GOOD JOBS FOR ANGOLAN YOUTH: OPPORTUNITIES, CHALLENGES AND POLICY DIRECTIONS Policy Brief Acknowledgements This policy report was prepared as part of the technical The report was prepared under the overall guidance of Jean- assistance on “Angola Youth Jobs and Inclusion”, at the request Christophe Carret and Albert G. Zeufack (Country Directors for of the Ministry of Public Administration, Labor and Social Angola) and Paolo Belli (Practice Manager, Social Protection Security (MAPTSS) through its National Institute of Employment and Jobs Global Practice, East Africa). The report benefitted and Professional Training (INEFOP). from detailed peer review guidance provided by Elizabeth Ruppert Bulmer, Rita Almeida, Matteo Morgandi, Sara Troiano, It was written by Emma Monsalve Montiel, Wendy Cunningham, Ramya Sundaram, and many colleagues in the World Bank and Maria Ngarachu. It is based on a detailed technical who provided insights, suggestions, and improvements to the report, written by a World Bank team led by Emma Monsalve report process and the final document. (Social Protection Specialist) and Dr. Wendy Cunningham (Lead Economist). The team included Frederico Gil Sander, The team wishes to thank Mr. Manuel Mbangui (Director of Zenaida Hernandez Uriz, Liliana D. Sousa, Miriam Muller, Rita the National Institute for Employment and Vocational Training Damasceno, Ana Luiza Machado, Waneska Bonfim, Christiane under the Ministry of Public Administration, Labor and Social Severo, Nelson Tisso Miezi Eduardo, Carlos Deosvaldo Fragoso Security) and his team, for their constant guidance and support Vaz, Alvaro Andre, Mauricio Salazar Saenz, David Suarez, Maria throughout the process and participation in numerous Njambi Ngarachu, Adriana Conconi, Caroline Nogueira, Elena consultation meetings. Gaffurini, Nicolas Lippolis, Xavier Cirera, and Arthur Giesberts. Administrative support was provided by Hajalalaina Consuella Rabearivony Andrianjakanava, Fernando Simao Baptista, and Amada De Jesus M Lourenco Rodrigues. 1 Acronyms ALMP Active Labor Market Program EJA Plano de acção para a intensificaçao da alfabetização e da educação de jovens e adultos (Action Plan for Literacy and Education of Youth and Adults) GDP Gross Domestic Product IBEP Inquérito sobre o Bem-Estar da População (Survey on Population Welfare) IDREA Inquérito sobre Despesas, Receitas e Emprego em Angola (Survey on Income, Expenditure and Employment in Angola) INE Instituto Nacional de Estadística (Statistical Office) INEFOP National Institute of Employment and Professional Training JQI Job Quality Index LIC Low-Income Country LMIC Lower-Middle Income Country LMIS Labor Market Information System LTDS Long-Term Development Strategy MAPTSS Ministry of Public Administration, Labor and Social Security NEET Not in Education, Employment or Training PAPE Plano de Acção de Promoção da Empregabilidade (Employability Promotion Action Plan) PDN Plano de Desenvolvimento Nacional (National Development Plan) REMPE Recenseamento de Empresas e Estabelecimentos (Census on Enterprises and Establishments) TVET Technical and Vocational Education and Training Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 2 Executive Summary Angola’s labor market is growing, although most new Underpinning Angola’s stagnant job creation and low jobs are of low quality and contribute modestly to productivity are a challenging fiscal situation, real economic growth and worker welfare. exchange rate appreciation and inflation. These factors are limiting foreign direct investment in productive assets, Angola created 3.5 million net jobs in the past decade. inhibiting economic diversification, and hindering private In spite of an economic slowdown since 2015, the Angolan sector development, leading to slower job creation, especially economy created an average of 350,000 net jobs annually in the formal sector. The high dependence on oil and expensive between 2009 and 2019. Labor force participation1 is high at 76 imports for basic goods contribute to accelerated inflation rates percent compared to 66 percent among comparable countries, which erode the purchasing power of labor earnings and lead and two-thirds of the adult population holds a job. to further declines in job quality. Angola has not successfully transformed its oil wealth into high quality jobs4 and, if That said, Angola is not creating enough quality jobs predictions hold, the country will run out of oil by 2030. that will spur sustained economic growth and enhance the well-being of its citizens. More than 72 percent of jobs Angola’s workforce is young and unskilled, even though created during 2009-2019 were family micro-businesses. Most education rates are increasing. new jobs were in unskilled occupations in the agriculture and commerce sectors, which contribute little to economic growth The young (and growing) population is not being or worker welfare due to low productivity and wages, poor sufficiently absorbed into the labor force, which threatens on the job learning opportunities and no job-linked social Angola’s future economic and social stability. Youth (aged benefits. Women are particularly active in these sectors. The 15-34) represent 83 percent of the unemployed in Angola, with “better” sectors – in terms of job stability and benefits – played 62 percent of youth spending more than one year in job search. a modest role in job creation. The lucrative extractives sector Youth are more educated than adults – 57 percent of youth have only employs 0.8 percent of Angolan working adults. some secondary education compared to 32 percent of adults – but they are concentrated in low-quality jobs. Youth earn less Angola’s economic growth is driven by “raw labor” than adults on average, and hold a higher share of low-quality instead of productivity increases, unlike its regional jobs: 85 percent of youth are in low quality jobs compared to 76 peers.2 During the period 2009-2019, the expansion in the percent of adults. Today’s youth unemployment problem can adult working population contributed positively to Angola’s become Angola’s long-term low labor productivity problem as GDP per capita by 2.4 percentage points, while a concurrent well as a source of persistent poverty among an increasingly decline in productivity subtracted 3.8 percentage points of GDP dissatisfied population. The government of Angola recognizes per capita, thus wiping out the gains from raw labor growth. In these challenges and is prioritizing jobs for youth and inclusion, contrast, South Africa and Nigeria, both commodity-exporting even more so following the Covid crisis.5 countries, experienced positive productivity growth, and an increase in GDP per capita over the same period. Relying on raw Gender gaps persist in education, employment, earnings labor for economic growth is not a sustainable strategy, and, in and job quality, though they have been narrowing conjunction with falling productivity, leads to low quality jobs among the younger generation. While 60 percent of young for too many people. But today’s demographic trends threaten women in 2019 have at least some secondary education, 70 to further entrench this model. percent of young men have finished secondary school. Young women are employed at a lower rate (52 percent vs 56 percent) Firms create jobs, but slowly. The more established private and are less inclined to study full-time compared to young men sector – those firms that are registered or have a fixed and (18 percent vs 21 percent). Young males earn twice as much as visible location – employs 650,000 workers in a workforce of young females. Low quality jobs are also more prevalent among 9.1 million.3 Angola’s private sector is dominated by micro- women (92 percent vs 78 percent), primarily driven by women’s enterprises, with 79 percent of firms employing less than five lower education levels and their clustering into less lucrative workers, accounting for 14 percent of private sector employees sectors of employment and job types. in the business census. On the other hand, large firms with over 100 workers represent only 1 percent of all fixed and visible Though Covid-19 had a strong short-term impact on firms but employ 44 percent of private sector employees as per jobs, young workers experienced fewer disruptions than the business census. older workers. As a response to the Covid-19 pandemic in 2020, the Angolan authorities implemented a set of public health measures including restrictions of movements, 1 Individuals who work or are unemployed during the week prior to the survey. 2 The comparators are Sub-Saharan Africa (SSA) commodity exporters. Nigeria has income per capita lower than Angola and South Africa’s GDP per capita is above that of Angola 3 The discrepancy between the REMPE (2019) and the IDREA (2018) estimate of the number of private sector employees in Angola is due to the limited coverage of micro-enterprises in the business census. 4 Though Angola has GDP per capita on par with lower-middle income countries (LMICs), its labor market looks more similar to that of lower-income counntries (LICs) than LMICs. An estimated 79 percent of Angolans report being self-employed compared to an average of 63 percent in LMICs, and 80 percent in LICs. 5 As expressed in its Long-Term Development Strategy (LTDS) 2025 and National Development Plan (PDN) (2018-2022). 3 curfews, and school closures. These measures generated an school-to-work pathway at age-appropriate milestones, additional contraction in the country’s economy, which was namely full-time students, and employees with good already weakened by four consecutive years of recession. While unemployment increased for most age groups at the beginning of the pandemic, no change was observed for the •  quality jobs. “ Vulnerable” youth (76 percent) are working in poor quality jobs or studying, but with age-grade distortions. This youngest age group. The muted impact of the pandemic on group can be sub-divided into five sub-groups: poor youth employment is likely due to young people’s already students or unemployed in rural areas (12 percent); poor high participation in subsistence and unpaid jobs. In fact, youth in rural areas working in agriculture (8 percent); these activities expanded during the pandemic. However, the young women in urban areas working in commerce or pandemic weakened employment prospects for educated unemployed (15 percent); young men in urban areas and urban youth, the group already facing the highest working in various economic sectors (22 percent); and unemployment rates before the pandemic. In 2020, Covid youth in urban areas who are studying full time though also impacted young Angolans’ access to training programs, in which the total number of beneficiaries from Angola’s Vocational Training centers significantly declined to 31,978 •  lagging for their age (19 percent). “Highly vulnerable” youth (20 percent) are mostly poor, illiterate, and married female NEETs (not in education, down from 61,730 in 2019. This was mainly due to limited employment or training) living in rural areas. supply, restricted eligibility criteria, large out-of-pocket costs, and the mobility restrictions and socio-economic impacts For policy purposes, we can classify each of Angola’s (loss of income, jobs, increases in poverty) caused by Covid-19. vulnerability groups and sub-groups according to their 1 labor market constraints and their social constraints (Figure ES 1). The “hard to serve” policy group, equivalent to 55 Angolan youth are highly economically vulnerable percent of youth, face high social and labor market barriers. Four and face different types and intensity of constraints, vulnerability groups or sub-groups comprise this policy group: requiring different sets of interventions. NEET women (the “highly vulnerable” group); non-working rural; vulnerable farmers; and vulnerable urban females (sub- Most (96 percent) Angolan youth are classified as groups of the “vulnerable” group). The “intensive action” policy vulnerable, with nearly 20 percent of these considered group includes youth who face some social barriers and high highly vulnerable. Young people’s vulnerability can be labor market barriers, namely urban students and urban male assessed vis-à-vis the labor market by their deviation from workers (both sub-groups of the “vulnerable” group). Finally, the standard school-to-work transition pathway. Using the the “market ready” policy group are youth who face low social cluster analysis statistical methodology6, we can define three and labor market barriers and are defined as on track (the “low- vulnerability groups, one of which includes five sub-groups: vulnerable” group), though even they will benefit from policies • “Low-vulnerable” youth (4 percent) are defined as those youth who are “on track,” meaning that they are on the to help them secure better jobs. Figure ES 1: Youth in Angola face significant labor market and social barriers Youth profiles and barriers High 2. Intensive Action: 41% 1. Hard to serve: 55% Labor market barriers (education, wages, JQI, Vulnerable Non- NEET women farmers (8%) working (20%) Vulnerable urban rural (12%) labor participation) Urban students (19%) females (15%) Urban male workes (22%) 3. Market ready: 4% On track (4%) Low High Social barriers (gender, poverty, rurality) Source: World Bank staff elaboration based on the 7 youth profile groups. Note: JQI indicates “job quality index”. 