1.1 Context
Youth unemployment is a major policy challenge around the world. According to Global Employment Trends for Youth 2017 of the International Labour Organisation (ILO), 70.9 million young people were unemployed across the world (ILO, 2017). In the least developed and developing countries, the problem of youth unemployment is exacerbated by poverty and inequality. Competition from a rapidly growing labour force is also very high in these countries as the economies cannot create enough jobs. Due to inadequate social protection schemes and ineffective labour market policies, the youth have no choice but to rely on support from families. However, families themselves may often have limited resources to support them. Thus, in many cases, youth may find jobs in the low-paid informal labour market.
The young population of a country is its most important resource, as it can contribute to the countryâs economic and social development. If engaged in economic activities of the country in a well-coordinated manner, youth can be a formidable force in taking the country forward. On the contrary, if not addressed, youth unemployment can become a threat to the social, economic, and political stability of a country. This is because youth unemployment can result in demoralisation, depreciation in human capital, and social exclusion (Freeman & Wise, 1982). Unemployed youth may gradually lose their skills and become mentally frustrated or socially alienated (Freeman & Wise, 1982). Youth unemployment is associated with malnutrition and loss of self-confidence, which may lead to depression. Additionally, youth unemployment may instigate stress and strife within families. Prolonged periods of unemployment can be psychologically debilitating and increase chances of future unemployment or wage penalty (Bell & Blanchflower, 2009). Crime rates are found to be positively related to youth unemployment (Fougère, Kramarz, & Pouget, 2009).
The challenge of youth unemployment is also evident in Bangladesh. The Quarterly Labour Force Survey 2016â2017 of Bangladesh Bureau of Statistics (BBS) reveals that while the national unemployment rate is 4.2%, youth unemployment rate is as high as 10.6%. The share of unemployed youth in total unemployment is 79.6%. More strikingly, unemployment rate among youth with tertiary level education is 13.4% (BBS, 2018). The Quarterly Labour Force Survey 2016â2017 also indicates that unemployment is highest among youth with secondary level education (28%). Moreover, 29.8% of the youth are not in education, employment, or training (NEET). This implies that in Bangladesh, education is not empowering youth with the right skill sets to be deemed employable in the job market. Prevalence of such high unemployment among the young population implies that Bangladesh is being deprived of the contribution from this large workforce.
Thus, Bangladesh is not being able to benefit from âdemographic dividendââa concept that implies that as the share of working-age population increases, there will be a fall in the dependency ratio. Countries of East Asia could take advantage of such a demographic dividend, and thus, were able to grow very fast during the latter half of the twentieth century (Bloom & Williamson, 1998).
Bangladesh economy, at present, stands on a strong footing in terms of high growth of Gross Domestic Product (GDP). Steady growth has resulted in increased per capita income and reduced poverty level to some extent. Medium-term development strategies such as the Five Year Plans (FYPs) and sector-wise policies have contributed to such positive achievements. However, the weakness of such growth is now becoming increasingly obvious through inequality and joblessness. But the recognition of youth unemployment as an emerging problem for the economy, is absent among the policymakers. There is no concrete plan of action from the government in addressing such issues. Given that the private sectorâs contribution is higher in the economy, the major source of employment will be the private sector. The government has to provide policy support towards creating more jobs in the private sector. Additionally, the high youth unemployment in Bangladesh also provides an impetus for the government to create better public-sector employment and improve publicâprivate partnership. It is estimated that 2.1 million people will enter the working-age population annually in Bangladesh between 2013 and 2023 (The World Bank, 2013). If Bangladesh can gainfully employ its youth, it will be able to achieve rapid growth.
As Bangladesh is moving towards becoming a developing country, aspires to become a developed country by 2041 and is also committed to implementing Sustainable Development Goals (SDGs) by 2030, it is imperative for the government to ensure a decent income for its citizens by generating employment for them. This task is at the heart of the ethos of âLeave No One Behindâ (UN, 2015). The achievement of a number of SDGs such as SDG 1 (no poverty), SDG 2 (no hunger), SDG 3 (good health and well-being), SDG 4 (quality education), SDG 5 (gender equality), and SDG 8 (decent work) are closely dependent on employment generation for the youth.
In view of high youth unemployment and the governmentâs commitment towards fulfilling the SDGs, this study has been undertaken to understand what factors contribute to youth unemployment in the current economic and social context of Bangladesh and how to overcome the problem.
1.2 Objectives of the Study
The specific objectives of the study are the following:
- i.to provide an overview of trends in youth unemployment in Bangladesh
- ii.to empirically analyse the determinants of youth unemployment in the country
- iii.to recommend policy measures for employment creation to reduce youth unemployment in Bangladesh.
1.3 Methodology and Data
This study presents an analysis of youth unemployment in Bangladesh, both quantitatively and qualitatively. It is based on the cross-sectional data of the Bangladesh Labour Force Survey 2016â2017, conducted by BBS. The research uses regression models with categorical dependent variables. Some possible determinants of youth unemployment, such as education, experience, time spent in doing household work, marital status, asset ownership, number of children, and geographical region are employed. The objective is to find the marginal effect of each of these variables on the status of youth unemployment. Given that employment decisions are often made differently by male and female youth, estimation of separate models for each gender is considered, in addition to the overall estimation. More details on the quantitative methods adopted in the study are presented in Chapter 5.
To develop an understanding of issues that are not adequately captured by quantitative data, a total of 21 focus group discussions (FGD) were held across various regions of Bangladesh. The participants of the FGD were individuals between the ages of 18 and 35 years, and NEET. The participants of the FGDs were from diversified socio-economic and cultural backgrounds. Such diversification has been chosen carefully so that opinions a...