69995 Labor Markets and Youth Social Protection & Labor Policy Note June 2012 | Number 13 Highlight Adolescence Economic crises Protecting and Promoting Human can delay or prevent the achievement Development in Times of Economic Shocks1 of developmental milestones during Kevin Hempel, Alice Wuermli, Mattias Lundberg2 adolescence, with potentially serious long- A term consequences. A dolescence is a demanding and critical period in life. Failure to meet certain better understanding of developmental milestones can have serious short- and long-term implications for the individual and society at large. This note provides an overview of how human developmental economic shocks can affect adolescent development, and how policies and programs can processes provides protect and promote human development in the face of adversity. Policies and programs useful entry points for to prevent and mitigate the negative impact of crises on schooling, employment, mental health and risky behaviors can be made more effective by incorporating psychosocial policies and programs. support and mentoring. Context Economic crises can have serious implications for human development. Financial crises, at both the global and the national level, are ubiquitous. This raises concern about the human impacts of crises, especially among more vulnerable populations in develop- ing countries. This is particularly true during childhood and youth, when the brain is developing rapidly, and when socioemotional and behavioral development are at their peak. Given the cumulative nature of human development, shortfalls or setbacks at any stage of the life course—from the antenatal environment through adolescence—are often difficult to reverse later in life and may have severe consequences for individual develop- ment as well as for the growth and development of successful communities. Thus, it is essential to protect and promote human development in the face of adversity. Three interrelated concepts provide the foundation for understanding the potential impacts of shocks on children and youth. ■ Timing: Human development is characterized by critical periods of life during which certain investments must be made to facilitate the achievement of specific milestones in development, or stage salient developmental tasks. These age-related expectations for the mastery of particular tasks provide benchmarks for the abilities 1 This note is part of a three note series that summarizes findings from Lundberg, M. and A. Wuermli (eds). 2012. Children and Youth in Crisis: Protecting and Promoting Human Development in Times of Economic Shocks. Washington DC: The World Bank. 2 The authors wish to thank Juliana Arbelaez, Davíd Robalino, and Michael Weber for their invaluable col- laboration and comments. 1 Policy Note: Labor Markets and Youth June 2012 | Number 13 that an individual should ideally master by different ages, and successfully managing this transition requires the mastery and that are correlated with successful development and of three interrelated stage-salient tasks:3 transition to subsequent stages in life. Economic crises can disrupt a young person’s “normal� development by ■ Autonomy and relatedness: As young people mature, they preventing or delaying the mastery of these developmen- renegotiate their relationships with parents, peers, teach- tal tasks at specific stages, which—if uncorrected—can ers, and other adults. Settings outside the family, such as have potential long term consequences. the workplace, become increasingly important. Young people must achieve greater personal and financial inde- ■ Context: Development in childhood and youth is in- pendence while maintaining positive relationships with fluenced by diverse contexts or settings (family, peers, parents and other adults. schools, communities, sociocultural belief systems, policy regimes, and the economy). The relative importance of ■ Identity: The process of growing more autonomous and de- these settings changes during the lifecourse. Interactions fining one’s role in society requires that adolescents establish among these settings determine both the transmission personal and vocational preferences and aspirations. of shocks such as a financial crisis to the young person’s ■ Goal setting and achievement: The ability to define goals immediate environment and the impact of the shock on and plan and act strategically provides the foundation for her development. As development is partly a function subsequent growth and development. of a person’s repeated interactions with her immediate environment (the proximal processes of human develop- Economic crises can impair healthy adolescent develop- ment), shocks can disrupt the contexts in which these ment. Crises affect the opportunities and support structures processes occur, and hinder a young person’s ability to available to adolescents to develop the cognitive, socioemo- develop successfully. tional, and