A record number of young people are approaching working age in emerging markets and developing economies (EMDEs), creating a historic global jobs challenge. Generating sufficient job opportunities for this large wave of young people is not only a critical development challenge: it could represent a transformative economic opportunity. This blog explores the defining features of this demographic wave and outlines the importance of policies for job creation.
Over the decade between 2025 and 2035, 1.2 billion young people are set to reach working age in EMDEs. They will constitute the largest youth cohort in history, and will likely represent the peak of a long-building demographic wave (figure 1). Large numbers of young people live across EMDEs, but over time, their regional concentration is shifting. Notably, the youth population in Sub-Saharan Africa, and to an extent in the Middle East and North Africa, continues to increase rapidly, with both regions facing larger youth cohorts over the ten years to 2035 than ever before. In Sub-Saharan Africa, the number of young working-age people has already doubled since 2000, and by 2035, over 330 million 15-to-24-year-olds are expected to live in the region—nearly two-and-a-half times the figure in 2000.
The dynamics of the wider working-age population are also important in shaping demand for jobs, and offer a useful complementary perspective to youth-focused approaches. Working-age population measures both entries and exits to working age: those aging into the working age population, but also those leaving it (through migration, aging, or death). Like youth cohorts, the working-age population has been rising over time in EMDEs, and this increase is set to continue. However, this aggregate trend masks regional notable divergences, with the increase becoming more concentrated in three regions, and in Sub-Saharan Africa in particular.
Over the next quarter-century, out to 2050, Sub-Saharan Africa is projected to account for more than three-quarters of the increase in the global working-age population, adding an additional 625 million people (figure 2). The Middle East and North Africa is expected to see a substantial increase too, in both numerical and percentage increase terms, while South Asia is also forecast to add a large number of additional people, albeit at a slowing rate.
Patterns are different in other regions, with East Asia and Pacific tipped to see its working-age population fall by more than 200 million people over the next 25 years. Countries with stalled or falling working-age populations are not immune from job creation challenges: youth inactivity is often high and large numbers of young people will still enter the labor force in these economies, while global economic growth has followed a declining path, and evolving structural shifts could change how jobs are created.
Not all young people or working-age people have jobs, and a large number are neither in employment nor actively looking for work. Some are in education, while others remain outside the labor market for health, cultural, or other reasons. Even so, inactive people represent untapped economic potential. With a record number of young people approaching working age across EMDEs as a group, and with projected working-age population growth set to outstrip recent recorded employment growth in many EMDEs, this is an important concern.
Beyond the number of young people reaching working age and changes in the total working-age population, new analysis considers a range of different methods for further refining estimates of the number of new jobs that are likely to be needed in future. However, these refinements rest on layering additional assumptions about wider macroeconomic variables—economic growth, the growth elasticity of job creation, employment-to-working-age population ratios or labor force participation rations, for example—which add information but are themselves unknowable, especially over longer time horizons. These assumptions therefore also introduce additional uncertainty. However, it is clear that to deliver on countries’ full economic potential, most of the 1.2 billion young people approaching working age over the next decade will ultimately need jobs.
Economies with large shares of young people in their populations have typically seen inactivity among young working-age people rise (figure 4). Between 2013 and 2023, the share of young working-age people who were not in employment, education, or training in countries rose in almost three-quarters of countries with high youth ratios. Only one-third of other countries saw rising youth inactivity over the same period. This further underscores the challenge facing Sub-Saharan Africa. High youth inactivity against the backdrop of the youth surge and wider macroeconomic challenges puts a premium on effective policy action.
There is no silver bullet for solving this jobs challenge, nor is there a substitute for sound policies. Sustained job creation ultimately depends on reinvigorating output growth, underpinned by sustained strong investment. Policies can set the stage for creating jobs and unlocking the potential of young people, however. Three pillars offer a framework for policy makers and have often been associated with successful employment growth episodes: foundational infrastructure, a business-enabling environment, and private capital mobilization. In addition, the World Bank Group has identified five sectors with particularly strong potential for local, resilient job creation at scale looking ahead: infrastructure (including energy), agribusiness and farming, health, tourism, and value-added manufacturing. The details of each country’s optimal policy path, centered around the three-pillar framework, will depend on its comparative advantages and capacity.
The jobs challenge is daunting, but it also represents a huge opportunity, and there are important reasons for hope. Policies can shape outcomes, and case studies show that a range of countries have successfully delivered sustained increases in employment, often underpinned by the three pillars. Moreover, today’s young people have great potential, and are better educated, on average, than previous generations. Whether these young people can realize this potential will shape development progress over the coming decades. That is why the World Bank Group has placed jobs at the heart of its strategy.
Source : World Bank
