Remarks by Angel Gurría, OECD Secretary-General, Seminar on Youth to Work Transition, 22 October 2013, Brasília, Brazil

(As prepared for delivery)

 

Dear Minister Dias, Dear Minister Mercadante, Ladies and Gentlemen,

It is a real pleasure to be back in Brasilia to launch “Investing in Youth: Brazil” and to participate in this Seminar on Youth to Work Transition. It gives us an opportunity to discuss how we can provide youth with a better future. I am delighted to see so many people here today.

One of Brazil’s greatest assets is its relatively young population. But you can reap a demographic dividend only if the environment is right for harnessing the potential and the talents of the young generation. Giving young people the skills and tools to find a job is not only good for their own prospects and self-esteem, it is also good for economic growth, social cohesion and widespread well-being. That’s why investing in youth must be a policy priority the world over!

This report is the outcome of a fruitful collaboration between the OECD and Brazil over the past 12 months. I want to thank Minister Manoel Dias and the Minister of Education, Aloisio Mercadante, for their valuable support for our work and for making today’s event happen. Thank you Ministers!

Brazil’s solid trajectory

Brazil’s significant reforms over the past decade have led to impressive strides, both economically and socially. Resisting the worst effects of the global financial crisis, the country’s economic dynamism has helped to reduce poverty, narrow disparities in the distribution of income and improve the well-being of the population.

Economic growth has had its effect on the labour market. Despite a slowdown in economic activity, unemployment has been falling steadily. In July 2013, the rate of unemployment in Brazil’s six largest metropolitan areas reached its lowest level in a decade at 5.6%, in contrast to the 8% OECD average.

Brazil has also made important progress in its efforts to support its youth. Policies focused on improving the skills and educational attainment of the population are bearing fruit. Resources allocated to education have increased a great deal – from 10.5% of total public expenditure in 2000 to 16.8% in 2009. These investments have resulted in significant progress in educational attainment. Brazil is one of the top three fastest improving countries in terms of its PISA programme test scores over the past decade.

And there are other improvements. The education and training system is now easier to access and of better quality than ever before, while the proportion of individuals who attain upper-secondary education has doubled within a generation.

Persistent challenges

These are very important accomplishments, but they should be no cause for complacency. Brazil is still facing important challenges in this area. Youth unemployment in Brazil stands at 15.3%, and nearly one out of every five young Brazilians is not in education, employment or training – NEETs or “nem-nems” as you call them here. The rate is twice as high for young women as for young men.

Young people in Brazil are over three times more likely to be unemployed than adults, while in the OECD this ratio stands at 2.5 to 1. There are also important gender, racial and regional inequalities in terms of youth employment. And let’s not forget precariousness: a large number of young people are often employed in low-quality jobs, where turnover is high and employers are failing to invest in their workers.

Many of these problems have their roots in the education system. In 2011, 8.5 million Brazilians aged 15 to 24 did not finish basic education, and a third of 20- to 24-year-olds left school without attaining an upper-secondary qualification – twice the average rate observed in the OECD. In addition, the number of apprenticeships is extremely low. In 2012, a mere 260 000 apprentices were hired – representing less than 1% of the youth population aged 15-24.

Building on the success of the education system

The report we are presenting today – Investing in Youth – addresses many of these challenges. It focuses on Brazil’s youth labour market and education system and provides insight, not only on what can be improved here in Brazil, but also what the rest of the world can learn from you. Let me highlight some of the report’s proposals.

The Bolsa Família programme has been one of Brazil’s great success stories, ensuring that many more young people from poor households go to school. Building on this achievement is now essential; its impact could be further boosted if conditionality shifted from attendance to completion and attainment. In addition, the vicious circle of poverty and unemployment could be avoided by ensuring that families don’t lose all their benefits as soon as they start to earn more than the minimum wage.

But getting kids to stay in school is only half the challenge. The quality of the education they receive is just as important, if not more so. Despite having a younger population than most OECD countries, Brazil still spends less than the OECD average on education. And although it has had a positive impact in numerous areas, spending remains heavily geared towards the tertiary sector, marked by very low participation rates, at the expense of primary and secondary education, which now have near universal participation. Teaching standards could be improved, for example, by introducing performance-related pay and promotion for teachers.

Every young person should leave school with the skills they need to find a decent job, but they will still face competition from older people with more experience. That’s why it’s so important to make it as easy as possible for firms to hire young people who may lack basic job search skills. It is therefore important that employment services, like SINE, are tailored to their needs and equipped with the capacity to monitor and assist in job searches.

Ideally, everything a young person needs to find a job should be brought under one roof: information and advice about their options for education and training, as well as social and employment services. A “one-stop shop”, like the proposed Estação Juventude, is exactly what young Brazilians need. The ProJovem programme has been highly successful in reaching out to pupils who have failed to complete their primary education in order to make sure they have the right skills to find a job, but it could be further improved by complementing classroom learning with work-based training.

Making young jobseekers more attractive to prospective employers is essential. And for this to be achieved, the cost of employing them must be reduced. Many OECD countries are going in the direction of reducing the level of social security contributions firms must make for young employees. Well-designed subsidies to companies taking on disadvantaged, unemployed youth can also a make a difference.

Introducing greater flexibility for employers is also important. They will be more inclined to hire a young person, for example, if they have more time to assess whether the person is right for the job. At three months, the trial period in Brazil is much shorter than the OECD average of five months. Consideration should therefore be given to extending the probationary period.

Ladies and gentlemen:

Brazil’s strength is proportionate to the skills of its youth. The current and the next generations of young Brazilians will build the country of the next 100 years. Providing support so that young people can develop their full potential is crucial for the future of the country, and policies aimed at helping them to develop skills are key to making progress in this direction.

The study we are launching today is a further step towards mobilising Brazil’s efforts to overcome the challenges faced by its youth. As always, the OECD stands ready to help Brazil to implement better policies for better lives.

Thank you very much.