behavioral competencies needed to master the stage-salient tasks. In particular, crises can lead to: ■ Transmission mechanisms: There are numerous pathways through which a crisis can affect the well-being and de- Limited and unpredictable employment opportunities. Youth velopment of a young person. Crises may be experienced employment tends to be more vulnerable to economic crises directly at the individual level (through e.g. a change in than adult employment.4 Young people are often engaged in aspirations and identity), or indirectly through the family, temporary and unprotected work—such as seasonal, tempo- school, or other settings (through e.g. increased parental rary, and part-time jobs—or in sectors particularly vulner- stress, parental job loss, a reduction in publicly-provided able to economic fluctuations, such as construction. By services). The developing person will experience crises constraining employment opportunities, as well as the avail- through the loss in income, but also through other chan- ability of other entry points into the labor market, such as nels, such as psychological distress. The relevance of each internships and apprenticeships, economic shocks affect the particular transmission mechanism varies depending process of acquiring necessary skills, work experience, and on the life stage of the person as well as on the context. achieving financial autonomy. Worsening labor market con- Different settings may provide protective factors that pre- ditions can also affect adolescents’ expectations, vocational vent, mitigate or attenuate negative impacts; these factors identity, and personal goals, as the context and perceived can be a source of resilience, facilitating positive adaptive likelihood of achieving them may change dramatically. behavior on the part of the developing person. Loss of parental employment and income, and deterioration of family dynamics. The threat or realization of losing income Effects of economic crises on adolescents or assets can lead to anxiety among parents, which is then Adolescence is a crucial stage in a person’s development. transmitted to adolescents through parents’ emotions Adolescence is marked by profound physical, emotional, and and behaviors.5 For example, the quality of parenting social transitions; the brain undergoes significant neurologi- can be negatively affected, impairing the development of cal development, and cognitive and socioemotional abilities adolescents’ autonomy and ability to form relationships. take shape. While social expectations of the precise timing Impaired family dynamics are linked to mental health of certain transitions vary across countries and cultures, all problems and heightened incidence of risky behaviors. adolescents are eventually expected to make the transition to Research also shows that adolescents who perceive economic adulthood, including entering work, becoming financially in- stress within their families have lower self-expectations for dependent, and starting a family. Adapting to these new roles the future. 3 See for example Roisman et al. 2004. “Salient and Emerging Developmental Tasks in the Transition to Adulthood.� Child Development 75 (1): 123–33.; Crockett, L., and R. K. Silbereisen. 2000. Negotiating Adolescence in Times of Social Change. Cambridge, UK: Cambridge University Press. 4 See for example Choudhry, M., E. Marelli, and M. Signorelli. 2010. “The Impact of Financial Crises on Youth Unemployment Rate.� Working Paper 79, Department of Economics, Università di Perugia: Perugia, Italy; Verick, S. 2009. “Who Is Hit Hardest during a Financial Crisis? The Vulnerability of Young Men and Women to Unemployment in an Economic Downturn.� Discussion Paper 4359, IZA: Bonn. 5 See for example Conger, R. D., and G. H. Elder. 1994. Families in Troubled Times: Adapting to Change in Rural America. New York: Aldine de Gruyter; Conger, R. D. et al. 1992. “A Family Process Model of Economic Hardship and Adjustment of Early Adolescent Boys.� Child Development 63 (3): 526–41. 2 Social Protection & Labor | Human Development Network | The World Bank Changes in the availability of adult role models outside the achievement, increased substance abuse, violence, and family. Crises may not only affect intrafamily dynamics, but risky sexual behavior. also the availability of and interactions with positive role models in the school or community. Lower public expen- ■ Risky behavior: Economic adversity and its effects on the diture can adversely affect the quality as well as quantity of adolescent and her immediate environment may lead to schooling, while supervised extracurricular activities and greater risk taking, although this response is by no means out-of-school programs are often discontinued. These reduce universal.9 Crises can diminish the quality of parenting, the availability of positive adult mentoring relationships, which in turn may increase the likelihood