6 We use Latent Cluster Analysis (LCA) to assign individual youth to each vulnerable group based on a range of similar observable characteristics, and labor market challenges. The groups are defined by type of barriers, along two axes: employability (education, experience, skills) and social barriers (gender, poverty, family responsibilities, etc). Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 4 In spite of the government’s priority to address youth national human resources. The PDN outlines several policies employment, its policies are not designed adequate for and programs with the objective of promoting job creation a large, vulnerable youth population. and inserting young people into the labor market. It frames employment policies on axis 1 “Human Development and Angola’s active labor market programs (ALMPs) are Sustainable” mainly through its Policy 3 on “Human Resource generally not designed to help vulnerable youth. Angola’s Development”; and on axis 2 “Diversified and Inclusive 57 active labor market programs generally are not designed for Economic Development” through its Policy 13 on “Employment vulnerable youth, are limited in scale, have restrictive eligibility and Working Conditions”. criteria, are fragmented, and in many cases have overlapping objectives. Although vulnerable youth are not explicitly More and better policies for Angola’s vulnerable youth. excluded from business start-up support programs, they are implicitly excluded due to burdensome eligibility criteria such To solve the youth employment challenge, Angola needs as requiring youth to have proved technical-professional skills a more holistic strategy that is a balance of policies in (at least) the basics of small business management, and that will disrupt structural constraints to job creation own a business. Similarly, programs that support professional in the long run, while offering short-term policies and and vocational training – which are two of the largest ALMP programs to improve opportunities for youth in the short programs – are more accessible to relatively skilled youth run (Figure ES 2). Those policies to affect long-term structural via eligibility restrictions requiring youth to have secondary constraints will help the Angolan economy create and connect education. Only 24 percent of the ALMPs programs explicitly with markets, increase the number and productivity of private target youth that are hard to serve and are more vulnerable, sector jobs and strengthen labor market institutions. The namely those in the upper right corner of Figure ES1. policies for short-term impacts focus on interventions that can be implemented under the current economic and business Youth employment is a top priority for the Angolan context by assisting Angola’s current and future workers to government, as expressed in its Long-Term Development build capacity and connect them to better jobs and earnings Strategy (LTDS) 2025 and National Development Plan opportunities, through wage work or their own enterprises. The (PDN) (2018-2022). The LTDS aims to promote the access of challenge is to find a balance between policies that invest for all Angolans to productive, qualified, remunerative and socially the long run and those to serve the needs of Angolans in the useful employment and ensure the sustained development of short run. Figure ES 2: A Jobs Strategy that balances alleviating long-term structural constraints and supporting short-term productive engagement Policies to alleviate Policies for short-term longterm productive engagement structural constraints Maintaining sound Supporting productivity scal, monetary and increase for exchange rate policies self-employed/micro Increasing productivity Enhancing job-relevant and rm growth skills of vulnerable youth Strengthening labor Easing youth transition market institutions into employment and increasing productivity Source: World Bank staff elaboration Policies to alleviate long-term structural constraints them to shift the structure of the overall economy and markets, intend to influence underlying structural factors that the improved jobs environment will mostly be observed in the lead to sustainable job creation. They would need to be long run. implemented in the short run but, given the time needed for 5 1. Maintaining sound fiscal, monetary and exchange Supporting productivity increases for the 4.  rate policies. This includes maintaining a flexible self-employed. Restructuring support to young exchange rate to facilitate job creation in productive entrepreneurs through packaging information/skills, non-oil export-oriented industries, ensuring inflation coaching, and finance into a single program; increasing expectations are well anchored to avoid eroding financial inclusion programs and the use of mobile wages and the quality of jobs, and establishing sound money; and addressing the specific constraints of fiscal policies (including prudent management of oil women entrepreneurs. These interventions will support revenues) for a steady public investment in infrastructure all categories of vulnerable youth, with the last set of and human capital that provide the basis for economic interventions particularly targeting women in the most diversification and the creation of good jobs. These vulnerable policy group, the “hard to serve”, who face policies benefit all types of youth but will likely be most multiple social constraints. beneficial to those in the policy group characterized as “market ready”, since they interact the most with the 5. Enhancing job-relevant skills of vulnerable youth. formal market economy. Through greater investment in the education system (particularly second-chance education) and continuing 2. Increasing productivity and firm growth. Achieving to improve access and relevance of professional and this through continued improvements to the regulatory vocational training for vulnerable youth (particularly environment to promote competition in markets, greater with short-term and accelerated vocational training), availability of finance to the private sector (especially especially those facing multiple constraints. These SMEs), attracting investments and developing value policies have the potential to enhance job-relevant skills chains in non-oil sectors with job creation potential. particularly for “hard to serve” young women and youth These policies will indirectly benefit youth in the living in rural areas. “intensive action”, especially in the “market ready” policy group who may be employed in new or growing firms 6. Easing youth transition into employment and that benefit from these policy changes. increasing their productivity. Expanding the internship program, enhancing the productive inclusion Strengthening labor market institutions to 3.  of vulnerable youth in rural and urban areas (especially boost the impact of labor market policies. Two women), and strengthening intermediation services to priority actions are: to carry out a systematic, rigorous provide the information needed to place vulnerable and monitoring and evaluation of ALMPs to inform evidence- non-vulnerable youth into the right jobs. These policies based policy making; and rationalize ALMPs by scaling have the potential to increase job opportunities for all up programs that most effectively support vulnerable youth. youth while scaling back those that are repetitive or can be offered by the private sector. These policies have the To jumpstart the policy reform, the government with potential to benefit all youth, particularly the “intensive private sector partnership could develop a new National action” and the “market ready” who are closer to labor Initiative on Employment that would lay out a roadmap market institutions. for reform. It would detail targeted actions and structural reforms to ensure that young people get better jobs, and Policies for short-term engagement of vulnerable youth. identify the responsible actors, legislative and procedural These policies are intended to support jobs in the current reforms, milestones, measurable targets, and timelines. economic and market structure. Though they will create fewer The process to develop the initiative could be a convening good jobs than the structural policies, their impacts will be opportunity for the many actors who play a role in job creation experienced in the short run. and quality enhancement, while the oversight may need to be at a high government-level to ensure collaboration across ministries and with the private sector. Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 6 Angola Youth Employment Diagnostic Policy Brief 7 Angola has many elements for a booming job market in the medium run and surpass them in the long run, aggressive and economy. Angola is the third largest economy in Africa actions are crucial in the short run to leverage current oil wealth and second largest oil producer. It has a young and growing to diversify the economy, prepare Angolans for higher-value population that is more educated than previous generations, and diverse jobs, and wean itself off oil. with women seeing the greatest gains. Following the end of the war in 2002, oil revenue led to sustained economic The government of Angola recognizes these challenges growth and the structure of the economy began diversifying, and is prioritizing jobs for youth and inclusion, even measured by the sectoral contribution to GDP through the more so in the aftermath of the Covid crisis. The National growth of the service, consumption (real estate, retail trade, Development Plan (PDN) (2018-2022) outlines several policies telecommunications, among others) and construction sectors. and programs to promote job creation and insert youth in the labor market. Three ministries and one Presidential entity are Though Angola has a similar GDP per capita to lower- responsible for providing job training,14 while programs aimed middle income countries (LMICs)8, its labor market at job creation are implemented by the Ministry of Public indicators, poverty rates, and human capital indicators Administration, Labor and Social Security (MAPTSS), Ministry of are closer to low-income countries (LICs). Angola has not Economy and Planning (MEP), and sectoral ministries. One of successfully transformed its oil wealth into a higher standard of the most important government initiatives to promote youth living for its people. An estimated 79 percent of Angolans report employment is the Employability Promotion Action Plan (Plano being self-employed, compared to an average of 63 percent in de Acção de Promoção da Empregabilidade, PAPE) approved in LMICs and 80 percent in LICs9. In 2018, 31.1 percent of Angolans 2019 and led by MAPTSS. could be characterized as “extreme poor”,10 compared to 11.3 percent in LMICs and 43.9 percent in LICs. While 52.9 percent of This brief is intended to lay out a policy agenda for more Angolans could be categorized as poor, the mean poverty rate good jobs, especially for youth, to inform the government of LICs is 70.9 percent (2017 data), and 39.7 percent for LMICs11. of Angola’s policy debates. It provides a summary of the This suggests that Angola is less successful than its LMIC peers main analytical findings, messages, and policy suggestions in leveraging its wealth to alleviate poverty and distribute presented in a detailed technical report. It takes a broad national wealth across the economy. view of jobs, including an assessment of the macroeconomic and demographic trends, the role of the private sector in The growing young population is not being sufficiently generating jobs, and the challenges facing the labor force absorbed into the labor force, which limits Angola’s future with a particular emphasis on youth. Based on this analysis, it economic and social stability.12 The youth unemployment turns to policy by outlining the current programs offered by rate is nearly 50 percent higher than the national average the national government in Angola to address the jobs and (22 percent vs 15 percent) and youth represent 83 percent employment challenges and provides suggestions on policies of the total unemployed in Angola. While youth are more that the government of Angola could consider adopting, with a educated than adults, they have fewer job opportunities and particular emphasis on addressing the needs of youth. are concentrated in low-productivity sectors and low-quality jobs. Idle youth do not contribute to national wealth nor are The research uses several primary data sources to they preparing themselves to do so over the next 50 years of understand the Angolan context today and how it has their lives. Today’s youth unemployment problem can become evolved over the past 10 to 20 years: Angola’s long-term low-labor productivity problem, as well as a source of persistent poverty among an increasingly dissatisfied • IBEP (Inquérito sobre o Bem-Estar da População; Survey on Population Welfare) provides detailed employment population. If predictions hold, Angola will run out of oil by 2030.13 By • data. It was collected in 2008/09. IDREA (Inquérito sobre Despesas, Receitas e Emprego em Angola; Survey on Income, Expenditure and then, it will be more difficult to start developing markets and engaging youth. If Angola is to join its LMIC counterparts Employment in Angola) provides detailed employment 7 The contents of this report summarize the messages of the detailed technical report. Good Jobs for Angolan Youth: Opportunity, Challenges, and Policy Directions. Washington, D.C: World Bank Group. 