1212thth National PESO Congress National PESO Congress

October 10-13. 2012October 10-13. 2012Baguio Country Club, Baguio CityBaguio Country Club, Baguio City

Helping Filipino Youth to a Good Start : Helping Filipino Youth to a Good Start :

Design of a youth employment facilitation Design of a youth employment facilitation programprogramKelly BirdKelly Bird

Principal EconomistPrincipal Economist

Asian Development BankAsian Development Bank

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Situation of youth in the Philippine labor Situation of youth in the Philippine labor market – some stylized factsmarket – some stylized facts

Evidence on the youth transition from Evidence on the youth transition from school-to-workschool-to-work

Lessons learned from international Lessons learned from international experience with youth employment experience with youth employment programsprograms

MyFirstJob Project Design FeaturesMyFirstJob Project Design Features

Overview of Presentation Overview of Presentation

(3) Unemployment in the Philippines is relatively high

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2007 2008 2009 2010

Indonesia Philippines Malaysia Thailand

Brazil Mexico Turkey

(5) Shift in the demand for labor in the Philippines

(percentage change in share of total employment, 2001 to 2008)

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-3

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-1

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Informationrelated

Sales/service Production andtrades related

Farm andelementary skills

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Youth School to Work Youth School to Work TransitionTransition

• The better the links between school and the labor market, the faster the transition from school to work for young people

500 households and over 1500 individuals (15 500 households and over 1500 individuals (15 to 65 years)to 65 years)

Construct transition indicators of young Construct transition indicators of young persons experience from school to workpersons experience from school to work

Median time to find a jobMedian time to find a job Time path of this transitionTime path of this transition How fast is this transitionHow fast is this transition Factors that influence this transitionFactors that influence this transition

Where do young find jobsWhere do young find jobs Ease of mobility between formal and Ease of mobility between formal and

informal employmentinformal employment

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2009ADB household survey in Manila and Cebu2009ADB household survey in Manila and Cebu

Youth School to Work Youth School to Work Transition – Main findingsTransition – Main findings

• The school to work transition is characterized by a lot of uncertainty for young Filipinos

• The transition to work is particularly slow for those with high school qualifications or less

• And for young females from lower socio-economic groups

Youth School to Work Transition –Youth School to Work Transition –Median time to find a jobMedian time to find a job

All youth – 2 years to find any job and 3 All youth – 2 years to find any job and 3 years to find a wage jobyears to find a wage job

High school or less – 3 years to find any job High school or less – 3 years to find any job and 4 years to find a wage joband 4 years to find a wage job

At least some college education – 1 year to At least some college education – 1 year to find any job and 2 years to find a wage jobfind any job and 2 years to find a wage job

OECD median is 1.1 years to find a wage job, OECD median is 1.1 years to find a wage job, with Australia, US, Finland with less than 1 year with Australia, US, Finland with less than 1 year and Italy, Greece and Spain recording 2.3 years and Italy, Greece and Spain recording 2.3 years or moreor more

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Youth School to Work TransitionYouth School to Work Transition– – Time PathTime Path

Youth Employment Rates 1, 5 and 8 years since leaving schoolYouth Employment Rates 1, 5 and 8 years since leaving school

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60

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1yr 5yrs 8yrs

Number of years after leaving initial education

All youth High school graduates College graduates

Factors that influence the school to work transition

• Education gap – statistical analysis shows that high school graduates and HS undergraduates have a slower transition from school to work compared to college graduates

• Age gap – teenagers have a more difficult time integrating in the labor market compared to youth

• Gender gap – females have a moderately more difficult time finding a first job

• Economic gap - family background also influences the transition with young persons from lower socio-economic groups experiencing longer transition from school to work

Where do young persons find jobs?Where do young persons find jobs?

