Marco Biagi Foundation - University of Modena and Reggio Emilia ADAPT - CENTRE FOR INTERNATIONAL AND COMPARATIVE STUDIES CAPE TOWN, 27 MARCH 2008 PRODUCTIVITY, INVESTMENT IN HUMAN CAPITAL AND THE CHALLENGE OF YOUTH EMPLOYMENT IN THE GLOBAL MARKET Comparative Developments and Global Responses in the Perspective of School-to-Work Transition Prof. Michele Tiraboschi Director, Centre for International and Comparative Studies University of Modena and Reggio Emilia (Italy) -

(1)rethinking the employment of young people in the global market : how and why? (2) finding a way to make a good use of the existing indicators on youth employment in a comparative perspective (3) evaluating the traditional regulatory / job creation approach of labour law and its limits in responding to the challenge of youth employment and decent work in a global market (4) proposing a different legal, institutional and industrial relations perspective: working on the concept of school-to-work transition (at present a sort of no man’s land) (5) discussing the theoretical and practical implications of our proposal in terms of future developments in the scope and goals of labour law and industrial relations OUTLINE OF THIS PRESENTATION

-Young people and decent work: European v. African perspective -The paradox of employment of young people in an international and comparative perspective: (1) the most advanced economies are characterised by a progressive raising of the age at which young people enter the labour market, giving rise to significant social and economic problems in a context in which the population as a whole is ageing. High levels of youth unemployment, but also difficulties on the part of enterprises in recruiting employees for positions that tend to be rejected by the local population; (2) the economies of the developing countries are characterised by the opposite trend (large-scale and often brutal exploitation of the young workforce and by child labour, massive unemployment, lack of education). Large-scale migration: risk of impoverishing human capital in the country of origin RETHINKING THE EMPLOYMENT OF YOUNG PEOPLE

-The employment trends of young people: what do we know? -The ILO Report on Global Employment Trends for Youth 2006 : “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 a good use of indicators that already exist: labour force participation rates, employment ratios, employment by status and sector, unemployment rates, hours of work and poverty, long-term unemployment, underemployment ”. -The real challenge is how to use the data in an operational and planning perspective, adopting a real global perspective, considering the problems of both developing and developed countries due to the irreversible interdependence between the economies of the world UTILISING YOUTH EMPLOYMENT INDICATORS: HOW?

-Broad consensus among politicians, international institutions and experts on the fact that decent employment is the only route out of poverty, and that full and productive employment is the right track for economic and social development. The controversy is about the practical means to achieve this strategic objective. - Regulatory approach : plethora of international measures – such as the prohibition of child labour, measures relating to decent and productive work, etc. – that are of great symbolic value but largely ineffective in terms of their impact on the real economy, both in the advanced countries (characterised by high levels of employment protection) and in the developing countries (due to the nature of circumstances and objective economic conditions) - Excessive level of employment protection, safeguarding existing jobs rather than promoting employability on the labour market THE TRADITIONAL REGULATORY APPROACH: ITS LIMITS

- A number of studies, focusing on Active Labour Market Policies in the OECD area, have come to fairly negative conclusions about these policies, suggesting that they do not play a useful role in promoting employment for those with a low level of employability -Also in developing countries, where the impact of normative measures and the level of employment protection is much lower, the effectiveness of traditional job creation schemes has been called into question. As noted by the Regional Office for Africa of the ILO, “ although the aggregate resources that are being invested in the plethora of small-scale schemes are significant, their impact is barely visibile ” -In any case, the number of schemes in favour of young people, at least in sub-Saharan Africa, is small compared to other regions of the world, amounting to just 3% and lacking any evaluation JOB CREATION POLICIES?

THE CONCEPT OF SCHOOL-TO-WORK TRANSITION -School-to-Work perspective: addressing potential problems early has a greater return than when young people have left formal education while job creation schemes and labour law regulations are set up when the problem has reached a critical stage - Evidence from the evaluation literature suggests the biggest pay-off for youths comes from early and sustained interventions - The reform of education and vocational training is needed to improve the functioning of the bodies intended to promote employability, by means of networks, formal and informal, between international and local institutions, educational and training bodies, employers’ associations, undertakings or trade unions -The actors in each industrial relations system need to contribute to the design and implementation of education and training in line with the needs of the global labour market.

(1)The perspective outlined in the present study requires more in- depth analysis. However, we believe that the concept of school- to-work transition is in line with (and can make a significant contribution to) recent proposals that call for a theoretical reformulation of labour law and industrial relations extending and modifying their frame of reference. (2) Working in this direction is the only way to ensure that these disciplines can continue to play a significant role, in spite of international trends tending to marginalise them. (3) It is not our intention to turn away from the traditional protective function, but simply to highlight the fact that labour law and industrial relations concerns first of all matters of production and not only income distribution. A lack of growth has a negative impact not on enterprises but also on workers. IMPLICATIONS OF OUR PROPOSAL

(1)In the new economy the main source of the wealth of nations is their endowment of human capital. Human capital is the key to growth and development, and the engine for change. (2)Compared to the European countries and the other western nations with an ageing population, most African nations are endowed with enormous wealth. (3)In order to avoid wasting this precious resource, there is a need to manage it not simply by legal regulation, 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. (4)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. FINAL REMARKS

HUMAN CAPITAL AND LABOUR MARKET (United Nation)

HUMAN CAPITAL AND LABOUR MARKET (our proposal)