The composition and track record of the current Israeli government leads Palestinians to expect very little from Israel in the way of advancing peace. After five decades of military occupation, and repeated failures of two decades of bilateral negotiations based on the Oslo Accords, there is a clear need for new ideas. But the proposals offered by Amos Yadlin’s post last month, “Two states, four paths for achieving them,” do not accord with basic realities on the Palestinian side, and as such do not offer a viable pathway to a two-state outcome.

Yadlin’s argument is premised on the belief that a negotiated two-state outcome is not possible today because of a Palestinian refusal to engage. He argues: “It appears that in 2016, the Palestinians do not view a two-state solution…as a preferred outcome.” Palestinians, by contrast, see their leaders’ actions, like the November 2012 UN General Assembly resolution that accorded Palestine observer state status, as efforts to save the two-state solution in the face of Israeli actions that undermine it.

The outcome Yadlin offers as one that would meet Israel’s needs would require Palestinians to forfeit basic components of statehood and basic principles of Israeli-Palestinian peace that are enshrined in international law, such as the right for Palestinian refugees to return to their or their families’ places of origin in what is today Israel. 

Similarly, Yadlin calls for Palestinians to accept “limitations on their sovereignty” to meet Israeli security concerns. From a Palestinian perspective, though, that sovereignty has been systematically constrained already by Israeli policies, including annexation of territory and the expanding settlement enterprise. These are but two examples of divergent viewpoints between Israelis and Palestinians that doom each of the “four paths” Mr. Yadlin proposes to reach a two-state solution. 

Each of Yadlin’s proposed paths for Israel—negotiations toward a final status agreement (with the expectation that they would fail due to Palestinian intransigence), pursuing a regional agreement, seeking an interim bilateral agreement, and taking unilateral action—is problematic.

“A negotiation process resulting in a final status agreement” – The Oslo Peace Accords and the 20 years of unconsummated negotiations that followed were an intensive effort to achieve just that. However, they failed in part because they did not address the fundamental asymmetry between the parties to those accords—Palestinians recognized a state, and Israel, in turn, recognized the representative body of a national movement seeking its right to self-determination. 

If Israelis were serious about two states, and heeded lessons from the failed interim agreements of the Oslo process, a good starting point would be for Israel to reciprocate the political recognition of Israel that the Palestine Liberation Organization (PLO) made back in 1993. Israel’s recognition of the state of Palestine is long overdue, especially after more than 130 countries—including the Vatican—have done so. 

This symmetrical recognition would also define the end game upfront as the outcome to which both sides are already formally committed—and then both sides can spend their negotiating energies on realizing two states living in peace.

“A regional agreement” – The notion that a regional track could substitute for the bilateral track suggests a failure to learn from the past. At many points throughout the history of this conflict, Israeli politicians and policymakers have sought to transfer the Palestinian issue onto other regional states—as in the Camp David I agreement with Egypt, or the suggestion that Palestinians should instead create their state in Jordan, a sovereign country. 

It is positive that Mr. Yadlin seems to embrace the Arab Peace Initiative (API) as a means for progress toward two states—but it can only play the role he envisions if it morphs into something it is not. 

The API is not a starting point for negotiations, but rather terms of reference for an agreement that Arab states would recognize as sufficient to gain Israel normalization within the Middle East. As such, Yadlin’s call for an “updated version” in which the “plan should be decoupled from the issue of the [occupied] Golan Heights” and “not be conditional on a solution to the refugee problem according to U.N. Security Council Resolution 194 from 1949,” do not take into account Arab governments’ own interests in these issues. Regional peace for Israel is unattainable without Israel first making peace with Palestinians.

“An interim bilateral agreement” – When Palestinians accepted the interim agreements of the Oslo bilateral process, there were 100,000 illegal settlers on the ground. Two decades of negotiations has left us with over 500,000 settlers and with the Palestinian community in the West Bank and Gaza further fragmented and battered. This is why the Palestinian leadership has been crystal clear in rejecting another interim agreement. 

Without more than verbal commitments to a viable two-state solution, and without a clear pathway to get there, another interim agreement would only allow Israel to create more “facts on the ground” that would preclude such a solution. It is hard to understand how such a proposal would offer Palestinians any hope of progress, given the experience of the past two decades. 

“In the case a negotiated agreement cannot be realized, an independent Israeli determination of its own borders” – It is even harder to understand how a unilateral Israeli determination of its own borders could, as Yadlin argues, “reinforce the agreed two-state solution paradigm,” especially because this would likely require massive Israeli military force (along with continued blind support from the United States) to create more facts on the ground. It’s understandable why Israelis would prefer to negotiate this conflict with themselves rather than engage with their adversaries, but it is the vast disparity in power between Israelis and Palestinians, not the logic of conflict resolution, that gives Israelis the realistic ability to do so. Still, this does not mean that unilateral decisions by Israel will one day find support among Palestinians. 

It’s understandable why Israelis would prefer to negotiate this conflict with themselves rather than engage with their adversaries, but it is the vast disparity in power between Israelis and Palestinians, not the logic of conflict resolution, that gives Israelis the realistic ability to do so.

It is the nature of international conflicts that they can “end” only in one of two ways: either the two parties agree to a solution that meets their mutual interests, or the side with greater power dictates, imposes, and enforces an outcome over the objections of the weaker side. In proposing unilateralism as a “solution,” Yadlin abandons the more sustainable former pathway for the latter, which I see as doomed. 

If Israel’s leadership is serious about reaching a two-state solution, the road is defined and clear. It requires that Israelis grapple with the real interests and demands of Palestinians as of equal substance and value to their own, rather than wishing them away. Equality can be achieved in two, truly independent states; or this conflict will default to a single state—as warned by President Obama and Secretary Kerry—marred by a civil rights struggle that may take another 70 years to bear fruition, but whose result is pre-defined.

While Israeli and Palestinian interests are best served by a negotiated two-state state solution, the peace plan that Sam Bahour proposed in his February post disregards Israel's demographic and security concerns and is tantamount to a Palestinian veto on a negotiated solution. His insistence on the right of return for Palestinian refugees and rejection of security limitations on Palestinian sovereignty in effect asks Israel to become a binational state while creating a militarized Palestinian state alongside it. Bahour rejects the notion of unilateral action, but his case only reinforces my belief that Israel may need to act independently to protect its interests.

The logic behind the Clinton parameters and President Obama’s peace plan was that in return for the creation of a Palestinian state, Palestinian refugees would relinquish their claim to Israel; the hope was that this would allow for the "two states for two peoples" to exist side-by-side. Yet Bahour rejects compromise on the refugee issue as the forfeiture of “basic components of statehood and basic principles of Israeli-Palestinian peace that are enshrined in international law.” Any peace agreement that both establishes a Palestinian state and recognizes the rights of millions of Palestinians to enter Israel would hasten the end of Israel's Jewish identity.

Israel's interest in the creation of a Palestinian state is also built upon the assumption that a sound agreement would improve its security rather than threaten it. To this end, Israel has called for a demilitarized Palestinian state, and this has been echoed by the United States, France, the Czech Republic, the European Union, and Australia’s Labor Party. Even Mahmoud Abbas accepted the premise of demilitarization, saying, “We don’t need planes or missiles. All we need is a strong police force.” Nevertheless, Bahour’s piece declares any limitations on the sovereignty of Palestine unacceptable. For Israel, a peace deal that grants one’s adversaries access to more deadly weaponry would be absurd.

Bahour argues that my strategies for reaching a two-state solution are doomed because they do not meet the "mutual interests" of the parties to the conflict, but his plan does not offer incentives for Israel to make peace.

Bahour argues that my strategies for reaching a two-state solution are doomed because they do not meet the "mutual interests" of the parties to the conflict, but his plan does not offer incentives for Israel to make peace. His proposal not only fails to improve Israel's situation in any tangible sense, but further endangers it. Rejectionist Palestinian positions like Bahour's (and Abbas's recent dismissal of Biden's initiative) would veto the two-state solution as a means to move towards a single binational state. That is precisely why Israel may need to act independently to keep a two-state solution viable.

On May 17, Egyptian President Abdel-Fatah el-Sissi did something Egyptian presidents have done many times before: he urged Israel and the Palestinians to renew negotiations for peace, this time by backing an international conference promoted by the French foreign minister.

But what made Sissi’s call particularly interesting is that he called on not just the leaders but also political "parties" to seize what he called “a real opportunity to find a long-awaited solution.” Sissi's call offered Israeli Prime Minister Benjamin Netanyahu an opportunity to accommodate Israel's newest best friend, Sissi, rather than the French themselves. It would not have brought peace, of course: though an international conference would offer a glimmer of hope to change some of the worst aspects of the current diplomatic deadlock, it would not solve any of the outstanding substantive issues between Israelis and Palestinians.

Sissi's reference to political parties was no coincidence: it fit perfectly with the domestic political needs of Netanyahu and of Opposition Leader Isaac Herzog, who were angling to bring the Zionist Union joint list into the government and give Netanyahu a much-needed parliamentary cushion beyond his current razor-thin coalition. 

Herzog first had to convince his own highly-reluctant party of the need to join its rival Netanyahu—and if peace was about to break out, how could they refuse? For about 48 hours it seemed like Herzog was indeed about to announce his decision to join the coalition, face the battle in his party, and become Israel's foreign minister.

Then something else happened. Rather than appointing Herzog as foreign minister, Netanyahu is now poised to bring back Avigdor Lieberman, a former foreign minister and Israel's least diplomatic politician. Lieberman won't be returning to diplomacy, however. Instead, he will get a significantly more powerful position, second only to the prime minister: minister of defense. In response, current Minister of Defense Moshe Ya’alon today resigned from the cabinet and the Knesset, refusing to take another cabinet position. He gave a scathing speech, saying that "[E]xtremist and dangerous forces have taken over Israel and the Likud movement."

In what can only be considered brilliant politicking—and reckless policy—Netanyahu jettisoned Ya’alon and Herzog in favor of his former associate and bitter personal rival, Lieberman.

In what can only be considered brilliant politicking—and reckless policy—Netanyahu jettisoned Ya’alon and Herzog in favor of his former associate and bitter personal rival, Lieberman. Herzog is left wounded and humiliated, played for a fool—the gravest sin in Israeli political culture. Netanyahu finds himself at the helm of an enlarged coalition (Lieberman brings with him five members of Knesset, after one member of his faction left the party today in protest of the move), safer from parliamentary shocks and from attacks from the right (the whole right wing is now inside the coalition. Lieberman will still likely criticize Netanyahu from within the government, but not quite as fiercely). 

