Asia’s youth job crisis deepens as informal work expands

Young people across Asia are facing growing struggles in securing decent employment, with millions trapped in low-paying, unstable jobs that offer little room for advancement.

A new World Bank report released this week warns that this imbalance could threaten economic progress and social cohesion, as frustrations over inequality and job scarcity continue to spill into the streets.

The report highlights that while overall employment remains high, the quality of available jobs has deteriorated. Most young jobseekers who find work end up in low-productivity or informal roles, especially in countries such as China, Indonesia, and the Philippines, where one in seven young people remains unemployed.

The World Bank cautioned that the share of people vulnerable to poverty now exceeds the size of the middle class in many Asian economies.

Youth unemployment gap shows persistent divide

Across Asia, unemployment among 15- to 24-year-olds is at least double that of the core working-age population. In countries such as Mongolia, Indonesia, and China, youth unemployment exceeds 10%, while the rate for those aged 25-54 remains below 5%.

This gap illustrates how difficult it has become for young workers to transition from education to stable employment.

Despite economic expansion in many Asian markets, the World Bank report notes that “most individuals who look for work find it,” but adds that these jobs are often in the informal economy.

These include roles in street vending, gig work, or temporary manual labour, which lack benefits, social protection, and prospects for long-term growth.

Job creation shifts from manufacturing to services

The report finds that employment growth has shifted from manufacturing—once a reliable source of upward mobility—to low-wage services. The shift has weakened one of the region’s key engines of inclusive growth.

Sectors such as retail, transport, and hospitality are expanding rapidly, but many of the new positions are informal and poorly paid. As a result, even though job numbers appear strong, productivity and income growth remain sluggish.

This transformation risks reversing decades of progress that helped lift millions out of poverty during Asia’s manufacturing boom.

Gender and regional gaps widen

Women remain disproportionately affected by limited job opportunities. The World Bank notes that female labour-force participation lags men’s by roughly 15 percentage points in Indonesia, Malaysia, and the Philippines.

In many Pacific island nations, participation rates across both genders remain low, further restricting overall economic potential.

These disparities, combined with lower access to education and childcare, have kept women concentrated in informal or unpaid family work.

The report underscores that addressing gender inequality in labour markets will be crucial to sustaining growth and ensuring fair access to opportunity.

New firms drive job creation but face barriers

According to the report, firms that are five years old or less play an outsized role in job creation across the region. In Malaysia and Vietnam, for example, such firms account for 57% of total employment but contribute nearly 79% of job creation.

Yet, the rate of new firm entry is slowing, limiting the pace at which productive jobs can be generated.

The World Bank warned that restrictive regulations, limited access to finance, and market concentration are making it harder for new companies to emerge and scale. This decline in entrepreneurial activity risks entrenching youth unemployment further.

Rising youth frustration sparks global protests

Mounting joblessness among the young has fuelled a wave of protests across Asia and Africa. In recent months, large demonstrations have erupted in countries including the Philippines, Indonesia, East Timor, Mongolia, Kenya, and Madagascar.

Many of these movements have been driven by Gen Z activists demanding accountability, fair wages, and anti-corruption reforms.

In some cases, such as Nepal and Bangladesh, youth-led unrest has contributed to political upheavals. The World Bank warns that if these structural challenges remain unaddressed, dissatisfaction among young people could undermine stability and stall growth in several economies.

Trade gains uneven and vulnerable to shocks

While trade has supported job creation in Cambodia and Vietnam, the benefits remain uneven. Many countries are struggling to move workers from low-productivity to high-productivity sectors.

The report stresses that without stronger institutional reforms and better support for innovation and education, Asia’s growth model could become increasingly fragile in the face of global disruptions.

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