# **Introduction**

Since 2000, a growing concern has been that persistent shares of individuals in Latin America (LA), in the 15-18 and 19-24 age groups, are neither working nor in the education system. According to the estimates provided by de Hoyos, Rogers and Popova (2013), and Cárdenas, et.al. (2011), the share of youth out of school and out of work (which we abbreviate to “ _Osow_ ” for the purposes of this paper) has oscillated between 23 and 19 percent during the 1990-2010 period, but due to population growth, the numbers in this condition increased by 2 million in the same period, reaching more than 18 million individuals by 2010.<sup>2</sup> The fact that the proportion of _Osow_ youth remained fairly stable is particularly worrisome in light of other variables reflecting improvement in the standard of living, such as the gross domestic product (GDP), which increased by more than 50 percent in real terms in the region during the same years.

Behrman et.al. (2014) propose a conceptual framework for identifying the potential decisions, restrictions, and contexts underlying these trends. They describe a model where the Osow youth phenomenon is determined by household and individual decisions, which are taken under a series of constraints and are influenced by the family, community, and macro environment.

The objective of this paper is to implement, to the extent possible, the aforementioned framework by focusing on the influence of community and macro factors on Osow youth. Since the “Osow youth” is an intrinsically dynamic phenomenon, we propose a cohort approach that follows groups of representative samples of individuals along a segment of their life-cycle to characterize the way in which they shift into different school, work, and Osow categories over time. We relate the observed transitions from school to work and to the Osow status to a series of variables in order to better understand why the shares of these groups have been persistent, and present estimates of the potential scarring effects of being Osow during youth on labor market outcomes that are observed later at older ages.

In order to perform our analysis, we exploit the time series of cross sections developed by Cárdenas et.al. (2011), updated for this paper with a set of recent household surveys, to create a synthetic

> 2 The exact definition of “ _not working_ ” includes all youth who declare not to be enrolled in paid labor market activity (formal or informal) during the week previous to the survey date. Those that are nor currently enrolled in the formal schooling system at any level are classified as “ _out of school_ ”. The analysis focuses on the population 15 and above, since the International Labor Organization (ILO) 1973 _Minimum Age Convention -_ to which all Latin American countries have abided- sets the minimum age for admission to employment or work at age 15 (http://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/child-labour/lang-en/index.htm). Actually, the ILO 1999 _Worst Forms of Child Labor Convention_ approved across LA childhood comprises the 0 to 18 age range and requires states to ensure access to free basic education and vocational training for all individuals belonging to this category to prevent them from working prematurely. Along the same lines the _Convention of the Rights of the Child_ of 1989, which is a legally binding international instrument, specifies universally agreed standards and obligations of governments towards individuals under 18 years of age, including the access to education as a preponderant right.

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