A cynics’ cynic

Lieberman's pending appointment has been met with astonishment by the opposition in Israel, by many in the military which he will oversee, and indeed here in Washington—and with good reason.

Just these past few months, Lieberman has viciously attacked both Netanyahu and the military brass for what he claimed was a weak response to terrorist attacks. In but one example of many, Lieberman came to the defense of a soldier who the Israel Defense Forces (IDF) had decided to prosecute for killing a Palestinian assailant who had already been thoroughly subdued. The contrast to current Minister of Defense Moshe Ya’alon is striking: Ya’alon defended the military's decision and stressed the importance of ethical norms and of rules of engagement in the military. Ya’alon is very right wing on the Palestinian issue, but he has consistently shown an honorable stance in the face of attacks on democratic norms. 

Lieberman is ostensibly less right-wing on the Palestinian issue—sometimes. Though he is a settler himself, he has endorsed a two-state solution in very general theory, noting he would even move if peace necessitated it. His endorsement, however, has always been couched in the toughest language possible and in utter mistrust of Palestinian intentions or the chances of peace ever materializing. On the niceties of democratic norms, including military law, he is a cynics' cynic. Benny Begin, another former Likud minister and an avowed hawk, has called Lieberman's appointment “delirious.”

As minister of defense, these positions will be highly consequential. Not only will he be in charge of the military brass and its promotion, but he will have statutory authority over many affairs in the West Bank, which is under military rule. Any attempt to improve the daily lives of Palestinians (such as a project just announced to streamline checkpoints for Palestinians) will be under his purview. His open calls to bring down Hamas through a ground invasion of Gaza if there is another round of fighting with Hamas—voiced even while he was a cabinet member during the last round of fighting—will now carry the weight of the minister of defense.

What was Herzog thinking? 

For the past year, since Netanyahu formed his fourth government, Herzog had denied time and again that he was aiming to join Netanyahu rather than replace him. He bemoaned the cynicism of those who simply would not believe him. This week the masks came off. Negotiations between the sides were accelerated and Herzog began a difficult intra-party fight to justify such a move. "National unity" governments are quite common in Israel, starting with the emergency cabinet of 1967, on the eve of the Six-Day War, when a sense of imminent doom swept the country. 

These governments, however, are usually justified by either an acute crisis, like in 1967, or in order to resolve a political deadlock, such as between Shimon Peres' Labor and Yitzhak Shamir's Likud in 1984. Peres and Shamir even "rotated" the post of prime minister. Though the government was incapable of any meaningful diplomatic advances, on which it was divided, it succeeded in tackling hugely important challenges in the economy—bringing inflation down from an annual rate of over 444 percent (not a typo) in 1984, and in defense—extricating Israel from most of Lebanon, following the first Israeli Lebanon War. 

What would be the logic this time? Herzog was promising three things to his party members: a host of portfolios (jobs and titles but also influence on a range of domestic policy issues); a veto on some aspects of policy which Labor finds most damaging, including remote settlement construction and legislation seen as limiting democratic discourse in Israel; and a leading role in any negotiations with the Palestinians, staring with the French peace conference. 

The jobs for Labor would have been real. A veto on policy could have been important—Tzipi Livni, Herzog's non-Labor partner in the Zionist Union, played a crucial role in protecting democratic norms as minister of justice in Netanyahu's previous government. 

On peace, however, Herzog was offering fool's gold. Put it this way: if you think Herzog would have real autonomy to run negotiations with the Palestinians while Netanyahu is prime minister, I have two suggestions. First, ask Tzipi Livni, who had that exact task in the previous government and was accompanied to every negotiation by Netanyahu’s personal lawyer, Yitzhak Molcho. Livni, incidentally, was strongly opposed to joining Netanyahu this time around. 

Second, I have some great real-estate in a swamp in Florida I'd like to discuss with you.

Herzog had a political rationale as well. He is a natural minister and backroom politician: smart, hardworking and prone to pragmatic compromises. He is not a natural public politician. As Leader of the Opposition he has wowed no one with his charisma or ability to stand up to Netanyahu and offer a bold alternative. Better to be in the halls of power than in the open arena. With the prospects of a fierce leadership challenge in his own Labor Party, moreover, he would have bolstered his bona fides as a national leader and therefore give himself a bit more time—the most a politician in Israel can really hope for. 

If there was a political benefit to Herzog personally, the outlook for his Labor Party would have been dismal.

If there was a political benefit to Herzog personally, the outlook for his Labor Party would have been dismal. Having joined Netanyahu, it would have been very hard to present the party as an alternative to his rule. 

What now?

Netanyahu can now feel slightly more secure in his coalition, though once again at the mercy of the mercurial Lieberman. Lieberman will enjoy a powerful post that usually bestows its occupant with new popularity in Israel (the converse is true of the finance ministry). Finance Minister Moshe Kahlon will enjoy a wider coalition to pass his domestic legislation and budget; indeed he'd been pushing for enlarging the coalition since it was formed. 

In the opposition, Herzog is weaker than ever. After being led on by Netanyahu for months, breaking his own word on the negotiations and then losing his gamble, he is severely exposed to challenges within Labor. His party's image has taken a serious hit as well.

Herzog's weakness will allow others in the opposition to claim the mantle of alternative to Netanyahu. Already, Yair Lapid’s centrist Yesh Atid party is the main beneficiary, but others may emerge as well, especially from the ranks of former generals like Gabi Ashkenazi. 

Most importantly, Israel's actual policy may be affected significantly by this move. Of all the governmental posts, defense is the one that has the most effect on the crucial questions of security for Israelis (and on the daily lives of Palestinians). Instead of grand peace plans Herzog was selling, Netanyahu's political brilliance has wrought one of the most hardline governments Israel has ever had.

In a lively and wide-ranging debate that aired earlier this month on Al Jazeera English, Brookings Executive Vice President Martin Indyk sparred with Head to Head presenter Mehdi Hasan about American efforts to resolve the Israeli-Palestinian conflict and the United States’ relationship with Israel.

Indyk began by stressing that American support for Israel is what gives the United States an influential role in the peace process and the leverage to encourage Israel to move towards peace. Indyk added that this does not mean that the United States should act as “Israel’s attorney” in the negotiations, and cited a promise he made to Palestinian leaders during the 2013-2014 peace talks led by Secretary of State John Kerry that Washington would not coordinate positions with Israel in advance. 

Brookings Executive Vice President Martin Indyk in a Head to Head interview with Al Jazeera English's Mehdi Hassan.

He pointed out that the United States has traditionally relied on its close relationship with Israel to encourage its leaders to take steps for peace and make offers to the Palestinians, and that no other potential mediator has been able to produce serious offers from Israel. “[The United States is] not neutral, we don't claim to be neutral. We have an alliance with Israel,” Indyk said. “But in order to achieve another interest that we have, which is peace in the region…and a settlement that provides for the legitimate national rights of the Palestinians, we need to be able to influence Israel.”

In responding to questions from Hasan and the audience, Indyk explained that he believes that both Israelis and Palestinians had made important concessions for peace, citing Israel’s acceptance of the Clinton Parameters in 2000, and the Palestinian Liberation Organization’s historic recognition of Israel as part of the Oslo Accords. Indyk also described the dramatic shifts in the way the United States has addressed the Palestinian issue over the past few decades, “from treating it only as a refugee issue and insisting that it be dealt with through Jordan to recognizing Palestinian national rights.” 

When asked about U.S. support for Israel at the United Nations, Indyk responded that this support is definitely warranted given the history of hostility towards Israel at the UN. However, he added that he personally wouldn’t oppose a carefully-worded resolution condemning Israeli settlements “so that the settlers in Israel understand that [settlement expansion] isn’t cost free.” Indyk rejected the notion that Israel has turned from a U.S. strategic asset in the Middle East into a burden, but explained that “making progress on the Palestinian issue enhances America’s credibility in the region and failing to make progress…hurts America’s credibility in the region.” 

Indyk concluded the discussion by reiterating his commitment to achieving Israeli-Palestinian peace and emphasizing that he would “never give up on trying to resolve this conflict in a way that meets Palestinian legitimate national aspirations to an independent and viable contiguous state living alongside Israel, a Jewish state, in peace.” 

Are Turkey and Israel on the verge of signing a normalization agreement, after a six-year hiatus? Comments in recent days by senior officials in both countries suggest so. A senior Israeli official, quoted in the Times of Israel, stated that “95% of the agreement is completed,” while Turkish Foreign Minister Mevlüt Çavuşoğlu said the parties are “one or two meetings away” from an agreement.

Media outlets in both countries have revealed that a meeting between senior Turkish and Israeli officials is expected to be held in Turkey on June 26—and that shortly after, an agreement is likely to be signed and go into effect. 

For two of America’s closest allies in the Middle East to bury the hatchet, reinstate ambassadors, and resume senior-level dialogue would surely be a boost for U.S strategic interests in the region. It would contribute to greater cohesion in dealing with the Syrian crisis, for example, and in the fight against the Islamic State. 

A quick recap

Let’s first recall how the crisis between the two former strategic allies developed, when in the aftermath of the Mavi Marmara incident (May 31, 2010)—resulting in the deaths of 9 Turks—Turkey recalled its ambassador in Tel Aviv and suspended nearly all defense and strategic ties with Israel. Israel also called back its ambassador in Ankara. At the time, Turkey set three conditions for resuming dialogue with Israel: a formal apology, compensation for the families of the victims, and a removal of Israel’s Gaza naval blockade. Relations came to a practical standstill, except in the economic sphere: trade between the two countries exceeded $5 billion in 2014, an unprecedented level. 

Israel formally apologized to Turkey in 2013 and in 2014 committed to paying compensation to the families of the victims. But the Gaza naval blockade has not been lifted. Turkey further demands greater access and presence in Gaza. For its part, Israel demands that Turkey not allow Hamas operative Salah al-Arouri, who resides in Istanbul, to coordinate terrorist operations against Israeli targets in the West Bank. Israel also wants Ankara to pressure Hamas to return the remains of two Israeli soldiers killed in the 2014 war in Gaza. 

Since the flotilla incident, Turkey was not always convinced that repairing relations with Israel actually served its interests. As the Arab Spring unfolded, Turkey hoped to assume a leadership role in the Arab and Muslim worlds—having good relations with Israel did not serve that purpose. And as Turkey went through periods of some unrest in the political arena (whether during the Gezi Park protests in 2013 or the hotly contested local and national elections), many in the ruling AKP party saw restoring relations with Israel as a potential liability in domestic politics. Israel, for its part, was mostly in a reactive mode: sometimes it tried to initiate contacts with Turkey, and sometimes it denounced Turkish anti-Israeli or anti-Semitic rhetoric.

