Productivity, Investment in Human Capital and the Challenge of Youth Employment in Sub-Saharan Africa: Comparative Developments and Global Responses in the Perspective of School-to-Work Transition

Abstract

Framing the issue: In an international and comparative perspective, access to labour market information and the labour market on the part of young people is a complex issue with certain contradictory aspects reflecting the degree of development or nature of labour law and industrial relations in the respective countries. In the most advanced economies there has been a steady increase in the age at which young people enter the labour market, giving rise to significant economic and social problems. The increase in levels of educational attainment is associated in some cases with an alarming rate of unemployment among those with academic qualifications, while employers encounter considerable difficulty in recruiting workers for unskilled and semi-skilled positions. The economies of developing countries, on the other hand, are characterised by different trends, that bring to mind the early stages of modern labour law, with in some areas the large-scale exploitation of young workers and children, many of whom join the flow of migrants towards the more highly developed regions of the world, with the consequent risk of impoverishing human capital in the country of origin. Furthermore, the current economic crisis has added a considerable amount of pressure on economies across the globe, whether in the developed or developing world. Those most vulnerable in the labour market such as the young, have felt the brunt of the loss of employment, and the lack of efficient employment opportunities. The two issues this paper aims to address is whether there is a way to draw a connection between the two trends in the developing and developed world, in order to overcome these imbalances in a global perspective, and the challenge for African states to take advantage of our technological age and make available labour information to pertinent stakeholders in local labour markets.Methodology and theoretical framework: This study adopts a comparative approach, based on the latest economic data on youth employment from ILO, OECD surveys and the AfDB working papers. The aim is to identify a perspective for tackling the issues of productivity and youth employment in a global dimension. It is proposed to make use of the school-to-work perspective, a concept that has so far attracted little attention from industrial relations and labour law scholars. The choice of this method follows on from an examination of the reasons for this marginal role. In the first place employment policies adopted until now have had a merely local and/or national application, whereas overcoming the gap between the wealthiest and the poorest regions of the world requires a global approach, strengthening the link between education and training on the one hand, and the labour market on the other. In the field of industrial relations and labour law, the school-to-work perspective seems particularly suitable for policy formulation and assessment, creating an avenue towards accountability of policy makers. This perspective makes it possible to examine issues such as productivity, investment in human capital, youth unemployment and underemployment. Although it is innovative, and requires further verification, it is a perspective in line with the theoretical insights of recent labour law research aimed at extending the scope of labour law and industrial relations, underlining the key role that these disciplines can play, in contrast with an international trend to relegate them to a marginal role.Findings: In light of the recent economic recession that we are emerging from, international organisations call for a re-thinking and evaluation of industrial relations systems. The ILO Report on “Global Employment Trends for Youth 2006” argued that for further expansion of the youth employment knowledge base, there is a need not to devise new indicators, but rather to find a way to make use of existing ones. Revisiting the usage of labour market information systems or labour market observatories at national and local level in light of increasing access to information communication technology across the African continent should be taken into consideration. Although data collection can always be improved, it seems that the real challenge is how to use the data in an operational and planning perspective. These indicators are of real value only if they are placed in a global perspective, considering the problems of both developing and developed countries, reflecting the global structure of the modern economy. The argument put forward in this study is that there is a common method, applicable to any context: the perspective of the school-to-work transition, providing lawmakers and industrial relations actors with the means to identify the legal and institutional measures for tackling the complex issues of youth employment.Conclusions/Recommendations: When applying the school-to-work transition concept to legal and industrial relations methods, in a comparative framework, it becomes clear that the improvement of human capital, work productivity and effective measures to deal with the problems of youth employment can be achieved only if policies are designed to cover the phase prior to entry into the labour market, i.e. the education and training phase. In fact, the policies applied to the labour market take into consideration only a given labour force, in developing countries this is often those in the formal economy, although the informal sector absorbs most workers. These policies should be informed by recent and accurate labour market information. Furthermore, the solution of the structural problems of youth employment, and particularly their impact on the gap between wealthy and poor regions is not considered by these policies. On the other hand, a method enabling us to tackle such problems at an earlier stage, in order to design education and training to respond to the demands of the rapidly changing global labour market, might contribute to solutions for the governance of international flows of labour in the long run. This strand of research will only develop its full potential if it succeeds in adopting a holistic vision linking the worlds of education and employment, moving beyond the traditional conception of legal measures and industrial relations, and education and training systems, that have until now been considered as two separate spheres, studied by specialised research groups who are separate from and not in communication with each other. A modern vision of the relations between education and training on the one hand, and socioeconomic development on the other, leads to the development of policies and programmes that take account not only of the demand for labour, but also of the quality of the labour supply. It is only by means of integration between education and training, and the world of work that it will be possible to deal in global and pragmatic terms with the problem of youth employment and a balanced development of human capital in all regions of the world. It is undoubtedly the case that the availability of adequate education and vocational training is a key factor in the allocation of resources on the part of investors, with an impact on the quality of employment. Investors do not set up businesses of good quality (that is to say, not aiming merely to exploit low-cost labour) in regions where there is a lack of personnel with the skills required to run the business. This means that the response to the problem of youth employment must be based on the construction of a system of education and vocational training. In addition to this, making better use of labour market information by educators, employers, governments, and employees themselves is likely to smooth the school-to-work transition for many young people in their own country and abroad. These are the real investment assets that generate income, productivity, development, social mobility and, last but not least, decent work.Final remark: In the new economy the main source of the wealth of nations is their endowment of human capital. Indeed, human capital is the key factor for growth and development, and the engine for change. From this point of view, compared to the European countries and the other western nations with a rapidly aging population, most African nations are endowed with enormous wealth. In order to avoid wasting this precious resource, there is a need to manage it not simply by means of legal regulation that may or may not produce results, but also by means of a reform of the education and training systems on a global scale that should be entrusted to the social partners (unions and employers). Furthermore, the availability to stakeholders in the labour market, of labour market information should not be underestimated in its ability to smooth the school-to-work transition. This appears to be possible only if we are prepared to rethink the role and functions of industrial relations, that need to make a contribution to the modernisation of education and training, closing the traditional gap between school and work through innovative and unique measures.