for delin- restricting the support and guidance available to adolescents quency among youth. Similarly, stress and mental health in mastering their developmental tasks. problems have been associated with risky sexual activity. But while young people who experience severe stress are In addition to these disruptions in their immediate environ- more prone to substance abuse, an income shock that ment, adolescents are more aware than younger children decreases disposable income can decrease the consump- of the impact of shocks on socioeconomic status, and they tion of alcohol, tobacco, and drugs. may perceive economic pressures and stigma more directly. This can lead to additional difficulties with psychosocial adjustment, and influence their self-esteem, identity, future Policy implications orientation, and efficacy beliefs. The choice of policies and programs to protect and promote adolescent development in times of economic stress will The failure to master critical tasks can have negative im- depend on the transmission mechanisms at play. The dif- plications for adolescent development. Failure to achieve ferent pathways by which a crisis affects adolescents provide stage-salient developmental tasks can jeopardize other life a variety of entry points for programming and policy. In ad- outcomes. Although there is considerable heterogeneity across dition to targeting the young person directly in an attempt to individuals, crises can have particularly negative consequenc- mitigate negative outcomes, interventions may also target the es in the following areas: family and other influential settings such as the school and the ■ Schooling & Employment: Contrary to the experience of community. Since intervening in one particular setting may idiosyncratic shocks, such as parental job loss, there is no sometimes be difficult or expensive, it is important to consider compelling evidence that young people leave school dur- the potential substitutability of different settings in which ing aggregate crises to work and support the household.6 one might achieve similar outcomes. For example, instead Young people have fewer job opportunities in a crisis; of reaching individual families to support quality parenting, this decreases the perceived returns to entering the labor it may be possible to intervene in a training or work context market relative to remaining in school. On the other where many youth can be reached at once. hand, diminished opportunities for employment can Support the school to work transition. Interventions can severely affect those young people who do try to enter the provide transfers directly to a young person conditional labor market. Early un- and underemployment is known on his or her attending school, receiving training, holding to have serious long-term effects on future employment an internship, or participating in some sort of mentoring and lifetime income, and these young people often fail to or coaching program. In addition to protecting enroll- catch up when the economy rebounds.7 ment, these programs can simultaneously provide short-run ■ Mental health: By altering their relationships, identity, income support and improve mental health.10 Young people and goals for the future, unexpected life events can affect who find themselves in a difficult labor market will be more adolescents’ physical and mental health. 8 Difficulty in willing to engage in training to increase their skills. Compre- the labor market may lead to hopelessness and lower hensive programs, such as JobCorps in the United States or self-esteem, especially for young people who are in the the Jóvenes model in Latin America, which combine techni- process of forming occupational identities. In fact, un- cal training with on-the-job training through internships employment experienced at early ages is associated with or apprenticeships and mentoring, have been shown to be stress, depression, and illness later in life. Mental health comparatively effective. In this context, strengthening efficacy problems during youth can also lead to lower educational beliefs, that is, the belief that one is able to set goals, plan 6 See for example Cunningham, W., and J. Bustos-Salvagno. 2011. “Shocks, Child Labor, and School Dropouts in Argentina.� Mimeo. World Bank; McKenzie, D. 2003. “How Do Households Cope with Aggregate Shocks? Evidence from the Mexican Peso Crisis.� World Development 31 (7): 1179–99. 7 See for example Duryea, S., and M. Morales. 2011. “Effects of the Global Financial Crisis on Children’s School and Employment Outcomes in El Salvador.� Devel- opment Policy Review 29 (5): 527–46.; Scarpetta, S., A. Sonnet, and T. Manfredi. 2010. “Rising Youth Unemployment during the Crisis: How to Prevent Negative Long-Term Consequences on a Generation.� Social, Employment, and Migration Working Paper 106, OECD: Paris. 8 See for example Das, J. et al. 2007. “Mental Health and Poverty in Developing Countries: Revisiting the Relationship.