The times they are a-changing

Now, however, new developments have prompted Turkey to seek a rapprochement with Israel. One key factor is the crisis in the Turkish-Russian relationship—in the aftermath of the suspension of the Turkish Stream natural gas pipeline project, Israeli natural gas is viewed as a possible substitute in the medium term for some of Turkey’s natural gas imports from Russia. And as the impact of the war in Syria on Turkey (including the refugee crisis and terrorist attacks) has made clear to Turkey that it must enhance its intelligence capabilities, and Israel can help. Israel, meanwhile, is searching for an export destination for its natural gas (Israeli Energy Minister Steinitz stated recently that “Turkey is a huge market for gas…they need our gas and we need this market”). Israeli leaders also know that resuming a political and military dialogue with Turkey may contribute to a more comprehensive view of the challenges Israel faces in the region. 

Five years after Israel’s formal request to open a representation office at NATO’s Brussels headquarters, Israeli Prime Minister Benjamin Netanyahu announced last month that NATO has approved the Israeli request. Turkey had opposed it, blocking progress, since NATO decisions are adopted by consensus. In a move seen signaling a thawing of relations, Turkey recently removed its objection to Israel’s request, paving the way to NATO’s decision. Israel continues to be a partner in NATO’s Mediterranean Dialogue along with Egypt, Algeria, Tunisia, Jordan, Mauritania and Morocco. 

At a time when Turkish President Recep Tayyip Erdoğan is attempting to strengthen his country’s regional strategic position and enhance its economic opportunities, a rapprochement with Israel makes sense. Bilateral negotiations are in the final stretch, as they have reached a compromise on the complex issue of Gaza and Hamas (Turkey will reportedly not demand the full lifting of Israel’s naval blockade on Gaza, settling for greater access and presence in Gaza. Israel will acquiesce to continued Hamas political activities in Turkey and will not demand the removal of Hamas operative al-Arouri from Turkey, but will get Turkish assurances that al-Arouri’s involvement in terror will cease.)

Fixing the troubled Turkish-Israeli relationship has been a mighty task for senior negotiators on both sides over the last few years, and although an agreement seems around the corner, the experience of recent years suggests that there can be last minute surprises. Israel’s Prime Minister had to jump over several hurdles, holding off pressure from Russia and Egypt not to seek rapprochement with Turkey, and ensuring support of the deal with Turkey from his newly appointed Defense Minister Avigdor Liberman, a known opponent of a deal. On the Turkish side, it seems that President Erdoğan wants a rapprochement with Israel, and feels that he needs it. This is tied directly to the Turkish domestic arena: Erdoğan has recently completed his consolidation of power, ousting Prime Minister Ahmet Davutoğlu and paving the way to the election of his trusted confidant, Binali Yıldırım, as prime minister. In addition, his new allies—the military-judicial establishment—are in favor of mending ties with Israel. One caveat is that Erdoğan’s top priority is establishing a presidential system, and so if he feels at any point that reaching an agreement with Israel will somehow undermine those efforts, he may opt for maintaining the status quo. 

Last month’s decision by the Palestinian Authority to schedule municipal elections in early October hardly registered in the West Bank and Gaza Strip, much less here in Washington. In light of Hamas’ recent decision to take part in the process, however, those elections have suddenly taken on new meaning. While the election of some 414 village, town, and city councils across the West Bank and Gaza Strip will not change the face of the Palestinian leadership or alter the diplomatic impasse with Israel, local elections have the potential to unlock the current paralysis within Palestinian politics.

Although Palestinian law calls for local elections to take place every four years, they have only been held twice since the creation of the Palestinian Authority (PA) in 1993, only one of which could be deemed genuinely competitive. The first and only local elections to take place in both the West Bank and Gaza Strip were held in 2004-05, in which Hamas—in its first foray into electoral politics—made major gains. Local elections were again held in 2012, although this time Hamas boycotted the process, preventing the vote from taking place in Gaza and allowing Fatah to declare a sweeping, if somewhat hollow, victory. 

Hamas’ decision to take part in this year’s local elections was therefore something of a surprise. Indeed, Hamas initially expressed dismay at the announcement, accusing the leadership in Ramallah of acting without consulting the other parties. Moreover, should the elections proceed as planned on October 8, they would be the first competitive electoral contest in the occupied territories since Hamas defeated Mahmoud Abbas’s ruling Fatah faction in the 2006 legislative election. Those elections triggered an international boycott of the PA which eventually led to the split between Fatah and Hamas and the current political paralysis.

If nothing else, Hamas’ entry into the elections averts another needless internal crisis in Palestinian politics. A boycott by Hamas would likely have further entrenched the political and geographic division between the Fatah-dominated West Bank and Hamas-ruled Gaza Strip, while dealing yet another blow to the beleaguered National Consensus Government, which despite being accepted by both factions in April 2014 has yet to physically return to Gaza. Movement on the reconciliation track could also help push the long-stalled reconstruction of Gaza, which has yet to recover from the devastating war of 2014.

Hamas has little to lose from participating in an election that is unlikely to significantly alter the political landscape one way or the other...[and Fatah] has little to gain from “winning” another electoral process that is largely uncontested.

What explains Hamas’ apparent change of heart? For one, Hamas may believe it has an advantage over Fatah, which continues to suffer from widespread perceptions of corruption and incompetence—a perception reinforced by the collapse of the peace process as well as the unprecedented unpopularity of President Abbas. Hamas may also view the upcoming vote as a way to gauge its current standing and future prospects in anticipation of long-awaited legislative and presidential elections. Either way, Hamas has little to lose from participating in an election that is unlikely to significantly alter the political landscape one way or the other. 

Hamas’ decision to participate in the elections is welcome news for Palestinian voters eager to see the return of competitive elections and a revival of political life after years of stagnation. It even helps Fatah, which has little to gain from “winning” another electoral process that is largely uncontested. More important, as the party that lost both parliamentary elections and a civil war in 2006-07 and that remains the chief proponent of a failed process, Fatah desperately needs a political victory of some kind as well as a basis on which to stake its claim to legitimacy and continued grip on power.

That said, it is important not to overstate the significance of local elections, which in the end will do nothing to address the deeper problems facing Palestinians in the occupied territories, whether from Israel’s continued occupation and its ever-expanding settlement enterprise or the ongoing political dysfunction within their own ranks. On the other hand, the prospect of the first competitive Palestinian elections in a decade represents a small but significant ripple in the otherwise stagnant waters of Palestinian politics.

Event Information

Established by the Food and Drug Administration Safety and Innovation Act of 2012, breakthrough therapy designation (BTD) is one of several programs developed by the U.S. Food and Drug Administration (FDA) to speed up the development and review of drugs and biologics that address unmet medical needs. In order to qualify for this designation, the treatment must address a serious or life-threatening illness. In addition, the manufacturer (i.e., sponsor) must provide early clinical evidence that the treatment is a substantial improvement over currently available therapies. The FDA is working to further clarify how it applies the qualifying criteria to breakthrough designation applications.

On April 24, under a cooperative agreement with FDA, the Center for Health Policy convened a public meeting to discuss the qualifying criteria for this special designation. Using examples from oncology, neurology, psychiatry, and hematology, the workshop highlighted considerations for the BTD application process, the evaluation process, and factors for acceptance or rejection. The discussion also focused on key strategies for ensuring that the qualifying criteria are understood across a broad range of stakeholder groups.

Video

• Breakthrough therapy designation: Two and a half years in
• Applying the breakthrough therapy criteria: Oncology
• Applying the breakthrough therapy criteria: Neurology
• Applying the breakthrough therapy criteria: Anti-infective/psychiatry/hematology
• Summary and discussion of lessons learned

Event Materials

• Breakthrough Therapy Designation_final
• Breakthrough therapy slide deck

For the last several years, the US government has been negotiating a free-trade agreement known as the Trans-Pacific Partnership (TPP) with 11 other countries across the Asia-Pacific and Latin American regions, which could have major impact on the pharmaceutical market.  When finalized it will be the largest free-trade agreement in history, impacting up to one-third of world trade and roughly 40 percent of the global gross domestic product. The deal has attracted a fair share of criticism from a wide range of groups, including concerns over proposed regulations for biologic drugs in participating countries. Specifically, critics are concerned about the length of data exclusivity granted to the companies that hold the patents on these drugs. Below is a primer on biologics and how they are being addressed in the TPP.

Biologic drugs include any therapy derived from a biological source; a group which includes vaccines, anti-toxins, proteins, and monoclonal antibodies. Because they are typically much larger and more structurally complex than traditional ‘small-molecule’ drugs, they are also more difficult—and much more costly—to develop and manufacture. Biologics are also among the most expensive drugs on the market, costing an average of 22 times more than nonbiologic drugs. Avastin, a cancer drug, can cost more than $50,000 a year, while the rheumatoid arthritis drug Remicade can cost up to $2,500 per injection.

Given these high costs, there is substantial interest in encouraging the development of biosimilars, a term used to describe follow-on versions of an original biologic. Estimates of the potential cost savings vary substantially, but some have predicted that competition from biosimilars could reduce US spending on biologics by $44 to $66 billion over the next ten years.  In the European Union, biosimilars have been on the market since 2006, and a 2013 analysis found that, for the 14 biosimilars on the market, the average price discount was about 25 percent. By 2020, the overall cost savings are projected to total $16-$43 billion.

After the Affordable Care Act (ACA) was passed in 2010, the US Food and Drug Administration (FDA) developed an accelerated approval pathway for biosimilars, modeled after the pathway used for the approval of small-molecule generics. In order to meet the criteria for biosimilarity, the drug must share the same mechanism of action for the approved condition of use, and there must be no clinically significant differences between the two drugs in terms of purity, safety, or potency. FDA recently approved its first biosimilar, Zarxio, which is a copy of the oncology drug Neupogen.

Under current FDA regulations, biologic drugs are granted 12 years of data exclusivity following approval. During this period of exclusivity, the FDA may not approve a biosimilar application that relies on the data submitted as part of the original biologic application. This form of temporary monopoly is distinct from patent protection, which is granted well before approval and is not related to clinical data.  Data exclusivity does not prevent another company from generating the data independently, but drug companies are unlikely to go to the considerable (and costly) effort of replicating a full course of clinical trials for a drug that is already on the market. (Though biosimilars may need to undergo some additional clinical testing under current FDA regulations, the amount of data required to support approval would certainly be less than what is required for an original biologic approval.)