8  GDP per capita in 2020 was $6 110 in Angola compared to an average of $6 765 for LMICs. Source: World Development Indicators (WDI). GDP per capita, PPP (constant 2017 international $). 9 WDI. Self-employed, total (% of total employment) (modelled ILO estimate). 10 Source: World Development Indicators. Poverty head count ratio at $2.15 per day, 2011 PPP. 11 Source: World Development Indicators. Poverty head count ratio at $3.65 per day, 2011 PPP. 12 The UN defines the young population as individuals aged 15 to 24-years old. Our definition extends the age bracket to consider individuals aged 15 to 34, as youth based on the government definition available for the Angolan Youth National Policy in the Presidential Decree 273/19 (Politica Nacional da Juventude). 13 World Bank (2018): Angola Systematic Country Diagnostic: Creating Assets for the Poor. 14 Vocational training is led by MAPTSS through INEFOP, technical education is led by the Ministry of Education (MED), and tertiary education is under the Ministry of Tertiary Education, Science, Technology and Innovation (MESCTI). The Technical Management Unit of the National Training Plan (UTG), is an entity under the supervision of the President of the Republic, overseeing the Technical and Vocational Education and Training (TVET) system. 7 •  data. It was collected in 2018/19. REMPE (Recenseamento de Empresas e Estabelecimentos) is a business census that provides detailed information These data are supplemented by data drawn from other (referenced) sources that allow for cross-country comparisons on all firms that either have a visible and fixed location or to benchmark Angola’s performance against its peers. are registered in the administrative records of INE or other institutions. It does not include informal self-employed firms in the oil sector; financial intermediation; and Angola’s economy produces insufficient quality jobs to insurance sectors; or individual agriculture producers. engage a growing population. The data were collected in 2002 and 2019, allowing for an analysis of the evolution of the business sector since Angola created 3.5 million net jobs in the past decade (2009-2019). In spite of an economic slowdown since 2015, •  independence. National accounts were used to derive sectoral value- the Angolan economy created an average of 350,000 net jobs annually. Labor force participation is high at 76 percent (Figure •  added data. Inventory of employment programs, created for the purposes of this research. It includes basic data on all 1), as compared to 66 percent among comparable countries, and two-thirds (65 percent) of the adult population holds a 57 jobs-related programs operated by the national job.15 Of the adult population active in the labor market, a large government in 2021. share (85 percent) is employed (Figure 1). Figure 1: Angola’s labor force participation is high Composition of the labor force in Angola in 2018/19 TOTAL POPULATION (29M) AGE 0-14 AGE 15-34 AGE 35-64 AGE 65+ (49%) 14.4M (31%) 8.9M (18%) 5.1M (3%) 0.76M WORKING AGE (15-64) (48%) 14.1M ACTIVE POPULATION (76%) 10.7M NONPARTICIPANT (24%) 3.3M EMPLOYED UNEMPLOYED (85%) 9.1M (15%) 1.6M PUBLIC PRIVATE EMPLOYER SELF-EMPLOYED FAMILY EMPLOYEE EMPLOYEE (7%) 0.6M (52%) 4.7M (10%) 0.8M (11%) 1M (20%) 1.8M DOMESTIC STUDYING INACTIVE PENSIONER ACTIVITY (51%) 1.6M (39%) 1.29M (5%) 0.17M (5%) 0.17M Source: World Bank staff calculations based on IDREA (2018/19). Note: the rows do not sum to 100% due to rounding estimates. Despite high participation and employment rates, a large non-wage jobs (Figure 2), namely proactive Angolans starting share of Angolans work in low productivity jobs with a micro-business to generate income for the household in limited prospects for increasing earnings or job quality. the form of self-employment (52 percent in Figure 1), unpaid More than 72 percent of jobs created during 2009-2019 were family labor (10 percent in Figure 1) or small-scale employers 15 The 9.1 million employed Angolans as a fraction of the working age population (ie 8.9 million in the 15-34 age bracket and 5.1 million in the 35-64 age bracket). Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 8 (7 percent in Figure 1).16 Most of the new non-wage jobs were in these sectors. The “better” sectors – in terms of job stability unskilled occupations in the agriculture and commerce sectors and benefits – played a more modest job-creation role. These (Figure 2), which contributed very little to economic growth included the lucrative extractives sector, financial services, or worker welfare due to low productivity and wages, and no manufacturing and public sector employment (Figure 2). job-linked social benefits.17 Women were particularly active Figure 2: Most new jobs were non-wage, namely self-employed, employers or family workers. Number of new jobs created by economic sector and job wage status, 2009-2019. 1 980 1 775 No. of new jobs created (thousands) 1 580 942 1 180 780 1 740 429 781 185 163 156 155 100 380 8 44 40 12 125 27 65 1 117 13 6 -20 3 ng ... n g s i nd es ive els es er ity om io rin sh vic at vic a ot ct ur ct tu t/c /w e/ te tru ra /h ec r er se ac ur ta t as r ce ls &s ns Ex po uf t es r ul /g cia he er m Co an ns al ric c m Ad Ot an Ele Re M a m Ag Tr Fin lic Co b Pu Wage Non-wage Source: World Bank staff calculations based on data from IBEP (2008/9) and IDREA (2018/19) Angola’s economic growth is, thus, driven by “raw attributable to demographic change and modest structural labor” instead of productivity increases, unlike its transformation (Figure 3). Most productivity loss during the regional peers. Limited structural transformation, within- decade is attributable to the high share of low value-added sector productivity declines, and a rapidly growing population jobs created in the service sector (eg: informal commerce). In result in the creation of lower productivity jobs that do not contrast, South Africa and Nigeria, both commodity exporting spur meaningful economic growth and the well-being of its countries like Angola, experienced positive productivity growth, citizens. During the period 2009-2019, the expansion in the and an increase in GDP per capita over the same period.18 adult working population (raw labor) resulted in an increase Relying on raw labor for economic growth is not a sustainable in Angola’s GDP per capita of 2.4 percentage points (Figure 3). strategy, and, in conjunction with falling productivity, leads to At the same time, negative growth in productivity dragged low quality jobs for too many Angolans. down output per capita, wiping out two-thirds of the growth 16 There is a slight difference in the estimated share of the non-wage jobs between Figures 1 and 2 due to different datasets and time periods. 17 An estimated 98 percent of employment in agriculture is informal; 85 percent of employment in commerce and hospitality is informal. 18 Nigeria increased its annual per capita growth in output by 0.9 percentage points and South Africa by 0.2 percentage points; Angola’s decreased by 1.4 percentage points. 9 Figure 3: Population growth drove most of Angola’s economic growth in the past decade, while productivity lags were an impediment. Contributions to value-added per capita growth over 2009 – 2019, percentage points (non-oil sectors) Demographic change 2,4 Employment rate -0,3 Structural change 0,3 Within-sector productivity -1,6 -2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0 Annual Change in per capita value added (percentage points) Source: World Bank staff calculations based on data from the National Statistic Office and WDI. The established private sector plays a small role in job hand, established firms with over 100 workers represent only creation in Angola, with most firms increasingly small- 1 percent of all the firms in the census but employ 44 percent scale.19 The established private sector employs less than 650 000 of the private sector employees in the business census (Figure workers, about 7 percent of the employed population. Angola’s 4). The highest growth among private sector employees in established private sector is dominated by micro-enterprises, the census occurred in established micro-enterprises which which are responsible for a small share of private sector tripled the number of workers from 2002 to 2019, while larger employment. About 79 percent of established firms employ less established firms absorbed around double the workers in 2019 than five workers, accounting for 14 percent of the private sector than they did a decade earlier. employees in the business census (Figure 4).20 On the other Figure 4: Most established firms are micro and small sized, while the majority of workers are employed by medium and large established firms. Distribution of firms and employment, by firm size. 60% 50% 45% 40% 29% % 23% 20% 14% 16% 18% 4% 0% 1% 0% No employees 1 to 4 5 to 19 20 to 99 100+ rm size (number of employees) Share of rms (%) Share of employment (%) Source: REMPE (2019) Most firms are young, with limited scope for hiring and dominate the market, they struggle to grow into job-creating potentially lower job quality for workers. About 68 percent entities.21 Although young firms make up 73 percent of non- of established firms in Angola are less than five-years old, while registered (informal) firms, the evidence seems to suggest that 21 percent are less than two- years old. Though young firms formal firms are job creators. 19 We refer to the firms in the REMPE database as “established” firms. This is intended to be a catchall for the REMPE, which draws its sample from “fixed and visible (meaning externally identifiable by some sign) firms”, and those firms, even non-visible, that are included in administrative records from the INE or other institutions. It includes firms regardless of whether their legal situation is regularized or not. REMPE 2019 does not include informal firms without a fixed establishment, such as street vendors and sellers in open markets. It also excludes oil, financial intermediation and insurance sectors. Firms in the agriculture and fisheries sectors are included but not individual agriculture producers. 20 Among those firms reporting employment, 33 percent have zero paid employees. This may reflect the self-employed or own account workers who do not count employed family members who are not on the payroll. 21 According to the Global Entrepreneurship Monitor (GEM) 2020, Angola leads all GEM economies in Total early-stage Entrepreneurial Activity (TEA) at a rate of 49.6 percent, suggesting that the ambitions in Angola of those intending to start a business do not always operationalize. Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 10 Underpinning Angola’s stagnant job creation and low same period. High fertility rates (6.2 children per woman – the productivity are government-spending decisions, second highest globally) and improvements in life expectancy exchange rate appreciation and inflation. Due to the have driven these trends over the past decades. Under the status collapse in oil prices in 2014, revenues fell but spending fell less quo, Angola’s “demographic dividend”22 will remain elusive even quickly. The deteriorating fiscal situation limited foreign direct by the year 2050 despite almost half of its population being investment and investments in productive assets, including young (with 15 million under 15-years old in 2020). With youth Angola’s ability to diversify its economy. As a result, foreign (age 15-34) representing 31 percent of the total population firms did not enter the market, local companies reduced and more than half of the labor force (Figure 1), Angola’s large their investments, and the creation of new quality jobs was youthful population will continue to be a drag on growth and limited. Exchange rate appreciation – driven by excessive oil development for many decades if it is not sufficiently absorbed dependence, high oil prices, and a fixed exchange rate regime into productive jobs. – undermined the competitiveness of non-oil sectors and further stunted economic diversification and private sector Among comparable countries, Angola ranks high development. As non-oil sectors became less competitive, both in terms of youth labor force participation and private sector growth slowed down, thereby creating fewer unemployment. Using the United Nations’ definition for youth jobs, especially in the formal sector. Not only were fewer jobs (age 15-24), young individuals participate less and have higher created, but economic diversification into new industries and unemployment rates than adults in all countries in the sample. types of work was also hindered, leading to low job creation Angola has the third highest youth labor force participation rate in non-competitive (low wage) firms. Furthermore, excessive (only surpassed by Brazil and Cameroon) and unemployment dependence on oil and expensive imports of basic goods rate (below that of South Africa and Algeria) (Figure 5 and contributed to accelerated inflation rates which eroded the Figure 6). Angola’s position in the rankings reflects many youth purchasing power of labor earnings and led to further declines entering the labor force at the same time, pressures to enter in job quality. the labor market prematurely, and difficulties in finding a job in Angola’s challenging labor market. Indeed, while 66 percent of Youth are a significant share of the Angolan population youth in rural areas aged 15-24 are employed, only 30 percent and are highly economically vulnerable. of youth in urban areas are. Using Angola’s definition for youth (age 15-34), labor force participation is higher among the poor, Angola has a young and fast-growing population. Angola’s defined as those classified being in the first income quintile, population of 32 million (in 2020) is one of the fastest growing compared to youth from the least poor households, namely in the world and is expected to more than double between those in wealth quintile five (74 vs 67 percent), with the level of 2020 and 2050, reaching 77 million by 2050. The working-age employment also higher for quintile one (68 percent) compared population (age 15-64) is projected to increase three-fold in the to 50 percent in quintile five. Figure 5: Angola’s youth labor force participation rates Figure 6: Angola’s youth unemployment rate is high are high compared to similar countries compared to similar countries Labor Force Participation Rates, 2019 Unemployment Rates, 2019 100 80 80 60 60 40 % % 40 20 20 0 0 Brazil Cameroon Angola Zambia Colombia Ecuador Timor Leste Ghana Malaysia Nigeria South Africa Algeria South Africa Algeria Angola Brazil Zambia Colombia Nigeria Timor Leste Malaysia Ghana Ecuador Cameroon Labor Force Participation (ages 15-24) Unemployment Rate (Ages 15-24) Labor Force Participation (ages 15-64) Unemployment rate Source: ILO Stats. Note: Both graphs are sorted by level of youth labor force participation and youth unemployment rates. Angolan youth fare particularly badly in the labor market, education than their adult counterparts. About 57 percent of even though they are more educated than adults. While the young population has acquired some secondary education, education-levels for youth are still low, they are acquiring more against 32 percent of adults. However, the improvement in 22 Cilliers, Jakkie. (2018). Getting to Africa’s Demographic Dividend. SSRN Electronic Journal. 10.2139/ssrn.3254117. 11 education attainment has not yet translated in better jobs for education-levels, with a big premium for tertiary education. the young population. Youth unemployment spells are longer Compared to adults, youth have higher rates of employment than those of adults, with 62 percent of youth searching for a in low quality jobs: only 9 percent of youth work in the highest job for more than a year. Youth work in more precarious jobs, quality jobs compared to 15 percent of adults (Figure 7). Overall, as they are three times more likely than adults to work for a 85 percent of youth are in low quality jobs compared to 76 family member, mostly as unpaid labor. They earn lower wages percent of adults (Figure 7). than adults,23 though their labor income gradually rises with Figure 7: Youth face more low-quality jobs than adults Figure 8: Female youth face more low quality jobs than male youth Job Quality Index, by age group Job Quality index among youth, by sex 100% 9% 100% 5% 15% 13% 3% 6% 80% 8% 80% 9% % of jobs 60% % of jobs 60% 60% 62% 53% 40% 59% 40% 20% 20% 23% 21% 17% 29% 0 0 15-34 35-64 Men Women 0 0.25 0.5 0.75 1 0 0.25 0.5 0.75 1 Source: World Bank staff calculations based on IDREA (2018/19) Notes: The “Job Quality Index” (JQI) uses 4 indicators: level of renumeration above the poverty line; signed contract; the worker holds a single job; and the provision of social benefits through the job. The JQI takes a value of 1 if a job meets all the conditions, a value of 0 if it meets none of the conditions, and an intermediate value depending on the number of conditions it meets. Low quality jobs are defined as those with a JQI less than or equal to 0.5. Gender gaps persist in education, employment, earnings “Low-vulnerable” youth are defined as those who are on and job quality, though they have been narrowing the school-to-work pathway at age-appropriate milestones; among the younger generation. Young women attain namely full-time students and employees with good quality lower education-levels than young men, though the gap has jobs (Table 1, top row). Only 4 percent of Angola’s youth are on narrowed over time. While 60 percent of young women in 2019 track. At the other end of the spectrum, 20 percent of youth can have at least some secondary education, 70 percent of young be classified as “highly vulnerable” (Table 1, bottom row). These men have finished secondary school.24 Young women are youth are mostly poor, illiterate, and married female NEETs (not employed at a lower rate (52 percent vs 56 percent) and are less in education, employment or training) living in rural areas. The inclined to study full-time compared to young men (18 percent remaining 76 percent are considered “vulnerable” as they are vs 21 percent). Substantial gender gaps in earnings persist with working in poor quality jobs or studying, but with age-grade young males earning twice as much as young females. Low distortions (Table 1, middle row). The vulnerable can be further quality jobs are also more prevalent among women (92 percent subdivided into five sub-groups: “urban students” (19 percent) vs 78 percent) (Figure 8). Nearly 75 percent of the difference in comprising youth in urban areas who are studying full-time job quality is explained by women’s lower education-levels and though lagging for their age; “urban male workers” (22 percent) their clustering into less lucrative sectors of employment and consisting of young men in urban areas working in various job types. economic sectors; “vulnerable urban females” (15 percent) who are young women in urban areas working in commerce or are Most (96 percent) Angolan youth are classified as unemployed; “vulnerable farmers” (8 percent) who are poor vulnerable, with roughly 20 percent of these considered youth in rural areas working in agriculture; and “non-working highly vulnerable. Young people’s vulnerability can be rural” (12 percent), who are poor students or unemployed assessed vis-à-vis the labor market by their deviation from the in rural areas. In other words, the three broad classifications standard school-to-work transition pathway. of economic vulnerability can be further dissected to seven different profile groups of youth. 23 Gaps in wage levels and job quality between adults and youth are attributable to skills learned on the job rather than the types of skills that more education offers. While regression and decomposition analysis throughout the technical report confirm the strong returns to education, the significant premium on experience in the labor market dominates. The returns to education and the employment quality index are both robustly higher for youth who achieved at least some level of secondary education. 24 Significant education gaps exist by location and income group as well. Youth in rural areas are far less likely to receive a secondary education, and the gap between males and females grows with de-urbanization, while youth in the poorest households are less likely to attain higher levels of education than better-off youth. Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 12 Table 1. Vulnerability Groups and Profile Groups of Angolan Youth Vulnerability Group Youth Profile Group Group Characteristics Average age of 25, equal share of men and women, Low Vulnerable (4%): Youth mostly unmarried, living in urban areas (mostly in Luanda). 1. On track (4%): full-time students who are on the school- Completed secondary education or more. Currently studying, and employees with good quality to-work pathway at age- high-qualified unemployed or working in high quality jobs in jobs appropriate milestones the public or private sector. Monthly average wage around 100,000 Kz. An average JQI of 0.83 2. Urban students (19%): living Average age is 18, equal share of men and women, unmarried, in urban areas and are full-time living in urban areas. Have incomplete secondary education students, though they lag in and are studying full time. school-level for their age 3. Urban male workers (22%): Average age is 25, living in urban areas. Incomplete secondary young men in urban areas who are education. Work in various low-productivity economic sectors. working in low-productivity sectors Monthly average wage is around 39,605 Kz. Average JQI is 0.6 Vulnerable (76%): Youth 4. Vulnerable urban females (15%): with school- level age Average age of 27, living in urban areas. Complete primary young women in urban areas distortions or working in education. Work in commerce activities or are unemployed. working in commerce or are low-productivity sectors or Monthly average wage around 22,961 Kz. Average JQI is 0.43 unemployed poorly paid jobs Average age of 26, 30 percent women, married and living 5. Vulnerable farmers (8%): poor in rural areas. Primary education or below. Mostly employed youth in rural areas who are in agricultural activities. Monthly average wage is 21,735 Kz. working in agriculture Average JQI is 0.42 6. Non-working rural (12%): poor Average age is 19, 40 percent women, unmarried and living youth in rural areas who are in rural areas. Primary education and 60 percent are attending students or unemployed school, while others are unemployed Highly Vulnerable (20%): Average age is 25, 60 percent are married and live in rural 7. NEET women (20%): poor, illiterate Youth who are not on a areas. Less than primary education. Not attending school, not female NEETs in rural areas school-to-work pathway working, with some dedicated to domestic work Notes: The methodology used in Almeida and Packard (2018) was adapted to construct the vulnerability matrix for Angolan youth. These classifications are used in the next section to identify the labor market constraints affecting different types of Angolan youth. JQI is a job quality index, which is a composite of four variables measuring job quality. 11 side factors include: macroeconomic factors, firm-specific Angolan youth face different types and intensity of constraints, entrepreneurship and self-employment gaps, and constraints. job productivity. The supply side factors include: skills gaps, information gaps, mobility constraints, time-use constraints, Even before the Covid pandemic, factors on the and social customs and norms. Finally, a set of institutional demand, supply and the intersection of the labor constraints, including labor regulations and the tax-and-benefit market underpinned the challenges that youth face system shape the overall context that the supply and demand in accessing the labor market (Figure 9). 25 The demand- forces operate within. 25 Though Covid-19 had a strong short-term impact on jobs, young workers experienced fewer disruptions than older workers. The set of public health measures implemented as a response to the Covid-19 pandemic generated an additional contraction in the country’s economy. 13 Figure 9: Youth face multiple constraints when transitioning into the labor market Labor market constraints for youth Supply Demand Active & Inactive Youth Informal & formal skill gaps (technical, cognitive and non- macro factors (economic growth, structural cognitive skills, experience, digital) transformation) information gaps (job opportunities, firm-specific constraints (low firm creation employer information about applicants) Employment and and expansion) mobility constraints (spatial mismatch labor productivity between job location and worker location) entrepreneurship/self-employment (access to finance, capacity) time use constraints job productivity social custom, norms and aspirations Institutional contraints (distorting labor regulations, tax and benefits system) Note: Adapted from Solutions from Youth Employment, S4YE (2015) to low-quality jobs, mostly affecting these same three groups. Demand-side factors (Figure 9) that are most relevant for Angola can be summarized in two categories, which Supply-side factors (Figure 9) that are most relevant for mostly affect “low vulnerable” youth (Table 2). Angolan youth can be summarized in four categories and are important for all youth, but especially the “highly  acro-economic constraints: Negative economic growth, 1. M vulnerable” (Table 2): particularly that caused by a slowdown in the oil sector, limits job creation with particular challenges for new entrants.  