Youth labour market analysis and forecasting to inform revisions to a youth employment accelerator’s strategy and targets

Background and context

Harambee Youth Employment Accelerator is a not-for-profit social enterprise, with over a decade of experience, that works with partners across government, the private sector, and civil society to find solutions to the challenge of youth unemployment. From its early years of effectively implementing a hands-on service provider model, Harambee adapted its strategy to reach young people at scale by implementing a systems change approach. The organisation has achieved notable success in scaling its interventions, helping youth to access over 1.2 million opportunity placements since its inception.

Despite the efforts of the organisation and its partners, South Africa’s youth unemployment rate and NEET population continue to grow. There are significant macro factors outside the control of the organisation that continue to constrain progress in labour market outcomes; namely, weak and jobless economic growth and a skills development system not equipping youth with the competencies they need to secure and sustain a foothold in both the formal and informal economies. Against this challenging backdrop, and in the context of the organisation nearing the mid-point of its funding journey with a prominent funder, Harambee recognised an opportunity to reflect on its progress and identify means by which it can significantly increase its impact on the youth labour market.

Purpose of the engagement

Harambee engaged Nova Economics to assist the organisation in reviewing its systems change strategy and impact targets until 2030. This process aimed to conduct forward-looking analyses to identify key levers it could pull to significantly improve youth labour market outcomes in South Africa. The key forward-looking learning questions included:

• What are the possible trajectories of South Africa’s youth labour market under plausible macroeconomic and demographic scenarios?
• What levers across Harambee’s strategic pillars could have a significant impact on youth employment and which could be pulled by either Harambee or its partners to enable these impacts?
• What could the quantitative impact on the system of these levers being pulled be? What are reasonable time horizons for these impacts and how should these inform Harambee’s targets?

Our approach

Working alongside resources from Harambee, the Nova Economics team carried out the work in three steps.

Step 1: Labour market modelling and forecasting

Based on data from the Quarterly Labour Force Survey (QLFS) and the SA Youth platform, we

• Segmented the youth labour market into eight distinct groups by education level, geography, and gender.
• Analysed trends in these groups’ labour market outcomes.
• Developed youth and non-youth labour market forecasts through 2030 based on four macroeconomic growth scenarios, using regression analyses to estimate model coefficients.

Step 2: Internal strategy workshops

We conducted workshops with four Harambee business units to:

• Present preliminary modelling and forecasting outputs.
• Discuss potential implications for specific youth segments and the broader labour market.
• Gather input to define lever scenarios for further analysis.

Step 3: Lever impact forecasting

In the final step of the project, we estimated the potential impact of various demand-side levers if pulled by Harambee and its partners. These results, alongside insights from earlier phases, were presented to Harambee’s Executive Committee in a final workshop, providing key considerations for ongoing strategy and target-setting processes.