The 12-year exclusivity period for biologics was established in the ACA following intense debate, and has continued to attract criticism. (By contrast, the period of data exclusivity is just five years for small-molecule drugs.) Supporters argue that given the greater cost and difficulty of bringing a biologic to market a longer period of exclusivity is necessary to incentivize innovation. Others argue that the resulting restrictions on competition keep drug prices unnecessarily high, inevitably putting a strain on the health system and keeping potentially life-saving drugs out of reach for many patients.

For the 11 countries besides the U.S. that are involved in the TPP, current data exclusivity protections range from zero (Brunei) to eight years (Japan). Under the Obama Administration’s current proposal, participating countries would increase those periods to match the US standard of 12 years. Curiously, this proposal directly contradicts the administration’s ongoing domestic efforts to lower the period of data exclusivity. Since the ACA passed, the Obama administration has repeatedly proposed reducing it to seven, arguing that this would save Medicare $4.4 billion over the next decade. Some have noted that, once the 12-year period is enshrined in the TPP, it will become significantly more difficult to change it through the US legislative process. Furthermore, imposing US standards on the 11 member countries would inevitably restrict competition at the global level, and many patient advocacy and international humanitarian organizations have argued that doing so would undermine the efforts of US global health initiatives like the Vaccine Alliance and the Global Fund to Fight AIDS, Tuberculosis and Malaria, which rely on price competition to manage program costs.

It is unclear whether the US will be successful in its efforts. There have been reports that the issue of data exclusivity has become a significant point of contention, and the US delegation may seek to compromise on its demands. It may, for example, negotiate exceptions for the poorer countries involved in the negotiation, as the Washington Post notes. However, the details of the negotiations are largely confidential, which makes it challenging to assess the possibilities, their relative advantages, or how the US Trade Representative (which is leading the US negotiations) is balancing the need to ensure adequate incentives for innovation with the need to control drug costs and facilitate patient access to potentially life-saving therapies.

Editor's note: Elizabeth Richardson, a research associate in the Center for Health Policy, contributed to the research and writing of this post. 

Event Information

Under the Food and Drug Administration Amendments Act (FDAAA) of 2007, the FDA has the authority to require pharmaceutical manufacturers to develop Risk Evaluation and Mitigation Strategies (REMS) for drugs or biologics that carry serious potential or known risks. Since that time, the REMS program has become an important tool in ensuring that riskier drugs are used safely, and it has allowed FDA to facilitate access to a host of drugs that may not otherwise have been approved. However, concerns have arisen regarding the effects of REMS programs on patient access to products, as well as the undue burden that the requirements place on the health care system. In response to these concerns, FDA has initiated reform efforts aimed at improving the standardization, assessment, and integration of REMS within the health care system. As part of this broader initiative, the agency is pursuing four priority projects, one of which focuses on improving provider-patient benefit-risk counseling for drugs that have a REMS attached.

Under a cooperative agreement with FDA, the Center for Health Policy at Brookings held an expert workshop on July 24 titled, “Risk Evaluation and Mitigation Strategies (REMS): Building a Framework for Effective Patient Counseling on Medication Risks and Benefits”. This workshop was the first in a series of convening activities that will seek input from stakeholders across academia, industry, health systems, and patient advocacy groups, among others. Through these activities, Brookings and FDA will further develop and refine an evidence-based framework of best practices and principles that can be used to inform the development and effective use of REMS tools and processes.

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The emerging field of precision medicine continues to offer hope for improving patient outcomes and accelerating the development of innovative and effective therapies that are tailored to the unique characteristics of each patient. To date, however, progress in the development of precision medicines has been limited due to a lack of reliable biomarkers for many diseases. Biomarkers include any defined characteristic—ranging from blood pressure to gene mutations—that can be used to measure normal biological processes, disease processes, or responses to an exposure or intervention. They can be extremely powerful tools for guiding decision-making in both drug development and clinical practice, but developing enough scientific evidence to support their use requires substantial time and resources, and there are many scientific, regulatory, and logistical challenges that impede progress in this area.

On October 27th, 2015, the Center for Health Policy at The Brookings Institution convened an expert workshop that included leaders from government, industry, academia, and patient advocacy groups to identify and discuss strategies for addressing these challenges. Discussion focused on several key areas: the development of a universal language for biomarker development, strategies for increasing clarity on the various pathways for biomarker development and regulatory acceptance, and approaches to improving collaboration and alignment among the various groups involved in biomarker development, including strategies for increasing data standardization and sharing. The workshop generated numerous policy recommendations for a more cohesive national plan of action to advance precision medicine.  

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Overview

Increasing educational attainment is likely to reduce conflict risk, especially in countries like Pakistan that have very low levels of primary and secondary school enrollment. Education quality, relevance and content also have a role to play in mitigating violence. Education reform must therefore be a higher priority for all stakeholders interested in a more peaceful and stable Pakistan. Debate within the country about education reform should not be left only to education policymakers and experts, but ought to figure front and center in national dialogues about how to foster security. The price of ignoring Pakistan’s education challenges is simply too great in a country where half the population is under the age of 17.

There has been much debate concerning the roots of militancy in Pakistan, and multiple factors clearly come into play. One risk factor that has attracted much attention both inside Pakistan and abroad is the dismal state of the national education sector. Despite recent progress, current school attainment and literacy levels remain strikingly low, as does education spending. The Pakistani education sector, like much of the country’s public infrastructure, has been in decline over recent decades. The question of how limited access to quality education may contribute to militancy in Pakistan is more salient now than ever, given the rising national and international security implications of continued violence.

The second half of 2009 witnessed not only the Pakistani government stepping up action against insurgents but also the release of a new Pakistan National Education Policy that aspires to far-reaching and important reforms, including a commitment to increase investment in education—from 2 to 7 percent of gross domestic product. Hundreds of millions of dollars in international education aid have been newly pledged by donor countries. This renewed emphasis on education represents a substantial opportunity to seek to improve security in Pakistan and potentially also globally over the medium to long term. Policymakers both inside and outside Pakistan should give careful consideration to whether and how education investments can promote peace and stability, taking into account what we now know about the state of the education sector and the roots of militancy.

This report takes a fresh look at the connection between schools, including but not limited to Pakistan’s religious seminaries, known as “madrasas,” and the rising militancy across the country. Poor school performance across Pakistan would seem an obvious area of inquiry as a risk factor for conflict. Yet to date, the focus has been almost exclusively on madrasas and their role in the mounting violence. Outside Pakistan, relatively little attention has been given to whether and how the education sector as a whole may be fueling violence, over and above the role of the minority of militant madrasas.

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INTRODUCTION

In recent years, there has been a resurgence of interest in the issue of inequality. Part of this resurgence can be traced to new evidence of persistent and widening wealth gaps. Average incomes may be converging globally as a result of high growth in emerging markets, stronger growth in many poor countries, and slow growth in rich countries. However, the evidence also shows that within countries a parallel process of income divergence, marginalization and rising inequality is also taking place. Put differently, the rising tide of global prosperity is not lifting all boats.

Much of the international debate on inequality focuses on the distribution of income across and within countries. Other dimensions of inequality have received less attention. This is unfortunate. Amartya Sen has described development as “a process of expanding the real freedoms that people enjoy” by building human capabilities or their capacity to lead the kind of life they value. Income is a means to that end but it is a limited indicator of well-being. Moreover, a person’s income reflects not just personal choice but also their opportunities for improving health, literacy, political participation and other areas. Education is one of the most basic building blocks for the “real freedoms” that Sen describes. People denied the chance to develop their potential through education face diminished prospects and more limited opportunities in areas ranging from health and nutrition, to employment, and participation in political processes. In other words, disparities in education are powerfully connected to wider disparities, including international and intra-country income inequalities. This is why education has been identified as one of the most critical factors in breaking down the disadvantages and social inequalities that are limiting progress toward the United Nations’ Millennium Development Goals (MDGs)—development targets adopted by the international community for 2015.

Understanding patterns of educational inequality is critical at many levels. Ethical considerations are of paramount importance. Most people would accept that children’s educational achievements should not be dictated by the wealth of their parents, their gender, their race or their ethnicity. Disparities in educational opportunities are not just inequalities in a technical sense, they are also fundamental in equities—they are unjust and unfair. In an influential paper, John Roemer differentiated between inequalities that reflect factors such as luck, effort and reasonable reward, and those attributable to circumstances that limit opportunity (Roemer 1988).1 While the dividing line may often be blurred, that distinction has an intuitive appeal. Most people have a high level of aversion to the restrictions on what people—especially children—are able to achieve as a result of disparities and inherited disadvantages that limit access to education, nutrition or health care (Wagstaff, 2002). There is a wide body of opinion across political science, philosophy and economics that equal opportunity—as distinct from equality of outcomes—is a benchmark of egalitarian social justice. The theories of distributive justice associated with thinkers such as Amartya Sen, John Rawls, Ronald Dworkin and John Roemer argue, admittedly from very different perspectives, that public policy should aim at equalizing opportunity to counteract disadvantages associated with exogenous circumstances over which individuals or social groups have no control. Given the role of education as a potential leveler of opportunity, it is a national focal point for redistributive social justice.

Considerations of economic efficiency reinforce the ethical case for equalizing educational opportunities. Education is a powerful driver of productivity, economic growth, and innovation. Econometric modeling for both rich and poor countries suggests that an increase in learning achievement (as measured by test score data) of one standard deviation is associated on average with an increase in the long-run growth rate of around 2 percent per capita annually (Hanushek and Wößmann, 2010; Hanushek, 2009; Hanushek and Wößmann, 2008). Such evidence points to the critical role of education and learning in developing a skilled workforce. Countries in which large sections of the population are denied a quality education because of factors linked to potential wealth, gender, ethnicity, language and other markers for disadvantage are not just limiting a fundamental human right. They are also wasting a productive resource and undermining or weakening the human capital of the economy.

International development commitments provide another rationale for equalizing educational opportunities. This is for two reasons. First, the commitments envisage education for all and achievement of universal primary education by 2015. Second, there is mounting evidence that inequality is acting as a brake on progress toward the 2015 goals. Since around 2005, the rate of decline in the out-of-school population has slowed dramatically. Based on current trends, there may be more children out of school in 2015 than there were in 2009. Caution has to be exercised in interpreting short-run trends, especially given the weakness of data. However, the past three editions of the UNESCO Education for All Global Monitoring Report (GMR) have highlighted the role of inequality in contributing to the slowdown with governments struggling to reach populations that face deeply entrenched disadvantages (UNESCO, 2008, 2010, 2011). Therefore, picking up the pace toward the 2015 goals requires a strengthened focus on equity and strategies that target the most marginalized groups and regions of the world (Sumner and Tiwari, 2010; UN-DESA, 2009; UNESCO, 2010). It should be added that disparities in education relate not just to access, but also to learning achievement levels.

