The Youth Bulge in Timor-Leste

Some interesting facts to get your attention. According to the most recent National Census data:

·       37% of the working-age population of Timor-Leste is aged between 15 & 24.  This percentage is among the highest in the world.

·       Every year around 30,000 young people complete their education, with most of these looking to enter the workforce in some form.

·       The vast majority of these young people do not end up in formal employment - some will become fulltime parents or carers, many will work in rural areas on the family land, others will find other forms of informal employment, and some will spend a long time looking for work with no success.  There is a big challenge of unemployment and underemployment amongst youth and young adults in Timor-Leste.

·       Our best estimate is that the unemployment rate among 15-24 years old looking for work is around 33% - one person in 3 in that age group cannot find work of any form. 

Earlier in 2021, the Monash team spent some time working on a report covering this challenge of youth unemployment and youth underemployment.  We will share a few posts here that talk about some of the main findings and proposals for how to move forward. 

In this first post, we will summarise the main themes covered in the report. 

First, the fertility story: Timor-Leste went through a period of rapid growth in the number of births in the years post-1999.  For example, in 2004, 45% of the population of the country were aged below 15.  This boom in births has translated to a very large number of youth and young adults entering the labour market in recent years - the Youth Bulge.

We have also used the 2015 census data to measure vulnerability among young people, and there are some areas of big concern: in 2015, 14% of 20-24 year-olds have never attended school, 15.7% of young people (aged 15-24) were reported as illiterate. And there is a huge variation in illiteracy by municipality - 5% in Dili, up to 30% in Oecusse.  Young people with poor educational outcomes have virtually no employment prospects apart from being own-account workers on the family land.

 

What are the paths to creating employment for young people?

 

Path 1: Creating Jobs

Where will the new employment opportunities come from?

As we look at the sectors of the economy, there are a few areas where the prospects for creating new jobs are pretty limited:

·        Government Public Sector –

Already Timor-Leste has a large public service, and future budget challenges mean its not likely to grow much.

·        Oil and Gas –

The petroleum sector has been an amazing source of government revenue in the past, funding most of the budget.  But it does very little to create jobs, being so highly capital-intensive.

 

There are other sectors where employment possibilities exist, but are still not likely to be at high levels or grow quickly:

·        Formal sector private businesses –

Currently, these businesses employ over 50,000 Timorese.  Strong growth in this sector will help, but even at really healthy sustained economic growth, formal businesses are only going to create a few thousand jobs at best.  We can’t rely solely on growth in the formal private sector.  Having said that, with strategic investment, some employment-generating industries can produce a steady flow of new employment.  This includes: Accommodation and Food services, Education and Construction.

·        Overseas Employment –

Thousands of families have found new economic opportunities through overseas employment for their young adults.  There is scope for some expansion here, but in a post-COVID-19 environment, progress is likely to be slow and steady at best.

 

Here is where the sizeable growth can be driven …

 

·        Agriculture –

The sector that provides main source of work for 60% of adults, including plenty of youth and young adults, and almost all are low-income traditional farmers. The scope for new opportunities and growing incomes for young people here is huge. But its going to take some smart strategies to attract young people to a new form of productive agriculture.

 

·        Microbusinesses, small entrepreneurs, informal businesses -

75% of workers in Timor-Leste are self-employed / own account workers - mostly in agriculture, but in other sectors too.  Following trends in other countries, there is plenty of scope for growth in small business self-employment opportunities in non-agricultural sectors. Sizeable growth in microfinance access provides one key to seeing this happen - more on this in a later article.

 

·        Government work programs –

are these a good idea for Timor-Leste, especially with a focus on new opportunities for young people?  I don’t know, but do think it’s an important area to look at more closely - some small steps forward might be wise.

 

Path 2: Helping People be Job-ready

 

The more job-ready young people are, the more employment opportunities will open up for them.  International experience suggests that a key factor in determining outcomes is in the quality of labour that is provided.  For Timor-Leste, this comes down to:

 

1. Continued improvements in the quality of basic education, from pre-school through to secondary school.  There is a long way to go here, but some great examples to follow within Timor-Leste.
   
   
2. Ongoing investment in vocational training and in tertiary education.  But again, the priority is not expanding the amount of training, the greater need is with improving the quality.  Perhaps some creative funding approaches can help with this.

 

Investing in human capital is a long, slow process - there’s no time to waste!

 

There is more to write and say on all of these topics - keep reading as we go into more detail in later blogs, or look at the full report in the Reports section of monashintimor.org.  I feel hopeful that the future of Timor-Leste is in great hands with this emerging generation of young adults ready to do their bit in taking their country to the next stages of development …