Interventions to Improve the Labour Market Outcomes of Youth: A Systematic Review of Training, Entrepreneurship Promotion, Employment Services and Subsidized Employment Interventions

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Background

Today’s labour market is a challenging arena for young people. Over 73 million youth are currently unemployed and many more are affected by vulnerable employment and working poverty. Youth remain highly susceptible to changing patterns in the world of work and experience slow and difficult transitions to stable jobs. What works to support them in the labour market? This is one of the most common and pressing questions posed by policymakers and practitioners today. Yet few overview or cross-country studies review and analyse the impact of Active Labour Market Programmes (ALMPs) on youth labour market outcomes.

Objective

The aim of this systematic review was to investigate the impact of youth employment interventions on the labour market outcomes of young people. The review looked at the available evaluation evidence in a systematic and rigorous manner in order to fill the knowledge gaps relating to the effectiveness of the various types of youth-targeted interventions in different contexts. The systematic review is registered with the Campbell Collaboration  , supported by the International Initiative for Impact Evaluation (3ie) , and conducted by the ILO in collaboration with the World Bank and the Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI).

Methods

This systematic review  and discussion paper  synthesize empirical evidence on the labour market outcomes of youth employment interventions worldwide. Interventions comprised skills training, entrepreneurship promotion, employment services, and subsidized employment. Outcomes of interest included employment, earnings and business performance. A comprehensive systematic search for relevant evidence across more than 70 sources, using search terms in English, French, German, Portuguese and Spanish, identified over 30,000 records that were screened according to the review’s inclusion criteria. For the selected studies that met the inclusion criteria, treatment effect estimates were coded and standardized mean differences (SMDs) were computed. The search process was completed in January 2015. The analysis explores the interventions’ overall effectiveness and the roles that context, evaluation and programme design and implementation play in determining impact.

Results

The systematic review and meta-analysis is based on evidence from 113 counterfactual-based impact evaluations  of 107 active labour market programmes in 31 low-, middle- and high-income countries. The ILO Evidence Gap Map  provides an overview of the available evidence by type of active labour market programme and labour market outcomes. Meta-analysis methods were employed to synthesize the evidence, based on 2,259 imputed effect sizes (SMDs). Overall, empirical results indicate positive treatment effects that are statistically different from zero on labour market outcomes. In other words, investing in young people through active labour market programmes pays off with positive impacts particularly on employment and earnings outcomes. This impact does not take effect immediately and is more pronounced among low- and middle-income countries than among high-income countries. 

Implications

Active measures to support the (re)intregration of young women and men into the labour market succeed in enhancing employment and earnings outcomes and have potential to increase human capital and employment prospects in the long-term. The evidence suggests that the type and design of youth employment intervention is important and is strongly influenced by the income level of the country. Programme evaluations generally show larger effect sizes in low- and middle-income countries than in high-income countries. Multi-pronged measures are shown to be effective in tackling the many barriers to success facing youth in the labour market, particularly in low- and middle-income countries, where skills training and entrepreneurship interventions have prompted significant improvements in youth employment and earnings outcomes. Targeting towards disadvantaged youth and features such as participant profiling, participant engagement mechanisms and incentives for service providers are positively correlated with a larger magnitude of impact. The results appear robust in terms of the quality of the underlying evidence. The review did not find differential treatment effects by gender or age.

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