Accelerated progress in education would generate wider benefits for the MDGs. Most of the world’s poorest countries are off-track for the 2015 MDG target of halving income poverty and a long way from reaching the targets on child survival, maternal health and nutrition. Changing this picture will require policy interventions at many levels. However, there is overwhelming evidence showing that education—especially of young girls and women—can act as a potent catalyst for change. On one estimate, if all of sub-Saharan Africa’s mothers attained at least some secondary education, there would be 1.8 million fewer child deaths in the region each year. Thus while education may lack the “quick fix” appeal of vaccinations, it can powerfully reinforce health policy interventions.

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INTRODUCTION

In August, 2010 the government of Kenya adopted a new constitution. This followed a referendum in which an overwhelming majority of Kenyans voted for change. The decisive impetus for reform came from the widespread violence and political crisis that followed the 2007 election. While claims of electoral fraud provided the immediate catalyst for violence, the deeper causes were to be found in the interaction of a highly centralized ‘winner-take-all’ political system with deep social disparities based in part on group identity (Hanson 2008).

Provisions for equity figure prominently in the new constitution. Backed by a bill of rights that opens the door to legal enforcement, citizenship rights have been strengthened in many areas,including access to basic services. ‘Equitable sharing’ has been introduced as a guiding principle for public spending. National and devolved governments are now constitutionally required to redress social disparities, target disadvantaged areas and provide affirmative action for marginalized groups.

Translating these provisions into tangible outcomes will not be straightforward. Equity is a principle that would be readily endorsed by most policymakers in Kenya and Kenya’s citizens have provided their own endorsement through the referendum. However, there is an ongoing debate over what the commitment to equity means in practice, as well as over the pace and direction of reform. Much of that debate has centered on the constitutional injunction requiring ‘equitable sharing’ in public spending.

On most measures of human development, Kenya registers average outcomes considerably above those for sub-Saharan Africa as a region. Yet the national average masks extreme disparities—and the benefits of increased prosperity have been unequally shared.

There are compelling grounds for a strengthened focus on equity in Kenya. In recent years, the country has maintained a respectable, if less than spectacular, record on economic growth. Social indicators are also on an upward trend. On most measures of human development, Kenya registers average outcomes considerably above those for sub-Saharan Africa as a region. Yet the national average masks extreme disparities—and the benefits of increased prosperity have been unequally shared. Some regions and social groups face levels of deprivation that rank alongside the worst in Africa. Moreover, the deep fault lines running through society are widely perceived as a source of injustice and potential political instability.

High levels of inequality in Kenya raise wider concerns. There has been a tendency in domestic debates to see ‘equitable sharing’ as a guiding principle for social justice, rather than as a condition for accelerated growth and enhanced economic efficiency. Yet international evidence strongly suggests that extreme inequality—especially in opportunities for education— is profoundly damaging for economic growth. It follows that redistributive public spending has the potential to support growth.

The current paper focuses on a group of 12 counties located in Kenya’s Arid and Semi-Arid Lands (ASALs). They are among the most disadvantaged in the country. Most are characterized by high levels of income poverty, chronic food insecurity and acute deprivation across a wide range of social indicators.

Nowhere is the deprivation starker than in education. The ASAL counties account for a disproportionately large share of Kenya’s out-of-school children, pointing to problems in access and school retention. Gender disparities in education are among the widest in the country. Learning outcomes for the small number of children who get through primary school are for the most part abysmal, even by the generally low national average standards.

Unequal public spending patterns have played no small part in creating the disparities that separate the ASAL counties from the rest of Kenya—and ‘equitable sharing’ could play a role in closing the gap. But what would a more equitable approach to public spending look like in practice?

This paper addresses that question. It looks in some detail at education for two reasons. First, good quality education is itself a powerful motor of enhanced equity. It has the potential to equip children and youth with the skills and competencies that they need to break out of cycles of poverty and to participate more fully in national prosperity. If Kenya is to embark on a more equitable pattern of development, there are strong grounds for prioritizing the creation of more equal opportunities in education. Second, the education sector illustrates many of the wider challenges and debates that Kenya’s policymakers will have to address as they seek to translate constitutional provisions into public spending strategies. In particular, it highlights the importance of weighting for indicators that reflect need in designing formulae for budget allocations.

Our broad conclusion is that, while Kenya clearly needs to avoid public spending reforms that jeopardize service delivery in wealthier counties, redistributive measures are justified on the grounds of efficiency and equity.

The paper is organized as follows. Part 1 provides an overview of the approach to equity enshrined in the constitution. While the spirit of the constitution is unequivocal, the letter is open to a vast array of interpretations. We briefly explore the implications of a range of approaches. Our broad conclusion is that, while Kenya clearly needs to avoid public spending reforms that jeopardize service delivery in wealthier counties, redistributive measures are justified on the grounds of efficiency and equity. Although this paper focuses principally on basic services, we caution against approaches that treat equity as a matter of social sector financing to the exclusion of growth-oriented productive investment.

Part 2 provides an analysis of some key indicators on poverty, health and nutrition. Drawing on household expenditure data, the report locates the 12 ASAL counties in the national league table for the incidence and depth of poverty. Data on health outcomes and access to basic services provide another indicator of the state of human development. While there are some marked variations across counties and indicators, most of the 12 counties register levels of deprivation in poverty and basic health far in excess of those found in other areas.

Part 3 shifts the focus to education. Over the past decade, Kenya has made considerable progress in improving access to basic education. Enrollment rates in primary education have increased sharply since the elimination of school fees in 2003. Transition rates to secondary school are also rising. The record on learning achievement is less impressive. While Kenya lacks a comprehensive national learning assessment, survey evidence points to systemic problems in education quality. In both access and learning, children in the ASAL counties—especially female children—are at a considerable disadvantage. After setting out the national picture, the paper explores the distinctive problems facing these counties.

In Part 4 we look beyond Kenya to wider international experience. Many countries have grappled with the challenge of reducing disparities between less-favored and more-favored regions. There are no blueprints on offer. However, there are some useful lessons and guidelines that may be of some relevance to the policy debate in Kenya. The experience of South Africa may be particularly instructive given the weight attached to equity in the post-apartheid constitution.

Part 5 of the paper explores a range of approaches to financial allocations. Converting constitutional principle into operational practice will require the development of formulae-based approaches. From an equitable financing perspective there is no perfect model. Any formula that is adopted will involve trade-offs between different goals. Policymakers have to determine what weight to attach to different dimensions of equity (for example, gender, income, education and health), the time frame for achieving stated policy goals, and whether to frame targets in terms of outcomes or inputs. These questions go beyond devolved financing. The Kenyan constitution is unequivocal in stipulating that the ‘equitable sharing’ provision applies to all public spending. We therefore undertake a series of formula-based exercises illustrating the allocation patterns that would emerge under different formulae, with specific reference to the 12 ASAL focus counties and to education.

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INTRODUCTION

With fewer than three years until the planned end-date of the United Nations Millennium Development Goals (MDGs), attention is rapidly turning to what will follow. The elaboration of the next global development agenda is a complex, multi-pronged process that is academic, political and practical, involving experts from a myriad of social and economic sectors and representing a cross-section of constituencies. While the formal U.N. process is still in the early stages, the ongoing discourse (predominantly occurring in the global north, but not exclusively) has introduced several potential frameworks for this agenda. This paper describes the leading frameworks proposed for the post-2015 global development agenda and discusses how education and learning fit within each of those frameworks. While many within the education community are working to develop a cohesive movement to advance an “access plus learning” agenda, it remains equally important to engage proactively with the broader development community to ensure that education fits within the agreed upon overarching organizing framework.

The frameworks described below represent a snapshot of current thinking in 2012. On the road to 2015, the education community will need to refine and sharpen its thinking with respect to how learning is incorporated into the prevailing framework. The seven frameworks that will be addressed in this paper are:

1. Ending Absolute Poverty
2. Equity and Inclusion
3. Economic Growth and Jobs
4. Getting to Zero
5. Global Minimum Entitlements
6. Sustainable Development
7. Well-Being and Quality of Life

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Interpreting employment stats among young people can be tricky. No one expects employment rates among teens or people in their early 20s to reach those of prime-age workers. These are prime years for what economists call “investing in human capital,” an activity most people would describe as “going to school.”

Education requirements for good jobs are getting higher, so finishing high school and earning a post-secondary credential like two or four-year college degrees, apprenticeships, or certifications are top priorities. But early work experiences can allow young people to learn new skills, gain experience, and expand networks. Evidence suggests that it can improve employment prospects down the line. And the earlier that people are exposed to the workplace, the earlier they learn such skills as teamwork, communication, and dependability—skills that employers say are in short supply. 

The employment rate for teens fell from 43 percent in 2000 to 26 percent in 2014, and for young adults aged 20 to 24, it fell from 70 to 62 percent. These are big drops. In a new analysis, I take a deeper look at employment trends among young people. When employment rates are broken out by age and race/ethnicity, you see the same downward pattern, but also substantial variation among whites, blacks, Latinos, and Asians.

Do these declines spell trouble? The answer is, it depends:  on how young people spend their time, what resources and support are available to them, and how the person making the judgement values academics and enrichment relative to employment.

Some argue that workplace experience provides key developmental opportunities that benefit all young people. Robert Halpern, for example, wryly notes that high school students are isolated from the adult world “at just the moment when [they] need to begin learning about participating in it.” 

Others say that employment matters more for some young people than others. For example, disadvantaged youth—those not on track to earn a post-secondary credential and without strong family or community  networks to help them find jobs—can particularly benefit from formal programs that connect them to the labor market. As Jeylan Mortimer concluded about “low academic promise” high school students (those with poor grades and low educational goals): “[H]aving a positive work experience can help to turn you around.  For those who have a lot of disadvantages, any positive experience is likely to have a greater impact than on people with a lot of advantages already.” Research on Career Academies, high schools that combine academics with career development, support this view. Career Academy students, disproportionately low-income, black, and Latino, posted significant earnings gains eight years after graduation, and young male graduates also had higher rates of marriage and custodial parenthood.

And some would say that it’s appropriate to prioritize education over employment, especially for teens, who are typically not responsible for supporting themselves and their families.

