Policy highlights:

  • In order to solve market failures and address equity concerns, public interventions are needed to develop the skills of (unemployed) youth.
  • Active labour market programmes (AlMPs), designed to overcome market failures, often suffer from ‘government failures’ such as lack of accountability or insufficient resources. Public-private partnerships (PPPs) can help to overcome such government failures as well as ensure that the development of skills better reflects labour market needs.
  • To efficiently involve the private sector in youth skills programmes, programme designers and policymakers are recommended to: 1) actively engage employers in programme design and operation to ensure training curricula match with market demand; 2) incorporate soft skills, like cognitive and communication skills, in training programmes; 3) take into account the motivations and constraints facing the firms that are expected to participate; 4) include on-the-job learning as central part of training trajectories; 5) engage and support SMEs and informal firms in youth skills and employment initiatives; and 6) provide advice and technical assistance to businesses.
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