Fight against poverty among young Peruvian graduates after Covid-19

By: Lyliana Guadalupe Alarcon Nuñez, Rodrigo Carlos Lozada Zapana and Virginia Isabel Lopez Quiroz


According to Peruvian regulations, young people are considered to be between 15 and 29 years old. In the year 2020, 24.1% of the Peruvian population fell into this category. Globally, young people are recognized as agents of change, capable of achieving a positive impact for future generations, and they have even participated in the development of the 2030 Agenda, in which the Sustainable Development Goals (SDGs) are presented. This action plan has as its first objective the end of poverty, which has been affected by the Covid-19 pandemic since mortality has been higher in countries with elevated levels of poverty, extreme poverty, and labor informality (Cid & Marino, 2022).

One in six young people between the ages of 18 and 29 in the world has stopped working since the pandemic began, and a quarter of the world's young people between the ages of 18 and 24 have lost their jobs. The impact of the pandemic on the economy is significant and has increased the vulnerability of young people, i.e., unfortunately, the pandemic not only impoverished Peruvians, especially young people, but also made job opportunities for university graduates more precarious. Higher education in the country does not always translate into formal employment opportunities for young people, since the reduced formal labor market faces new challenges around the so-called "teleworking", especially for young people who compete unequally due to family burdens, housing conditions, or other difficulties.

At the national level, Peru's Gross Domestic Product (GDP) fell 11.1% in 2020, the lowest rate in the last three decades according to the National Institute of Statistics and Informatics (INEI). These figures show the worsening of unemployment and poverty in the national territory. The monetary poverty rate for 2021, at the national level, stood at 25.9%, down from 30.1% in 2020; but still above the pre-pandemic poverty rate, exactly 5.7 percentage points. According to the Technical Report "Evolution of Monetary Poverty 2007-2016", people residing in households whose per capita expenditure is insufficient to purchase a basic food basket are considered monetary poor. Analyzing at the departmental level, the situation is more critical in the central highlands or jungle. In departments such as Huancavelica, Ayacucho, and Pasco, poverty rates have worsened even more in recent post-pandemic years.

Covid-19 in recent graduates: Unemployment and poverty

The Covid-19 pandemic affected a large part of young people, who were forced to abandon their studies or lost their jobs. Regarding the Peruvian case, the Superintendencia Nacional de Educación (Sunedu) reported that the rate of interruption of university studies doubled in 2020. In this regard, Noelia Chávez, National Secretary of Youth, highlighted the precarious situation experienced by young people, who have had to look for jobs -mostly informal- to be able to support themselves and/or support their families.

However, this job placement did not necessarily translate into good conditions for young people. Thus, for example, by June 2022, the rate of young people with employment increased by 71.7%, compared to the same month of 2020; however, young people with formal jobs decreased by 22.7%. In this regard, Senaju warned that the lower the educational level of a young person, the greater the probability of being in an informal employment situation (2019).

The importance of paying special attention to unemployment lies in its strong impact on social mobility, otherwise, poverty is perpetuated intergenerationally. To this extent, although the precariousness of jobs has affected a large part of the population, those with fewer resources have greater difficulties in escaping poverty. In addition, this precariousness is consolidating a working class that tends to impoverish (Andrade & Jiménez-Bandala, 2018).

Policies to fight poverty in recent graduates

In our country in 2019, 61.4% of young people belonged to the EAP (Economically Active Population) and 38.6% to the EIP (Economically Inactive Population). Youth unemployment continues to increase in recent years, however, data show that the health emergency has hurt this situation. Trends in recent years show that unemployment affects more the age groups of 20 to 24 years (18.2%) and 25 to 29 years (17.2%). Among 15 – 19-year-olds, unemployment fell from 13.6% in 2019 to 8.8% in the second quarter of 2020. One question that could be explored in future research is whether this phenomenon is related to the greater responsibility for maintaining household income among young people in this age group.

To the alarming data obtained, the Peruvian government has launched initiatives aimed at promoting and generating better life opportunities for young people, especially the temporary employment scheme "Trabaja Peru", which aims to provide jobs to people over 18 years of age and in poverty, extreme poverty or affected in whole or in part by natural disasters or health emergencies. There are also programs such as "Jóvenes productivos", "Proyecta tu futuro", "Innóvate Perú" and "Ponte en carrera", in addition to initiatives led by the national government. Therefore, it is necessary to strengthen the role of regional and local authorities in this area.

The Government approved the National Youth Policy, which establishes several priority objectives of public intervention for the comprehensive development of the young population and their effective participation in society, among them: developing competencies in the educational process, increasing the access of the young population to decent work, comprehensive health care for the graduate population, reducing victimization and discrimination of the graduate population in situations of vulnerability and increasing citizen participation of the young population.

A regional approach to poverty

It is necessary to focus specifically on the poorest regions of our country, regions that paradoxically are the ones that have the most natural resources, whether in agriculture or mining. Such is the case of San Martin, which leads with the largest amount of resources received: S/. 524.4 million, but until November 16, 2021, has managed to execute one-fifth of its budget. This is due to the ineffectiveness of the local authorities, who are responsible for maintaining rural precariousness. According to Macroconsult, the impact of the pandemic on the Peruvian economy will have consequences on the country's capacity to reduce poverty in the medium and long term. However, this is more acute in the three poorest departments of Peru in 2020, which, according to the Peruvian Institute of Economics (IPE), will be observed in Huancavelica (47.7%), followed by Ayacucho (46.4%) and Pasco (44.8%).

According to a recent INEI study in the highlands and jungle regions, 32% of graduates took 9 months or more to get their first job. This figure is lower than in the coastal region. Analyzing the situation of young high school graduates who manage to get a job in Lima, they remain on the payroll for an average of 13 months. This is in contrast to the provinces, where formal employment can last about nine months for young graduates. In short, there is a comparative disadvantage that violates the right to work, not only in the strict sense but also violates the interdependent and essential elements of the right to work: Availability, Accessibility, Acceptability, and Quality.