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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Bibliographic Details
Main Author:	Cunningham, Wendy
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ADOLESCENTS ADULT MALES ADULT MEN ADULT WOMEN ADULT WORKERS AGE CATEGORIES AGE GROUP AGE GROUPS APPRENTICESHIP ATTRITION AVERAGE UNEMPLOYMENT ECONOMIC ANALYSIS EMPLOYMENT OUTLOOK EMPLOYMENT PROGRAM EMPLOYMENT STATUS EMPLOYMENT TRENDS FINDING EMPLOYMENT GENDER GAP HIGH UNEMPLOYMENT HIGH UNEMPLOYMENT RATES HOUSEHOLD INCOME HUMAN DEVELOPMENT INFORMAL SECTOR JOB EXPERIENCE JOB SEARCH JOB TRAINING JOB TURNOVER JOBS LABOR ECONOMICS LABOR FORCE LABOR FORCE ATTACHMENT LABOR MARKET LABOR MARKET TURNOVER LABOR MARKETS LABOR TURNOVER LABOUR LOW UNEMPLOYMENT LOW UNEMPLOYMENT RATES MALE YOUTH MODERATE UNEMPLOYMENT MOTIVATION NUMBER OF PEOPLE OLDER ADULTS PERMANENT JOB POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR FAMILIES POOR HOUSEHOLDS POOR PEOPLE PRESENTS UNEMPLOYMENT PRIME AGE PRODUCTIVE ACTIVITIES PRODUCTIVITY PROGRESS RETIREMENT SALARIED EMPLOYMENT SCHOOL AGE SECONDARY SCHOOL SEX SOCIAL ISSUES SOCIAL SECURITY TEENAGERS TOTAL LABOR FORCE TOTAL UNEMPLOYMENT UNEMPLOYED UNEMPLOYED POOR UNEMPLOYED YOUTH UNEMPLOYMENT DURATION UNEMPLOYMENT DURATIONS UNEMPLOYMENT SPELL UNEMPLOYMENT SPELLS UNEMPLOYMENT TRANSITION URBAN AREAS WAGE EMPLOYMENT WAGE SUBSIDIES YOUNG ADULT YOUNG ADULT WOMEN YOUNG ADULTS YOUNG MEN YOUNG PEOPLE YOUNG PERSON YOUNG WOMEN YOUNG WORKERS YOUTH YOUTH LABOR YOUTH POPULATION YOUTH RATES YOUTH UNEMPLOYMENT YOUTH UNEMPLOYMENT RATE YOUTH UNEMPLOYMENT RATES YOUTH VIOLENCE
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

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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.

Unpacking Youth Unemployment in Latin America

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