Featured News 2019 News

In South Africa, financial capability intervention improves youth employment probability

Credit: Centre for Social Development Africa

In South Africa, young people face staggering unemployment rates. In addition to limited growth in the number of available jobs, South African youth must contend with various barriers to the labor market, and many struggle to navigate the pathways to employment.

What can be done to reverse this trend and stabilize employment rates?

The Centre for Social Development Africa—CSD’s sister center at the University of Johannesburg—offers some answers through its recently published Siyakha Youth Assets Study. Led by Leila Patel, Gina Chowa and Lauren Graham (among others), the study examines whether the combination of a Youth Employability Program and a financial capability intervention can have an impact on young people’s job outcomes.

Credit: Centre for Social Development Africa

Launched in 2013, the study tracked 1,974 participants of Youth Employability Programs in 44 sites across the country. Participants in half of the sites were randomly assigned financial literacy training and given access to a no-cost savings account. Graham says, “most of these young people were from very poor households earning less than $40 per person per month. They faced significant financial barriers to work-seeking.”

“We hypothesized that supporting young work seekers to manage limited financial resources could be a complementary intervention to existing Youth Employability Programs that might enable them to achieve their goals,” says Patel. The study finds that Youth Employability Programs positively contribute to young people’s labor market, education and resilience outcomes. Compared to youth in the control group who did not receive the financial capability intervention, program graduates are 9% more likely to find employment.

Credit: Centre for Social Development Africa

Moreover, 28% of the full sample found and retained employment two years after completing the program, and 17% moved on to pursue further education. The remaining 54%, though still unemployed two years after completing the Youth Employability Program, continued the search for work and remained hopeful—a sign of resilience.

The compelling findings from this study warrant further research to more fully understand the effects of financial capability interventions on young people and how they can inform policy for Youth Employability Programs in the future.

This study represents the potential of true partnerships between international academic institutions. Rather than simply bestowing expertise upon developing nations, dedicated international collaborations exemplified by this model mutually benefit all involved. In such partnerships, applied research studies undertaken in countries across the globe generatively inform and strengthen each other as evidence continues to build, thus ensuring the greatest sustained impact for individuals and communities.

Chowa, who trained at CSD and the Brown School and now serves as the founding director of Global Social Development Innovations at the University of North Carolina at Chapel Hill, emphasizes the significant results possible through strong partnerships: “Bringing together Leila’s expertise in social development and my own experience in financial capabilities enabled us to develop and test an innovative and impactful intervention to address youth unemployment in South Africa.”