kills gaps: Low education-levels26 and a disconnect 1. S The nature of and pace of structural transformation are also between the TVET system and the labor market mean that not conducive to good job growth. Vulnerable Angolan many youth do not have the basic and technical skills needed youth living in urban areas and those classified as “on track” to succeed. Limited work experience and the lack of digital are particularly affected by macro-economic constraints skills also prevent youth from accessing better jobs. Highly due to their greater reliance on the market economy for vulnerable youth and the vulnerable youth in groups that employment. are at an educational disadvantage – non-working rural and young women – are most constrained by low skills-levels.  irm-specific constraints: The limited role that Angolan 2. F firms play in job creation is due to constraints to firm creation  nformation constraints: Limited social networks hinder 2. I and expansion, the result of a difficult investment climate youth’s access to opportunities. Weak linkages between including high levels of red tape, poor infrastructure and education institutions and job opportunities exacerbate the limited market contestability. These constraints are most problem. This is a particular challenge for young women, relevant for vulnerable youth in urban areas where large who have few networks outside the household. firms operate. Limited access to credit and alternative sources of finance, especially for younger and rural populations, 3. Mobility constraints: Spatial mismatch between job low skills and firm capabilities are also an impediment to and worker locations, combined with mobility constraints entrepreneurship and improved conditions for the self- and safety concerns limit job search and employment employed. Three vulnerability groups – vulnerable farmers, opportunities, especially for vulnerable young women and vulnerable urban females, and urban male workers – who rural youth. are overwhelmingly self-employed are most affected by impediments to starting and running a micro-business. 4. Social constraints: Most poor young Angolans are expected Declining labor productivity signals that Angola is on a path to work from an early age.27 Social norms guiding women’s 26 The share of Angolans with at least some secondary education expanded by nearly 17 percentage points between 2008 and 2019, as the share with less than primary education has declined; tertiary education has also doubled over the past decade. Despite improvements, the education and skills’ base remain low. Many Angolans still lack the basic skills needed to drive productivity increases in the labor market while limited skills’ capabilities hinder employers’ ability to innovate and efficiently manage firms. Most (45 percent) business owners in Angola have completed only secondary school. Instead, there is a heavy reliance on a skilled expatriate workforce, especially foreign executives and technical personnel rather than training and hiring locally. Angola is positioned 138th (out of 141 countries) globally on the reliance of its professional management. 27 This is consistent with Angola’s large youthful demography and a high dependency ratio such that working-age adults need to earn to support several dependents. This situation creates social pressures for young individuals to leave school and prematurely enter the labor market. Due to the low educational accumulation, they will necessarily enter lower quality jobs, putting themselves on a pathway for a lifetime of low productivity jobs. Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 14 time-use constrains labor force participation. Household with legislation in other countries with greater productivity composition, especially being the head of a household, is the growth, formal employment, and firm creation, and is thus biggest contributor to premature entry into the labor market. not likely to significantly impede job creation in Angola’s less Family responsibilities (eg: childcare) and lack of childcare dynamic and more informal economy. Limited enforcement services influences participation and limits the types of likely makes the legislation even less important in firm employment young women can do. decision-making on human resource issues.28 Institutional factors (Figure 9) are important in Angola Youth earn less than the minimum wage in agriculture 2.  but given the low level of enforcement of labor and commerce/hotels where most youth work. However, regulations and high informality rates, they do not enforcement of legal minimum wages is difficult given the represent a significant barrier for youth employment. use of verbal contracts and the limited number of labor To the extent that institutional factors distort labor markets, inspectors in Angola. Thus, the real extent of the potential they would have the greatest impact on low vulnerable (“on effects of the minimum wage on labor outcomes remains track”) youth who are most engaged in formal labor markets. ambiguous. However, institutional factors are likely to have spillover effects on vulnerable urban youth who interact with the formal In summary, youth in Angola face multiple constraints but economy. The two institutional factors that are most relevant different groups of youth face different types and intensity include (Table 2): of constraints. Table 2 provides a detailed mapping of the constraints faced by each youth profile group, as well as how  abor regulations in Angola combine flexibility with strong 1. L prevalent those constraints are for each group. worker protection. The General Labor Law of 2015 is on par Table 2: Different groups of youth face different types of and intensity of constraints Mapping of constraints and Vulnerability Group YOUTH PROFILE GROUPS Non-working NEET women Urban male Vulnerable Vulnerable students On track workers females farmers CONSTRAINTS Urban urban rural DEMAND-SIDE: Macro-economic factors X X X X X X X Firm-specific constraints - - - X X - X Entrepreneurship & self-employment X - X X X - X Low-quality jobs X - X X X - X SUPPLY-SIDE:               Skills gaps:               ·   Basic skills (education) X X X X X X X ·   Technical skills X X X X X X X · (Non-)cognitive & digital skills X X X X X X X ·   Work experience  X X X X X X X Time-use & household constraints X X X X X X X Mobility constraints X X X X X X X Social norms, customs & aspirations X X X X X X X INFORMATION & INTERMEDIATION:               Informational gaps in the job market X X X X X X X INSTITUTIONS:               Minimum Wages, Government and Tax X X X X X X X Reform Source: World Bank staff elaboration. Notes: The color indicates to what extent each barrier affects each group: X Red = severe constraints; X Yellow = moderate constraints; X Green = minor constraints. A dash (–) indicates that the constraint is not relevant for the related group. 28 For instance, while the process for dismissing workers and severance pay may affect some hiring decisions, low compliance makes it unlikely the effects are particularly strong. 15 Angola has several employment programs to help youth included in the PDN 2018-2022. The database was constructed transition into the labor market, but they are generally using an Excel template that captures quantitative information not targeted at vulnerable youth. on spending and beneficiaries and qualitative information on key design features of the programs. Quantitative data – such as Youth employment is a top priority for the Angolan budget and number of beneficiaries – were captured for almost government, as expressed in its Long-Term Development half of the programs, but they cover the largest government Strategy (LTDS) 2025 and National Development Plan programs, so it is representative. Given the lack of detailed (PDN) (2018-2022). The LTDS aims to promote the access of qualitative information on some programs, the information all Angolans to productive, qualified, remunerative and socially for design features was only available for a limited number of useful employment and ensure the sustained development of programs. national human resources. The PDN outlines several policies and programs with the objective of promoting job creation For the purposes of the assessment, Angola’s programs and inserting young people into the labor market. It frames are classified into four types of active labor market employment policies on axis 1 “Human Development and programs, according to their main objectives (Figure 10). Well-being” mainly through its Policy 3 on “Human Resource The four types of active labor market programs closely align with Development”; and on axis 2 “Sustainable, Diversified, and the labor market constraints described in Figure 9. The main Inclusive Economic Development” through its Policy 13 on categories of Active Labor Market Programs (ALMPs)30 that are “Employment and Working Conditions”. relevant for Angola are: 1) Labor demand programs intended to stimulate job creation (incentives for retaining employment Framework for assessing youth employment interventions and incentives for creating employment); 2) Labor-supply in Angola programs intended to strengthen young people’s employability (incentives for seeking and keeping a job and incentives for An inventory of public employment programs was human capital enhancement); 3) Labor market matching created for purposes of assessing youth employment programs meant to strengthen the job-search process; and 4) interventions in Angola. Administrative data provided by Comprehensive programs that recognize that youth, especially government authorities was the source of information for the the most vulnerable, may face multiple constraints and thus inventory. The exercise built on an inventory of entrepreneurship adopt a holistic approach that tries to stimulate both job and professional training programs conducted by the World demand and supply. Some programs benefit those who are Bank in 2020.29 The inventory of programs includes only public already working (insiders), while others are intended for those programs implemented by the Angolan government at national who are not working (outsiders). and municipal- levels; it covers all labor market programs Figure 10: Schematic of ALMP options to tackle labor market constraints Labor Demand Incentives for retaining employment: job-sharing and short-duration work; wage subsidies. (Insiders) Incenctives for creating employment: hiring subsidies; business start-up Comprehensive Programs support. (Outsiders) Labor Supply Incentives for seeking and Labor Market Matching keeping a job: in-work Job-searching assistance. bene ts, subsidies, tax credits. (Outsiders) (Insiders, Outsiders): public works: activation and Employer intermediation workfare. (Outsiders) services. (Outsiders and Insiders) Incentives for human capital enhancement: on-the-job Counseling and training; classroom training. monitoring (Outsiders, Insiders) (Outsiders) Source: Adapted from Brown and Koettl (2015). Note: “Insiders” refer to those who are currently employed; “outsiders” refers to the unemployed, long-term unemployed, discouraged, informal workers, and inactive. “Activation and Workfare” programs commonly condition the receipt of unemployment benefits or other type of income support on the participation in workfare programs. They aim to increase inflow into employment by strengthening work incentives. 29 World Bank (2022): “Enhancing Public Support to Youth Employment: Towards an ALMP System in South Africa.” The World Bank. https://documents1.worldbank.org/curated/ en/099715008182226438/pdf/P1721750cde2840190a52300f83fe001556.pdf 30 ALMPs aim to keep workers employed, bring them into employment, increase their productivity and earnings, and improve the functioning of labor markets through active policies to increase and enhance labor supply, increase labor demand, and raise the efficiency of labor market matching (Brown and Koettl, 2015). Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 16 For purposes of making policy recommendations, the non-working rural; vulnerable farmers; and vulnerable urban seven youth profile groups identified above are clustered women. The “intensive action” policy group includes youth who into three policy groups, where each policy group faces face some social barriers but high labor market barriers, namely similar labor market and social challenges, and as such, urban students and urban male workers. Finally, the “market could benefit from similar policy approaches (Figure ready” policy group are youth who face low social and labor 11). Each policy group needs a unique set of targeted policy market barriers. Only the low-vulnerability, on track youth are assistance. The “hard to serve” policy group, equivalent to 55 in this category, though even they will benefit from policies to percent of youth, face high social and labor market barriers. Four help them secure better jobs. vulnerability groups comprise this policy group: NEET women; Figure 11: Youth in Angola face significant labor market and social barriers. Youth profile groups and barriers High 2. Intensive Action: 41% 1. Hard to serve: 55% Labor market barriers (education, wages, JQI, Vulnerable Non- NEET women farmers (8%) working (20%) Vulnerable urban rural (12%) labor participation) Urban students (19%) females (15%) Urban male workes (22%) 3. Market ready: 4% On track (4%) Low High Social barriers (gender, poverty, rurality) Source: World Bank staff elaboration. Note: JQI indicates “job quality index”. Youth employment programs in Angola entrepreneurship (Figure 12)31. Youth employment is a top priority for the government, demonstrated by the variety The government of Angola implements about 57 national of ALMPs implemented. Job creation is the most common labor market programs at a cost of more than 630 billion program objective, with nearly half of the ALMP programs kwanzas annually, with most programs supporting dedicated to supporting business start-ups or job-sharing. Figure 12: Most of Angola’s programs support business start-ups Number of programs by ALMPs’ classification 25 Number of programs 13 10 1 1 3 2 1 intermediation On-the-job subsidies, tax Classroom Counselling Work sharing Business monitoring support start-up job search assistance training training and short bene ts, Employer In-work credits services work and Labour Demand Labour Supply Labour Market Matching Comprehensive Source: World Bank staff elaboration based on ALMP inventory. 31 More than half of the programs in the inventory (that report budget information) have annual budgets that exceeds 1 billion kwanzas. 17 Few of Angola’s ALMPs are design to help vulnerable provide the comprehensive support youth need to succeed in youth.32 The existing portfolio of Angola’s ALMPs is not the labor market even though most Angolan youth are classified effectively aligned to support the needs of the large population as vulnerable and face multiple constraints. For example, of vulnerable youth. Youth that are more vulnerable and hard- entrepreneurship programs provide financial support without to-serve represent 55 percent of all youth in Angola, yet only complementary training to promising young entrepreneurs 24 percent of ALMPs target this group (Figure 13). In contrast, who often lack the requisite business skills. Similarly, there is youth who are less vulnerable and market-ready represent only limited offering of classroom training with practical on-the- 4 percent of all youth but benefit from 33 percent of the total job training which would yield promising results for vulnerable ALMP portfolio (Figure 13). Furthermore, most programs do not youth and women. Figure 13: Angola’s ALMPs are mostly design for the less vulnerable youth Number of programs by youth group profiles 35 33 30 Number of programs 25 22 21 20 15 10 9 5 6 5 4 0 NEET women Non-working Vulnerable Vulnerable Urban male Urban On-track rural farmers urban farmers workers students Hard to Serve (55% of youth) Intensive Action (41% of Market ready youth) (41% of youth) Comprenhensive Market matching Labor demand Labor supply Source: World Bank staff elaboration based on ALMP inventory. Angola’s ALMPs are generally limited in scale, have More and better policies for Angola’s vulnerable youth. restrictive eligibility criteria, are fragmented, and in many cases have overlapping objectives.33 Despite high Angola will need to adopt a balanced jobs strategy to expenditure on employment interventions, most programs (72 address both long-term structural constraints to the percent) serve a small number of beneficiaries (less than 5,000 creation of more good jobs and short-term improvements annually) with programs often not meeting their beneficiary to the productive engagement of vulnerable youth (Figure target numbers. Though most programs do not appear to use 14). To solve the youth employment challenge, Angola needs explicit eligibility criteria for targeting, many implicitly exclude a more holistic strategy than it currently has. Policies to affect vulnerable youth through initial eligibility criteria. For instance, long-term structural constraints will help the Angolan economy although vulnerable youth are not explicitly excluded from create and connect with international markets, increase the business start-up support programs, they are implicitly excluded number and productivity of private sector jobs and strengthen due to burdensome eligibility criteria such as requiring youth to labor market institutions. The policies for short-term impact have proven technical-professional skills and own a business. focus on interventions that can be implemented under the Similarly, programs that support professional and vocational current economic and business context, by assisting Angola’s training – which are two of the largest ALMP programs – current and future workers to build capacity and connect to are more accessible to relatively skilled youth via eligibility better jobs and earning opportunities through wage work or restrictions requiring youth to have secondary education. their own enterprises. Policies adopted must proactively serve vulnerable youth who are largely underserved by existing policies. The proposed policies, as well as the types of youth each will serve are summarized in Table 3. 32 Notably, our data only includes the number of programs in each category. If data were available on the number of youth served in each program, we could provide a more rigorous assessment of the extent to which the portfolio of ALMPs serve the youth with different vulnerabilities. Nevertheless, our analysis (albeit limited) helps us rationalize the mix of Angola’s programs and gives some indication of whether the existing programs/instruments are appropriate for its youth. 33 An analysis of the entire portfolio in terms of resource allocation, coverage/scale and other efficacy indicators would be ideal but is not feasible due to data limitations. Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 18 Figure 14: A Jobs Strategy that balances alleviating long-term structural constraints and supporting short-term productive engagement Policies to alleviate Policies for short-term longterm productive engagement structural constraints Maintaining sound Supporting productivity scal, monetary and increase for exchange rate policies self-employed/micro Increasing productivity Enhancing job-relevant and rm growth skills of vulnerable youth Strengthening labor Easing youth transition market institutions into employment and increasing productivity Source: World Bank staff elaboration 19 Table 3: Proposed policy actions tailored to groups of youth Policies Hard to Intensive action (41%) Market Ready (4%) serve (55%) 1. Maintain a flexible exchange rate, which supports job creation in productive non-oil export-oriented sectors. Maintaining 2. Ensure inflation expectations are well anchored, as high inflation tends to erode wages and the quality sound fiscal, of jobs. monetary and 3. Sound fiscal policies (including prudent management exchange rate of oil revenues) allow for the steady implementation of policies public investments in infrastructure and human capital that provide the basis for economic diversification and the creation of good jobs. Increasing 1. Continue to improve the regulatory environment and promote competition in markets. productivity and 2. Improve the availability of finance to the private sector, especially SMEs. firm growth 3. Attract investment and develop value chains in non-oil sectors with job creation potential. Strengthening 1. Improve monitoring and evaluation of ALMPs. labor market institutions 2. Rationalize ALMPs to invest more and scale up programs that work. 1. Increase financial inclusion and the use of Supporting mobile money. productivity 2. Restructure support to young entrepreneurs by packaging information, skills, coaching, increases for the and finance into a single program. self-employed 3. Address the specific constraints of women micro-entrepreneurs. 1. Enhance investment in the education system Enhancing job- (including second-chance education) to better relevant skills of serve vulnerable youth and adults. vulnerable youth 2. Improve access and relevance of professional and vocational training for vulnerable youth. 1. Facilitate labor market transition through expanding the Easing youth internship program. transition into employment and 2. Enhance the productive inclusion of increasing their vulnerable youth in rural and urban areas, productivity especially women. 3. Strengthen intermediation services to provide the information needed to place vulnerable and non-vulnerable youth into the right jobs. Source: World Bank staff elaboration Notes: “Hard to serve” includes NEET women (poor illiterate females NEETs), poor and vulnerable youth in rural areas who are studying or unemployed (non-working rural) or working in agriculture (vulnerable farmers) and vulnerable women in urban areas who are unemployed or working in low quality commerce activities (vulnerable urban women). “Intensive action” includes males working in different economic sectors in urban areas (urban male workers) and full-time students with school-age distortion (urban students). “Market ready” includes the low-vulnerable youth well educated and young top earners of Angola (on track). The political challenge is to develop a balanced portfolio to alleviate long-term structural constraints should also begin of policies that invest for the long term while addressing now, though they will take longer to be developed and thus short-term needs, as demonstrated by the balance impact jobs in a more distant time period. These are legislative graphic in Figure 14. The policies for short-term productive changes and policies that are intended to shift the functioning engagement can begin now, can be achieved relatively quickly, of the economy. Both sets of policies are necessary to shift the and impact jobs in the short run. These are mostly programs or jobs’ picture, and both must begin immediately. policies that are not subject to broad debate, legislative change or shifting the functioning of the economy. Work on the policies Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 20 To jumpstart the policy reform, the government, with food (and at the same time create new jobs in agriculture and private sector partnership could develop a new National promote economic diversification). Concrete examples of such Initiative on Employment that would lay out a roadmap policies include investments in agricultural research, extension for reform. It would detail targeted actions and structural and training, and improved rural infrastructure (connectivity, reforms to ensure that young people get better jobs, including electricity for processing, and cold chains) as well as developing the responsible actor, legislative and procedural reforms, efficient transport and logistics systems to support agricultural milestones, measurable targets, and timelines. The process to production, such as building and maintaining road networks develop the initiative could be a convening opportunity for the and improving the operations of Angola’s ports and airports. many actors who play a role in job creation and quality, while the oversight may need to be at a high government-level to Sound fiscal policy, including prudent management of ensure collaboration across ministries and with the private oil revenues, needs to ensure that resources are directed sector. towards investments in physical and human capital that provide the basic platform for business development Policies to Alleviate Long-term Structural Constraints and job creation. They include: i) Continued commitment to the fiscal surplus required to reduce debt ratios; ii) Continued Maintaining sound exchange rate, monetary and fiscal policies increase in the efficiency of expenditures so that better results that create the stable macroeconomic environment necessary are obtained with more restrained spending; iii) Continued for robust growth and job creation in non-oil sectors reduction in the number of public investment contracts undertaken through direct award to promote transparency Sound exchange rate policies ensure that the currency and efficiency in public investment projects (especially is neither over nor undervalued, providing the right infrastructure); and iv) Avoiding providing tax incentives incentives for job creation in export-oriented industries to “preferred” (oil) economic sectors. This would mean, for beyond natural resources. While Angola has made great example, privileging infrastructure investments outside oil progress in reforming its exchange rate regime resulting in and gas towards sectors that create more good jobs, including significant currency depreciation since reforms began in 2019, investment in reliable and clean energy connectivity to industrial two additional strategies can be undertaken: i) Accelerating areas (which will facilitate the creation of urban industrial jobs) debt repayments to further buttress macroeconomic stability, as well as urban infrastructure (transport, sanitation, digital) to while avoiding revenues that enter the economy from driving create more growth in services sectors