Youth Unemployment and Economic Growth in Developing Economies: A Review of Structural Drivers and Policy Interventions

Youth unemployment remains a major socioeconomic challenge in developing economies, constraining productivity, increasing poverty, and limiting the potential contributions of young people to sustainable economic growth. This review examines the structural drivers of youth unemployment and evaluates policy interventions designed to improve youth employment outcomes and promote inclusive economic development. It explores the interconnected roles of skills mismatches, inadequate education and vocational training, limited access to finance, rapid population growth, informality, weak industrial development, gender inequalities, and insufficient employment opportunities in shaping youth labor market outcomes. The review also considers how macroeconomic instability, technological transformation, and institutional constraints influence the capacity of developing economies to generate decent and sustainable jobs for young people. Furthermore, it assesses key policy interventions, including technical and vocational education and training, entrepreneurship development, youth enterprise financing, active labor market programs, digital skills development, industrialization, and public–private partnerships. The review indicates that isolated interventions are often insufficient to address the multidimensional nature of youth unemployment, particularly where economic growth fails to generate adequate productive employment. Instead, coordinated strategies that align education and skills development with labor market demand, strengthen private-sector job creation, expand access to productive resources, and promote inclusive economic diversification are essential. The review also highlights the importance of institutional effectiveness, gender-responsive policies, and targeted support for disadvantaged youth in improving employment outcomes. It concludes that reducing youth unemployment requires an integrated, long-term policy framework that connects employment creation with structural economic transformation, human capital development, and equitable access to economic opportunities. Such an approach can strengthen productivity, stimulate aggregate demand, reduce socioeconomic inequalities, and enhance the contribution of young people to sustainable economic growth in developing economies.