A looming global jobs gap tests the promise of young populations

The brief in 5 cards

1. Context1 / 5
   • A recent opinion piece warns of a widening gap between the number of young people entering the workforce and the number of jobs being created, especially in developing countries.
   • World Bank President Ajay Banga has said that about 1.2 billion young people in developing countries will reach working age over the next 10 to 15 years, while current projections suggest only about 400 million jobs, leaving a gap of nearly 800 million.
   • The International Labour Organization (ILO) reports global unemployment steady at 4.9%, but youth unemployment rising to 12.4% in 2025, and 20% of young people classed as NEET.
   • The author argues that automation, weak structural transformation and skill gaps could turn a demographic dividend into a burden, unless job creation becomes an explicit goal.
2. Key highlights2 / 5

   The table below brings the headline figures together. The World Bank and the ILO measure different things, so their figures are not directly comparable.

   Indicator	Figure	Institution and period
   Young people reaching working age in developing countries	about 1.2 billion	World Bank, next 10 to 15 years
   Jobs projected in the same economies	about 400 to 420 million	World Bank, same period
   Global unemployment rate	4.9%, about 186 million people	ILO, projection for 2026
   Global jobs gap, those who want paid work but lack it	about 408 million	ILO, projection for 2026
   Global youth unemployment, ages 15 to 24	12.4%, about 67 million	ILO, 2025
   Youth not in employment, education or training	20%, about 257 million	ILO, 2025
   Workers in informal employment	about 2.1 billion	ILO, 2026

   • Why low unemployment can mislead. A headline rate of 4.9% hides underemployment, informality and low wages. Many people work, but in insecure and poorly paid jobs.
   • Who is most affected. Women make up more than two-thirds of NEET youth. Nearly nine in ten young workers in low- and lower-middle-income countries work informally.
3. Key concepts3 / 5

   1. What is the demographic dividend?

   The growth boost a country can get when its working-age population is large relative to its dependants. It is a window, not a guarantee. If the young cannot find productive work, a large youth population becomes a strain instead. Think of a field ready for sowing: the harvest depends on whether anyone plants it.

   2. What is premature deindustrialisation?

   When manufacturing's share of jobs begins to fall at lower income levels than it did in today's rich countries. In East Asia, factories absorbed workers leaving the farms. Automation now lets factories produce more with fewer workers, so that route to mass employment has narrowed.

   3. What is NEET?

   Young people not in employment, education or training. The measure captures those cut off from both work and learning, which matters because long spells outside both erode skills and future earnings.

   4. What is structural transformation?

   The movement of workers out of low-productivity activities, such as subsistence farming, into higher-productivity manufacturing and modern services. It is how most countries raised living standards. The ILO reports that this movement has slowed.

4. Note4 / 5

   India at an inflection point

   • A large working-age population. India's demographic window is open, so the cost of slow job creation is highest now.
   • Agriculture holds too many workers. It employs a much larger share of the workforce than its share of output, which signals low productivity per worker.
   • Low female participation. Women's low labour-force participation is a large unused capacity.
   • Informality. Many workers lack stable contracts and social protection.
   • Skill mismatch. Qualifications do not always match what employers need.
5. Way forward5 / 5

   These are suggested measures, not approved policy.

   • Make employment an explicit target alongside GDP growth, favouring labour-intensive sectors.
   • Build labour-intensive manufacturing: textiles, footwear, electronics assembly and food processing.
   • Strengthen MSMEs through credit, simpler compliance and access to markets.
   • Expand the care economy, covering health, childcare and eldercare, which creates jobs and supports women's participation.
   • Link skilling to employers through apprenticeships and vocational training.
   • Manage technology by investing in reskilling and social protection as artificial intelligence spreads.

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