500 young people participated in the Honduran Ministry of Labor and Social Security’s PROEMPLEO program. A strategic partnership with the private sector enabled the program to achieve a job placement rate of 77 percent. A total of 9,607 participants obtained permanent jobs with benefits at the companies where they interned at the end of the program. And in a significant step towards gender equality, over half the program’s beneficiaries were women.