to absorb the young, up the real exchange rate; and ii) Making use of (additional) better educated population (“market ready”) (Table 3). revenues stemming from higher oil prices to undertake needed investments in physical and human capital that increase the Increasing productivity and firm growth to strengthen productive capacity of the economy. The latter strategy would the job-creation potential of private firms require boosting the quality of public investment management to ensure dollars of investment translate into actual investment Continuing to improve the regulatory environment will capital on the ground. Both these policies will likely be most promote competition in markets, thereby facilitating firm beneficial to “market ready” youth who are working in tradable entry and growth, as well as support Angola’s economic sectors and related industries (Table 3). diversification efforts while increasing its export base. The Angolan government has made important regulatory and Ensuring inflation is controlled is also important for institutional changes in recent years to ease several constraints overall macroeconomic stability that support job facing firms, attract investment and reduce regulatory creation.34 High inflation erodes the purchasing power of labor compliance costs.35 A new round of reforms can further foster earnings, which leads to a decline in the quality of jobs, affecting private investment that is necessary to grow existing firms and workers of all vulnerability categories (Table 3). Monetary policy, launch new ones. These include measures to: i) Decrease the together with supply-side policies in agriculture will ensure (current) high costs of trade and logistics and reduce non- price stability that help businesses plan and create more jobs. tariff barriers (including reducing licensing, authorizations, and Standard monetary policy tools, namely interest rate changes inspections requirements);36 and ii) Continuing to implement that anchor inflation expectations, may be insufficient to deal the competition framework, including building the capacity of with Angola’s current inflation challenges, which have been the Competition Authority, so anti-competitive behavior and primarily driven by the fast increases in food prices. New policies distortive regulations can be addressed. An improved regulatory to increase the supply of food could also play a stabilizing role. environment may indirectly benefit vulnerable (“intensive For example, trade policies could be adjusted to ensure ample action”) and, especially less-vulnerable youth (“market ready”) availability of food in Angola, together with policies to improve who may be employed in new or growing firms that benefit productivity in the agricultural sector to increase the domestic from these policy changes. availability of 34 It is important to differentiate once-off inflation increases, such as may be caused by the adjustment of fuel subsidies, with the need to ensure inflation expectations are well anchored. 35 These include removing restrictions to foreign investment, modernizing tax policies and administration, easing business registration, automating customs’ procedures, and improving contract enforcement. Moreover, for the first time Angola developed a competition policy framework and established an antitrust agency, while privatizations and revisions to sectoral regulations (eg: energy and water, telecommunications) open space for private sector participation and better service delivery in enabling economic sectors. 36 IMF (2022): 2021 Article IV Consultation. IMF Country Report No. 22/11. 21 Improving the availability of finance to the private employment prospects, especially as services are increasingly sector, especially SMEs and startups would allow growth- seen as a pathway for productivity growth in developing oriented firms to start and expand their production, and countries and are becoming integral to the development of introduce new products and services, increasing their other sectors, like manufacturing.39 potential to hire workers. Current efforts that contribute to this objective include reforms to strengthen financial Strengthening labor market institutions to boost the impact of sector infrastructure, including improving credit information, labor market policy modernizing payment systems and encouraging the use of movable collateral and out of court debt restructuring. Several An integrated policy approach and a strong monitoring new governmental programs encourage access to finance and evaluation system can inform the design of and for SMEs and co-operatives, primarily in agriculture, including boost the impact of labor market policy. Two strategies can incentives for banks to lend through partial credit guarantees, move Angola towards this objective. First, Angolan institutions and training programs to improve firms’ business practices responsible for labor market programs should develop and and ability to prepare bankable projects. Even though some institutionalize monitoring and evaluation systems to increase regulations are in place, microfinance, leasing, factoring, institutions’ capacity to generate robust empirical evidence on value chain finance, fintech, and non-collateral loans are programs’ effectiveness in helping youth attain employment underdeveloped in Angola.37 Additional measures to support outcomes (ie quality of jobs, earnings or employment status this objective would include: i) Designing risk-sharing facilities over time). Establishing the system involves: defining  a set of to mitigate the risk for banks to lend to small businesses; measures against which the implementation agencies report, ii) Continued support on the demand side to help firms systematically collecting the appropriate data for tracking those strengthen their financial management and other capabilities; measures, producing regular progress reports and creating and iii) Supporting the development of early-stage finance (eg: a special monitoring unit. Second, rationalize ALMPs and seed capital, angel investors, venture capital, crowdfunding) to redirect resources to scale up programs that effectively help create jobs in new industries (eg: tech sector that may employ youth, especially vulnerable youth to address their labor market less vulnerable youth). These policies would most benefit constraints. This will entail identifying which target group(s) to “market ready” youth who may have access to finance and may prioritize and what kind of support should be provided to them, indirectly affect vulnerable “intensive action” youth who may as well as consolidating and unifying programs that overlap benefit from the new jobs created or spillover effects as new (accomplish similar objectives, target similar groups and have SMEs source from micro-enterprises run by vulnerable youth. similar benefits). One co-ordinating government body, housed within the Presidency could facilitate collaboration across the Attracting investment and developing value chains in different institutions, implementing labor market interventions non-oil sectors with job-creation potential will open new and be responsible for: i) Developing the country’s overall opportunities in a diversified economy. The cross-cutting ALMP strategy; ii) Monitoring and evaluation across the ALMP productivity and firm-growth policies can be complemented system; and iii) Information-sharing across implementing (and with specific policies to attract investment and develop value other) government departments. All categories of youth would chains in non-oil sectors with potential for creating new jobs benefit from Angola’s redefined labor market strategy, especially and potentially better jobs for “intensive action” and “market vulnerable youth who are currently implicitly excluded from ready” youth than in the low-employment and (generally) low programs (Table 3). jobs quality extractives sector (Table 3). Diversification into other sectors may provide more and better job opportunities. Policies for short-term productive engagement Several sectors have potential: agricultural products, diamonds, and fisheries; minerals and derivates such as quartz and mica; Supporting productivity increases for self-employment to and light-manufacturing.38 Immediate program interventions engage vulnerable youth. include: i) Providing extension services and market-friendly support to access quality inputs by small holders; ii) Supporting Improving opportunities for the high number of self-employed market access by fostering linkages between small producers goes beyond business environment policies that foster firms and buyers and improving rural infrastructure; and iii) Increasing (discussed above). Instead, policies to support the vulnerable the availability of finance to agriculture. Complementary to become self-employed focus on the micro-entrepreneurs policies include: iv) Supporting the availability of infrastructure themselves to increase productivity and earnings in the smallest land in well-managed industrial zones to develop agri- enterprises. processing and light manufacturing industries as well as v) Increasing financial inclusion and the use of mobile Attracting FDI, through targeted investment promotion efforts, money will improve opportunities for the high number and providing an attractive and stable legal framework to help of self-employed and increase their productivity and access technology and markets in these sectors. Developing a earnings. Addressing the gap in access to financial services modern service sector is also important for Angola’s growth and 37 US Embassy in Angola (2019): QQSE – Luanda Entrepreneurial Ecosystem Mapping. 38 World Bank (2018): Angola Country Economic Memorandum: Towards Economic Diversification. 39 Nayyar G, Hallward-Driemeier M, Davies E (2021): At Your Service: The Promise of Services-Led Development. Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 22 in Angola,40 especially among low-income, women, and rural entrepreneurs by packaging information, skills, coaching, populations will be most beneficial for the “hard to serve” and and finance into a single program will help establish “intensive action” policy groups (Table 3). There is also potential more sustainable enterprises. Providing budding young for development of mobile money – which is very nascent in micro-entrepreneurs with a package of support will increase Angola compared to regional peers41 – to improve productivity the chances of successfully launching and managing a micro- in the smallest firms. Angola could make use of savings from enterprise. Interventions that combine grants and business the consolidation of its ALMPs to expand and equip the agent advice have shown promise for micro-entrepreneurs, if targeted network, foster private sector partnerships, implement just in to those who can benefit the most (Box 1 presents some time financial and technology literacy interventions, and make international evidence). The government can: i) Map out the investments that can immediately address power shortages pathway for acquiring the full set of entrepreneurial support; ii) (eg: generators, solar panels, and low-cost towers). This would Identify (and fill) gaps in terms of program offerings or program build on the steps already taken by the Central Bank to simplify pre-requisites that may interrupt the learning pathway; and account-opening requirements, foster an interoperable digital iii) Help youth to navigate the learning pathway. This package payments ecosystem, and promote inclusion of informal of support can benefit “intensive action” and “market ready” merchants by making it easier for them to acquire Point-of-Sale entrepreneurs (Table 3). As there is some heterogeneity among terminals. the self-employed, including different levels of entrepreneurial orientation and business performance, the support would need Restructuring support to young vulnerable micro- to be targeted to their characteristics. Box 1. International evidence on entrepreneurship programs for youth or vulnerable populations. The international evidence shows that entrepreneurship programs for youth or vulnerable populations have positive (and large) impacts on labor market outcomes in the long term. Several experiences show that programs that offer a suite of financial and non-financial services have a greater impact than single-component programs: • Ghana’s Graduating the Ultra-Poor Program involved the transfer of a productive asset, training, consumption support, and coaching to stimulate sustainable transition to self-employment. Treatment households experienced a 91 percent increase in non-farm income in addition to a 50 percent gain in livestock revenue, relative to a comparison group. • Uganda’s Youth Opportunities Program (YOP) specifically aimed at mitigating capital constraints for poor and vulnerable young people through grants for non-agricultural vocational training and business start-ups. Relative to the control group, the YOP increased business assets by 57 percent, work hours by 17 percent and earnings by 38 percent. • Uganda’s Women’s Income-Generation Support combined