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This paper uses a new standardized micro database for a large set of developing countries to (1) describe the patterns of labor market outcomes for youth, and (2) explain the contributions of supply and demand factors to youth outcomes. The paper shows that youth face various difficulties in transitioning to work. This is reflected in their relatively higher unemployment rate, higher incidence of low paying or unpaid work, and a large share of youth who are neither working nor in school. This is especially true for young girls who are found outside the labor market, some engaged in home production. Finally, the paper also finds that cross-country estimates show that changes in the youth relative cohort size is unlikely to have a large effect on how youth are faring in the labor market.

Employment Outcomes --- Finding Work --- Health, Nutrition and Population --- High Unemployment --- High Unemployment Rates --- Jobs --- Labor --- Labor Demand --- Labor Force --- Labor Market --- Labor Market Demand --- Labor Market Indicators --- Labor Market Needs --- Labor Market Outcomes --- Labor Markets --- Labor Policies --- Population Policies --- Social Protections and Labor --- Unemployment --- Unemployment Rate --- Youth and Government --- Youth Employment --- Youth Labor --- Youth Unemployment --- Youth Unemployment Rate

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August 1995 - Applying mechanically active OECD labor policies in Hungary, Poland, and Russia makes no sense because the economies are so different. Which labor policies are realistic there? Training able workers in scarce, needed skills; easing credit for (and thereby encouraging) the self-employed; giving public jobs to problem workers and the long-term unemployed; and improving consultation services for the unemployed. Transition economies have introduced a range of OECD active labor market policies to combat unemployment - albeit often on paper only, as with rising unemployment passive policies have crowded out active ones. But even in the Czech Republic, active labor market policies have contributed only marginally to reducing unemployment. One task for policymakers in Central and Eastern Europe must be to convey the message that, even under the best circumstances, active labor policies can play only a marginal role in reducing unemployment. OECD labor policies cannot be applied mechanically in Central and Eastern Europe because the situation there is different. Severe and persistent shortages in capital and managerial ability are sure to keep labor demand weak in the medium term, while labor supply will be abundant. As enterprises are restructured and liquidated, the newly unemployed workers cannot be absorbed by the weak private sector and must compete for scarce jobs. Women and older, less educated men have particular trouble finding work. Which active labor policies does Lehmann suggest might be effective? Limited funds for active labor policies might best be spent retraining the most able unemployed workers to develop skills needed in the private sector. Public employment programs might be targeted especially to problem groups of workers and to the long-term unemployed - more for reasons of equity than of efficiency. The point is to have a clear idea whether both aims of efficiency and equity can be pursued and, if efficiency gains are unrealistic, whether equity considerations are politically indispensable. Because nontradable services are underdeveloped, Central and Eastern European countries might eliminate credit rationing that discourages self-employment (the self-employed have trouble getting financing). Improving consulting services for the unemployed in Hungary, Poland, and Russia makes more sense than applying a broad menu of OECD programs. The labor market in the Russian Federation appears to be more dynamic than in Hungary and Poland, but this is probably because of massive labor hoarding in Russian enterprises. Once they start shedding labor in earnest, their employment figures will look more like those in the other Central and Eastern European countries. This paper - a product of the Office of the Vice President, Development Economics - was prepared as a background paper for World Development Report 1995 on labor.

Active Labor --- Active Labor Market --- Active Labor Market Policies --- Active Labor Policies --- Employment Programs --- Finding Work --- Jobs --- Labor Demand --- Labor Markets --- Labor Policies --- Labor Supply --- Labour --- Labour Market --- Labour Market Policy --- Open Unemployment --- Private Sector --- Public Employment --- Rising Unemployment --- Social Protections and Labor --- Unemployed --- Unemployed Workers --- Workers