Making The Case Ml
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Transcript of Making The Case Ml
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ILO/GTZ/WHO/World Bank, Torino, October 2008
Making the case for investing in youth
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Your tasks
What do you need to do? Convince the Finance Minister to
invest in programs that benefit youth.
How can you do it? Think from the perspective of the
Finance Minister.
Use her language to make your point.
Base your argument on evidence.
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The Finance Minister
What does she care about? Economic growth
Jobs
Government balances
External balances
Politics
The entire economy, not just youth.
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The Finance Minister
What constraints and incentives does she face? The short run – election cycles may discourage
long-term human capital investments
A wide variety of interest groups – all of whom compete for limited resources
Political survival – she is sensitive to demands from her bosses and from the people
Fiscal space – limits how much she is able to spend
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The fundamental question:
How does your proposal achieve
her broader objectives (e.g. jobs,
growth) while satisfying her
constraints (e.g. short horizon,
political economy)?
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Three basic principles
Opportunity costs Not investing is costly Higher returns than to other investments
Financial and fiscal responsibility Reallocating resources to things that work
Political economy Policymakers are concerned about large
numbers of unemployed, disaffected youth.
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Opportunity costs
Resources are fixed – otherwise we’d spend money on everything.
We have to set priorities – some things we fund, others we don’t.
We want to invest in things that yield the greatest payoff.
Must understand costs and benefits.
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Endogenous opportunities
Positive externalities – your investments may provide benefits to other people and in other sectors.
Complementarity – investments now enhance the returns to future investments.
Dynamic “fiscal space” – what you do this year changes future opportunities.
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That’s fine, but why youth?
Demographic window of opportunity
New environment, new challenges Global integration
Changing labor demands
HIV/AIDS
Youth is when adult habits are established.
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The demographic window
Under-5 mortality rate per 1000 live births
0
50
100
150
200
250
300
1950 1960 1970 1980 1990 2000 2010
Sub-SaharanAfrica
Middle East &North Africa
South Asia
East Asia &Pacific
Latin America &Caribbean
Source: World Bank
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The demographic window
Year of Peak Youth Population
19501960
19701980
19902000
20102020
20302040
2050
Japan
Italy
Window closed
China
Chile
Window will close < 10 years
India
Bolivia
Window closes >10 years
Afghanistan
Uganda
Window has yet to open
Similar countries: Ethiopia, Niger, Timor Leste
Similar countries: Indonesia, Thailand, Kazakhstan, Iran
Similar countries: Ireland, Germany, France, Czech Rep.
Similar countries: Egypt, Colombia, Nicargua, Morocco
Year window opens
Year window closes
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The demographic window
Source: WDR
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Not investing can be costly
Change in GDP growth due to early school leaving
Source: World Bank 2007
-60
-50
-40
-30
-20
-10
0
Colombia Dominican Republic El Salvador Guatemala
Per
cen
t
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Not investing can be costly
HIV prevalence rate (%) in young (15-24) pregnant women
0
10
20
30
40
50
Source: UNAIDS
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Partly because youth don’t have the right information
0 20 40 60 80 100
MaliRwanda Nigeria
Burkina Faso Mozambique
Zambia Cameroon
Uganda NamibiaGhana Kenya
Tanzania
Male Female
Percent of young people who are aware of multiple ways to prevent HIV/AIDS
Source: DHS
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Partly because youth don’t have the right information
Percent of young women, 15-24, who can read a simple sentence or know condoms can prevent HIV/AIDS after six years of primary school
Inadequate preparation for adolescence improve quality of basic education
Relevance of education for jobs curriculum reform, flexibility in school systems
0
10
20
30
40
50
60
70
80
90
100
Ghana Zambia Ghana Zambia
Literacy Condom Knowledge
Source: DHS
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Information matters
Measured = actual earnings based on worker surveys
Perceived = earnings perceived by 8th grade boys if they finish primary or secondary school
Measured returns significantly exceed perceived returns
Program provided information campaigns in AND outside schools
Source: Jensen (2006)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
complete primary complete secondary
perceived measured
Perceived and actual benefits from schooling in the Dominican Republic
DR pesos per week
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to facilitate entry to work
Promote growth that leads to greater youth employment Reform institutions that inhibit job creation for and mobility of unskilled youth
Excessively high minimum wages or employment protection Opening up opportunities to migrate Source: WDR
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Annual cancer deaths, males, United States
Adult outcomes are a function of early choices
Source: WDR
0
10
20
30
40
50
60
70
80
1950 1955 1960 1965 1970 1975 1980 1985 1990
Dea
ths
per
100,
000
mal
es
Lung Oral cavity and pharynx Esophagus Larynx
NB: smoking peaked in 1945
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Smoking prevalence among youth
And in developing countries?
Source: WDR
0 10 20 30 40 50 60
Haiti
Uganda
Zambia
Kenya
Mexico
Armenia
Russia
Vietnam
Nepal
Indonesia
Percentage
Boys Girls
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0 5 10 15 20 25 30 35 40 45
NepalIndia
Burkina FasoMalaw i
MaliKazakhstan
ZambiaBenin
KyrgyzUgandaGhanaKenya
HaitiMorocco
Zimbabw eArmenia
CameroonColombia
NicaraguaBoliviaTurkeyEgypt
Percentage
Underweight Overweight
Girls more likely to be overweight than underweight
Source: WDR
Obesity and related diseases
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to close ineffective programs “boot camps” for young offenders, paying
teachers for test scores, migration restrictions
to promote effective programs public-private partnerships, community
governance, vouchers for services
to test potentially effective programs wage subsidies, apprenticeship programs,
entrepreneurship training, “life skills” training, “youth-friendly” services
Finally, use evidenceuse evidence
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Betcherman’s youth labour review
(14 of 289)
positive impact and cost-effective
positive impact
positive, objectively-measured
impact
WDR review of youth HIV evaluations
(6 of 300+)
And learn from learn from experienceexperience