� Social Science and Medicine 65: 467–80.; Bell, D., and D. Blanchflower. 2010. “Young People and Recession: A Lost Generation?� Working Paper. Dartmouth College. 9 Chassin, L., A. Hussong, and A. Beltran. 2009. “Adolescent Substance Use.� In Handbook of Adolescent Psychology. 3rd ed., Hoboken, NJ: Wiley.; Lundberg, P. et al. 2011. “Poor Mental Health and Sexual Risk Behaviours in Uganda: A Cross-Sectional Population-Based Study.� BMC Public Health 11 (125): 1–10. 10 See for example Filmer, D., and N. Schady. 2009. “School Enrollment, Selection, and Test Scores.� Policy Research Working Paper 4998, World Bank, Washington, DC; Baird, S., J. de Hoop, and B. Ozler. 2011. “Income Shocks and Adolescent Mental Health.� Policy Research Working Paper 5644, World Bank: Washington, DC. 3 Policy Note: Labor Markets and Youth June 2012 | Number 13 strategically, and subsequently achieve them, can enhance beneficiaries’ motivation and self-confidence. Given the close Case Study: Supporting goal setting and mental links between mental health and employment, the integration health in education and employment programs12 of psychosocial support and counselling services into youth employment programs may enhance adolescents’ ability to find and maintain employment (see case study). Supporting goal-setting and psychosocial well-being is increasingly recognized as an important strategy to Enhance household support programs. Income-support enhance the effectiveness of education and youth em- programs targeted at the household, such as cash transfers ployment interventions, especially in conflict and crisis or public works, may replace lost family income in the short settings. The International Rescue Committee (IRC), run. However, as adolescents become increasingly aware for example, uses a comprehensive training package for of the family’s socioeconomic status and the stigma associ- their microfranchising and apprenticeship programs that ated with the receipt of public benefits, these programs may aim not only at generating income and savings, but have negative side-effects on the development of vocational also building self-esteem and goal-setting behaviors. In identity and future orientation among beneficiaries’ teen- addition to acquiring employability and business skills, age children. Household-level income-support programs are youth learn how to identify personal and work-related likely to be of greater long-term benefit to adolescents if they goals and manage their own lives. Confidence in goal also provide assistance with job search and other support setting and achieving, in turn, seeks to provide partici- services in the community.11 pants with a more positive future orientation, sense of self-worth, and supports the development of a produc- Support positive relationships with adults outside the tive vocational identity. family. Positive role models outside the family can be of great importance in the process of forming identity, developing Similarly, organizations like AVSI have introduced self-regulatory skills, and setting and achieving goals. Thus, individual psychosocial counseling into their vocational in addition to preventing adolescents from dropping out of education programs to assist students with reducing school in the first place, providing adult-supervised out-of- psychological distress and identifying coping strategies. school activities in youth-friendly spaces may help to develop In addition, by training instructors in basic psychosocial competencies and provide socio-emotional support. Leverag- support, they enabled the teaching staff to better iden- ing the existing personnel and infrastructure of the schools tify symptoms of mental health problems and respond and community can reduce costs and make these interven- appropriately inside and outside the classroom. tions viable even in low-resource environments. Since these services are generally provided by local authorities, this requires that budgets for sub-national levels of government are increased or at least maintained in times of adversity. 11 McLoyd, V. et al.. 2011. “Assessing the Effects of a Work-Based Antipoverty Program for Parents on Youth’s Future Orientation and Employment Experiences.� Special issue, “Raising Healthy Children,� Child Development 82 (1): 113–32. 12 International Rescue Committee. 2011. Microfranchising: The Potential for Innovation in Youth Entrepreneurship. Youth Livelihoods Technical Review. IRC: New York; Bannink-Mbazzi, F. and A. Lorschiedter. 2009. “Psychosocial support to vulnerable youth in vocational schools in northern Uganda.� Intervention Volume 7, Number 2, Page 130–137. The findings, interpretations, and conclusions expressed herein are those of the author(s), and do not necessarily reflect the views of the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. For more 4 information, please visit www.worldbank.org/sp.