Urgent and Important: Measuring Investments in Youth Economic Opportunity
August 11, 2016
Youth economic opportunity (YEO) has become a hot issue in recent years. Its links to growth, stability, and peace are sometimes highlighted and other times downgraded. Any way you look at it, connecting youth to economic opportunity, through technical and vocation training, life skills development, work readiness programs, job placement services, entrepreneurship, and financial inclusion is an imperative for the start of this third millennium.
One way to assess how seriously the world takes this imperative is to see where the money is. There is very little data on investments in YEO. Donors rarely categorize their projects as a YEO intervention. Private contributors mostly do not publish their spending, though we know many corporations invest substantial funds in workforce development through their human resources departments, as well as charitably.
Though the data not is readily available, my colleague Rohan Naik and I sifted through thousands of projects from multilateral and bilateral organizations, private foundations, and corporations to tally up one year’s worth of investments. The grand total: US$1.8 billion for 2014. That’s about $1 per young person (15–29 years old) in the developing world.
We know that this figure is low. If it was not in the public space, we could not count it. If a youth employment element was baked into a larger project, we did not attempt to estimate the share allocated to the youth component.
Nevertheless, the exercise was useful. Compared to other development sectors in which donors invest, such as primary education, health, and agriculture, contributions to young people’s long-term economic viability is low. Even if the figure were tripled, it would still not approach the amount of donor administrative costs.
While all investments in development are critical to fostering stable and equitable economic growth, YEO interventions can bring a faster rate of return. As people move from low to middle income their spending patterns favor health, nutrition, education of family members, and improved housing (this is especially true of women). These rising consumers spark immediate economic growth as they spend a greater share of their earned income than wealthier populations.
The intent of this analysis was not to get the exact number “right.” It was to shine a light on a critical area of global development that demands our urgent attention and to begin a conversation on better data on investments in youth economic opportunity.
Photo courtesy of the International Youth Foundation