According to the author’s estimates, more than 25% of the world’s 15- to 24-year-olds are neither employed nor in school. In total, nearly half of the world’s youth population is less productive than they could be. Various solutions have been proposed to address this problem.

The worldwide underutilization of the younger labor force is a negative economic force that practitioners should understand. Historically, rates of un- or underemployment for young people have been higher than overall average rates. This problem has been exacerbated in the past few years by the financial crisis and the inefficiency of labor markets in emerging countries, where the youth population is large.

The economic loss in Europe from disengaged young people in 2011 is estimated to be nearly 1% of GDP. Other studies have concluded that people who enter the workforce without having had prior jobs tend to earn less and have a greater chance of unemployment in the future, especially in developed countries.

Nations with the highest rates of youth unemployment share three problems: low economic growth, rigid labor markets, and a mismatch between the skills employers need and those that young people possess. Many employers are struggling to find young workers with appropriate skills for entry-level positions.

Germany has been able to limit youth unemployment with its traditional apprenticeship programs. Programs of this type have been used less outside of Europe and are not popular in the United States, where job training expenditures continue to be reduced.

But there are places where this skills gap is being addressed, primarily by upgrading vocational schools, expanding the use of apprenticeships, strengthening ties between schools and local businesses, and embracing technology as a more cost-effective way to provide vocational training.

Long-term solutions to the youth employment problem will require countries to increase economic growth, break down labor barriers, and build connections between business and education.