So what do the data tell us? Voluntarily dropping out of the labor force to concentrate on academics as a young person can pay off when people enter their prime working years, generally considered to be 25 to 54. Though education and work are not necessarily incompatible, employment rates are generally lower among students than among those not enrolled in school. Among teens and young adults, Asians have the lowest employment rates, but they also have the highest school enrollment rates. 92 percent of Asian 16- to 19-year-olds and 63 percent of Asian 20- to 24-year-olds are in school, compared to 80 percent and 38 percent among all races. It follows, then, that Asians have high levels of educational attainment. In fact, 50 percent of 23- to 24-year-old Asians have a Bachelor’s degree, double the average rate. Given the strong correlation between education and employment, it is not a coincidence that prime-age Asians have high employment rates and low unemployment rates. Their low employment rates as young people do not, on the whole, seem to lead to problems as adults. (Of course, this is not to downplay the diversity of the Asian population and to suggest that all Asians are doing well economically.)

On the other hand, blacks have the second lowest employment rates as teens and young adults, and the lowest rate as prime age workers. They also have the highest unemployment rates, showing an active desire to work. Among black teens in 2014, the unemployment rate was 38 percent, compared to 23 percent overall, and it was 22 percent among black young adults, compared to 13 percent overall. The trend continues into prime working years: blacks have an unemployment rate of 11.4 percent, nearly double the overall rate of 6.2 percent.  The low employment rate among young black people is not driven by school enrollment. Latinos have similar (below-average) enrollment levels but higher employment rates, and whites have much higher employment rates but only slightly higher enrollment levels. The weaker employment outcomes of blacks at all ages is probably related to multiple factors: relatively low levels of educational attainment, discrimination, and the neighborhood effects of living in concentrated poverty.

Blacks and Latinos are disproportionately represented among so-called “disconnected youth,” young people aged 16 to 24 who are neither working nor in school. 17 percent of black young adults aged 20 to 24 are disconnected, as are 13 percent of Latinos, 7 percent of whites, and 4 percent of Asians. Half of disconnected young adults have a high school credential and another 20 percent have taken some college courses, suggesting that getting these young people on a better path involves not only reducing the high school dropout rate, but also strengthening the transition from high school to post-secondary education and the labor market. 

In short, employment rates among young people tell different stories that often track by race and ethnicity. Some voluntarily withdraw from the labor market to focus on academics and extra-curricular activities, others would really like a job but can’t find one, and some—the most disadvantaged—are alienated from both school and the labor market.

May’s jobs gains, released this morning, show that only 38,000 new jobs were added this May, down from an average of 178,000 over the first four months of the year, and the least new jobs added since September 2010.

This year’s monthly job gains and losses can indicate how the economy is doing once they are corrected to account for the pattern we already expect in a process called seasonal adjustment. The approach for this seasonal adjustment that is presently used by the Bureau of Labor Statistics (BLS) puts very heavy weight on the current and last two years of data in assessing what are the typical patterns for each month.

In my paper “Unseasonal Seasonals?” I argue that a longer window should be used to estimate seasonal effects. I found that using a different seasonal filter, known as the 3x9 filter, produces better results and more accurate forecasts by emphasizing more years of data. The 3x9 filter spreads weight over the most recent six years in estimating seasonal patterns, which makes them more stable over time than in the current BLS seasonal adjustment method.

I calculate the month-over-month change in total nonfarm payrolls, seasonally adjusted by the 3x9 filter, for the most recent month. The corresponding data as published by the BLS are shown for comparison purposes. According to the alternative seasonal adjustment, the economy actually lost about 4,000 jobs in May (column Wright SA), compared to the official BLS total of 38,000 gained (column BLS Official).

In addition to seasonal effects, abnormal weather can also affect month-to-month fluctuations in job growth. In my paper “Weather-Adjusting Economic Data” I and my coauthor Michael Boldin implement a statistical methodology for adjusting employment data for the effects of deviations in weather from seasonal norms. This is distinct from seasonal adjustment, which only controls for the normal variation in weather across the year. We use several indicators of weather, including temperature and snowfall.

We calculate that weather in May had a negligible effect on employment, bringing up the total by only 4,000 jobs (column Weather Effect). Our weather-adjusted total, therefore, is 34,000 jobs added for May (column Boldin-Wright SWA). This is not surprising, given that weather in May was in line with seasonal norms.

Unfortunately, neither the alternative seasonal adjustment, nor the weather adjustment, makes todays jobs report any more hopeful. They make little difference and, if anything, make the picture more gloomy.

a. Applies a longer window estimate of seasonal effects (see Wright 2013).
b. Includes seasonal and weather adjustments, where seasonal adjustments are estimated using the BLS window specifications (see Boldin & Wright 2015). The incremental weather effect in the last column is the BLS official number less the SWA number.

Over the past two decades, Ghana’s economy experienced an average annual growth rate of 5.8 percent, and became a low-middle income country in 2007. Though Ghana’s average annual employment growth between 1993 and 2013 has been higher than sub-Saharan Africa’s—3.7 percent versus 3.0 percent—its overall employment growth has not kept up with its economic growth. Notably, Ghana’s impressive economic growth has largely stemmed from crude oil exports, mining, and financial intermediation—all sectors and subsectors in which labor absorption is low. Given these trends, Ghana’s ability to transform its growth gains into better livelihoods for its citizens is being challenged.

In their paper, Understanding Ghana’s growth success story and job creation challenges, Ernest Aryeetey and William Baah-Boateng examine the sustainability of the high growth Ghana has experienced over the last two decades and advise Ghanaian policymakers to rethink their growth strategy.

For a more in-depth look at these and related topics, such as labor productivity, you can read the full paper here.

Like in many other sub-Saharan African countries, the agriculture sector is the largest employer in Ghana, though its employment share is decreasing from 61.1 percent in 1984 to 44.7 percent in 2013. In addition, while industry’s employment share has slightly grown from 13.7 percent to 14.6 percent over the same period (and the manufacturing subsector has decreased from 10.9 percent to 9.1 percent), services has grown from 25 percent to 40.9 percent—leading to what the authors refer as a “missing middle.”

As noted above, the authors emphasize that the sectors that have been driving Ghana’s growth are not labor-intensive, namely mining, oil extraction, and finance. While labor has been moving from agriculture to services, the authors note that the trend “may not reflect a structural and productive transformation,” largely because the jobs created in the services sector are mostly informal and have low productivity. Indeed, services sector maintained the lowest annual average growth of labor productivity between 1992 and 2013. As part of these shifts, informal employment—which represented 88 percent of Ghanaian employment in 2013—grew by 3.7 percent on average while formal employment grew by only 2.6 percent during this period.

Unemployment in Ghana remains low, at 5.2 percent, though has experienced significant swings from 2.8 percent in 1984 to 10.4 percent in 2000 to 3.1 percent in 2006. The authors note, though, that these numbers might be deceptive due to the high numbers of informal, vulnerable, and “discouraged workers” (those who are jobless and available for work but fail to make the effort to seek work for various reasons) in Ghana. In fact, they state that, in 2006, after accounting for discouraged workers the unemployment rate more than doubled from 3.1 percent to 6.5 percent.

Despite Ghana’s relatively low unemployment rate, many laborers still live in poverty: According to the authors, 22 percent of working people are poor. Many others work in “vulnerable employment”—which the authors define as “a measure of people employed under relatively precarious circumstances indicated by their status in employment. It consists of own account and contributing family work that are less likely to have formal work arrangements, access to benefit or social protection programs, and are more ‘at risk’ to economic cycles (ILO 2009).” This definition is opposed to “productive employment,” or “paid employment and self-employed with employees.” Vulnerable workers are usually found in the informal sector and tend to have lower earnings—a situation exacerbating the ever-widening earnings gap and growing income inequality.

According to the authors, working poverty is closely linked with vulnerable employment, for which seven of 10 jobs in Ghana qualify (Table 1).  Some policies, which could combat working poverty, have been somewhat ineffective in reducing poverty: For example, Ghana has been consistent in raising its minimum wage, keeping it largely above the rate of inflation, but this policy tends to only affect those in the formal sector, leaving out workers in the informal sector. This trend has also increased Ghana’s inequality: The Gini coefficient increased from 35.4 percent in 1987/88 to 42.3 percent in 2013.

Table 1: Quantity and quality of employment (percent of employed)

Notes: * Gainful/productive employment comprises paid employment and self-employed with employees.

** Vulnerable employment comprises own account and contribution family work.

Source: Computed from Ghana Living Standards Survey (GLSS) 3, 4, 5, and 6; Population Census 1984, 2000, and 2010.

Overall, though, Ghana has made great strides. Vulnerable employment has been declining, and productive employment has risen, gains the author attributes to the drop in working poverty—down from 48.7 percent in 1992 to 22.3 percent two decades later (Table 1). However, they also hint that these improvements could have been even larger had job growth been concentrated in paid employment and self-employed with employees.

In their paper, the authors posit that job creation has occurred in less productive sectors due to a lack of skills and education in the workforce—and skill-intensive jobs/vacancies are instead getting filled by foreign laborers. While the proportion of the labor force with no formal education has significantly fallen from 44.1 percent in 1992 to 25.6 percent in 2013, post-primary education rates have barely risen—from 5.7 percent to 12.1 percent during that same period for secondary, vocational, and technical education. Tertiary is even less—from 2 percent to 5.4 percent. Ghanaian universities have not been training engineers, scientists, and technical workers that could increase the productivity and grow the industrial sector. A shortage of technical and vocational skills also limits this sector. Thus, the authors note, employers are forced to look outside of the country to find the workers with the skills required to do the job. The authors emphasize:

[P]roductive structural economic transformation hinges on the level and quality of education and labour skills. A highly skilled, innovative, and knowledgeable workforce constitutes a key ingredient in the process of structural economic transformation, and as productive sectors apply more complex production technologies and research and development activities increase the demand for education and skills. However, the observed weak human capital base does not provide a strong foundation for structural economic transformation of Ghana.

At the same time, the more educated in Ghana also tend to be more likely to be unemployed due to limited job creation for them in the formal sector. In 2013, the unemployment rates for those with secondary education and above (including tertiary) was over 6 percent. The unemployment rate for those with basic education or less was under 3.3 percent. The authors suggest that this trend is due to the fact that those with less education are more likely to take an informal job, while more educated laborers struggle to find jobs in the small formal sector.

Though Ghana has outperformed many of its sub-Saharan neighbors in terms of job creation and growth, its challenges with declining manufacturing, high informal employment, and low education attainment endanger its momentum. To tackle these obstacles, the authors recommend:

1. Adjust the priorities of the growth strategy to promote manufacturing, and reconsider the goal of economic growth for growth’s sake by acknowledging that sustainable growth must be coupled with generation of productive and high-earning jobs for all.
2. Create a manufacturing and business-friendly environment by addressing the country’s high interest rates, high taxes, and chronic energy problems, among others.
3. Enact policies to enhance the high-productivity, high-labor-absorbing agricultural sector, such as improving agricultural extension, develop irrigation plans, among others.
4. Develop policies to increase the number of secondary school graduates as well as students studying science, technology, engineering, and math.

