Unpacking Youth Unemployment in Latin America
High youth unemployment rates may be a signal of difficult labor market entry for youth or may reflect high churning. The European and United States literature finds the latter conclusion while the Latin American literature suggests the former. Thi...
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| Language: | English |
| Published: |
2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090824083220 http://hdl.handle.net/10986/4218 |
| Summary: | High youth unemployment rates may be a
signal of difficult labor market entry for youth or may
reflect high churning. The European and United States
literature finds the latter conclusion while the Latin
American literature suggests the former. This paper uses
panel data to examine whether Latin American youth follow
OECD patterns or are, indeed, unique. By decomposing
transition matrices into propensity to move and rate of
separation matrices and estimating duration matrices, the
authors find that Latin American youth do follow the OECD
trends: their high unemployment reflects high churning while
their duration of unemployment is similar to that of
non-youth. The paper also finds that young adults (age
19-24) have higher churning rates than youth; most churning
occurs between informal wage employment, unemployment, and
out-of-the labor force, even for non-poor youth; and
unemployment probabilities are similar for men and women
when the analysis control for greater churning by young men.
The findings suggest that the "first employment"
programs that have become popular in the region are not
addressing the key constraints to labor market entry for
young people and that more attention should be given to job
matching, information, and signaling to improve the
efficiency of the churning period. |
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