business skills training, cash grants and follow-up support to young women. Program participants were found to have larger gains in employment outcomes than beneficiaries of less comprehensive interventions. Addressing the specific constraints of women micro- The education and training systems can do more to entrepreneurs can provide job opportunities that are help vulnerable young people acquire a range of job- compatible with women’s non-market constraints. To relevant skills. Improving basic skills for the most vulnerable help women address constraints related to agency – defined youth (providing long-term returns), as well as technical skills as the ability to set goals, pursue them and achieve them for vulnerable and less vulnerable youth (providing short to – successful interventions have included personal initiative medium-term returns) would enhance job-relevant skills for training that creates a growth mindset and builds self- the “hard to serve” and “intensive action” policy groups (Table confidence. To address contexts driven by social norms, such as 3). Providing youth with short-term and accelerated vocational women having limited decision-making about family finances, training, through one to three months of intensive hands-on in-kind grants have been used to provide business inputs to training and practice can be customized to better meet local women. To help women engage in potentially more lucrative job market needs quicky. industrial sectors, programs may support women’s preparation for and entry to male-dominated sectors through exposure The education system’s effort to support vulnerable (eg: apprenticeships) and female role-modelling. Tackling populations can be expanded in two ways. First, fully resourcing these constraints will be most beneficial to women who are the EJA (Plano de acção para a intensificação da alfabetização more likely to be self-employed in low quality jobs and in retail e da educação de jovens e adultos – Action Plan for Literacy activities (ie “hard to serve” and “intensive action” in Table 3). and Education of Youth and Adults) can increase efforts to combat illiteracy, reduce school delay among the young and Enhancing job-relevant skills of vulnerable youth to successfully adult population, and improve professional and vocational integrate them into the labor market qualifications, especially among women and girls in rural areas. Second, adapting cash transfer and scholarship programs 40 World Bank. 2020. Enhancing Financial Capability and Inclusion in Angola. World Bank, Washington, DC. 41 Angola reports 9.2 mobile money accounts per 1 000 adults compared to a regional average near 650 such accounts per 1 000 adults (World Bank, 2020). 23 to better reach vulnerable youth can incentivize school Easing youth transition into employment and increasing their completion, especially those targeting girls and young women productivity. (“hard to serve” and “intensive action” policy groups in Table 3). Youth of all vulnerability levels need help entering The training sector can adapt its policies and practices to the labor market. Angola can undertake three strategies account for the needs of vulnerable youth through three to give opportunities to first-time job seekers and improve strategies: First, continue expanding physical access to training comprehensive labor market programs as well as labor market centers by upgrading existing facilities and expanding mobile intermediation services. training units, especially in remote areas. This can help youth who have left the education sector to acquire job-related skills. Consolidating and scaling-up the Professional Internship Second, upgrading training course curricula and aligning them Program by increasing the partnership between schools to the labor market will improve the labor market opportunities and employers can improve the internship experience for job-seekers. Third, removing barriers especially for women for the intensive action and market ready youth and through expansion of training areas, scholarships and adapting help them make the school-to-work transition (Table programs designed to serve vulnerable women (Box 2 illustrates 3). International evidence shows that on-the-job training one such example). programs facilitate entry into jobs, particularly for young labor market entrants (Box 3). However, in Angola, several companies Box 2: Key design features of Jóvenes program (classroom and are reluctant to accept interns due to the cost of remunerating workplace-based technical training) additional staff (the interns) and the associated transaction costs of having an additional (relatively unskilled) person on The Jóvenes programs in Latin America and the Caribbean the shop floor. To scale up the program, the government could developed a model that targets vulnerable youth with a consider introducing adequate tax incentives for companies joint package of classroom-based technical training in low- that accept interns, and companies that hire interns after the skilled trades, socio-emotional skills development delivered internship is completed, through specific legislation. over three to six months, followed by one to three months in an apprenticeship in the private sector. Several impact Box 3: International evidence on on-the-job training programs evaluations have found the program design to have positive for youth or vulnerable populations. effects on employability, formality and/or earnings, particularly among women and more vulnerable youth. Some of the key International evidence shows clear positive effects of on-the- features that have made the program a success, include: job training on employment, earnings, and job quality: • The services are provided by NGOs that specialize in • Increased earnings by 50 percent in Ghana for employed training. They operate under the umbrella of a public individuals who did apprenticeships but had no formal sector entity responsible for program implementation. education, although the return declined as education • NGOs are selected through a competitive process. levels rose. Commonly, NGOs must provide evidence of, among • Increased employability of apprentices in Brazil in a non- other criteria: (i) Experience providing training courses to temporary formal job both in the short and medium vulnerable youth; (ii) Appropriate facilities and presence run. The impacts increase over time, with much larger in communities where the target population live; (iii) A estimates (between 10.4 to 17.7 percent) in the medium curriculum that provides technical training with a strong run. emphasis on socio-emotional and behavior skills (SEBS) • Increased employment by 15 percent in Kenya among that are built into the curriculum and the culture of the vulnerable young males who were out of school and/or program; and (iv) a MOU with a private sector firm that had no permanent job. The dual nature of the program will provide apprenticeship experience to beneficiaries. offered an internship and classroom-based technical • Strong NGO and firm collaboration in terms of defining training. Positive effects on wage earnings among the technical and SEBS that will be taught in the pre- females and older males were also observed. apprenticeship phase, active NGO engagement with the learners during the apprenticeship period (including Enhancing the productive inclusion of vulnerable youth in troubleshooting employment issues), and joint rural and urban areas, especially women, by expanding management of the apprenticeship process. this component of Kwenda. Where markets are limited, • A stipend to cover basic transportation and food such as in rural areas, or potential workers are very vulnerable expenses (and childcare expenses for young mothers) is and face many constraints, bundled economic inclusion given to youth participants to offset the opportunity cost interventions42 are uniquely placed to address the plurality of of program participation. constraints poor women face and to empower them beyond the economic domain. The Kwenda cash-transfer program 42 Economic inclusion programs are a bundle of coordinated, multidimensional interventions that support individuals, households, and communities so they can raise their incomes and build their assets. While the measures will vary considerably across countries and contexts, a common set of multidimensional interventions may include some form of cash or in-kind transfer, skills training or coaching, access to finance, and increasingly, links to market support. (Partnership for Economic Inclusion, World Bank.) Good Jobs for Angolan Youth: Opportunities, Challenges and Policy Directions. Policy Brief. 24 already provides such support to a minority of beneficiaries. for the public sector to constantly update services to help job It can do more by adopting gender-sensitive measures to seekers acquire those jobs. The system should be built on high- encourage women’s participation: hiring women as frontline quality data collected by the Statistical Office (Instituto Nacional staff (ADECOS or community workers) so that they may provide de Estadisticas, INE), acquired through regular household, labor a coaching role and engage on sensitive subjects that often market and business surveys, and complemented by big-data arise in the beneficiary population, such as gender-based sources, scraped from online job postings and social media. violence or family planning; exclusive use of digital transfers The LMIS will need to use the data to produce and disseminate to increase the prospect for women to have control over the information that is designed for and targeted to the needs of resources and mitigate the risk of having funds appropriated different users. The labor market Observatory for the Informal by other family members; provision of community training, Economy recently created under the Ministry of Economy and Planning (Executive Decree n. º 222/22) could be in charge of behavioral and coaching sessions near beneficiaries’ homes; producing and disseminating the information. childcare facilities or compensation for childcare to alleviate potential conflicts with childcare responsibilities; and offering flexible hours of participation to accommodate domestic In summary and care responsibilities. These measures will reduce many of The report’s main conclusion is that Angola is at a critical the barriers hindering income-earning activities by Angola’s juncture and a multi-sectoral strategy is needed to stimulate job creation that will help build the economy extreme poor and vulnerable young women in rural and urban and future prospects for young Angolans, while more areas (“hard to serve” and “intensive action” in Table 3). deeply engaging youth and increasing productivity in the short term. Job prospects are limited and although Strengthening intermediation services to provide the youth are better prepared for the labor market than adults, information to place vulnerable and non-vulnerable youth they are still highly vulnerable and face multiple constraints. into the right jobs (Table 3). First, Angola can enhance the The existing ALMPs offer few programs that are appropriate for capacity of Employment Centers by developing an integrated the most vulnerable youth. Though the latest macro-economic job vacancy system and adapting services to meet the needs adjustments and fiscal consolidation will help, much more is of vulnerable youth and women. Timely career information needed to leverage oil revenues away from pure consumption provision (including before leaving the education system), and and towards investment to develop Angola as a country in its pro-active labor intermediation services (eg: CV preparation, own right. More aggressive policy reforms in the private sector job interview techniques) is an effective, low-cost intervention, are needed to support productive job growth for firms as well as particularly for women who frequently self-select into entrepreneurs to ensure good jobs that are particularly inclusive traditional and low-paying sectors. The integrated job vacancy of vulnerable youth and women. Furthermore, investments in system would collect and share information on job vacancies, human capital will help youth develop the skills needed for while partnerships with the private sector to run Employment better jobs while improving labor-matching mechanisms to Centers would enable a more efficient running of the same help youth transition into employment. Experiences from other centers while public employment services could be prioritized countries offer lessons that Angolan policymakers can consider for vulnerable groups (albeit not highly vulnerable) with private as they implement the National Development Plan and build intermediation services focused on the non-vulnerable. Second, Angola for the decade when Angolans, rather than oil, drive the Angola can create a Labor Market Information System (LMIS) to economy and their own welfare. collect and provide information relevant to students, parents, teachers, job seekers, training institutes, and the public sector to enable workers to be better prepared for employment and 25