For further discussion and recommendations, read the full paper here.

Note: The African Lions project is a collaboration among United Nations University-World Institute for Development Economics Research (UNU-WIDER), the University of Cape Town’s Development Policy Research Unit (DPRU), and the Brookings Africa Growth Initiative, that provides an analytical basis for policy recommendations and value-added guidance to domestic policymakers in the fast-growing economies of Africa, as well as for the broader global community interested in the development of the region. The six papers, covering Mozambique, Kenya, Ghana, South Africa, Ethiopia, and Nigeria, explore the key constraints facing African economies as they attempt to maintain a long-run economic growth and development trajectory.

American voters are angry. But while the ill effects of globalization top their list of grievances, nobody is well served when complex economic issues are reduced to bumper-sticker slogans – as they have been thus far in the presidential campaign.

It is unfair to dismiss concerns about globalization as unfounded. America deserves to have an honest debate about its effects. In order to yield constructive solutions, however, all sides will need to concede some inconvenient truths – and to recognize that globalization is not the same phenomenon it was 20 years ago.

Protectionists fail to see how the United States’ eroding industrial base is compatible with the principle that globalization boosts growth. But the evidence supporting that principle is too substantial to ignore.

Recent research by the McKinsey Global Institute (MGI) echoes the findings of other academics: global flows of goods, foreign direct investment, and data have increased global GDP by roughly 10% compared to what it would have been had those flows never occurred. The extra value provided by globalization amounted to $7.8 trillion in 2014 alone.

And yet, the shuttered factories dotting America’s Midwestern “Rust Belt” are real. Even as globalization generates aggregate growth, it produces winners and losers. Exposing local industries to international competition spurs efficiency and innovation, but the resulting creative destruction exacts a substantial toll on families and communities.

Economists and policymakers alike are guilty of glossing over these distributional consequences. Countries that engage in free trade will find new channels for growth in the long run, the thinking goes, and workers who lose their jobs in one industry will find employment in another.

In the real world, however, this process is messy and protracted. Workers in a shrinking industry may need entirely new skills to find jobs in other sectors, and they may have to pack up their families and pull up deep roots to pursue these opportunities. It has taken a popular backlash against free trade for policymakers and the media to acknowledge the extent of this disruption.

That backlash should not have come as a surprise. Traditional labor-market policies and training systems have not been equal to the task of dealing with the large-scale changes caused by the twin forces of globalization and automation. The US needs concrete proposals for supporting workers caught up in structural transitions – and a willingness to consider fresh approaches, such as wage insurance.

Contrary to campaign rhetoric, simple protectionism would harm consumers. A recent study by the US President’s Council of Economic Advisers found that middle-class Americans gain more than a quarter of their purchasing power from trade. In any event, imposing tariffs on foreign goods will not bring back lost manufacturing jobs.

It is time to change the parameters of the debate and recognize that globalization has become an entirely different animal: The global goods trade has flattened for a variety of reasons, including plummeting commodity prices, sluggishness in many major economies, and a trend toward producing goods closer to the point of consumption. Cross-border flows of data, by contrast, have grown by a factor of 45 during the past decade, and now generate a greater economic impact than flows of traditional manufactured goods.

Digitization is changing everything: the nature of the goods changing hands, the universe of potential suppliers and customers, the method of delivery, and the capital and scale required to operate globally. It also means that globalization is no longer exclusively the domain of Fortune 500 firms.

Companies interacting with their foreign operations, suppliers, and customers account for a large and growing share of global Internet traffic. Already half of the world’s traded services are digitized, and 12% of the global goods trade is conducted via international e-commerce. E-commerce marketplaces such as Alibaba, Amazon, and eBay are turning millions of small enterprises into exporters. This remains an enormous untapped opportunity for the US, where fewer than 1% of companies export– a far lower share than in any other advanced economy.

Despite all the anti-trade rhetoric, it is crucial that Americans bear in mind that most of the world’s customers are overseas. Fast-growing emerging economies will be the biggest sources of consumption growth in the years ahead.

This would be the worst possible moment to erect barriers. The new digital landscape is still taking shape, and countries have an opportunity to redefine their comparative advantages. The US may have lost out as the world chased low labor costs; but it operates from a position of strength in a world defined by digital globalization.

There is real value in the seamless movement of innovation, information, goods, services, and – yes – people. As the US struggles to jump-start its economy, it cannot afford to seal itself off from an important source of growth.

US policymakers must take a nuanced, clear-eyed view of globalization, one that addresses its downsides more effectively, not only when it comes to lost jobs at home, but also when it comes to its trading partners’ labor and environmental standards. Above all, the US needs to stop retrying the past – and start focusing on how it can compete in the next era of globalization.

Editor's note: this piece first appeared on Project-Syndicate.org.

In a recent analysis, I highlighted how employment and disconnection among young people vary by age, race, and place. In this podcast, I dig deeper into the data on the Washington, D.C. region. Although the area generally performs well on employment measures, not all young people are faring equally well.

Listen to the full podcast segment here: 

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Sub-Saharan Africa’s growth performance over the last decade has been astounding, though they mask underlying job creation challenges facing policymakers. The unemployment rate for sub-Saharan Africa remained fairly stable over the period. In 2015, it stood at a slightly high 7.4 percent, compared with over 9 percent in the European Union and 5.3 percent in the United States. However, the figures on vulnerable employment and the working poor[1] in Africa tell a different story—averaging 69.9 percent and 64.0 percent in 2015, respectively. Indeed, of those who are employed, four in five workers are not in the wage economy, but in the informal sector, with no access to workers’ benefits, social protection, and job reliability. In addition, many workers—both formal and informal—are underemployed or overqualified.

The conventional knowledge of structural transformation—labor migration from agriculture to high-productivity, labor-intensive industry—has been turned on its head in Africa. Instead, Africans are moving to jobs in the services sector, which some experts argue is a less productive path. Then again, unique opportunities in African digital jobs are opening up doors the world has never seen before.

The need for decent job creation in Africa also provides both threats and opportunities to the United States. For example, a lack of viable jobs could make the turn to crime, violence, and even extremism—with the promise of steady income from these activities—more appealing to economically marginalized individuals, especially among the youth. Furthermore, job creation boosts the growth of the middle class, expanding the base of consumers for American products, at the same time creating new, stronger trade partners able to supply goods to American consumers. Already, the United States and other countries are creating a myriad of programs to boost entrepreneurship on the continent.

On Monday, June 27, the Brookings Institution’s Africa Growth Initiative and the Congressional African Staff Association hosted an event to discuss why Africa is struggling to create the quantity and quality of jobs it needs and what policies—both African and U.S.—can turn that trend around. Ernest Danjuma Enebi, founder and managing partner of The Denda Group, moderated the discussion. Panelists included Dr. Eyerusalem Siba, research fellow at the Africa Growth Initiative; Hassanatu Blake, co-founding director and president of the non-profit Focal Point Global; and Nicolas Cook, a specialist in African Affairs in the Foreign Affairs, Defense, and Trade Division of the Congressional Research Service.

The discussion touched on multiple key points, including what Africa’s unique structural transformation path means for the region’s employment landscape; how development partner efforts affect job growth on the continent; how Africa can avoid a potential “demographic timebomb” of youth unemployment and instead benefit from a “demographic dividend”; and how the United States is addressing the challenges these trends pose for both the continent and the U.S.

Enebi began the dialogue with a Q&A with Siba on an overview of African economic trends, youth unemployment, and formal sector jobs on the continent.

Blake argued that the high youth unemployment is due in part to the region’s struggling educational systems where Poor quality education leads to poor grades on periodic tests and thus students are being pushed out of school, she said. Once out of the formal schooling system, they enter the workforce underprepared without the skills they need to succeed in the job market.

Blake continued to argue this point through a description of Harambee, a private South African organization that works towards improving prospects of youth employment. The program has placed over 20,000 youth into jobs over the past 5 years by testing job applicants on literacy and mathematical ability and matching them with employers. Harambee addresses a broader skills mismatch that Blake argued is holding back job creation. More broadly, Blake argued, public-private partnerships must be created to help youth find jobs and employers find employees.

A major theme of the discussion was that a shift away from aid and towards the support of labor-intensive industries and enabling environments for business can spur job creation.

Of course, causes of unemployment are largely driven by the demand-side factors, acknowledged the panelists. A major theme of the discussion was that a shift away from aid and towards the support of labor-intensive industries and enabling environments for business can spur job creation. Indeed, Cook discussed the importance of the mantra “trade not aid” in addressing these issues, as there are many large American firms with an economic interest in expanding to Africa; however this interest is miniscule compared to Africa’s trade with the rest of the world. Increasing global investments in Africa is, thus, a key part of any job creation, he emphasized.

Cook also touched on global relationships with Africa. He noted that only 1 percent of U.S. foreign direct investment (FDI) goes to Africa, and only one percent of American trade is with Africa. Now, several economic development programs, like the U.S. Electrify Africa Act of 2015 and the USAID Power Africa Initiative, exist but are in need of continued funding. To boost trade, the United States has launched the Trade Africa program and has established trade hubs in western, eastern, and southern Africa.

Investments in infrastructure, greater participation in the export market, interventions on improving managerial and marketing skills and the use of information and communications technologies (ICTs) to access global markets can help clear the way for greater job creation.

Siba agreed with the idea of a focus on trade and FDI as major factors in job creation. In fact, she shifted the discussion toward a focus on investments in supporting industry because, as she emphasized, the biggest predictor of business performance including job creation is export market participation. Investments in infrastructure, greater participation in the export market, interventions on improving managerial and marketing skills and the use of information and communications technologies (ICTs) to access global markets can help clear the way for greater job creation, she said.

There are clearly many opportunities for foreign investors to support African industry, but challenges to development remain due to poor infrastructure and a lackluster environment for business.

Blake agreed that ICTs and infrastructure hold great potential for spurring job growth, but pointed out that ICT and infrastructure investment “look different” in different parts of the continent. In some countries in central Africa that she worked with and Cameroon, she suggested, ICTs are not always the best vehicle to drive job growth due to the prohibitive cost of ICT devices and emphasized that keeping local conditions in mind when exploring potential job-creating programs and investments is essential for success.

Cook then pivoted to a discussion on the importance of small enterprises and technology in boosting job growth. He pointed out the importance of WhatsApp as a new means of communication that has helped spur job growth and productivity, and the mobile money transfer platform m-Pesa as a key component of the increase in micro-lending in Kenya. Offered by Safaricom, Kenya’s largest mobile network, M-Pesa allows mobile phone users to transfer money, pay bills, and deposit money. The World Bank highlighted the service in 2009, concluding that “The affordability of the service has been key in opening the door to formal financial services for Kenya’s poor.” The service has also allowed financing of micro-enterprise to take off, but Cook acknowledged that ascertaining the precise impact of these technologies on job growth is very difficult due to the scarcity of data.

