Young People: Invest Now, Gain Later

Investing in young people is crucial for a nation's future. Young people are a vital resource for a country's development and governments should prioritise expenditure on the younger generation. The COVID-19 pandemic highlighted the need to support young people, who were disproportionately affected by the labour market impacts of the crisis. They faced higher rates of unemployment and struggled to find work, with many having to move back in with their families. Furthermore, the pandemic disrupted their education, with remote learning becoming the norm. Even before the pandemic, young people faced challenges such as the risk of poverty, difficulty finding affordable housing, and limited access to mental health support. Governments must address these issues and invest in youth to ensure a brighter future for their societies and economies.

Education and training

Secondly, education has significant economic benefits for individuals. The rate of return on education equates to the value of lifetime earnings compared to the costs of education. Global data shows that each additional year of schooling leads to an average increase of 10% in lifetime earnings, with the returns being higher for women at all levels of education. This highlights the importance of governments investing in education to improve the economic prospects of their citizens, especially women, who often face barriers to accessing education in many parts of the world.

Thirdly, education systems must ensure that they are providing students with the necessary skills and knowledge to succeed in the job market. In many countries, primary and secondary schools are failing to equip students with essential cognitive skills such as numeracy, literacy, problem-solving, and scientific knowledge. Additionally, inadequate technical and vocational education can leave students unprepared to meet the changing demands of the job market, creating a skills gap. Therefore, governments should invest in improving the quality of education to ensure that young people have the skills needed to contribute productively to the economy.

Finally, the COVID-19 pandemic has exacerbated the global learning crisis, affecting both the funding and delivery of education, particularly in low-income countries. The pandemic has highlighted the disparities in access to quality education, with many children being out of school or not receiving adequate basic education. Governments should prioritize education funding in their recovery plans to address these disparities and ensure that young people have the opportunity to achieve their full potential.

Financial literacy

Paragraph 1: The Importance of Financial Literacy

Paragraph 2: Early Education and Resources

It is essential to educate young people about finances early in life and at pivotal points in their development. Providing age-appropriate financial education in schools can help students develop the building blocks of financial capability. This includes understanding basic financial topics, such as saving, spending, and borrowing. Early financial education can have a lasting impact on their financial well-being, reducing the likelihood of making costly financial mistakes later in life.

Paragraph 3: Addressing Inequality and Supporting Entrepreneurship

Underinvestment in young people can contribute to a generational wealth gap, as seen in the US, where resources are diverted away from the youth to support the elderly. This has resulted in younger generations facing challenges such as debt from college loans, high unemployment, and stagnant wages. By investing in financial literacy, governments can help address this inequality and empower young people to build capital, buy homes, and even start new businesses. This can stimulate economic growth and reduce the wealth gap between generations.

Paragraph 4: Long-Term Benefits for Society

Investing in financial literacy for young people has long-term benefits for society as a whole. Financially literate individuals are more likely to have the capital to buy homes, raise children, and contribute to the economy. It can help address the "demographic winter" phenomenon, where the workforce shrinks as society ages and fewer people can afford to have children. Additionally, financially literate entrepreneurs are more likely to take risks and start successful businesses, further contributing to economic growth.

Paragraph 5: Government Investment in Financial Literacy

Governments play a crucial role in promoting financial literacy among young people. They can achieve this through various initiatives, such as providing grants to organizations that offer financial education, developing and distributing educational resources for schools and communities, and partnering with financial institutions to offer youth-focused programs. By investing in financial literacy, governments can help young people make better financial decisions, reducing the likelihood of them falling into debt or facing financial hardships.

Mental health support

Impact of the COVID-19 Pandemic

The pandemic has disrupted the lives of young people, affecting their education, social interactions, and economic opportunities. Remote learning became the norm, and in-person teaching was suspended for months during the pandemic. The pandemic has also led to financial insecurity and sharp income losses, causing many young people to move back in with their families. These disruptions and uncertainties have taken a toll on the mental health of young people, with symptoms of anxiety and depression rising sharply.

Existing Challenges in Accessing Mental Health Support

Even before the pandemic, seeking mental health support was challenging for young people. Long waiting lists meant that young people often had to wait a long time before receiving the help they needed. Additionally, the cost of private mental health care can be a burden, especially for those who are still in school or starting their careers. The current generation faces challenges such as an expensive housing market and a rising cost of living, contributing to unprecedented anxiety about their future.

Government Investments in Mental Health Support

Recognizing the urgency of addressing these issues, governments have taken steps to invest in mental health support for young people:

• The Biden-Harris Administration in the United States announced over $200 million to support youth mental health, including grant programs, expanding access to mental health care in schools, and improving the quality of mental health services provided to children in the child welfare system.
• The UK government invested £3.3 million to expand 23 local projects aimed at preventing mental illness in children and young people, including counselling, mentoring, and arts programmes.
• The Canadian government announced a $500 million Youth Mental Health Fund to help young Canadians access mental health care by reducing wait times and providing more care options through community health organizations.
• The OECD (Organisation for Economic Co-operation and Development) countries have introduced emergency income support for young people, hiring subsidies to encourage employers to hire young people, and strengthened apprenticeship schemes and summer jobs.

