Without timely solutions, the global labour market could face an alarming jobs gap over the coming decades, leaving hundreds of millions of young people in developing countries unable to find work.
The youth employment crisis is deepening across many regions, becoming an urgent socio-economic challenge for all countries. Alexander De Croo, administrator of the United Nations Development Programme (UNDP), has warned that around 1.2 billion young people will complete their education and enter the labour market over the next 15 years.
However, on current economic growth trends, the world is expected to create only 400 million new jobs, potentially leaving 800 million young people without work. This bleak forecast has led many experts to warn of the risk of an “ice age” in the labour market.
In developing economies, the challenge lies not only in unemployment rates but also in job quality. Unable to afford long job searches, many young people are forced to take informal or insecure work.
Research by the International Labour Organisation (ILO) shows that nearly 90% of workers aged 15-29 in low-income and lower-middle-income countries are employed in the informal sector. This keeps young people from securing stable incomes, pursuing career opportunities and accessing social protection.
Slowing economic growth, rising geopolitical tensions and rapid technological change are weighing on labour markets. The biggest constraint, however, is the lack of growth momentum in many economies, which leaves job creation unable to keep pace with the number of young people seeking work.
Ajay Banga, President of the World Bank Group, has described the imbalance as a multidimensional crisis with potentially serious consequences.
Youth unemployment is not merely an economic problem that wastes human resources and reduces labour productivity; it can also fuel social instability, strain social protection systems and drive up irregular migration.
Technological advances, particularly the rapid development of artificial intelligence (AI), are also reshaping the labour market.
Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has likened AI to a slow-moving tsunami gradually transforming the global jobs market, with recent graduates among those most vulnerable.
With limited experience, new entrants to the labour market often begin their careers in routine, mid-skilled jobs such as data entry, cashiering and administrative work. As AI spreads, these jobs are increasingly being taken over by automated systems, narrowing opportunities for young people.
A study by the Organisation for Economic Co-operation and Development (OECD) found that AI is profoundly changing the structure of employment but has not so far triggered the wave of mass unemployment predicted in many earlier forecasts.
The challenge today lies not so much in AI replacing humans as in whether the workforce can adapt to changing skill requirements and hiring practices. Against this backdrop, investment in lifelong learning and adaptability is key to helping workers, particularly young people, minimise risks and seize the opportunities of digital transformation.
Expanding employment opportunities for young people is an urgent need for maintaining social stability and one of the most important investments in any country’s development.
The ILO has called on governments and businesses to step up investment in job creation, improve workforce skills and support a smoother transition for young people from education to work. Only then can the global jobs gap be closed.