The small credit card market and rarely used banking services exclude a wide percentage of the population from the financial system. The widespread presence of mobile phones has now opened up this system.

Fifty to 80 percent of new jobs in Africa are created by small businesses that are not likely to survive more than five years.

Siba elaborated on Cook’s description of the vital role of small businesses in creating jobs on the continent. She argued that any job creation programs in Africa should focus on solving the challenges of small businesses in job creation because they dominate the market structure. Unfortunately, at the moment, small businesses there are not robust. Fifty to 80 percent of new jobs in Africa are created by small businesses that are not likely to survive more than five years. Since small and medium enterprises comprise over 90 percent of all firms in sub-Saharan Africa, this volatility affects the whole economy. As a result, any potential solutions must take this market structure into account. In addition, as Siba suggested, increased focus must be paid to the integration of African businesses into regional markets and domestic and global value chains so that small and medium enterprises have more opportunities to grow.

The discussion concluded with a focus on opportunities for growth: Governments should focus on processing raw commodities for local uses, like timber, coffee, and cocoa; small- and medium-sized enterprises should be scaled up with stronger access to financing and skill development; governments should pursue partnerships with private companies to address the skills mismatch; and education funding should be deliberately targeted to address missing skills, correctly processed, and carefully monitored. Continued job creation in Africa depends on it.

Globalization has been hugely beneficial to Asia. Japan, South Korea, Taiwan, Malaysia, Singapore, Hong Kong, Thailand, and China have reaped lasting benefits from worldwide investment flows, knowledge exchanges, and rapid economic growth. And while globalization undoubtedly made the rich even richer, the poor also benefitted.

Several Asian economies saw the emergence of a large middle class and the virtual elimination of poverty. The rural poor received higher wages after finding better quality manufacturing jobs in urban centers. And with improvements in technology and expanded trade, there was optimism about job prospects. In ethnically diverse societies such as Malaysia, globalization contributed significantly to the reduction of racial tensions rather than exacerbate them, contrary to what is happening in the West.

There is no question that the West has also benefited from globalization. The United Kingdom and the United States have seen huge gains in the services sector, especially in financial services. However, the accompanying income inequality is of a different hue than in Asia. Younger, better educated workers located in cosmopolitan urban centers such as New York and London have seen a phenomenal increase in their income. On the other hand, older, less educated workers in the rusting industrial belts of northern England and America have lost their jobs to manufacturers overseas. Instead of jobs with good growth prospects enjoyed by several generations in the past, the quality of jobs has deteriorated and there is little hope among the rust belt’s working class that this situation can be turned around. Worst, there is a perception that politicians don’t care. The recent voting patterns in the U.S. and the U.K. are a clear reflection of this despondence.

How did Asia achieve a shared prosperity from globalization with consistent domestic political support while the rich countries have struggled and are suffering the political blowback? 

The answer may lie in the heavy investment made by Asian governments in human capital (education and health) to prepare the workforce to take advantage of the high wage manufacturing jobs created by globalized investment. This was complemented by public investment in infrastructure to continue to attract foreign investment. The fiscal deficits associated with large public investment in human capital and physical infrastructure were tolerated because the political and economic benefits of preparing the workforce for new jobs were considered worthwhile objectives.

Both the U.S. and the U.K, in contrast, have underinvested in infrastructure and in “skilling up” the labor force to make the transition to new and better jobs from the ones lost to lower wage workers in Asia.  In the U.K, it happened under the watch of the incumbent conservative government. While presenting to Parliament the result of the recent referendum to the European Union, Prime Minister David Cameron spoke proudly of leaving behind a sound economy resting on the pillar of a sharp fiscal retrenchment—low taxes and even lower public expenditure. One result of this “sound” economy is that a large number of people are stuck in dead-end jobs and are looking for opportunities to vent their frustration.

In the U.S., the Obama administration has been hemmed in by the recalcitrant Republican Congress. Badly needed public investment in health and education to prepare workers and an overdue upgrade of infrastructure to attract investment have been thwarted by a Congress wedded to fiscal austerity. This has prolonged the pain of transition to new jobs.

The long and painful transition to productive jobs has resulted in the clamor for reneging on globalization commitments. This is misplaced because protecting jobs that are best done elsewhere is not possible without putting curbs on investment. That would be moving towards a world that globalizes misery. There is thus no alternative to a proactive government that eases the transition to new jobs in rich countries.

Of course, Asia had the advantage of preparing its work force for known job streams. Rich countries, on the other hand, have to discover new productive jobs. However, we do know that discovery is more likely if education standards improve, physical infrastructure is cutting edge, and science and research are well-funded.  

Rich countries don’t have to give up on manufacturing as a source of employment. Germany has shown the way to creating high-end manufacturing jobs in a rich-country setting. It has a highly skilled work force that produces technology-intensive products which generate a large trade surplus. There is little support in Germany for reneging on global commitments.

Dying cities, dead-end jobs, and a seemingly uncaring government feed into the perception that living standards will continue to fall. Demagogues exploiting ethnicity point the finger at immigrants and have succeeded in directing rich-country worker ire at them. This is a far cry from the democratic vision rich democracies should aspire to and is not in any away a solution to these problems.  The protest should be aimed, instead, at elected governments to play their role in facilitating the transition to the next generation of jobs.     

The world has paid heavily for Europe’s nationalistic ambitions—colonial subjugation of Africa and Asia and the two world wars are the most egregious examples. The EU is an attempt to tame those impulses by seeking to cooperatively address common challenges instead of competing for narrower nationalistic objectives. The dissolution of the EU and the weakening of other multilateral institutions because of rich countries’ failure to rise up to the globalization challenge would be truly retrogressive. 

Summer jobs programs for young people have experienced a resurgence of interest and investment since the Great Recession, driven by concerns about high youth unemployment rates, particularly among low-income, black, and Hispanic youth. 

Summer jobs programs typically last five to seven weeks and provide work opportunities to teens and young adults who otherwise might struggle to find jobs. They offer a paycheck, employment experiences, and other organized activities in the service of multiple goals: increasing participants’ income, developing young people’s skills and networks to improve their labor market prospects, and offering constructive activities to promote positive behavior. Most young people are placed in subsidized positions in the public and nonprofit sectors, although most cities also secure unsubsidized and private-sector placements, which typically come with higher skill and work-readiness requirements. Recent research finds that summer jobs programs have positive effects: reducing violence, incarceration, and mortality and improving academic outcomes.

But a strong program does not automatically follow from good intentions. Program design and implementation carry the day and determine the results. Moreover, research has not yet linked summer jobs programs to improved employment outcomes; evaluations to date are silent on effective program design; and, in the absence of agreed-upon standards and best practices, there is no guarantee of quality.

This paper is written to help clarify what is known about summer jobs programs and to provide information and guidance to city leaders, policymakers, and funders as they consider supporting larger and better summer efforts. Many jurisdictions are rebuilding their summer programs after a long hiatus that followed the end of dedicated federal funding in the late 1990s. Summer jobs programs are complex endeavors to design and deliver. Local leaders and administrators make a multitude of choices about program design, implementation, and funding, and these choices have a direct impact on quality and results. It is an opportune moment to assess the knowledge base and gaps about the operations and impacts of summer jobs programs.

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• Press release

Unlike prime-age Americans, who have experienced declines in employment and labor force participation since the onset of the Great Recession, Americans past 60 have seen their employment and labor force participation rates increase.

In order to understand the contrasting labor force developments among the old, on the one hand, and the prime-aged, on the other, this paper develops and analyzes a new data file containing information on monthly labor force changes of adults interviewed in the Current Population Survey (CPS).

The paper documents notable differences among age groups with respect to the changes in labor force transition rates that have occurred over the past two decades. What is crucial for understanding the surprising strength of old-age labor force participation and employment are changes in labor force transition probabilities within and across age groups. The paper identifies several shifts that help account for the increase in old-age employment and labor force participation:

• Like workers in all age groups, workers in older groups saw a surge in monthly transitions from employment to unemployment in the Great Recession.
• Unlike workers in prime-age and younger groups, however, older workers also saw a sizeable decline in exits to nonparticipation during and after the recession. While the surge in exits from employment to unemployment tended to reduce the employment rates of all age groups, the drop in employment exits to nonparticipation among the aged tended to hold up labor force participation rates and employment rates among the elderly compared with the nonelderly. Among the elderly, but not the nonelderly, the exit rate from employment into nonparticipation fell more than the exit rate from employment into unemployment increased.
• The Great Recession and slow recovery from that recession made it harder for the unemployed to transition into employment. Exit rates from unemployment into employment fell sharply in all age groups, old and young.
• In contrast to unemployed workers in younger age groups, the unemployed in the oldest age groups also saw a drop in their exits to nonparticipation. Compared with the nonaged, this tended to help maintain the labor force participation rates of the old.
• Flows from out-of-the-labor-force status into employment have declined for most age groups, but they have declined the least or have actually increased modestly among older nonparticipants.

Some of the favorable trends seen in older age groups are likely to be explained, in part, by the substantial improvement in older Americans’ educational attainment. Better educated older people tend to have lower monthly flows from employment into unemployment and nonparticipation, and they have higher monthly flows from nonparticipant status into employment compared with less educated workers.

The policy implications of the paper are:

• A serious recession inflicts severe and immediate harm on workers and potential workers in all age groups, in the form of layoffs and depressed prospects for finding work.
• Unlike younger age groups, however, workers in older groups have high rates of voluntary exit from employment and the workforce, even when labor markets are strong. Consequently, reduced rates of voluntary exit from employment and the labor force can have an outsize impact on their employment and participation rates.
• The aged, as a whole, can therefore experience rising employment and participation rates even as a minority of aged workers suffer severe harm as a result of permanent job loss at an unexpectedly early age and exceptional difficulty finding a new job.
• Between 2001 and 2015, the old-age employment and participation rates rose, apparently signaling that older workers did not suffer severe harm in the Great Recession.
• Analysis of the gross flow data suggests, however, that the apparent improvements were the combined result of continued declines in age-specific voluntary exit rates, mostly from the ranks of the employed, and worsening reemployment rates among the unemployed. The older workers who suffered involuntary layoffs were more numerous than before the Great Recession, and they found it much harder to get reemployed than laid off workers in years before 2008. The turnover data show that it has proved much harder for these workers to recover from the loss of their late-career job loss.

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