Recommendations for Further Action

While these investments are a step in the right direction, more can be done to ensure that young people have access to the mental health support they need. Governments should continue to prioritize mental health in their policies and budgets, ensuring that young people have timely access to affordable and effective mental health services. This includes investing in early intervention and prevention programmes, as well as ensuring that schools and communities have the necessary resources to identify and support young people at risk of mental health problems.

By addressing these challenges and investing in mental health support for young people, governments can help lay the foundation for a healthier, more resilient, and more fulfilled generation.

Housing affordability

In recent years, demand for housing has been sustained or increased due to factors such as population growth, immigration, and the desire for homeownership as part of a country's identity (e.g., Canada). At the same time, the supply of housing has not kept up with this demand due to various factors.

One factor limiting supply is the resistance to high-density developments in established neighbourhoods. Local governments and communities often oppose taller, higher-density residences, resulting in strict zoning laws and land-use regulations that prevent or limit such initiatives. For example, the Greenbelt in Ontario, Canada, protects 2,000,000 acres of land surrounding Toronto from development for environmental reasons. While this preserves the character of these neighbourhoods and mitigates urban sprawl, it also restricts the availability of land for new housing.

Another factor is the time-consuming and costly nature of the development process due to bureaucratic hurdles, permits, building codes, and regulations. These obstacles make it more expensive to build new homes and can even halt projects altogether, reducing the number of homes available on the market.

The consequences of the housing affordability crisis are significant. Young people are making compromises, such as living with their parents for longer, delaying relationships and starting a family, or moving to more affordable but less desirable locations. Additionally, the dream of homeownership is slipping away for some, and even renting has become unaffordable for many, with rents rising at a historic rate.

To address the housing affordability crisis, a comprehensive strategy is required. This includes increasing the supply of housing by developing new units, preserving existing affordable housing, and exploring different housing types, such as multi-family units like apartments and condos. Additionally, governments can play a role by investing in rental assistance programs, providing incentives for affordable housing developments, and reforming policies that restrict supply.

While there are trade-offs to consider, such as sacrificing the character of neighbourhoods or environmental preservation, the benefits of improving housing affordability for young people are significant. It empowers them to pursue their dreams of homeownership, start families, and contribute to the economy as innovators and entrepreneurs.

Entrepreneurship

Provide access to funding

One of the biggest challenges for entrepreneurs is accessing capital to turn their ideas into reality. Governments can help by providing grants, loans, and other financial incentives. For example, the US Small Business Administration offers loans of up to $5 million to eligible businesses. Governments can also provide tax incentives for investors who fund start-ups. This is especially important for young entrepreneurs who may have limited access to capital and struggle to secure funding from traditional sources.

Reduce bureaucratic red tape

Entrepreneurs often face complex regulations and paperwork. Governments can simplify and streamline the process of starting and running a business. For instance, Singapore has an online business registration system that allows entrepreneurs to register a company in a matter of hours. Reducing red tape makes it easier for young people to navigate the process of starting a business and removes barriers to entry.

Invest in education and training

Entrepreneurs need a wide range of skills, from business management to product development. Governments can invest in education and training programmes to help entrepreneurs, particularly young entrepreneurs, acquire these skills. For example, the National Science and Technology Entrepreneurship Development Board in India provides training and support in science and technology entrepreneurship. This is crucial for young people who may be starting their entrepreneurial journey and need guidance and skills development.

Encourage innovation

Create a supportive legal framework

A favourable legal environment is essential for entrepreneurship to flourish. Governments can simplify business registration, protect intellectual property rights, and enforce contracts to support entrepreneurs. For example, the US patent system and the ease of forming LLCs and corporations. A clear and supportive legal framework provides certainty and protection for young entrepreneurs as they navigate the business world.

Foster a culture of entrepreneurship

Governments can promote entrepreneurship by creating a culture that values and supports it. This can be done through public awareness campaigns and recognising the contributions of entrepreneurs. For example, Global Entrepreneurship Week brings together entrepreneurs, investors, and experts to exchange ideas. Celebrating young entrepreneurs and their achievements can inspire and motivate other young people to pursue their entrepreneurial dreams.

Stimulate networking and collaboration

Entrepreneurs often need to network and collaborate with peers, investors, and experts. Governments can create opportunities for entrepreneurs to meet and exchange ideas through accelerators and incubators, which provide mentorship, training, and resources to early-stage start-ups. These programmes offer a network of support and help start-ups grow and succeed. Encouraging collaboration among young entrepreneurs can foster a sense of community and provide a platform for them to learn from and support each other.

Frequently asked questions