Most (70%) college graduates find wage Most (70%) college graduates find wage employmentemployment

About half of young persons with high school About half of young persons with high school education education find wage employmentfind wage employment

Teenagers (15 to 19 y/o) enter unpaid family work Teenagers (15 to 19 y/o) enter unpaid family work or or employment in private households employment in private households

Young women with high school education or less Young women with high school education or less are are more likely to enter these precarious forms of more likely to enter these precarious forms of employmentemployment

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Youth School to Work TransitionYouth School to Work Transition– – Youth mobilityYouth mobility The young person’s first job matters in influencing The young person’s first job matters in influencing future employabilityfuture employability

If your first job is in the formal sector, then you If your first job is in the formal sector, then you have a 50% chance of finding your next job in have a 50% chance of finding your next job in the formal sectorthe formal sector

If you first job is in self employment, then you If you first job is in self employment, then you have a 70% chance of staying in self have a 70% chance of staying in self employmentemployment

Temporary wage contracts are a steeping stone Temporary wage contracts are a steeping stone in to formal employment for many young in to formal employment for many young personspersons

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Helping Young Filipinos Get a Good Start in the

Labor Market

• High school graduates or drop outs• Lower socio-economic groups• Young females

Examples of Youth Employment Facilitation Programs

• Job search assistance programs – Public employment offices– Outsourced to private employment offices

• Training programs for young persons having difficulty integrating into the labor market– Provisioned through training providers

• Wage subsidies for employing young persons at entry level positions

• Public job creation schemes

Lessons Learned from International Experience

• Monitoring and evaluation of programs is necessary to allow for adjustments to program

– Programs should be assessed on their net benefits of the program

• Benefits = higher employment rates and higher incomes of program participants compared non-participants

• Costs = admin costs of programs and risks of employment displacement

Lessons Learned from International Experience

• Programs with a mix of strategies tend to perform better than programs with a main strategy

– Programs that include job search assistance, counseling, vocational training and wage subsidies tend to perform better in terms of employment rates and higher incomes over the medium term

– Example: Joven program in Latin America– JobStart in UK

Lessons Learned from International Experience

• Programs with well defined target group tend to do better than general targeting

– High school graduates or drop outs, socio-economic disadvantaged groups etc

Lessons Learned from International Experience

• Programs with activation strategies tend to do better– Encourage young persons to job

search early in the unemployment spell

– Active monitoring of job search activities and linked to benefits

Lessons Learned from International Experience

• Readiness of public employment offices– Good governance structure– Well trained staff– Well resourced

Proposed MyFirstJob Pilot ProjectProposed MyFirstJob Pilot Project

Background:Background:

Collaboration between ADB and DOLECollaboration between ADB and DOLE MyFirstJob draws on successful youth MyFirstJob draws on successful youth

employment programs in Latin America (i.e., employment programs in Latin America (i.e., Joven program in Chile), Canada, UK, and Joven program in Chile), Canada, UK, and several European countries.several European countries.

MyFirstJob is at the design stage and we aim to MyFirstJob is at the design stage and we aim to pilot in 2013pilot in 2013

Executing agency is Department of labor and Executing agency is Department of labor and EmploymentEmployment

Implemented through selected PESOsImplemented through selected PESOs Funded through a grant from Canada Funded through a grant from Canada

International Development AgencyInternational Development Agency26

MyFirstJobMain features

• Counseling services provided to participants in Counseling services provided to participants in the programthe program

• Grants for vocational education (4 weeks and Grants for vocational education (4 weeks and 6 months)6 months)

• Grants/wage subsidies for job internships with Grants/wage subsidies for job internships with public and private sector employers (up to 12 public and private sector employers (up to 12 months)months)

• M&E framework – LM performance of the 1,500 M&E framework – LM performance of the 1,500 beneficiaries and a similar sized control group beneficiaries and a similar sized control group will be evaluatedwill be evaluated– Results will inform GOP on a larger pilot. Results will inform GOP on a larger pilot.

THANK YOUTHANK YOU