Youth Unemployment Declines in Latin America Amid Challenges

Youth unemployment in Latin America and the Caribbean dropped to 13.6% in 2023, continuing a three-year downward trend. Despite these improvements, significant challenges, particularly gender disparities and informal employment, remain across the region.

In 2023, the youth unemployment rate in Latin America and the Caribbean fell to 13.6%, marking the third consecutive year of improvement. This data, released by the International Labour Organization (ILO), reflects a region that has been resilient in the face of the severe economic impacts brought on by the COVID-19 pandemic. While this trend is encouraging, the area still faces substantial challenges, particularly in addressing gender disparities and the prevalence of informal employment among young workers.

The ILO report emphasizes that, despite being one of the regions most affected by the pandemic regarding job loss among young people, Latin America has consistently recovered youth employment. The progress made since 2019 is significant, with the unemployment rate dropping by three percentage points from pre-pandemic levels. However, the recovery has not been uniform, and many young people, especially women, continue to face significant barriers in the labor market.

Sara Elder, head of the ILO’s Employment Analysis and Economic Policies Unit, highlighted the positive developments in youth employment across the region. “Latin America is doing very well in youth unemployment, with the rate dropping by three percentage points compared to 2019,” Elder noted during the report’s presentation. This improvement has translated into around 6.8 million unemployed young people in the past year—a significant reduction from the 9.4 million reported in 2019.

Despite these improvements, the youth unemployment rate in the region remains higher than the global average. The ILO report predicts the rate will stabilize at 13.6% this year, with a slight decrease to 13.4% expected by 2025. While these figures suggest continued progress, they also underscore the need for sustained efforts to create more opportunities for young people in the region.

Gender Disparities: An Ongoing Challenge

One of the most concerning findings of the ILO report is the persistent gender disparity in youth unemployment. In 2023, the unemployment rate for young women was 16.6%, compared to 11.6% for young men. This gap highlights the slower recovery that young women have experienced compared to their male counterparts.

The gender gap is particularly pronounced among the so-called “ninis” (young people who are not in education, employment, or training). According to the report, 26% of young women in Latin America and the Caribbean fall into this category, nearly double the 13.6% of young men. This stark difference points to the broader structural issues that continue to hinder women’s full participation in the labor market.

Young women in the region often face a double burden of economic and domestic responsibilities, which limits their ability to engage in the workforce. The ILO’s findings suggest that without targeted policies to address these challenges, the gender gap in youth employment is unlikely to close shortly.

Another significant issue highlighted by the ILO report is the high level of informal employment among young people in Latin America. Gilbert Houngbo, the ILO’s Director-General, expressed concern over the rise of “insecure” work, which refers to jobs not officially recognized or protected by labor laws. He warned that this type of employment is becoming “the norm” in the region, with approximately half of all employed young people working in informal jobs.

Informal employment poses several risks, including lower wages, lack of job security, and limited access to social protections. For young workers, who are often entering the job market for the first time, the prevalence of informal employment can have long-term consequences for their economic stability and career development.

Houngbo’s warning underscores the need for policies that promote the transition from informal to formal employment, particularly for young people. This includes creating more formal job opportunities, improving access to education and training, and strengthening labor laws to protect young workers from exploitation.

Addressing Inequalities and Promoting Inclusion

While the overall trend in youth unemployment is positive, the ILO report clarifies that more needs to be done to ensure that all young people in Latin America and the Caribbean can benefit from the region’s economic recovery. Addressing the gender disparities in employment and tackling the issue of informal work is critical to building a more inclusive and equitable labor market.

To achieve this, governments in the region must prioritize policies that promote equal opportunities for young men and women. This includes investing in education and training programs that are accessible to all, providing support for young entrepreneurs, and implementing measures to reduce the barriers that prevent women from fully participating in the workforce.

In addition, efforts to formalize informal employment should intensify. This could involve offering incentives for businesses to hire young workers on formal contracts, strengthening labor law enforcement, and expanding access to social protections for informal workers. By addressing these issues, Latin American countries can create a more stable and prosperous future for their young populations.

Reducing youth unemployment in Latin America and the Caribbean is a positive development, reflecting the region’s resilience in the face of significant challenges. However, the progress made so far is fragile, and much work remains to ensure that all young people can benefit from the region’s economic recovery.

The persistent gender disparities and the rise of informal employment are particularly concerning and require urgent attention. By addressing these issues, the region can build a more inclusive and sustainable labor market that provides opportunities for all young people to thrive.

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As Latin America and the Caribbean continue to recover from the pandemic, the ILO’s report reminds us that progress must be measured not only by the overall reduction in unemployment but also by the quality of jobs created and the inclusivity of the labor market. The region can hope to build a brighter future for its young people by tackling the deep-rooted inequalities that persist.