August 19, 2020 (MLN): The coronavirus disease (COVID-19) pandemic has triggered a massive disruption of labour markets that has had disproportionate impacts on youth employment. In Asia and the Pacific, strict lockdown and related measures resulted in a combination of shocks to both business activity (the demand side) and education and training (the supply side).

According to the International Labour Organization (ILO), the combined effects threaten to create a “lockdown generation” that will feel the weight of this crisis for a long time.

‘Tackling the COVID-19 youth employment crisis in Asia and the Pacific,’ a  recent research report co-published by the Asian Development Bank (ADB) and the International Labour Organization(ILO),  explored the challenges and prospects for youth in the world of work in Asia and the Pacific as a result of COVID-19.

Asia and the Pacific region is home to the majority of the world’s young people and their contribution is key to the region’s productivity and inclusive development.

Prior to the COVID-19 crisis, labour force participation of young people in most countries in Asia and the Pacific was higher than the global average. In Eastern Asia, 45 per cent of youth were economically active, compared to the global rate of 41 per cent. The share in South-Eastern Asia and the Pacific was even higher at 47 per cent. Only in Southern Asia was the participation rate below the global average, at 32 per cent, driven entirely by the extremely low participation rate of young women at 14 per cent.

Nearly 220 million young workers (15–24 years) in the region are particularly vulnerable given their short tenure on the job, their employment in especially hard-hit sectors – wholesale and retail trade and repair, manufacturing, rental and business services, and accommodation and food services and their tendency to earn livelihoods in unsecured informal jobs.

The current COVID-19 crisis brings the vulnerabilities of youth labour markets to the fore, but with the further complication of disrupted education and training pathways. Young people will be hit harder than adults in the immediate crisis and also bear higher longer-term economic and social costs.

The crisis negatively impacts the prospects for youth through three channels. Young people are experiencing (1) job disruptions from reduced working hours and layoffs, (2) disruptions in education and training as they try to complete studies, and (3) difficulties transitioning from school to work and moving between jobs.

The fall in economic activity will impact youth employment throughout 2020. The research estimated job losses for all of 2020 for 13 countries in the region, based on expected output losses.

The report highlighted that youth unemployment rates jumped in the first quarter of 2020 from the last quarter of 2019 in all economies for which data are available. Compared with the first quarter of 2019, the youth unemployment rate increased in six of nine economies that have quarterly data available: Australia, Indonesia, Japan, Malaysia, and Viet Nam, as well as in Hong Kong, China, which showed the largest increase of 3 percentage points. All economies that experienced increases showed sharper jumps in youth rates than in adult rates.

Lockdown measures in response to COVID-19 have resulted in unprecedented reductions in hours worked in the region, affecting workers of all ages. The ILO estimated that 7.1 per cent of working hours were lost in Asia and the Pacific during the first quarter of 2020, equivalent to 125 million full-time equivalent jobs (based on a 48-hour workweek), relative to the fourth quarter of 2019. The loss of working hours increased to 13.5 per cent in the second quarter of 2020.

With regards to job losses among youth in 2020, the report made working on two scenarios -3-month and a 6-month period owing to COVID-19 containment. Under the 3-month scenario, Young people in the 13 countries may lose the equivalent of 9.9 million jobs in 2020. Naturally, the largest losses are expected in countries with the largest workforce, but the start date of serious containment measures and the severity of restrictions also have an important impact. In India, the equivalent of 4.1 million youth jobs may be lost.  While in Pakistan about 1.5 million youth might be unemployed in three months.

It is pertinent to mention that short containment results are best viewed as a lower bound of job losses. They may be most realistic for countries that have avoided a serious outbreak such as Cambodia, Thailand and Viet Nam.

In the 6-month scenario, job losses among youth may reach 14.8 million in 2020.  The research projected that young people may likely see the equivalent of 6.1 million jobs in India, followed by Pakistan with 2.3 million. Indonesia may see lower job losses (1.9 million) than Pakistan, despite the former having a larger youth workforce. This is likely the result of higher concentrations of youth in badly hit sectors and lower labour productivity in Pakistan, the research assessed.

The youth unemployment rate may rise in all 13 countries but less than double in most.  In Cambodia, Fiji, Nepal, Pakistan, the Philippines and Thailand, youth unemployment rates are expected to reach at least double the 2019 estimates even in a scenario of short COVID-19 containment.

Overall, between 10 and 15 million youth jobs (full-time equivalent) may be lost across 13 countries in Asia and the Pacific in 2020. These estimates are based on the expected fall in output and consequent decrease in labour demand for the year relative to a non-COVID-19 scenario.

To address the youth employment crisis, the research suggested that governments in the region urgently need to adopt large-scale and targeted responses which include:

• providing youth-targeted wage subsidies and public employment programmes;
• expanding job information and employment services targeted to young jobseekers;
• supporting apprenticeship programmes and focusing on demand-driven skills development;
• increasing funds for upskilling and reskilling, especially in growth sectors;
• investing in digital inclusion for equitable access to education, training and entrepreneurship; and
• supporting young entrepreneurs through access to capital combined with non-financial services.

Further, the research also recommended responding to three cross-cutting issues into policies including reaching the most vulnerable youth including the poorest and marginalized young women, meaningfully engaging young people in policy development and social dialogue, and facilitating disaggregation of crisis impact data by age and enhanced youth labour market information.

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